BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Tom Torlakson, Chairman
2058 (Levine)
Hearing Date: 8/4/08 Amended: 6/30/08
Consultant: Miriam Barcellona IngenitoPolicy Vote: EQ 5-2
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AB 2058 (Levine)
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BILL SUMMARY: AB 2058 would, starting July 1, 2011, prohibit a
store from providing plastic carryout bags to customers unless
the store (1) demonstrates an increased diversion rate, as
defined, of 70 percent in the total number of plastic carryout
bags provided by the store during a specified period, or (2)
charges the customer at least 25 cents per plastic bag. AB 2058
would specify that revenues from the plastic bag fee would be
used by the store for plastic carryout bag recycling, cleanup,
and waste reduction programs, and 3 percent of the monies would
be deposited into the Integrated Waste Management Account for
use by the Integrated Waste Management Board (IWMB) for the
administration and enforcement of the provisions of this law.
AB 2058 would repeal a sunset date of January 1, 2013.
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Fiscal Impact (in thousands)
Major Provisions 2008-09 2009-10 2010-11 Fund
IWMB implementation $1,536 $1,505 $1,505 Special*
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*Integrated Waste Management Account, partially offset by new
fees established in the bill.
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Under existing law, supermarkets and drug stores are required to
establish a plastic bag recycling program. Additionally, state
law preempts local governments from enacting fees on plastic bag
use. This law contains a July 1, 2007 operative date and a
sunset date of January 1, 2013.
AB 2058 would strike the state preemption and would therefore
allow local agencies to impose fees for plastic carryout bags,
and strike the operative and sunset dates.
Starting July 1, 2011, a store, as defined, would be prohibited
form providing a plastic carryout bag to a customer unless the
store demonstrates to IWMB that a 70 percent plastic carryout
bag diversion rate has been achieved for specified periods. If a
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AB 2058 (Levine)
store fails to comply with this requirement, the store may
provide a plastic carryout bag to customers only if the store
charges the customers not less than 25 cents per bag.
Any store charging customers for plastic bags would be required
to demonstrate that revenue collected, less the cost of the
plastic carryout bags, the 3 percent submitted to IWMB, and a
"reasonable financial return," will be used by a store to
implement plastic bag litter reduction, plastic bag cleanup,
plastic bag waste reduction, and plastic bag recycling
activities. Staff notes that a "reasonable financial return" is
not defined.
IWMB would be required to administer and enforce the plastic
carryout bag requirements. As noted above, stores that collect
the fee for these bags must pay 3 percent of revenues collected
from the fees to IWMB, to be deposited into the Integrated Waste
Management Account for expenditure upon appropriation by the
Legislature for the purposes of administering and enforcing the
requirements of AB 2058.
IWMB estimates it would require 16 additional position-years to
develop regulations, provide assistance to regulated stores and
evaluate effective overall program implementation.
Additionally, IWMB estimates it would review between 1,000 and
10,000 annual reports, complete data entry into the programs
tracking database and prepare necessary documents for each
year's reporting cycle. Database development and random audits
would also be included in IWMB's workload. Total costs
associated with implementing AB 2058 would be about $1.5 million
annually, including the first year because there would be a need
to acquire new equipment.
The existing tipping fee was set in statute in 1995-96 at $1.34
per ton and IWMB was given the authority to increase that fee to
$1.40. The $1.40 per ton fee will generate an estimated $58
million in 2008-09 to support the IWMB's core functions in
managing solid waste. Staff notes that projected expenditures
from the Integrated Waste Management Account will exceed
revenues by about $3.1 million in 2008-09 and DOF is projecting
that the IWMA fund balance will be exhausted by 2010-11. Staff
notes that if the 1995-1996 fee was adjusted for inflation based
on the Gross Domestic Price deflator for state and local
governments (the price deflator for purchases of goods and
services by state and local governments), the fee should be set
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AB 2058 (Levine)
at $2.13. Staff recommends increasing the tipping fee, which is
used to support the activities of the IWMB and some of the
activities at the State Water Resources Control Board, for
inflation.