BILL ANALYSIS
SB 55
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: SB 55
AUTHOR: Corbett
AMENDED: As Introduced
FISCAL: Yes HEARING DATE: April 20, 2009
URGENCY: No CONSULTANT: Caroll
Mortensen
SUBJECT : CALIFORNIA CONTAINER RECYCLING AND LITTER
REDUCTION ACT
SUMMARY :
Existing law , under the California Beverage Container
Recycling and Litter Reduction Act (Act) (Public Resources
Code Section 14500, et al.):
1) Requires every beverage container, as defined, sold or
offered for sale in this state to have a minimum refund
value.
2) Requires a distributor to pay a redemption payment for
every beverage container sold or offered for sale in the
state to the Department of Conservation (DOC) and DOC is
required to deposit those amounts in the California
Beverage Container Recycling Fund (fund). The money in the
fund is continuously appropriated to DOC for the payment of
refund values and processing fees.
3) Defines "beverage' to include, among other things, beer and
other malt beverages, wine and distilled spirit coolers,
carbonated mineral and soda waters, noncarbonated fruit
drinks, and vegetable juices, in liquid form that are
intended for human consumption.
4) Excludes from the definition of 'beverage', among other
things, vegetable drinks in beverage containers of more
than 16 ounces, milk, medical food, and any product sold in
a container that is not an aluminum beverage container, a
glass container, a plastic beverage container, or a bimetal
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container.
5) Defines "Beverage manufacturer" as any person who bottles,
cans, or otherwise fills beverage containers, or imports
filled beverage containers, for sale to distributors,
dealers, or consumers.
6) Defines "Processor" as any person, including a scrap
dealer, certified by the department who purchases empty
aluminum beverage containers, bimetal beverage containers,
glass beverage containers, plastic beverage containers, or
any other beverage containers, including any one or more of
those beverage containers, which have a refund value
established pursuant to this division, from recycling
centers in this state for recycling, or, if the container
is not recyclable, not for recycling, and who cancels, or
who certifies to the department in a form prescribed by the
department the cancellation of, the refund value of these
empty beverage containers by processing empty beverage
containers, in any manner which the department may
prescribe. However, the department shall not take any
action regulating scrap dealers or recycling centers who
are processors or recycling centers unless authorized by
and pursuant to the goals of Act.
7) Defines "Recycler" as a recycling center, dropoff or
collection program, or curbside program.
8) Requires DOC to calculate a processing fee and a processing
payment for each beverage container with a specified scrap
value. The processing fee is required to be paid by
beverage manufacturers for each beverage container sold or
transferred to a dealer.
9) Requires DOC to establish reporting periods of six months
each for redemption rates and recycling rates for beverage
containers and requires them to determine the redemption
rates and recycling rates for those beverage containers for
each reporting period and to issue a report on those
determinations.
10) Authorizes funding for specified purposes to
increase beverage container recycling (see
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http://www.consrv.ca.gov/DOR/gpi/webcon.pdf or page 7 for
California Beverage Container Recycling and Litter
Reduction Act flow chart).
This bill :
1) Redefines the term "beverage" to include vegetable, nut,
grain, or soy drinks.
2) Deletes the exclusion from the term "beverage," for a
product that is not sold in aluminum, glass, plastic, or
bimetal container, thus including aseptic and paperboard
type beverage containers that hold more than 7 fluid
ounces.
3) Adds a definition of "product manufacturer".
4) Increases processing fees for container types with low
recycling rates (e.g. from 45% to less than 30%).
5) Adds a provision to require DOC to establish a supplemental
processing payment that would be paid to a processor that
would be passed to the recycler for glass as well as PET
and HDPE plastic containers.
6) Deletes the provisions that require DOC to establish
reporting periods for redemption rates and that require
them to determine redemption rates for specified types of
beverage containers and deletes the definition of
redemption rate.
7) Increases the amount available for grants for litter
reduction and recycling programs to community conservation
corps as described from $15 million to $17.5 million
annually.
8) Increases the total amount available for payments cities
and counties for litter reduction and recycling programs
from $10.5 million to $15 million annually; increases the
payments from $5000 to $7500 for cities and from $10,000 to
$15,000 for counties.
9) Adds to the list of eligible projects under the grants to
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support market development efforts,
a) Projects that upgrade or retrofit existing beverage
container recycling and processing facilities
b) Construction of new facilities that process or
recycled beverage containers, including aseptic
containers.
c) Payments to California manufacturers that utilize
material from the new containers proposed to be added
through this bill.
10) Deletes obsolete provisions.
11) Makes conforming changes to other definitions, for
purposes of the Act.
12)Makes extensive findings and declarations related to
recycling.
