Chris Bray writes for the Federalist about a key beneficiary of a new California regulation.
[C]ompanies that make or distribute any form of textiles in California are required to start making payments this year to a nongovernmental organization (NGO) that has been designated by the state as the official “producer responsibility organization” (PRO), which will develop a statewide textile recycling plan. Under the terms of the Responsible Textile Recovery Act of 2024, mandatory payments to the NGO in 2026 start at $1,000, then shift to an “eco-modulated” future sum that has yet to be determined. …
… To see how all of that works in practice, read the extraordinary proposal submitted to the state by a very new nonprofit corporation called Landbell USA. …
… First paragraph: Remember that every company subject to the new regulatory requirements owes a mandatory $1,000 payment this year, so “35,000-40,000” companies making payments to the PRO implies $35 million to $40 million in first-year revenue, backed by steep penalties for noncompliance. (On page 133, Landbell USA predicts that initial noncompliance will limit revenue for the first two years to a little under $20 million.)
Second paragraph: Preliminary staffing will require the hiring of senior managers, after which “an organization can be formed underneath these three leaders.”
So Landbell USA secured mandatory payments totaling tens of millions of dollars a year as its corporate revenue, then promised to hire some people and form the organization.
It gets more complicated from there.
The Landbell Group is a for-profit German corporation that formed Landbell USA to compete for the California PRO designation. California’s textile recycling law requires that the state’s designated PRO be a nonprofit corporation, which the Landbell Group is not, so the German Landbell couldn’t just compete for the California role; it had to form a new entity. The creation of the new U.S.-based nonprofit happened in a rush. And it’s still not entirely clear just how much Landbell USA, the nonprofit corporation that promised in its application to one day hire some people, exists.
