Pub. Resources Code, § 42968.52

(a) In recognition that the material makeup and construction of a covered product affects the technical and economic recyclability of a covered product, the funding mechanism required pursuant to subdivision (c) of Section 42968.32 shall establish and be composed of a system of differential assessments that takes into account the financial burden that a particular covered product has on the producer responsibility plan, and the amount of postconsumer recycled content contained in a particular covered product. Based on market history and modeling, if a certain covered product requires a higher subsidy to incentivize use in the marketplace, then that material shall have a proportionally higher assessment assigned to it. The assessment shall be remitted to the producer responsibility organization on a quarterly basis and the producer responsibility organization may expend the assessment only to carry out the producer responsibility plan.

(b) The amount of the assessment and the anticipated revenues from the assessment shall be specified in the producer responsibility plan and shall be approved by the department as part of the producer responsibility plan. The amount of the assessment shall be sufficient to meet, but not exceed, the anticipated cost of carrying out the producer responsibility plan. The amount of the assessment shall not create an unfair advantage in the marketplace.

(c) The assessment established pursuant to this section is exempt from the taxes imposed by Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code and shall meet both of the following requirements:

(1) The assessment shall be added by a producer to the purchase price of all covered products sold by producers to a California retailer or wholesaler or otherwise sold for use in the state. The assessment shall be clearly visible on invoices or functionally equivalent billing documents as a separate line item and shall be accompanied by a brief description of the assessment or a label approved by the department.

(2) Each retailer and wholesaler shall add the assessment to the purchase price of all covered products sold in the state. The assessment shall be clearly visible on invoices or functionally equivalent billing documents as a separate line item and shall be accompanied by a brief description of the assessment or a label approved by the department.

(d) It is the intent of the Legislature that the amount of the assessment be reduced by the producer responsibility organization as the producer responsibility program is implemented over time and becomes more efficient.

(e) (1) If the amount of the assessment is insufficient to fund the producer responsibility program, the producer responsibility organization shall submit a revision to the producer responsibility plan, pursuant to Section 42968.35, to increase the assessment.

(2) If the assessment generates a fund balance at the end of a program year that is greater than one year’s operating costs of the producer responsibility plan, the producer responsibility organization shall submit a revision to the producer responsibility plan, pursuant to Section 42968.35, to decrease the assessment.

(f) The producer responsibility organization shall not expend funds from the assessment for any of the following purposes:

(1) Penalties imposed pursuant to this chapter.

(2) Costs associated with litigation against the state.

(3) Engineered municipal solid waste conversion, as defined in Section 40131.2, the use of cement kilns to burn covered product, or transformation, as defined in Section 40201.