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