BILL ANALYSIS Ó
AB 1846
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Date of Hearing: April 7, 2014
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 1846 (Gordon) - As Amended: March 28, 2014
SUBJECT : Beverage containers: enforcement
SUMMARY : Clarifies and strengthens the enforcement provisions
under the California Beverage Container Recycling and Litter
Reduction Act (Bottle Bill).
EXISTING LAW establishes the Bottle Bill, which:
1)Requires beverage containers sold in this state to have a
California redemption value (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 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
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.
3)Requires CalRecycle to:
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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 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)Specifies that a certified recycling center or processor shall
not pay or claim any refund value, processing payment, or
administrative fee on beverage containers if the center knew,
or should have known, that the containers are ineligible for
redemption.
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2)Adds the authority for CalRecycle to suspend or permanently
revoke eligibility of a certified recycling center to receive
handling fees at one or more recycling centers as one of the
disciplinary actions available under the Bottle Bill.
3)Revises the prohibition against redeeming ineligible or out of
state containers with "intent to defraud" to "not knowingly"
engage in those acts.
FISCAL EFFECT : Unknown
COMMENTS :
Bottle Bill background : 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
state. The Bottle Bill program has resulted in more than 10,000
jobs and over $100 million in reduced landfill disposal fees.
Finding fraud : 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
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outstanding General Fund loans. The structural deficit means
that program expenditures exceed program revenues under the
current mandated expenditure and revenue structure. When the
Bottle Bill does not have adequate funding, CalRecycle is
required to "proportionally reduce" many of the program's
expenditures evenly among program participants, with the
exception of CRV redemption for consumers.
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.
This bill : According to the author, this bill seeks to
strengthen CalRecycle's enforcement authority by clarifying that
it is unlawful to redeem out-of-state material or any other
ineligible material for CRV.
REGISTERED SUPPORT / OPPOSITION :
Support
California Nevada Soft Drink Association
Californians Against Waste
Glass Packaging Institute
Opposition
None on file
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092
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