BILL ANALYSIS Ó
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2013-2014 Regular Session |
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BILL NO: SB 700 HEARING DATE: April 9, 2013
AUTHOR: Wolk URGENCY: no
VERSION: April 2, 2013 CONSULTANT: Katharine Moore
DUAL REFERRAL: Environmental QualityFISCAL: yes
SUBJECT: Natural Resources: parks: carryout bags
BACKGROUND AND EXISTING LAW
Californians use an estimated 10 - 15 billion single-use
shopping bags annually. Many of these bags are improperly
disposed of, resulting in environmental harm, on-going clean-up
costs and visual blight. For example, the risks of waste
plastic to wildlife in the marine environment are
well-documented. Existing law (Public Resources Code (PRC)
§42250 et seq) provides for certain "at store" recycling
programs for plastic carryout bags meeting specified criteria.
Recently, SB 1219 (Wolk, c. 384, Statutes of 2012) extended the
sunset date for this program and repealed provisions prohibiting
local governments from implementing separate plastic carryout
bag recycling programs.
There have been numerous legislative attempts in recent years to
institute state-level restrictions or bans on plastic single-use
carryout bags and institute fees, assessed at the point-of-sale
by certain retailers, for single-use bags. These have failed
(e.g. AB 2769 (Levine, 2008), AB 1998 (Brownley, 2010), AB 298
(Brownley, 2012), among others). Attempts to institute
single-use carryout bag bans via state-level legislation
continue (see the Comments section below).
Local ordinances restricting or banning the use of single-use
carryout bags have been much more successful. More than 70
cities and counties are reported to have ordinances covering
approximately one third of California's population. For
example, the City of San Jose passed a ban on plastic single use
carryout bags while offering any needed paper bags for sale.
After the first year, reports indicate that the use of reusable
bags increased considerably (from 4% to 62%), outdoor single-use
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carryout bag waste was reduced up to 59 - 89%, and costs for
litter pick-up and waste-processing decreased substantially.
In lieu of banning plastic single-use carryout bags and charging
a fee on paper bags, some governments tax all single-use bags
with specified exceptions. For example, Washington DC
instituted a five cent tax on all single-use carryout bags. The
number of bags used annually has dropped 80% from 270 million
(pre-tax) to about 55 million in 2010. Maryland's Montgomery
County also recently passed a local ordinance imposing a five
cent tax on all single-use carryout bags provided by retailers.
The collected tax funds local clean-up activities. News reports
indicate that Montgomery County's use of single-use carryout
bags also declined about 90% (from a monthly average of 22.5 to
3 million) when the program was implemented. Other countries
have also instituted taxes on single-use carryout bags.
Ireland, for example, introduced a ?0.15 tax in 2002 that
resulted in greater than a 90% reduction in the use of
single-use carryout bags. The tax was increased in 2007 (to
?0.22) in order to continue decreasing the number of single-use
carryout bags used.
PROPOSED LAW
This bill would provide funding for a new program at the city or
county level to support litter clean-up and local park and
recreation-related activities. Revenue for the program would be
generated by a new $0.05 charge assessed on consumers at the
point-of-sale for any needed single-use carry-out bags.
Specifically, this bill would:
Establish the Local Environmental Enhancement Fund in
the state treasury to receive the charges collected on
single-use carryout bags.
Require that the Natural Resources Agency (agency)
return the collected funds, less up to 10% administration
and implementation costs, to the city or county where the
charge on single-use carryout bags was paid in order to
support local programs to reduce and clean-up litter.
Specify the range of programs that the city or county
could support with the grant from the agency which
includes:
o operating and maintenance costs, as specified,
with a priority for private nonprofit organizations
operating local state parks,
o acquisitions, with a priority for
"under-parked" and disadvantaged communities,
o expansion of access to parks and recreation,
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as specified,
o local park improvement and rehabilitation,
o protecting and restoring park cultural and
historical resources,
o expansion and improvements of nonmotorized
trail systems and networks,
o litter abatement and removal programs, and
o encouraging cities and counties to provide
special districts, including regional park districts,
high priority to receive funding.
Define relevant terms, including "single-use carryout
bag". The single-use carryout bag can be plastic, paper or
other material.
Specify the per bag charges on customers for the use of
single-use carryout bags ($0.05) and permit the retailer to
retain up to $0.01 of each charge, in certain conditions.
Direct the retailer to remit the collected charges to
the State Board of Equalization (board) and direct the
board's actions in handling and tracking the collected
charges.
Provide that this bill's proposed program would not
preempt or prohibit local ordinances, regulations,
resolutions or rules governing single-use carryout bags or
recycling programs, as specified, or solid waste or
household hazardous waste agreements.
Provide that a city or county may adopt a local
ordinance to opt out of the charge.
This bill contains a tax and will require a 2/3s vote for
passage.
ARGUMENTS IN SUPPORT
According to the author "SB 700, the Local Environmental
Enhancement Act, establishes a statewide 5 cent tax (with local
option) on all single use shopping bags, paper and plastic, and
distributes the revenue to local governments to support local
parks, litter and environmental clean-up programs."
