BILL ANALYSIS                                                                                                                                                                                                    


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                                 THIRD READING

          Bill No:  SB 55
          Author:   Corbett (D)
          Amended:  5/13/09
          Vote:     21

           SENATE ENV. QUALITY COMMITTEE  :  5-2, 4/20/09
          AYES:  Simitian, Corbett, Hancock, Lowenthal, Pavley
          NOES:  Runner, Ashburn

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           SUBJECT  :    Recycling:  California redemption value  

           SOURCE  :     Author

           DIGEST  :    This bill prohibits a convenience zone recycler  
          from paying scrap value on top of the California Refund  
          Value paid to consumers.

           ANALYSIS  :    Under existing law, the California Beverage  
          Container Recycling and Litter Reduction Act (Act), every  
          beverage container sold or offered for sale in this state  
          is required to have a minimum refund value.  A distributor  
          is required to pay a redemption payment for every beverage  
          container sold or offered for sale in the state to the  
          Department of Conservation (DOC) and the department is  
          required to deposit those amounts in the California  
          Beverage Container Recycling Fund.  The money in the fund  
          is continuously appropriated to DOC for the payment of  


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          refund values and processing fees.  A violation of the act  
          is a crime.  Existing law requires DOC to adopt guidelines  
          and methods for paying handling fees to supermarket sites.   
          To ensure that handling fees paid to the supermarket site  
          are not used for the purpose of engaging in unfair and  
          predatory pricing, existing law requires an audit upon  
          certain complaints filed with DOC and sets forth a  
          procedure for handling the audit.

          This bill revises the auditing procedure and revises the  
          definition of "unfair and predatory pricing."

          Existing law requires DOC to convene an informal hearing if  
          the director of the department determines there is probable  
          cause that a supermarket site has engaged in unfair and  
          predatory pricing.  Existing law allows the respondent to  
          rebut the presumption of unfair and predatory pricing by  
          demonstrating specified facts to the director.

          This bill eliminates this opportunity to rebut the  
          presumption of unfair predatory pricing. 

          Existing law prohibits a supermarket site from receiving  
          handling fees for a period of six months to five years,  
          depending on certain criteria, if the director determines  
          that a supermarket site has engaged in unfair and predatory  

          This bill decreases the period of time that a supermarket  
          site is ineligible to receive handling fees to a period of  
          two months to three years, depending on certain criteria,  
          if the director determines that the supermarket site has  
          engaged in unfair and predatory pricing.

          Existing law establishes the amount that a beverage  
          distributor shall pay DOC for each beverage container sold  
          or offered for sale in this state.

          This bill prohibits a certified recycling center that  
          receives handling fees from paying scrap value for redeemed  
          beverage containers and instead would require the recycling  
          center to pay only the refund value established in statute  
          for each type of beverage container.


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          According to the author's office, California's successful  
          Bottle and Can Recycling Law has reached historic rates of  
          recycling.  Containers covered in this program are recycled  
          at almost 70 percent.

          Since 1988, Californians have recycled more than 10 million  
          tons of aluminum, glass and plastic beverage containers.   
          No other recycling program or policy in this state has  
          resulted in higher recycling levels, and no program of its  
          kind in the county has been found to be more cost  
          effective.  California's recycling industry is comprised of  
          5,300 establishments, 85,000 jobs, generates $4 billion in  
          salaries and wages, and produces $10 billion worth of goods  
          and services annually.

          Consumes have three options to ensure their containers are  
          recycled.  One option is a municipal recycling program that  
          collects recyclables at ones curb.  If consumer wishes to  
          redeem their California Refund Value (CRV) deposit, they  
          can either take their containers back to a local  
          convenience zone recycler typically based in a parking lot  
          of a grocery store or to a traditional recycler that has  
          its own site and recycles a wide range of products.

          Convenience zone recyclers receive a handling fee for  
          collecting beverage containers.  Handling fees are used to  
          create more opportunities for consumers to redeem their  
          containers.  In 2006, AB 3056 (Assembly Natural Resources  
          Committee), Chapter 907, Statutes of 2006, was signed into  
          law removing any cap to the amount of handling fees paid to  
          one site, any minimum number of containers a site must  
          redeem to receive handling fees, and reduced of the  
          handling fees paid per container.

          This bill protects a competitive market place between  
          convenience zone recyclers and traditional recyclers.

          This bill prohibits convenience zone recyclers who receive  
          handling fees from paying a scrap value on top of the CRV  
          to consumers thereby reducing the viability of convenience  
          zone recyclers that do not pay that scrap value or  
          traditional recyclers who do not receive a handling fee.


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          Any recycler that violates this provision will risk having  
          their handling fees suspended by the Department of  

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  Yes

           SUPPORT  :   (Verified  5/12/09)

          Allan Company
          Californians Against Waste
          Institute of Scrap Recycling Industries
          Tomra Pacific, Inc.

          TSM:cm  5/14/09   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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