There are times when an industry faces a watershed moment that will forever alter its trajectory. While these moments often emerge only in hindsight, sometimes the implications are clear from the outset. The flooring industry in California is facing one of these watershed moments now, and the threat to the future of our industry could not be more clear.

California Assembly Bill 863 was introduced in 2023 to address relatively minor issues in the long-standing and successful California Carpet Stewardship Program. It had been inactive for months, but recently the original bill was gutted and radically amended.  

Under the amended AB 863, the current carpet program is terminated and replaced with an expanded flooring recycling program covering carpet, carpet tile, carpet cushion, and resilient flooring (defined by the bill as luxury vinyl tile, vinyl composite tile, sheet vinyl, linoleum, cork, and rubber). The bill also eliminates the consumer fee that funds the carpet program, instead requiring direct producer funding of the bill’s expansive program requirements.

Since the carpet program’s inception in 2011, the carpet manufacturing industry, through its stewardship organization the Carpet America Recovery Effort (CARE), has increased the California carpet recycling rate from 4% to 41% (although the cost has contributed to a 50% drop in California carpet sales over that time). The carpet program’s recycling rate now rivals California’s statewide recycling rate, and by any objective measure this must be viewed as a successful program.  

Why kill a program with a proven track record of success?  

The reality of this watershed moment is that AB 863 will kill a successful carpet program and much more besides. Implementation and compliance will be extremely difficult and costly, to the tune of many years and many hundreds of millions of dollars. This will result in significantly increased flooring prices and steadily declining sales for all covered products.  

Worse yet, the true cost impacts of AB 863 are unknown. The bill allows for many of its most aggressive compliance requirements to be determined by the state through regulations that won’t be written for several years. Here's what we know for now:

• AB 863 calls for at least five public collection sites per county, or one site for every 10,000 people, whichever is greater. This means producers will have to establish an estimated 800 to 1,000 state approved collection sites across California that will accept all covered products. For some perspective, after 12 years of intense effort, the current carpet program has established 350 collection sites (public and private) that accept carpet only.  All covered product collection at these new sites must be free to the public and the costs incurred must be directly funded by the producers.

• Mandatory collection and sorting will be required for all covered products under AB 863.   This means any covered product removed from any floor by anyone anywhere in California may only be taken to one of these approved collection sites for sorting – every single pound of every single product. Try to imagine the impact this will have on installation efforts across the state. Imagine the impact on the collection sites themselves, many of whom are carpet dealers in the current program, which will suddenly be flooded with multiple discarded flooring products to sort and process.  

• Recycling rate requirements for covered products are not listed in the bill; they will be determined by the state through the regulation process. The true compliance burden and associated costs of adhering to the primary requirements of the bill will not be known for several years.

• AB 863 introduces extensive product design requirements for all covered products.   Standardized back-stamping, minimum recycled content percentages (50% post-consumer content by 2035), and product “performance standards” are included but largely undefined in the bill. It is reasonable to expect many popular products may no longer qualify to be sold in California when these requirements are finally codified by the state via regulations.

These requirements present a draconian and unjustifiable compliance burden on our industry that will cost California flooring consumers the favorable product selection, affordability, and performance they have every right to expect from us. This will have a devastating effect on every flooring business operating in California.  

Given the inflationary and interest rate pressures being felt across the entire housing segment, flooring businesses and consumers in California can hardly afford an ill-conceived, hastily pursued, and prohibitively costly recycling program as contemplated in AB 863.  

The California flooring industry cannot afford to stay on the sidelines in this watershed moment. AB 863 is a point of no return for the flooring industry as we know it.