BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1846|
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THIRD READING
Bill No: AB 1846
Author: Gordon (D), et al.
Amended: 6/24/14 in Senate
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 5-0, 6/4/14
AYES: Hill, Gaines, Hancock, Jackson, Leno
NO VOTE RECORDED: Fuller, Pavley
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 74-0, 5/5/14 - See last page for vote
SUBJECT : Beverage containers: enforcement
SOURCE : Author
DIGEST : This bill clarifies and strengthens the enforcement
provisions under the California Beverage Container Recycling and
Litter Reduction Act (Act).
ANALYSIS : Existing law, under the Act, requires beverage
containers sold in this state to have a California redemption
value (CRV) of five 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).
These funds are continuously appropriated to CalRecycle for the
payment of refund values and processing fees. The Act also:
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1.Requires CalRecycle to 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.
2.Requires CalRecycle to certify recycling centers and
promulgate regulations establishing a procedure for
certification of recycling centers.
3.Prohibits a certified recycling center or processor from
paying or claiming any refund value, processing payment, or
administrative fee on beverage containers if the center or
processor knew, or should have known, that the containers were
from out of state.
4.Requires CalRecycle to 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.
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.
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.Specifies that the act of labeling a beverage container must
not, in and of itself, be deemed to aid in the redemption of
ineligible beverage containers.
Background
The Act is designed to provide consumers with a financial
incentive for recycling and to make recycling convenient to
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consumers. The centerpiece of the Act 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.
Handling fees . Handling fees are monthly payments made by
CalRecycle to recycling centers that meet certain eligibility
requirements. A recycler can receive a monthly handling fee
payment for each eligible container redeemed at an eligible
center. CalRecycle makes handling fee payments to recyclers in
order to provide incentives for the convenient redemption of
empty beverage containers, with the idea being that there is an
extra cost incurred by these recyclers associated with redeeming
containers at certain locations, specifically near supermarkets
and places of beverage retail. The handling fee is based solely
on actual numbers of containers redeemed as reported on a
calendar monthly basis.
Structural deficit . Deposits on covered beverage containers are
remitted to CalRecycle and deposited into the Beverage Container
Recycling Fund (BCRF). The BCRF's expenditures fit into two
primary categories: (1) CRV reimbursements to the recycler and
(2) program expenses, including administration, grant programs,
education and outreach that are funded by unredeemed CRV.
Higher recycling rates reduce the amount of unredeemed CRV to
fund program expenses. The "breakeven" recycling rate where
expenditures equal revenues is about 72%.
According to CalRecycle, the Act is currently operating under an
approximately $100 million annual structural deficit, where
program expenditures exceed program revenues under the current
mandated expenditure and revenue structure, mainly caused by
historically high recycling rates, along with mandated program
payments and outstanding General Fund loans. When the Act 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.
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Fraud . The BCRF is currently operating at a recycling rate of
greater than 80%, but it is known that there is a fraction of
fraud within the program that artificially elevates the
recycling rate and contributes to the structural deficit.
A significant type of fraud is the importation of out-of-state
beverages. In the summer of 2011, CalRecycle, in coordination
with the 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 Act BCRF
is $7 million annually.
In addition to the redemption of out-of-state beverage
containers by recycling centers and processors, fraud is also
performed when redeeming ineligible materials, such as
previously redeemed beverage containers and beverage containers
not subject to CRV, including wine bottles and milk containers.
Pursuant to AB 1933 (Gordon, Chapter 540, Statutes of 2012)
CalRecycle adopted regulations early this year, effective
immediately, to require anyone transporting into California a
load of empty plastic or aluminum beverage containers weighing
25 pounds or more, or 250 pounds or more of glass, to pass
through a CDFA quarantine inspection station and obtain and
carry proof of inspection. A form documenting the source and
destination of the material must also be completed.
Other recent changes CalRecycle has undertaken to prevent fraud
include new training requirements for operators of recycling
centers and processing facilities, along with revised
regulations that reduce the number of containers an individual
can bring to recycling centers in a single day from 500 pounds
of aluminum or plastic to 100 pounds, and from 2,500 pounds of
glass to 1,000 pounds.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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SUPPORT : (Verified 6/25/14)
Association of California Recycling Industries
California Nevada Soft Drink Association
Californians Against Waste
Glass Packaging Institute
ARGUMENTS IN SUPPORT : 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.
ASSEMBLY FLOOR : 74-0, 5/5/14
AYES: Achadjian, Alejo, Allen, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Holden,
Jones, Jones-Sawyer, Levine, Linder, Lowenthal, Maienschein,
Medina, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan,
Patterson, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A.
Pérez
NO VOTE RECORDED: Ammiano, Donnelly, Logue, Mansoor, Melendez,
Vacancy
RM:e 6/25/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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