Equipment Leasing and Finance Association - Equiping Business for Success

Electronic Recycling

Issue Overview

Electronic recycling legislation can be grouped into two broad categories: (1) legislation imposing an Advanced Recovery Fee, and (2) legislation imposing Extended Producer Responsibility, at times referred to as “manufacturer responsibility.”

ELFA supports a producer responsibility approach to electronic recycling that is funded by manufacturers remitting fees to the state because this concept accommodates the commercial leasing sector. All states except California have taken a producer responsibility approach but the manner in which it is done varies widely between the states. ELFA opposes advanced recovery fees due to the difficulty lessors face in collecting the fee. These proposals placing fees directly on customers duplicate a California consumer program for household products never meant to involve business-to-business equipment lease financing.

Advanced Recovery Fees

California remains the only state to adopt an Advanced Recovery Fee (ARF) to finance electronic recycling by imposing a fee on the purchase or lease of new electronic devices. ARF model electronic recycling legislation is opposed by the Equipment Leasing and Finance Association (ELFA) due to the difficulties that have arisen in California for lessors attempting to properly collect the recycling fees. ELFA has engaged ARF model legislation across the U.S.

Equipment lessors are not “retailers,” as the term is used by proponents of placing fees directly on customers. Most noticeably, lessors do not have physical possession of equipment prior to a lease and must often rely on equipment descriptions and information contained in vendor invoices. This makes it challenging at best and impossible on occasion to reach an informed decision on what equipment is subject to the fee, especially without a “leasing vendor provision” recognizing the relationship between a financing source and vendors. Leasing also poses issues different from Internet sales that can escape these retail fees.

California has adopted a three-tier fee system based on the viewable diagonal screen size of the covered equipment sold or leased. This has resulted in lessors providing funding for an acquisition, who have never seen the equipment in question, suddenly forced to determine which fee to collect based on the physical characteristics of a machine they never had in their direct possession. Fee collection based on physical characteristics, which burdensome to standard retail sellers, creates even more unique difficulties for equipment leasing and finance companies.

Extended Producer Responsibility

All other states that have passed electronic recycling legislation instituted a form of Extended Producer Responsibility (EPR) in which responsibility for funding recycling is imposed upon the producer, typically through an apportioned share of the yearly cost of electronics recycling within the state attributed to each manufacturer. Electronic recycling laws initially tended to cover televisions, computer monitors, computers, computer peripherals, or some combination of the four.  However, one state after another has expanded covered products to keep pace with the ever growing variety of electronic equipment.

The patchwork of producer responsibility laws being enacted is beginning to raise concerns, especially as states contemplate clauses requiring sellers and lessors of covered electronics to provide specific information at the point of sale concerning where and how to recycle electronics. This would create enormous difficulties for lessors unlikely to have access to local information on equipment collection and recycling opportunities, especially in situations where equipment is intended for delivery or use in multiple locations.

ELFA has also expressed its concern that a requirement to supply recycling information when entering into a lease agreement can be both difficult and counterproductive; there is no true "point -of-sale" as described in many examples, and the provision of information on recycling opportunities in a lease agreement could result in a lessee incorrectly disposing of equipment that is still the property of the lessor.

Resources & Advocacy Materials

ELFA General Resources


Legislative Testimony


Requests for Guidance


External Resources


For more general information on electronic recycling, visit one of the sites below: