BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1005


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          Date of Hearing:  January 11, 2016 


                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES


                                 Das Williams, Chair


          AB 1005  
          (Gordon) - As Amended January 4, 2016


          SUBJECT:  California Beverage Container Recycling and Litter  
          Reduction Act:  market development payments


          SUMMARY:  Extends the sunset for the Plastic Market Development  
          Payment (PMDP) program from 2017 to 2022.  


          EXISTING LAW establishes the California Beverage Container  
          Recycling and Litter Reduction Act (Bottle Bill), which:


          1)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).  Continuously appropriates these  
            funds to CalRecycle for the payment of refund values and  
            processing fees.  

          2)Requires CalRecycle to: 

             a)   After deducting refund values, administrative fees, and  
               a reserve for contingencies, appropriate remaining monies  
               to designated programs, grants, and fee payments.  








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             b)   Award up to $10 million for PMDPs to "certified  
               entities" (collection and processing operations/recyclers)  
               and "product manufacturers."  

             c)   Specifies that CalRecycle may set different payment  
               amounts for certified entities and product manufacturers,  
               but neither payment shall exceed $150 per ton, according to  
               the following considerations:  

               i)     The minimum funding level needed to encourage  
                 in-state washing and processing of empty plastic beverage  
                 containers collected for recycling; 

               ii)    The minimum funding level needed to encourage  
                 in-state manufacturing that uses empty plastic beverage  
                 containers collected for recycling; and, 

               iii)   The total amount of funds projected to be available  
                 (currently $10 million annually) for PMDPs and the desire  
                 to maintain the minimum funding level needed throughout  
                 the year.  

          3)Sunsets the PMDP program on January 1, 2017.  

          FISCAL EFFECT:  This bill would continue the existing allocation  
          of $10 million annually for PMDP program. 


          


          COMMENTS:  


          1)The Bottle Bill.  The Bottle Bill is intended to create a  
            financial incentive for recycling and to make recycling  
            convenient for consumers to decrease the beverage container  
            component of the solid waste stream.  The centerpiece of the  








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            Bottle Bill is the California Redemption Value (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.  

          2)PMDP.  The plastic market development program uses surplus  
            redemption funds to make payments of up to $150 per ton to  
            California-based processors and manufacturers that recycle and  
            utilize post-consumer plastic beverage containers.  In  
            2007-09, the total amount of funds authorized was $5 million.   
            Beginning in 2010, the Legislature increased this payment  
            authority to $10 million annually.  This bill would extend the  
            sunset on the current $10 million annual allocation from 2017  
            to 2022.

          3)Program effectiveness.  The PMDP has benefitted California  
            plastic recyclers and processors, improved recycling markets  
            in California, and created jobs for Californians.    However,  
            some suggestions have been made by stakeholders to improve the  
            program, including addressing contamination in baled plastic  
            and targeting payments to increase recycling.  The author and  
            committee may wish to work with CalRecycle and stakeholders  
            should the bill move forward to ensure that the program  
            operates efficiently and effectively to maximize recycling  
            opportunities.

          REGISTERED SUPPORT / OPPOSITION:


          Support


          California Nevada Beverage Association








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          Californians Against Waste


          CarbonLITE


          Ecopet Plastics


          Global Plastics


          RePET Inc.


          Talco Plastics Inc.


          Verdeco Recycling, Inc.




          Opposition


          None on file




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












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