Amended in Senate June 14, 2016

Amended in Assembly January 4, 2016

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1005

Introduced by Assembly Members Gordon and Levine

(Coauthors: Assembly Members Patterson and Wilk)

February 26, 2015

An act to amend Sections 14549.2 and 14581 of the Public Resources Code, relating to beverage containers, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 1005, as amended, Gordon. California Beverage Container Recycling and Litter Reduction Act: market development payments.

Existing law, the California Beverage Container Recycling and Litter Reduction Act, requires a distributor to pay a redemption payment for every beverage container sold or offered for sale in the state to the Department of Resources Recycling and Recovery for deposit in the California Beverage Container Recycling Fund. Moneys in the fund are continuously appropriated to the department for certain payments, including market development payments. Existing law authorizes the department, until that authorization is repealed on January 1, 2017, to annually expend up to $10,000,000 from the fund to make market development payments to an entity certified by the department as a recycling center, processor, or dropoff or collection program for empty plastic beverage containers that are subsequently washed and processed into flake, pellet, or other form, and made usable for the manufacture of a plastic product, or to a product manufacturer for empty plastic beverage containers that are subsequently washed and processed into flake, pellet, or other form, and used by that product manufacturer to manufacture a product.

This bill would postpone that repeal until January 1, 2022. By extending the term of a continuous appropriation, this bill would make an appropriation.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 14549.2 of the Public Resources Code
is amended to read:

14549.2.  

(a) For purposes of this section, the following
definitions shall apply:

(1) “Certified entity” means a recycling center, processor, or
dropoff or collection program certified pursuant to this division.

(2) “Product manufacturer” means a person who manufactures
a plastic product in this state.

(b) In order to develop California markets for empty plastic
beverage containers collected for recycling in the state, the
department may, consistent with Section 14581 and subject to the
availability of funds, pay a market development payment to a
certified entity or product manufacturer for empty plastic beverage
containers collected and managed pursuant to this section.

(c) The department shall make a market development payment
to a certified entity or product manufacturer in accordance with
this section, only if the plastic beverage container is collected and
either recycled or used in manufacturing, in the state, as follows:

(1) The department shall make a market development payment
to a certified entity for empty plastic beverage containers that are
collected for recycling in the state, that are subsequently washed
and processed by a certified entity into a flake, pellet, or other
form in the state, and made usable for the manufacture of a plastic
product by a product manufacturer.

(2) The department shall make a market development payment
to a product manufacturer for empty plastic beverage containers
that are collected for recycling in the state, that are subsequently
washed and processed into a flake, pellet or other form in the state,
and used by that product manufacturer to manufacture a product
in this state.

(3) The department shall determine the amount of the market
development payment, which may be set at a different level for a
certified entity and a product manufacturer, but shall not exceed
one hundred fifty dollars ($150) per ton. In setting the amount of
the market development payment for both certified entities and
product manufacturers, the department shall consider all of the
following:

(A) The minimum funding level needed to encourage the in-state
washing and processing of empty plastic beverage containers
collected for recycling in this state.

(B) The minimum funding level needed to encourage the in-state
manufacturing that utilizes empty plastic beverage containers
collected for recycling in this state.

(C) The total amount of funds projected to be available for
plastic market development payments and the desire to maintain
the minimum funding level needed throughout the year.

(4) The department may make a market development payment
to both a certified entity and a product manufacturer for the same
empty plastic beverage container.

(d) This section shall remain in effect only until January 1, 2022,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2022, deletes or extends that date.

SEC. 2.  

Section 14581 of the Public Resources Code is
amended to read:

14581.  

(a) Subject to the availability of funds and in
accordance with subdivision (b), the department shall expend the
moneys set aside in the fund, pursuant to subdivision (c) of Section
14580, for the purposes of this section in the following manner:

(1) For each fiscal year, the department may expend the amount
necessary to make the required handling fee payment pursuant to
Section 14585.

(2) Fifteen million dollars ($15,000,000) shall be expended
annually for payments for curbside programs and neighborhood
dropoff programs pursuant to Section 14549.6.

(3) (A) Ten million five hundred thousand dollars ($10,500,000)
may be expended annually for payments of five thousand dollars
($5,000) to cities and ten thousand dollars ($10,000) for payments
to counties for beverage container recycling and litter cleanup
activities, or the department may calculate the payments to counties
and cities on a per capita basis, and may pay whichever amount
is greater, for those activities.

(B) Eligible activities for the use of these funds may include,
but are not necessarily limited to, support for new or existing
curbside recycling programs, neighborhood dropoff recycling
programs, public education promoting beverage container
recycling, litter prevention, and cleanup, cooperative regional
efforts among two or more cities or counties, or both, or other
beverage container recycling programs.

(C) These funds shall not be used for activities unrelated to
beverage container recycling or litter reduction.

(D) To receive these funds, a city, county, or city and county
shall fill out and return a funding request form to the department.
The form shall specify the beverage container recycling or litter
reduction activities for which the funds will be used.

(E) The department shall annually prepare and distribute a
funding request form to each city, county, or city and county. The
form shall specify the amount of beverage container recycling and
litter cleanup funds for which the jurisdiction is eligible. The form
shall not exceed one double-sided page in length, and may be
submitted electronically. If a city, county, or city and county does
not return the funding request form within 90 days of receipt of
the form from the department, the city, county, or city and county
is not eligible to receive the funds for that funding cycle.

