AAWA BATTERY CORE LEGISLATION UPDATE

AAWA SAVES  YOU MONEY

To assure that you do not lose money on the predominance of your battery core deposit transactions, the Arizona Automotive Wholesalers Association (AAWA) will be introducing a bill in the 2010 Arizona Legislature on your behalf.  The concept of the bill is provided for your information below. 

ISSUE
Updates the amount of the recycling deposit that distributors/retailers can charge to consumers that purchase automotive batteries to an amount that is not greater than the recycling deposit charged by battery manufacturers.

BACKGROUND
In 1990, legislation was enacted that prohibits the disposal of lead acid batteries (automotive batteries) in landfills or through incineration.  In addition, to encourage compliance, a refundable $5 deposit was established on the purchase of new automotive batteries.

As part of the program, under current law, upon purchase of a new automotive battery, the distributor/retailer is required to collect a $5 deposit from the person purchasing the new battery.  The deposit is to be refunded to the consumer, provided the used battery is exchanged within 30 days of the purchase of the new battery.  In turn, distributor/retail sellers of automotive batteries are required by statute to dispose of the batteries properly; this usually entails returning the used battery core to the manufacturer.   

Currently, most manufacturers of automotive batteries require a deposit to be made by distributor/retailers, typically the deposit charged by the manufacturer is greater than what consumers are charged under the existing statutory cap.  As with the end user of the battery, distributors/retailers receive a refund of their deposit if a used battery core is returned to the manufacturer. 

In a best-case scenario, a distributor/retailer pays the manufacturer a deposit for a new battery that will be sold to a consumer.  At the time of purchase, the consumer will provide a used battery core to the distributor/retailer.  In this best-case scenario, the consumer avoids paying the deposit, as during the transaction they have recycled their used automotive battery core.  Likewise, the distributor/retailer is, ultimately, able to collect their deposit from the manufacturer by returning the used battery core.

If the consumer does not return the used battery core within a 30-day period, the consumer forfeits the right to receive a refund of the $5 deposit.   However, as the distributor/retailer did not receive a used battery core that can be returned to the manufacturer from the transaction, the distributor/retailer loses the difference between the amount of the distributor/retailer deposit and the consumer deposit.

Since the enactment of the existing statute in 1990, many manufacturers currently require a higher deposit to the distributor/retailer than what state statute allows the retailer to charge to the consumer.  As a result, distributors/retailers are being monetarily penalized by the state-mandated recycling program every time a consumer fails to return a used automotive battery core.

PROVISIONS
Increases, from $5 to not more than $15, the recycling deposit that a distributor/retailer can charge a consumer for the purchase of a new automotive battery.  The deposit is returned to the consumer upon the return of the used battery core.

Increases, from 30 days to 45 days, the amount of time a consumer has to return a used automotive battery core for recycling, in order to have the recycling deposit returned in full.

Should you have any questions or comments on our efforts next year, please call our Legislative Advocate, Stuart Goodman in Phoenix at 602.277.0911.  We will keep you updated on the bill's progress.

Founded in 1955, CAWA is a nonprofit trade organization representing automotive jobbers, warehouse distributors, retailers, manufacturers and manufacturer's representatives in California, Nevada and Arizona.  CAWA's mission is to provide communications, education, legislative and regulatory advocacy and group purchasing of services for its members while promoting the automotive aftermarket industry.

For additional information about CAWA and for the latest industry news, go to www.cawa.org.