Georgina Sikorski, executive director of Carpet America Recovery Effort (CARE), presented a free, hour-long webinar to retailers April 21 on California’s AB 2398 bill. The legislation, which was passed last September, requires manufacturers to assess five cents per square yard on retailers for any carpet sold or shipped into California beginning July 1. The retailer/dealer must then pass the assessment onto their customers.

The money assessed is ultimately sent to CARE, the carpet stewardship organization assigned by the state’s Department of Resources Recycling and Recovery (CalRecycle), to be distributed to first-line carpet recycling processors as an incentive for them to invest in new technologies to further increase their ability to recycle and divert carpet. The assessment is only an incentive, and does not recover the full costs of recycling.

Alternatively, manufacturers who have already had their stewardship plans approved by CalRecycle can use the assessment as part of their plans, which must include consumer education efforts, the assessment of fees, and progress measurement and reporting.

CalRecycle is responsible for approving manufacturers’ stewardship plans, checking progress, and providing oversight and enforcement. Anyone not found in compliance – including manufacturers, retailers, wholesalers and distributors – can be penalized up to $1,000 per day, or $10,000 per day if non-compliance is found to be knowing, negligent or intentional.

AB 2398 covers both residential and commercial broadloom and modular carpet sold or shipped into California. It does not include rugs, underlayment, carpet cushion, samples or synthetic turf.

What the law means for retailers
Retailers in California may only sell carpets from manufacturers in compliance with AB 2398, beginning July 1. CalRecycle will post a list of manufacturers in compliance on itswebsite. Retailers and wholesalers/distributors are required to monitor the list. If a manufacturer is not listed, they are asked to contact their sales representative orCAREdirectly.

The assessment must be visible on all customer invoices as a separate, after-tax line item. CARE recommends that the line item be listed as CA Crpt Stewardship Assessment. The legislation also requires that retailers retain their records of sales for three fiscal years.

Retailers with carpet in stock before July 1, for which they have not paid an assessment to the manufacturer, must still include the assessment to consumers beginning July 1. The assessment must then be remitted to CARE.

Retailers will only submit funds directly to CARE during this transition period. Once manufacturers start charging retailers the assessment in the purchase price, retailers will simply recoup the assessment by passing it on to their customers.

Any carpet that is sold outside of the state is not subject to the assessment. “If you [a retailer] sold carpet to an installer located in California, you would assess that installer. If he then sells the carpet into Nevada, he would provide you an exemption form and you would return that assessment to him. Then you would provide that exemption up to the manufacturer for credit,” Sikorski explained. The manufacturer can also be refunded through a quarterly remittance statement, she added.

Retailer/dealers must include the assessment as part of the purchase price when selling to general contractors. Retailers picking up the carpet in another state and bringing it to California for sale must inform the manufacturer at the time of pick up that the product will be sold in California so the assessment can be added.

CARE is developing consumer educational materials that will be available beginning June 1. The materials include a brochure that can be given to customers at point of purchase (a Spanish version will be available online), a showroom placard to insert the brochures into, a window cling and PowerPoint slides. These materials will be available for order through the CARE website. Retailers may also receive consumer education materials from manufacturers.

For more information,