BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1149|
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THIRD READING
Bill No: AB 1149
Author: Gordon (D) and Wieckowski (D)
Amended: 9/1/11 in Senate
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 5-0, 6/20/11
AYES: Simitian, Strickland, Hancock, Kehoe, Lowenthal
NO VOTE RECORDED: Blakeslee, Pavley
SENATE APPROPRIATIONS COMMITTEE : 6-3, 8/25/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Emmerson, Runner
ASSEMBLY FLOOR : 77-1, 6/1/11 - See last page for vote
SUBJECT : Beverage containers: recycling and litter
reduction: funds
SOURCE : Author
DIGEST : This bill extends for five years the Department
of Resources Recycling and Recoverys (CalRecycle)s plastic
market development program, which provides Bottle Bill
funds to support recyclers and manufacturers using empty
plastic beverage containers. Specifically, this bill
extends the plastic market development program and funding
authority from January 1, 2012 to January 1, 2017 and
requires CalRecycle to consider specified factors when
setting payment amounts.
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Senate Floor Amendments of 9/1/11 specify additional
funding for the plastic market development program within
the beverage container recycling program. Specifically,
the increase, based upon a specified formula and the
availability of funds, the amount available for those
payments. The amendments also strike reference to two
grant programs that are set to sunset on January 1, 2012.
ANALYSIS : Existing law authorizes funding for specified
purposes to increase beverage container recycling,
including up to $10 million annually for market development
payments for empty plastic beverage containers until
January 1, 2012. AB 1149 extends those payments for an
additional five years until January 1, 2017. The proposed
amendments
ANALYSIS :
Existing law, the Beverage Container Recycling and Litter
Reduction Act (Bottle Bill):
1. Establishes refund value and redemption payments for
beverage containers.
2. Requires a distributor to pay a redemption payment for
every beverage container sold or offered for sale in the
state to CalRecycle, which is required to deposit those
amounts in the California Beverage Container Recycling
Fund (Fund). The money in the Fund is continuously
appropriated for the payment of refund values and
processing fees.
3. Requires CalRecycle to review the status of the Fund
every three months to ensure that funds are adequate to
make expenditures according the Bottle Bill and make
specified determinations.
4. Authorizes funding for specified purposes to increase
beverage container recycling, including up to $10
million annually for market development payments for
empty plastic beverage containers until January 1, 2012.
Comments :
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The Bottle Bill is designed to provide consumers with a
financial incentive for recycling and to make recycling
convenient to consumers so that the beverage container
component of the solid waste stream will decrease. The
centerpiece of the Bottle Bill is the California Redemption
Value (CRV). Consumers pay a deposit, the CRV, on each
beverage container they purchase. Retailers collect the
CRV from consumers when they buy beverages. The dealer
retains a small percentage of the deposit for
administration and remits the remainder to the distributor,
who also retains a small portion for administration before
remitting the balance to CalRecycle. When consumers return
their empty beverage containers to a recycler (or donate
them to a curbside or other program), the deposit is paid
back as a refund.
For many years, surpluses have accumulated in the Fund as a
result of unredeemed deposits. Among other purposes, the
surplus funds have been used, per statute, to fund various
programs to reduce litter, increase recycling and promote
use of recycled materials, including the plastic market
developments program. Surplus funds have also been loaned
to the General Fund in prior Budget Acts.
In May 2009, CalRecycle notified the Legislature that the
Fund was facing a $160 million shortfall by the end of the
2009-10 Fiscal Year (FY) and initiated an 85 percent
proportional reduction for all expenditures except CRV
payments to consumers. In October 2009, CalRecycle
increased this reduction to 100 percent. These cuts
damaged the state's recycling infrastructure and directly
contributed to the loss of at least 500 jobs statewide. In
order to temporarily alleviate this funding shortfall, the
Legislature passed AB 7 X8 (Assembly Budget Committee),
Chapter 5, Statutes of 2010 Eighth Extraordinary Session,
which provided a one-time influx of $100 million dollars
and temporary suspended multiple grant programs to provide
funding through 2010. According to CalRecycle's most
recent report on the Fund (April 8, 2011):
In general terms, the Recycling Fund Condition Summary
indicates that the Fund will be solvent as long as
expected loan repayments to the Recycling Fund
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continue. The Recycling Fund Balance is not projected
to reach a level that would require proportionate
reduction in FY2010-11 or FY2011-2012. However,
assessment is entirely dependent upon continued
repayment of historic loans made from the Recycling
Fund. The Governor's proposed FY2011-2012 Budget
includes General Fund loan repayments of $98M in
FY2010-2011 (of which, $68M has already been
transferred to the Recycling Fund) and $88M in
FY2011-2012. It also includes repayments of
approximately $21M in each of those fiscal years for
loans made from the Recycling Fund to the Air Resources
Board. If those loan repayments-beyond the $68M
already repaid in the current year-are not made in
FY2010-2011 and FY2011-2012, CalRecycle will need to
revisit the question of proportionate reduction for the
FY2011-2012 period.
The plastic market development program uses surplus
redemption funds from the Fund to make payments of up to
$150 per ton to California-based processors and
manufacturers that recycle and utilize post-consumer
plastic beverage containers. In 2007-09, the total amount
of funds authorized was $5 million. For 2010 and 2011, the
Legislature increased this payment authority to $10 million
annually. This bill continues the $10 million annual
allocation until 2017.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, by
extending the sunset of the program, this bill will
increase Bottle Bill program costs by $10 million per year,
plus administrative costs of about $450,000 per year which
are paid from the Beverage Container Recycling Fund, but
are not included in the $10 million provided for market
development payments.
SUPPORT : (Verified 8/25/11)
Advanced Drainage Systems, Inc
California Grocers Association
California Nevada Soft Drink Association
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California Resource Recovery Association
California Retailers Association
California State Association of Counties (CSAC)
Californians Against Waste (sponsor)
CarbonLITE Industries
Central Contra Costa Solid Waste Authority
City and County of San Francisco
Earthbound Farm Organics
Envision Plastics
Epic Plastics
Global PET
LA County Solid Waste Management Committee
NAPCOR
Norton Packaging, Inc
Peninsula Packaging Company
Peninsula Plastics Recycling
PepsiCo
Pinnacle Plastic Containers
Plastic Recycling Corporation of California
Regional Council of Rural Counties (RCRC)
RePET
Republic Services
Silicon Valley Leadership Group
Talco Plastics, Inc.
ARGUMENTS IN SUPPORT : The author's office contends it
important to continue to subsidize California businesses
that manufacture products from used plastic bottles and the
firms that facilitate that manufacturing. Otherwise, the
author's office contends, used plastic bottles will be
shipped out of state for use in lower-cost markets, thereby
eliminating jobs in California and thwarting development of
California-based industry.
ASSEMBLY FLOOR :
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara,
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Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller,
Mitchell, Monning, Morrell, Nestande, Nielsen, Norby,
Olsen, Pan, Perea, Portantino, Silva, Skinner, Smyth,
Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski,
Williams, Yamada, John A. Pérez
NOES: Grove
NO VOTE RECORDED: Gorell, V. Manuel Pérez
DLW:do 9/1/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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