(F) For the purposes of this paragraph, per capita population
shall be based on the population of the incorporated area of a city
or city and county and the unincorporated area of a county. The
department may withhold payment to any city, county, or city and
county that has prohibited the siting of a supermarket site, caused
a supermarket site to close its business, or adopted a land use policy
that restricts or prohibits the siting of a supermarket site within its
jurisdiction.

(4) One million five hundred thousand dollars ($1,500,000) may
be expended annually in the form of grants for beverage container
recycling and litter reduction programs.

(5) (A) The department shall expend the amount necessary to
pay the processing payment established pursuant to Section 14575.
The department shall establish separate processing fee accounts
in the fund for each beverage container material type for which a
processing payment and processing fee are calculated pursuant to
Section 14575, or for which a processing payment is calculated
pursuant to Section 14575 and a voluntary artificial scrap value is
calculated pursuant to Section 14575.1, into which account shall
be deposited both of the following:

(i) All amounts paid as processing fees for each beverage
container material type pursuant to Section 14575.

(ii) Funds equal to the difference between the amount in clause
(i) and the amount of the processing payments established in
subdivision (b) of Section 14575, and adjusted pursuant to
paragraph (2) of subdivision (c) of, and subdivision (f) of, Section
14575, to reduce the processing fee to the level provided in
subdivision (e) of Section 14575, or to reflect the agreement by a
willing purchaser to pay a voluntary artificial scrap value pursuant
to Section 14575.1.

(B) Notwithstanding Section 13340 of the Government Code,
the moneys in each processing fee account are hereby continuously
appropriated to the department for expenditure without regard to
fiscal years, for purposes of making processing payments pursuant
to Section 14575.

(6) Up to five million dollars ($5,000,000) may be annually
expended by the department for the purposes of undertaking a
statewide public education and information campaign aimed at
promoting increased recycling of beverage containers.

(7) Up to ten million dollars ($10,000,000) may be expended
annually by the department for quality incentive payments for
empty glass beverage containers pursuant to Section 14549.1.

(8) (A) Up to ten million dollars ($10,000,000) may be
expended annually by the department for market development
payments for empty plastic beverage containers pursuant to Section
14549.2, until January 1, 2022.

(B) In addition to the amount specified in subparagraph (A),
the department may expend the amount calculated pursuant to
subparagraph (C) for market development payments for empty
plastic beverage containers pursuant to Section 14549.2.

(C) The department shall calculate the amount authorized for
expenditure pursuant to subparagraph (B) in the following manner:

(i) The department shall annually determine, on or before
January 1, whether the amount of funds estimated to be necessary
pursuant to clause (ii) of subparagraph (A) of paragraph (5) for
deposit to a processing fee account established by the department
for plastic beverage containers to make processing payments for
plastic beverage containers for the current calendar year is less
than the total amount of funds that were estimated to be necessary
the previous calendar year pursuant to clause (ii) of subparagraph
(A) of paragraph (5) for deposit to that processing fee account.

(ii) If the amount estimated to be necessary for the current
calendar year, as specified in clause (i), is less than the amount
estimated to be necessary for the previous calendar year, the
department shall calculate the amount of that difference.

(iii) The department shall expend an amount that is not greater
than 50 percent of the amount calculated pursuant to clause (ii)
for purposes of subparagraph (B).

(iv) If the department determines that the amount of funds
authorized for expenditure pursuant to this subparagraph is not
needed to make plastic market development payments pursuant to
subparagraph (B) in the calendar year for which that amount is
allocated, the department may expend those funds during the
following year.

(v) If the department determines that there are insufficient funds
to both make the market development payments pursuant to
subparagraph (B) and to deposit the amount required by clause (ii)
of subparagraph (A) of paragraph (5), for purposes of making the
processing payments and reducing the processing fees pursuant to
Section 14575 for plastic beverage containers, the department shall
suspend the implementation of this subparagraph and subparagraph
(B).

(D) Subparagraphs (B) and (C) shall remain operative only until
January 1, 2022.

(b) (1) If the department determines, pursuant to a review made
pursuant to Section 14556, that there may be inadequate funds to
pay the payments required by this division, the department shall
immediately notify the appropriate policy and fiscal committees
of the Legislature regarding the inadequacy.

(2) On or before 180 days, but not less than 80 days, after the
notice is sent pursuant to paragraph (1), the department may reduce
or eliminate expenditures, or both, from the funds as necessary,
according to the procedure set forth in subdivision (c).

(c) If the department determines that there are insufficient funds
to make the payments specified pursuant to this section and Section
14575, the department shall reduce all payments proportionally.

(d) Before making an expenditure pursuant to paragraph begin delete (5) end delete begin insert (6) end insert
of subdivision (a), the department shall convene an advisory
committee consisting of representatives of the beverage industry,
beverage container manufacturers, environmental organizations,
the recycling industry, nonprofit organizations, and retailers to
advise the department on the most cost-effective and efficient
method of the expenditure of the funds for that education and
information campaign.

(e) Subject to the availability of funds, the department shall
retroactively pay in full any payments provided in this section that
have been proportionally reduced during the period of January 1,
2010, through June 30, 2010.