BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 402
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          Date of Hearing:   September 11, 2009

                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES
                                Nancy Skinner, Chair
                    SB 402 (Wolk) - As Amended:  September 4, 2009

           SENATE VOTE  :   Vote not relevant
           
          SUBJECT  :   Recycling: beverage containers: redemption payments.

           SUMMARY  :    This bill addresses the insolvency in the Bottle  
          Bill by expanding the program, closing the loophole for large  
          juice containers, moving the threshold for the 10 cent CRV from  
          24 ounces to 20 ounces, accelerating the CRV payment to the  
          Department of Conservation (DOC) from 90 to 60 days.  This bill  
          also authorizes DOC to reduce the number of unserved  
          supermarket-based recycling centers.  

           EXISTING LAW  , pursuant to the California Beverage Container  
          Recycling and Litter Reduction Act (Bottle Bill):  

          1)Requires every beverage container, as defined, sold or offered  
            for sale in this state to have a minimum refund value and  
            requires a distributor to pay a redemption payment for every  
            beverage container sold or offered for sale in the state to  
            DOC, which 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.

          2)Defines "beverage" to include, among other things, soda, 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.  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 container.

          3)Requires DOC to establish reporting periods of six months each  
            for redemption rates and recycling rates for beverage  
            containers and requires them to determine and report the  
            redemption rates and recycling rates for those beverage  








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            containers for each reporting period.
           
          THIS BILL  :
           
           1) States legislative intent that projects under contract with  
             DOC be fully completed for the $35 million in market  
             development grants awarded during the 2008/2009 fiscal year  
             for which partial or complete encumbrance of funds has taken  
             place by September 1, 2009. 

          2) Regarding the definition of "beverage" effective April 1,  
             2010:

             a)    Redefines the term "beverage" to include vegetable,  
                nut, grain, or soy drinks; 
             b)    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; and
             c)    Exempts beverages in a flexible foil, plastic pouch, or  
                aseptic container that hold than 7 fluid ounces or less. 

          3) Adds a definition of "paper beverage container" that means a  
             paperboard carton, gable-top, aseptic, poly-coated  
             paperboard, or other beverage container made primarily of  
             paper.

          4) Adds a definition of "unserved convenience zone" to mean a  
             convenience zone where this is not an operating certified  
             recycling center or other locations that meet the  
             requirements of the Act.

          5) Changes the threshold for the 10 cent CRV payment paid by the  
             distributor and the refund value from containers that hold 20  
             ounces or more.

          6) Requires beverage distributors to make the CRV payment no  
             later than the last day of the 2nd month following the sale  
             of the beverages instead of the 3rd month. 

          7) Establishes, for calendar years 2010 and 2011, the processing  
             payment for paper beverage containers at $135 per ton and the  
             processing fee equivalent to 35% of $135 per ton. 

          8)  Increases the amount for grants funds to certified community  








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             conservation corps for beverage container litter reduction  
             programs and recycling programs from $15 million to $19  
             million.

          9) Suspend, for the 2009-10 fiscal year, expenditures for grants  
             for beverage container recycling and litter reduction  
             programs and a statewide public education and information  
             campaign aimed at promoting increased recycling of beverage  
             containers. 

          10) Prohibits DOC from reducing expenditures for handling fees  
             and conservation corps grants for the 2009-10 and 2010-11  
             fiscal years. 

          11)Provides assistance and incentives to reduce the number of  
             zones not serviced by a certified recycling center.  

           12)Deletes obsolete provisions and make conforming changes.  

          FISCAL EFFECT  :  Unknown 

           COMMENTS  :  

           1)Purpose of the bill  :  According to the author, current law  
            provides consumers with a recycling incentive of 5 cents on  
            most beverage containers (10 cents on containers 24 ounces and  
            larger. Over the last two decades, this program has stimulated  
            recycling levels in the 60-80 percent range. However, as a  
            result of increased recycling and general fund loans, there  
            are insufficient funds available in the Beverage Container  
            Recycling Fund to pay ongoing costs of the recycling  
            infrastructure. This bill contains provision to rectify those  
            issues.

          AB 983 intends to balance program funding and expenditures by:

             a)   Suspending and/or eliminating outdated/unnecessary  
               program expenditures;

             b)   Closing container exemption loopholes; increasing  
               recycling incentives on higher cost/larger containers; and,

             c)   Accelerating the timeframe for beverage distributor CRV  
               payments.  









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           2)Amendments  .  Several amendments are needed to clarify intent  
            of several provisions, to adjust funding, and to ensure  
            effective implementation.  Those include:

             a)   Temporarily lock in processing payments and fees for  
               glass.

             b)   Providing assurance to recyclers that they will not be  
               penalized if they can not find markets for the new  
               paperboard containers.

             c)   Including language for a retroactive provision requiring  
               DOC to reimburse costs of the proportional reduction on  
               January 1, 2010.  

             d)   Removing the proportional reduction exemption for the  
               convenience zone recyclers.

             e)   Removing a provision relating to DOC's administrative  
               funding. 

             f)   Extending the implementation date for the new container  
               types two months, from April 1 to July 1, 2010.  

             g)    Clarifying funding for the conservation corps and  
               protecting the one-time augmentation of $8.25 million  
               provided in this year's Budget Act from a proportional  
               reduction.

             h)   Clarifying that distributors are not required to remit  
               the CRV to the DOC if they have not yet received the  
               payment.  

             i)   Clarifying that $20 million in unencumbered funds  
               currently held by the DOC may be expended to close the  
               shortfall.  

             j)   Adjust funding in various market development programs to  
               maximize market development efficiencies and effectiveness.  
                

           











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          REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          Anheuser-Busch Companies, Inc.
          California Bottled Water Association
          CalCoast
          California Refuse Recycling Council
          California Small Brewers Association
          California State Association of Counties
          Crown Imports
          Cities of Napa and San Jose 
          ECO2 Plastic, Inc.
          Ecoplast
          Heineken USA
          League of California Cities
          Merlin Plastics
          Miller Coors
          NexCycle
          Peninsula Packaging Co.
          Peninsual Plastics Recycling, Inc.
          Regional Council of Rural Counties
          SF Environment
          Strategic Material, Inc.
          Talco Plastic, Inc.
          Tri-City Economic Development Corporation
          Urban Counties Caucus
          UrbanOre
          Waste Management, Inc.

           Opposition 
           
          California League of Food Processors

           Analysis Prepared by  :  Elizabeth MacMillan / NAT. RES. / (916)  
          319-2092