COMMENTS :
1) Purpose of Bill . According to the author, this bill would
expand the Beverage Container Recycling Program to cover
beverages it currently covers regardless of size or
container types with few exceptions. Currently, glass,
metal and plastic beverage containers are the only
container types in the program. This bill will put other
container types in the program, such as paper. It will
also reform the market development grant program to help
aseptic containers be recycled and create green jobs. In
addition, the bill provides assistance to our local
conservation corps, recyclers and local government
recycling programs
2) New Containers: Aseptic and Paper Containers . This bill
proposes to add a new packaging group to the Act commonly
known as "aseptic containers". These are composite,
layered containers that are mainly paper with plastic and a
small amount of aluminum. The containers are light weight
and have the benefit of keeping the contents fresh without
the refrigeration. There are also similar paperboard
containers that are layered with paper and plastic, wax or
other impermeable material and have a folded or
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'gable-topped" appearance. They are used to contain a wide
array of products. However, for the purposes of this bill
and the Act, containers containing soy, nut, grain and
vegetable beverages would be included. The bill would not
include the small 'juice boxes' that are popular with
children as most of those contain less than 7 ounces. It
is estimated that there are approximately 225 million and
350 million aseptic containers sold in California, however
this includes the small "juice boxes" that are proposed as
part of the expansion in this measure. Those boxes are a
large share of the market, thus a conservative estimate
might be approximately 50-60 million containers that would
be subject to the Act. The litter issues with these
containers are not well documented, especially for the
larger container sizes.
These containers can pose a recycling challenge in that
there are not currently many recycling opportunities.
However, as with other materials types that have been added
to the Act through the years, the purpose is to develop
recycling technologies and markets for those materials, or
switch to containers that are recyclable.
3) Processing Fees . This bill proposes increasing processing
fees for containers with low recycling rates to cover costs
to recycle. These are fees are paid by beverage
manufacturers and are in proportion to the recycling rates
for containers. The higher the rate, the less the
processing fee paid. This bill would increase the fees for
containers that are being recycled at a rate less than 50%.
This system is designed to encourage beverage
manufacturers to increase recycling rates for the
containers that they use or switch to containers with high
recycling rates.
4) Supplemental Processing Payment . This bill proposes an
additional payment to recyclers for glass and PET
(polyethylene terephthalate or #1) and HDPE (high density
polyethylene or #2) plastic containers. These payments are
an attempt to assist the suffering commodity markets as
discussed in #6 below).
5) Redemption Rate Calculation . This bill deletes provisions
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that require DOC to calculate and report on redemption
rates. DOC is required to calculate a recycling rate the
commonly used ratio of materials recycled divided by
materials sold, which is a true indicator of program
activities. The redemption rate calculation considers
postfilled food or drink containers (not included in the
Act) returned for recycling, in addition to empty beverage
containers (included in the Act) returned for recycling.
The recycling rate calculation only considers empty
beverage containers returned for recycling. In this
respect, the redemption rate does not actually depict the
success of the Act because it includes material that is
outside of its scope.
6) The State of Recycling Markets . With the downturn in the
economy, there has been a parallel drop in the market for
recyclable materials, including materials from beverage
containers. A rapid drop in recyclable commodity prices
happened last fall. Much of what is reclaimed in
California and the nation is destined for overseas markets,
most notably China. The United States exported $22 billion
worth of recycled materials to 152 countries in 2007. Now
it is estimated the value of American recyclables has
decreased by 50 to 70 percent. Many California recyclers
and local governments are dealing with mounting stockpiles
whose value in many cases continues to sink. It has also
been reported that some importers have been demanding to
renegotiate contracts drastically downward. In some cases,
they are refusing to accept shipments they already have a
contractual obligation to take.
These market challenges effects the containers subject to
the Act and the related payments and fees related to their
handling, processing and recycling. It also points to the
vulnerability to changes in global markets as well as the
need to maintain existing and foster new recycling and
recycled content product markets in the US, especially
California. This bill will move toward addressing those
concerns by make more funds available for market
development grants, however with the uncertainty of the
fund condition (see #7 below), these expansions should be
viewed with caution.
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7) Policy Considerations . Prioritization of Expenditures:
The Act has been in place since 1986 and has gone through
many expansions with increases in the numbers and types of
projects that get funded through unredeemed beverage
container deposits. Currently in Section 14581 that
describes the allocation of unredeemed funds, there are
tens of millions of dollars outlined for recycling and
litter reduction projects that could be funded. While
these projects do assist with the overall goals and
objectives of the Act when there is money in the fund, as
has been the case for many years, it could pose a problem
in years when the fund is low. With the downturn in
recycling markets, even with the expansion proposed by the
bill, the fund is being depleted. It might be appropriate
to determine what expenditures are essential to the
implementation of the Act and prioritizing the uses of the
fund to ensure that core responsibilities are maintained.
Further Program Expansion: With the expansion proposed by
this bill the universe of beverage containers subject to
the Act is becoming more inclusive. However, there are
beverages such as milk, wine, and liquor that are excluded.
Further expansion efforts should address those beverages.
8) Related Legislation . Senator Corbett authored SB 1625 in
2008. That proposed to expand the Act to include a wide
variety of plastic containers, including non-beverage
containers. That bill was held in the Assembly Rules
Committee.
9) Amendment Needed . The bill adds a definition of "product
manufacturer" that is not necessary, that definition should
be removed.
SOURCE : Californians Against Waste
SUPPORT : California Refuse Removal Council
California State Association of Counties
City of Fremont
Sierra Club California
Tomra Pacific, Inc.
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OPPOSITION : California League of Food Processors
California Nevada Soft Drink Association
Grocery Manufacturers Association