BILL ANALYSIS
SB 55
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Date of Hearing: August 19, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 55 (Corbett) - As Amended: May 20, 2009
Policy Committee: Natural
ResourcesVote:9-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill deletes the definition of redemption rate and removes
the requirement that the Department of Conservation (DOC)
periodically calculate and report the redemption rate for
various types of beverage containers as part of its beverage
container recycling program.
FISCAL EFFECT
Negligible costs.
COMMENTS
1)Rationale. According to the author, the requirement that DOC
calculate and report on redemption rates is a holdover related
to now defunct aspects of the beverage container recycling
program. The author contends the provisions creating the
requirement are obsolete and confuse the public and interested
parties who monitor the program's activity.
2)Background. The DOC's Division of Recycling (DOR) administers
the Beverage Container Recycling Program, commonly referred to
as the Bottle Bill program. This program was created 20 years
ago by Chapter 1290, Statutes of 1986 (AB 2020, Margolin). The
program encourages the voluntary recycling of most beverage
containers by guaranteeing a minimum payment (California
Redemption Value [CRV]) for each container returned to
certified recyclers. Beverages are subject to the CRV (and the
flow of payments under the program, discussed below) based on
the content of the container, not the container material.
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Funding for the program flows through the Beverage Container
Recycling Fund, which DOR administers. The program involves
the flow of beverage containers and payments between several
sets of parties, and generally operates as follows:
a) Distributors and Retailers . For each beverage container
subject to the CRV that they sell to retailers,
distributors make redemption payments that are deposited
into the recycling fund. The cost to distributors of the
redemption payments is typically passed on to retailers.
b) Retailers and Consumers. Beverage retailers sell
beverages directly to consumers, collecting the CRV from
consumers for each applicable beverage container sold.
c) Consumers and Recyclers. Consumers redeem empty
recyclable beverage containers with recyclers, from whom
they recoup the cost of the CRV they paid at the time of
purchase.
d) Recyclers/Processors and Manufacturers . Recyclers sell
the recyclable materials to processors in exchange for the
scrap value of the material and for the CRV. Processors,
who are reimbursed from the recycling fund for these CRV
pass-throughs, then collect, sort, clean, and consolidate
the recyclable materials and sell them to container
manufacturers or other end users who make new bottles,
cans, and other products from these materials.
In establishing the Bottle Bill program, the Legislature set a
statutory recycling goal of 80 percent. DOC is required to
determine and report on beverage container redemption and
recycling rates every six months. Recently, the recycling
rate topped 75 percent.
3)Recycling Rate, Not Redemption Rate, Is the Measure of
Program's Success. To calculate the redemption rate, DOC,
pursuant to existing law, considers containers subject to the
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Bottle Bill that have been returned for recycling, as well as
containers not subject to the Bottle Bill program that have
been returned for recycling. In contrast, DOC calculates the
recycling rate by considering only beverage containers subject
to the Bottle Bill that have been returned for recycling. In
this way, the recycling rate is an accurate measure of Bottle
Bill activity, whereas the redemption rate is not.
Previously, the Bottle Bill program included automatic
increases in the CRV payout triggered by redemption rates. The
goal of the redemption rate trigger was to encourage beverage
container manufactures, who also functioned as monopoly food
and beverage container recyclers, to recycle containers not
subject to the CRV. Since the Bottle Bill program began, the
beverage container recycling industry has diversified, and the
redemption-rate triggers are no longer needed. Accordingly,
there is no longer a programmatic justification for DOC to
calculate redemption rates.
4)Support . The Sierra Club is the only registered support for
the current version of the bill. There is no registered
opposition.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081