"Some communities have banned plastic shopping bags and require
a charge on paper bags which is kept by the retailer. SB 700 is
an alternative approach based on successful programs in
Washington DC and elsewhere that use collected fees or taxes on
bags to achieve an environmental purpose. The goals of SB 700
are to:
Reduce the use of single use shopping bags, both paper
and plastic.
Use tax revenues to achieve an environmental purpose.
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Allow local community choice to opt out of a statewide
program or to design their own.
Retain consumer choice to use reusable bags or pay tax
on single-use plastic or paper bags."
The California Park and Recreation Society estimates that SB 700
would represent "a multi-million dollar infusion into
California's local parks system. More specifically, for a
community of 50,000 it is estimated that if implemented this
bill would generate upwards of $500,000 annually for local park
operations."
ARGUMENTS IN OPPOSITION
The American Forest and Paper Association "respectfully
oppose[s] this bill and urge[s] [the author] to amend this
legislation to remove mandated fees on paper bags." They argue
that paper bags are "highly recycled, recyclable, compostable,
and renewable," cite US EPA statistics indicating that paper
bags are recycled at a rate of almost 50%, and describe the
paper industry's goals to spur recycling at higher levels in the
future. Additionally, they argue that the bill, as currently
drafted, "would have little, if any, effect on current retailer
or consumer behavior. The vast majority of retail bags used are
plastic, and an equal fee on plastic and paper not force
consumers or retailers from using plastic."
COMMENTS
This bill is double-referred to the Senate Environmental Quality
Committee . The Senate Environmental Quality Committee has
jurisdiction over recycling and related activities. Therefore,
this analysis will focus on the elements of the bill relevant to
the jurisdiction of this committee, particularly with respect to
the proposed funding program for local parks and related
projects.
15 billion bags multiplied by $0.04 and 90% is a lot of money
for local parks . While acknowledging that these calculations
are only roughly approximate, hundreds of millions of dollars
may potentially be raised to fund the Local Environment
Enhancement Act. The experience at the local level in
California and elsewhere in the world suggests that the number
of single-use carryout bags used would drop appreciably once the
tax was implemented, but the funds raised would likely remain
significant. The potential revenues - as well as savings from
reduced clean-up costs - could provide substantial financial
assistance to the local operation of state parks and other
programs specified in the bill.
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There are multiple funding programs established in statute to
support parks and park-related activities to use as a model .
State Parks' programs and bond programs supporting parks and
park-related activities (for example see PRC §5070 et seq and
§5710 et seq) typically provide statutory guidance on
grant-making activities by the state or other designated
entities at varying levels of detail. This guidance is intended
to safeguard the public's interest and can include:
Appraisal requirements for significant property
acquisitions,
Fair-market value pricing requirements for property,
Audit requirements, and
Public process and the opportunity for public
participation in the development of competitive grant
criteria, among other requirements.
In view of the potential size of the funds annually generated by
the proposed tax and in order to improve the statutory guidance
provided by this bill, the committee may wish to incorporate the
guidance noted above, as well as clarifying technical changes,
into the bill (Amendment 1).
This bill is a work-in-progress . The concept underlying the
bill is clear. However, developing a practical program to
implement the concept is challenging. There are numerous
potential parts of a robust program that are not yet addressed
in this bill. Examples include the appropriate oversight of the
grant programs, the handling of unspent local grant funds,
consistency with existing planning documents, compliance with
local permitting requirements, and others. The committee may
wish to direct committee staff to continue working with the
author's office on the development of the proposed grant
program. The committee may also wish to hear the bill again if
subsequent amendments substantively alter the bill's contents
subject to the committee's jurisdiction.
Taxes and fees. The new charge assessed on single-use carryout
bags by this bill is used to fund sufficiently diverse array of
projects to be considered a tax. A recent appellate decision in
favor of Los Angeles County's single-use plastic bag ban has the
potential to broaden how a fee may be successfully structured in
some instances (Schmeer et al. vs. the County of Los Angeles et
al., California Court of Appeal, Second Appellate District, case
no. B240592). News reports indicate that this decision may be
appealed to the California Supreme Court.
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The Irish experience suggests that tax rates may periodically
need to be changed to promote continuing progress in reducing
the use of single-use carryout bags. Under California law,
changing tax rates would have to meet the two-thirds vote
standard in the legislature, while changing fee amounts would be
by majority vote.
Related legislation
AB 158 (Levine, 2013) would extend in-store recycling to more
retail facilities and set-up a certification program that each
type of reusable grocery bag meets specified requirements
(before the Assembly Natural Resources Committee).
SB 405 (Padilla, 2013) would ban certain stores from providing
single-use plastic bags to customers and develop a certification
program for bags used in the state (before the Senate
Environmental Quality Committee)
SB 529 (Leno, 2013) would restrict and eventually ban the use of
disposable packaging and single-use carryout bags by fast food
facilities, unless specific criteria are met (before the Senate
Environmental Quality Committee)
SUGGESTED AMENDMENTS
AMENDMENT 1
See mock-up to the bill
SUPPORT
California Park and Recreation Society (sponsor)
1 Bag At A Time
OPPOSITION
American Forest and Paper Association
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