BILL ANALYSIS Ó
AB 1001
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Date of Hearing: April 29, 2013
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 1001 (Gordon) - As Amended: April 3, 2013
SUBJECT : Recycling: voluntary beverage containers
SUMMARY : Revises the California Beverage Container Recycling
and Litter Reduction Act (Bottle Bill) to authorize the
inclusion of voluntary beverage containers. Establishes a
product stewardship program for beverage containers that are not
included in the Bottle Bill, and permits distributors of those
beverage containers to participate in the Bottle Bill in lieu of
implementing the product stewardship program.
EXISTING LAW: Establishes the Bottle Bill, which:
1)Requires beverage containers sold in this state to have a CRV
of 5 cents for containers that hold fewer than 24 ounces and
10 cents for containers that hold 24 ounces or more and
requires a distributor to pay a redemption payment to the
Department of Resources Recycling and Recovery (CalRecycle).
Continuously appropriates these funds to CalRecycle for the
payment of refund values and processing fees.
2)Defines a number of terms, including:
a) "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.
b) "Convenience zone" to mean either an area within a
one-half mile radius of a supermarket, or an area
designated by CalRecycle at a location where there is no
supermarket but there are two or more dealers located
within a one-mile radius of each other, and meet certain
specified criteria.
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3)Requires CalRecycle to:
a) 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
containers for each reporting period.
b) Certify recycling centers and promulgate regulations
establishing a procedure for certification of recycling
centers. Specifies that these regulations shall include,
as a condition for certification, that if one or more
certified entities have operated at the same location
within the past five years, the recycling center must
demonstrate to CalRecycle that its operations exhibit a
pattern of compliance with the Bottle Bill and its related
regulations.
c) Pay handling fees to supermarket sites, nonprofit
convenience zone recyclers, or rural region recyclers to
provide an incentive for the redemption of empty beverage
containers in convenience zones, and adopt guidelines and
methods specifying a procedure for the payment of these
fees.
d) After deducting refund values, administrative fees, and
a reserve for contingencies, appropriate remaining Fund
monies to designated programs, grants, and fee payments
(PRC Section 14581).
4)Prohibits a lease entered into by a dealer to contain a
leasehold restriction that prohibits or results in the
prohibition of the establishment of a recycling location and
prohibits CalRecycle from making any payments, grants, or
loans to a city, county, or city and county if that
municipality has adopted or is enforcing a land use
restriction that prevents the siting or operation of a
certified recycling center at a supermarket site.
THIS BILL :
1)Establishes Division 12.5 of the Public Resources Code, which
creates a product stewardship program (program) for "regulated
beverage containers." Under the program:
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a) "Regulated beverages," include 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, including fruit juice in a container larger
than 46 ounces and vegetable juice in a container larger
than 16 ounces. Excludes any product sold in a container
that is not an aluminum beverage container, a glass
container, a plastic beverage container, or a bimetal
container. (Essentially, all beverage containers that are
excluded from the current Bottle Bill.)
b) "Regulated beverage container" as the individual bottle,
can, jar, carton, or other receptacle, but does not include
open or loosely sealed receptacles.
c) Beginning January 1, 2014, requires distributors of
regulated beverages to submit a plan to CalRecycle for the
implementation of a "takeback and recycling system" that
includes:
i) How the distributor will obtain a written agreement
with each dealer that the dealer will take back empty
regulated containers in the store or at a recycling
location in the store's parking lot;
ii) Provisions to ensure that every empty regulated
container returned is recycled and that not less than 80
percent of the regulated beverage containers sold by the
distributor are recycled; and,
iii) Provisions to ensure that the regulated beverage
containers contain not less than 35 percent recycled
content.
d) By January 1, 2015, distributors must implement the plan
and comply with the recycling and recycled content
requirements.
e) Authorizes CalRecycle to collect an annual
administrative fee from each distributor at an amount that
is adequate to cover CalRecycle's administrative costs.
f) Permits distributors of regulated beverage containers to
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participate in the state's current Bottle Bill program in
lieu of the product stewardship requirements. Specifies
that regulated beverage containers (as defined in (b)
above) that are included in the Bottle Bill are "voluntary
beverage containers."
1)Defines the term "unserved convenience zone" as a convenience
zone in which there is not a certified recycling center or
other location that takes back and refunds CRV to consumers.
2)Authorizes CalRecycle to waive the requirement that if one or
more certified entities have operated at the same location
within the past five years, the recycling center must
demonstrate to CalRecycle that its operations exhibit a
pattern of compliance with the Bottle Bill and its related
regulations if the new operator has no relationship or
affiliation with an entity that previously operated at the
location.
