BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1001
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          ASSEMBLY THIRD READING
          AB 1001 (Gordon)
          As Amended  May 28, 2013
          Majority vote 

           NATURAL RESOURCES   6-3         APPROPRIATIONS      12-0        
           
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          |Ayes:|Chesbro, Garcia,          |Ayes:|Gatto, Bocanegra,         |
          |     |Muratsuchi, Skinner,      |     |Bradford,                 |
          |     |Stone, Williams           |     |Ian Calderon, Campos,     |
          |     |                          |     |Eggman, Gomez, Hall,      |
          |     |                          |     |Ammiano, Pan, Quirk,      |
          |     |                          |     |Weber                     |
           ----------------------------------------------------------------- 
           -------------------------------- 
          |Nays:|Grove, Bigelow, Patterson |
          |     |                          |
           -------------------------------- 
           SUMMARY  :  Requires the Department of Resources Recycling and  
          Recovery (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.  

           EXISTING LAW  :  Requires CalRecycle to 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. 

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, this bill has minor and absorbable costs.  

           COMMENTS  :  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 California Redemption Value (CRV).  Consumers pay a deposit,  








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          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% - 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 carbon dioxide  
          equivalent greenhouse gas emissions over the last four years.  

          Recycling in California also results in economic benefits to the  
          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  








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          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. 

          Historically, the state has had a large number of "unserved  
          zones," areas of the state in which there is no certified  
          recycling center making it difficult, and sometimes impossible,  
          for Californians to redeem the CRV on beverage containers.  This  
          bill will make it easier for existing recycling centers to  
          operate by waiving the requirement that new operators must  
          demonstrate that the center has complied with all laws and  
          regulations over the previous five years when the operator has  
          no affiliation with the previous operator.  
           

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


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