BILL ANALYSIS                                                                                                                                                                                                    
                                                                  AB 87
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          Date of Hearing:   May 6, 2009
                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair
                     AB 87 (Davis) - As Amended:  April 27, 2009 
          Policy Committee:                              Natural  
          ResourcesVote:6-3
          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No
           SUMMARY  
          This bill restricts grocery and convenience stores from  
          providing single-use carry out bags to their customers.  
          Specifically, this bill:
          1)As of July 1, 2010, prohibits grocery and convenience stores  
            and pharmacies, as defined, from providing single-use carryout  
            bags, to customers without charging a sales tax-free fee of 25  
            cents per bag (the Bag Pollution Cleanup Fee).
          2)Exempts from the fee customers participating in certain  
            low-income assistance programs.
          3)Allows stores charging the fee to retain a portion of the  
            amount generated by the fee to pay for implementation of the  
            requirements of the bill, including educational programs and  
            donation of reusable bags to community groups, nonprofits, and  
            similar entities.
          4)Creates the Bag Pollution Fund, available for annual  
            legislative appropriation to the Integrated Waste Management  
            Board for state programs for litter cleanup and source  
            reduction and for grants to cities and counties for those same  
            purposes. 
           FISCAL EFFECT  
          1)One-time costs, about $300,000 in 2010-11, to the board to  
            establish the program required by this bill. (IWMA.) 
          2)About $600,000 ongoing annually, starting in 2012-13, to  
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            enforce these provisions. (IWMA.)
          3)Ongoing annual costs in the range of several hundreds of  
            thousands of dollars to the Board of Equalization (BOE),  
            starting in 2009-10, for collection of the bag fee.  These  
            costs would be covered by the portion of the bag fee set aside  
            in the bill for BOE. 
          4)Unknown, potentially significant proceeds from the fee,  
            perhaps in the millions of dollars annually, to the Bag  
            Pollution Fund.
          5)Unknown, potentially significant private proceeds, perhaps in  
            the millions of dollars annually, for the stores that collect  
            the fee and retain a portion to cover their costs of  
            implementing this provision.
           COMMENTS
           
           1)Rationale.   The author contends the volume of plastic bags  
            distributed to customers by grocery and convenience stores and  
            pharmacies needs to be reduced significantly to reduce the  
            volume of plastic bags that enter landfills and are disposed  
            of illegally as litter or marine debris. The author notes that  
            California uses over 19 billion plastic bags a year but  
            recycles less than five percent of those bags. The author also  
            cites significant costs associated with disposing of plastic  
            bags in landfills and cleaning up litter.  The bill is  
            supported by many municipal governments and a wide variety of  
            environmental and conservation groups.
                
            Opponents  claim that the fee imposed by this bill is actually  
            a tax because the burden will be disproportionably borne by  
            one group of individuals-customers of certain retail  
            stores-rather than proportionally by all individuals who  
            contribute to plastic bag litter. 
           2)Related Legislation.  
              a)   AB 68 (Brownley), similar to this bill, would place a  
               25-cent fee on single-use carryout bags.  AB 68 won passage  
               in Natural Resources Committee on a vote of 6-3.
             b)   AB 2058 (Levine) would have prohibited the free  
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               dispensing of carryout plastic bags by a store to its  
               customers, unless the store can demonstrate to the  
               California Integrated Waste Management Board (CIWMB) that  
               35% and 70% of the plastic bags it dispensed in 2007 have  
               been diverted from the waste stream by July 1, 2011 and  
               July 1, 2012, respectively.  Assembly Appropriations  
               identified approximate one-time costs of $600,000 and  
               approximate ongoing costs of $600,000 associated with this  
               bill, and noted the potential for the fee required by the  
               bill to raise millions of dollars.  AB 2058 died in Senate  
               Appropriations.
             c)   AB 2449 (Levine) - Chapter 845, Statutes of 2006  
               requires supermarkets and drug stores to establish plastic  
               bag recycling programs.  AB 2449 also pre-empted local  
               governments from enacting fees on plastic bag use.
           
          3)Bag Fee.   This bill requires stores to charge consumers a  
            25-cent fee per bag on all carryout bags.  While such a fee  
            could generate substantial revenue statewide if consumers  
            continue to use carryout bags unabated, it is likely that many  
            consumers will bring reusable bags instead of paying the fee.  
             
            This fee would be charged and collected by stores and then  
            used by those same stores to cover their own carryout bag  
            costs, including public service announcements and reusable bag  
            donations.  In any case, until January 1, 2013, a store may  
            not retain more than five cents for each single-use carryout  
            bag and ten cents for each green carryout bag, which the bill  
            defines as a nonreusable bag having specified amounts of  
            postconsumer content and having certain compostable  
            characteristics. After January 1, 2013, the board will  
            determine what amount of fee proceeds, if any, may be retained  
            by stores. 
            Any proceeds remaining will be transferred to the Bag  
            Pollution Fund for local plastic bag reduction, cleanup, waste  
            reduction and recycling efforts, upon appropriation.
           Analysis Prepared by  :    Jay Dickenson / APPR. / (916) 319-2081