3)Requires CalRecycle to provide assistance and incentives to
reduce the number of unserved convenience zones to less than
five percent.
4)Authorizes CalRecycle to increase the size of a convenience
zone in rural areas, as specified, and to allow a recycling
center to operate at reduced hours if it is located in a zone
that has been unserved for at least six months, as specified.
5)Requires that all reports, claims, and other information
submitted to CalRecycle pursuant to the Bottle Bill be
submitted electronically.
6)For the 2014, 2015, and 2016 calendar years, prohibits
CalRecycle from calculating the "comingled rate" (the amount
that CalRecycle determines can be paid for a load of mixed
Bottle Bill and non-Bottle Bill containers) and prohibits
recycling centers from paying a refund value for comingled
containers.
7)Repeals the provision that increased the CRV from 4 cents and
8 cents to 5 cents and 10 cents, which reduces the CRV on
containers currently included in the program back to 4 cents
and 8 cents.
8)Establishes the CRV for voluntary beverage containers at five
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cents for containers with a capacity of less than 24 fluid
ounces and ten cents for containers with a capacity of 24
fluid ounces or more.
9)On and after January 1, 2014, specifies that no person shall
enter into a lease with a supermarket that prohibits the
operation of a recycling center or inhibits the ability of the
supermarket to operate as, or contract with, a recycling
center.
10)Prohibits CalRecycle from exempting an individual convenience
zone from the recycling center requirement if the zone does
not include a supermarket.
11)Establishes the Voluntary Beverage Container Fund (Fund).
Directs all fees, deposits, and other revenue collected from
voluntary beverage containers into the Fund and authorizes
CalRecycle to expend the Fund, upon appropriation by the
Legislature, to implement the requirements of the bill, as
specified.
12)Increases the base amount of funding that CalRecycle
allocates to certified community conservation corps from $15
million to $21 million annually.
13)Repeals the provision that authorizes CalRecycle to issue
retroactive payments to entities that lost funding because
payments in Section 14581were "proportionally reduced" due to
lack of adequate funding.
14)Clarifies that voluntary beverage containers are not eligible
for funding pursuant to Section 14581.
15)Prohibits a city or county that receives sales tax funds from
prohibiting the siting of a recycling center in the parking
lot of a supermarket.
16)Prescribes the manner in which CalRecycle shall determine
handling fees for voluntary beverage containers collected by
recycling centers.
17)Sunsets the provisions that prescribe how CalRecycle
determines handling fees for recycling centers on July 1,
2014, and after that date specifies handling fees in the
following manner:
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a) $0.001219 per container for a center that handles less
than an unspecified number of containers per month;
b) $0.00581 per container for a center than handles more
than an unspecified number of containers, but fewer than an
unspecified number of containers per month; and,
c) $0.0058 per container for a center that handles more
than an unspecified number of containers, but fewer than
335,000 containers per month.
d) Does not provide for handling fees for recycling centers
that handle more than 335,000 containers per month.
18)Makes a number of related clarifying and technical changes.
FISCAL EFFECT : Unknown
COMMENTS :
Background on the Bottle Bill . The Bottle Bill is designed to
provide consumers with a financial incentive for recycling and
to make recycling convenient to consumers. The centerpiece of
the Bottle Bill is the 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.
California's Bottle Bill has achieved an overall recycling rate
over 80 percent - higher than any other bottle bill program
North America. According to Californians Against Waste, since
its inception 25 years ago, the program has resulted in the
recycling over more than 11.9 million tons of glass; 3 million
tons of aluminum; and, more than 2 million tons of plastic. In
addition to the diversion from landfill disposal, this recycling
has avoided an estimated 2 million metric tons of CO2 equivalent
greenhouse gas emissions over the last four years.
Recycling in California also results in economic benefits to the
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state. The Bottle Bill program has resulted in more than 10,000
jobs and over $100 million in reduced landfill disposal fees.
In some ways, the Bottle Bill program is a victim of its own
success. According to CalRecycle, the Bottle Bill is currently
operating under an approximately $100 million annual structural
deficit, mainly caused by historically high recycling rates,
along with mandated program payments and outstanding General
Fund loans. The structural deficit means that program
expenditures exceed program revenues under the current mandated
expenditure and revenue structure. Potential program reforms
will be required to address the structural deficit of the
Recycling Fund and ensure the integrity and long-term viability
of the program. When the Bottle Bill does not have adequate
funding, CalRecycle is required to "proportionally reduce" many
of the expenditures across the board evenly. These reductions
cause significant hardships for participants in the program.
