BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                               AB 1933
                                                                       

                      SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                        Senator S. Joseph Simitian, Chairman
                              2011-2012 Regular Session
                                           
           BILL NO:    AB 1933
           AUTHOR:     Gordon
           AMENDED:    As Introduced
           FISCAL:     Yes               HEARING DATE:     May 14, 2012
           URGENCY:    No                CONSULTANT:       Peter Cowan
            
           SUBJECT  :   BEVERAGE CONTAINERS: ENFORCEMENT
           
            SUMMARY  :    
           
            Existing law  , under the California Beverage Container 
           Recycling and Litter Reduction Act (the Act):

           1)Establishes refund value and redemption payments for 
             beverage containers and requires a distributor to pay a 
             redemption payment for every beverage container sold or 
             offered for sale in the state to the Department of Resources 
             Recycling and Recovery (DRRR), which is required to deposit 
             those payments into the California Beverage Container 
             Recycling Fund (Fund).  The money in the Fund is 
             continuously appropriated for the payment of refund values 
             and processing fees.  (Public Resources Code §14500 et 
             seq.).

           2)Authorizes funding for specified purposes to increase 
             beverage container recycling, including payments to cities 
             and counties.  (§14581).

           3)Requires any person importing more than 100 pounds of 
             aluminum, bimetal, or plastic beverage container material, 
             or 1000 pounds of glass beverage container material, into 
             California to report the material to DRRR and to provide an 
             opportunity for inspection.  (§14596).

            This bill  : 

           1) Reduces the threshold for reporting the imported beverage 
              container material from 100 pounds to 25 pounds for 
              aluminum, bimetal or plastic beverage container material, 









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              and from 1000 pounds to 250 pounds for glass beverage 
              container material.  

           2) Requires that any person required to report the importation 
              of beverage container material to DRRR additionally provide 
              documentation of the source and destination of the 
              material.  

            COMMENTS  :

            1) Purpose  .  According to the author "California's bottle and 
              can recycling law has been found to be the most cost 
              effective program of its kind in the country, and no 
              recycling policy or program in the state is achieving 
              better results.  However, the very incentives that have 
              spurred high rates of recycling have also inspired 
              entrepreneurial criminals?ƯAB 1933] will help create 
              deterrents on importers trying to illegally redeem out of 
              state beverage containers in California by creating a paper 
              trail and requiring documentation of the source and 
              destination of the material."

            2) Background on the Act  .  The Act is designed to provide 
              consumers with a financial incentive for recycling and to 
              make recycling convenient to consumers.  The centerpiece of 
              the Act 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 DRRR.  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.  

            3) Container fraud  .  The extent of illegal redemption of 
              out-of-state containers is unknown.  However, in 2010, 31 
              people were arrested in an enforcement action involving the 
              Department of Justice and DRRR.  Three separate fraud rings 
              coordinated the importation of millions of cans and bottles 
              from Arizona and Nevada for redemption of the CRV.  









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              According to the Attorney General, the rings stole more 
              than $3.5 million.  Neither Arizona nor Nevada has beverage 
              container redemption programs.   

              In the summer of 2011, DRRR, in coordination with the 
              California Department of Food and Agriculture (CDFA), 
              initiated a "no-cost" pilot program to survey and document 
              vehicles importing out-of-state beverage container material 
              into California through all 16 CDFA Border Protection 
              Stations.  During the first 60 calendar days of the pilot 
              program, the information gathered indicated that over 2,500 
              vehicles (including 378 rental trucks filled to capacity) 
              imported out-of-state beverage container material through 
              these stations.  Based on the survey data referenced above, 
              DRRR states that a conservative estimate of fraud exposure 
              to the Fund is $7 million annually. 

              AB 1933 would reduce the redemption value of beverage 
              container material that could be imported into California 
              without notifying DRRR from a maximum of approximately $150 
              to a maximum of less than $50. 

            4) Support concerns  .  According to the California Grocers 
              Association, AB 1933 will reduce fraud which will increase 
              stability in the Fund, helping recyclers stay in business.
            
           SOURCE :        Californians Against Waste
            
           SUPPORT  :       California Grocers Association

            OPPOSITION  :    None on file.