PC Makers, Electronics Industry Oppose California Recycling Law

California may become the first U.S. state requiring computer makers to charge buyers at the point of sale to recycle the machines, a move local companies say will push consumers to seek products made elsewhere.

Governor Gray Davis has until Sept. 30 to sign or veto a measure that would require companies such as Hewlett-Packard Co., the world's largest personal-computer maker, and television sellers such as Best Buy Co., the largest U.S electronics retailer, to add a $10 fee to purchases starting Jan. 1, 2004.

Environmentalists say the law is needed to deal with the more than 6 million discarded monitors and TV sets waiting to be recycled. It's illegal in California to put them in a landfill because they contain toxic levels of lead and other hazardous materials. Computer and TV makers say the measure would crimp sales at California companies as buyers seek to avoid the fee.

``One of our main concerns with the electronics recycling legislation that is currently waiting on the Governor's desk is a question of fairness,'' said Kerry Fennelly, spokeswoman for the Electronics Industries Alliance, a Washington-based trade group.

The measure automatically becomes law if Davis doesn't act by the end of the month. Lawmakers in the state's Senate and Assembly passed the bill on the last day of their session in August. The fee would raise an estimated $240 million a year to set up a statewide recycling program operated by public, private and nonprofit recyclers.

Under the new law, any company that doesn't comply would be barred from selling equipment or services to the state. Davis hasn't yet decided whether he will sign the bill, press secretary Steve Maviglio said.

Supporters of the plan said the pay-as-you-go collection programs offered by some manufacturers, in which consumers and small businesses pay a fee in order to drop off or ship their obsolete computers for recycling, doesn't address the larger problem of machines already discarded or stored for disposal.

``They're making a marketing error in opposing legislation that is popular with the public,'' said Mark Murray, executive director of Californians Against Waste, an environmental group that sponsored the legislation.

Apple Computer Inc., which opposed the bill when it was first introduced in February, agreed to support the measure after language was added to the bill requiring companies that sell over the Internet to charge the fee as well. Apple, based in Cupertino, California, is the only computer maker to come out in favor of the legislation.

The Electronics Industries Alliance and computer makers in California said imposing the fee on out-of-state companies would violate the commerce clause of the U.S. Constitution. They said they are worried that companies that sell via the Internet, such as Austin, Texas-based Dell Computer Corp., the world's second- largest PC maker, would sue for exemption from the fee or simply not bother to collect it.

``The whole language is untested, and I'm not sure if it would really work,'' said David Isaacs, Hewlett-Packard's director of public policy.

The lawmaker who wrote the bill, Senator Byron Sher, a Democrat from Silicon Valley, included a provision that revokes the fee program entirely if a company outside the state such as Dell sues and wins an exemption.

Dell spokesman Bryant Hilton said the company anticipates it will have to pay the fee. The company opposes the bill because a national solution is better and the fee is arbitrary, he said.

``If we end up with every state approaching this differently, that's not a solution,'' Hilton said. ``Who is to say years from now that it will cost $10 to recycle a monitor? Why $10? We think a market solution would continue to drive that cost down. It might cost more, or over time it might cost less.''

The computer and TV makers have argued that consumers should pay when they are ready to recycle the machines, instead of up front. They are working with U.S. Congressman Mike Thompson of California on federal legislation for a nationwide recycling fee.

``No two states are going to be the same. It's confusing to the consumer, it's confusing to us,'' said Frank Marella, manager of corporate environmental affairs at Sharp Electronics Corp. ``It's just impossible to really work and create an efficient system state by state.''