Fraud also contributes to the structural deficit. In the summer
of 2011, CalRecycle, 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, CalRecycle states that a conservative estimate
of fraud exposure to the Bottle Bill Fund is $7 million
annually.
Product stewardship . According to the California Product
Stewardship Council:
Product stewardship involves consumers, government
agencies, and product manufacturers sharing the
responsibility of reducing the impact of product waste on
public health, the environment, and the economy. Extended
Producer Responsibility (EPR) is a strategy to place a
shared responsibility for end-of-life product management on
all entities involved in the product chain, instead of the
general public; while encouraging product design changes
that minimize a negative impact on human health and the
environment at every stage of the product's lifecycle. This
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allows the costs of treatment and disposal to be
incorporated into the total cost of a product. It places
primary responsibility on the producer, or brand owner, who
makes design and marketing decisions. It also creates a
setting for markets to emerge that truly reflect the
environmental impacts of a product, and to which producers
and consumers respond.
This bill . According to the author, "AB 1001 attempts to
modernize California's successful 25 year old [Bottle Bill] and
bring program income and expenditures into balance. [This bill]
will add container types currently exempt from the program, such
as paperboard, aseptic containers, and large juice containers."
The author indicates that this bill will reduce program
inefficiencies and administrative costs by:
1)Suspending the comingled rate at recycling centers;
2)Transitioning to an electronic reporting system, which will
save more than $700,000 in paper processing costs;
3)Stepping up enforcement of existing and updated rules against
out-of-state fraud; and,
4)Increasing certification requirements for recyclers to help
maintain an even playing field for legitimate operators.
Handling the handling fee . This bill makes significant changes
to the way that handling fees are determined. CalRecycle and
other stakeholders indicate that the current mechanism for
determining handling fees results in inequitable payments,
especially for the smallest recycling centers. CalRecycle is in
the process of proposing an alternative system for handling
fees. To ensure that this bill results in the best possible
mechanism for handling fee distribution, the author should
continue to engage in discussions with CalRecycle and the
committee should the bill move forward.
Suggested amendments . The committee may wish to make a number
of technical and clarifying amendments to the bill:
1)Correct a significant drafting error on page 13, lines 9-13
that inadvertently lowers the CRV from 5 cents and 10 cents to
4 cents and 8 cents for containers that are less than 24
ounces and 24 ounces and larger, respectively.
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2)Correct a drafting error in Section 14571.5 by striking out
lines 27 - 30 on page 16 and correcting the numbering in that
section.
3)Revise Section 14575 to strike out the provision on page 25,
lines 35 and 36 that exempts voluntary beverage container
manufacturer from paying, or crediting, the account of the
beverage manufacturer in an amount equal to the processing
fee.
4)Strike out lines 24 - 30 on page 28 of the bill and lines 30 -
32 on page 30, as these provisions are obsolete.
5)Strike out "on and after July 1, 2012" on page 32, lines 35
and 36.
6)Revise the new handling fee amounts established by the bill to
correct a drafting error and to specify the number of
containers:
(e) (1) For beverage containers returned for recycling on
and after July 1, 2014, the handling fee shall equal the
following amounts:
(A) The amount of one and two hundred nineteen hundredths
of one cent ($0.01219) one and two hundred nineteen
thousandths of one cent ($0.001219) per beverage container
for a recycling site handling less than 325,000 ____
beverage containers per month.
(B) The amount of five hundred eighty-one thousandths of
one cent ($0.00581) per container for a recycling site
handling more than 325,000 ____ beverage containers per
month but less than 572,000 ____ containers per month.
(C) The amount of five hundred twenty-two thousandths of
one cent ($0.00522) per beverage container for a recycling
site handling more than 572,000 ____ containers per month
but less than 335,000 containers per month .
(2) For purposes of this subdivision, "recycling site"
means a single location of a supermarket site, nonprofit
convenience zone recycler, or rural region recycler.
REGISTERED SUPPORT / OPPOSITION :
Support
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California League of Conservation Voters
Californians Against Waste
City of Sunnyvale
Environment California
Epic Plastics
Global PET, Inc.
Napa Recycling and Waste Services
Natural Resources Defense Council
Nexcycle
Northern California Recycling Association
Peninsula Sanitary Service, Inc.
Planning and Conservation League
rePlanet
Strategic Materials, Inc.
Opposition
American Forest & Paper Association
California League of Food Processors
California Manufacturers and Technology Association
California/Nevada Soft Drink Association
Carton Council
Glass Packaging Institute
Grocery Manufacturers Association
National Federation of Independent Business
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092