BILL ANALYSIS Ó AB 1005 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1005 (Gordon and Levine) As Amended August 15, 2016 2/3 vote -------------------------------------------------------------------- |ASSEMBLY: |75-1 |(January 25, |SENATE: |39-0 |(August 22, | | | |2016) | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: NAT. RES. SUMMARY: Extends the sunset for plastic market development payments (PMDP) from 2017 to 2018. The Senate amendments change the sunset date from 2022 to 2018. 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 $0.05 for containers that hold fewer than 24 ounces and $0.10 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 AB 1005 Page 2 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. 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: According to the Senate Appropriations Committee, this bill has the following costs: 1)$10 million annual appropriation (Beverage Container Recycling Fund) to the PMDP. AB 1005 Page 3 2)$173,000 per year (Beverage Container Recycling Fund) to the Department of Resources Recycling and Recovery (CalRecycle) for program administration. COMMENTS: 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 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. The PMDP 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 until 2017. This bill would extend the sunset on the current $10 million annual allocation from 2017 to 2018. Analysis Prepared by: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0004408 AB 1005 Page 4