BILL ANALYSIS Ó
AB 1108
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Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 1108
(Low) - As Amended March 26, 2015
SUBJECT: Beverage Containers: recycling
SUMMARY: Prohibits certified recycling centers from accepting
or paying the California Refund Value (CRV) to a consumer for
more than 50 pounds of aluminum beverage containers or plastic
beverage containers, or 500 pounds of glass beverage containers
during a 24-hour period.
EXISTING LAW, pursuant to the California Beverage Container
Recycling and Litter Reduction Act (Bottle Bill):
1)Requires beverage containers sold in this state to have a CRV
of 5 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
CalRecycle. Continuously appropriates these funds to
CalRecycle for the payment of refund values and processing
fees.
2)Defines a number of terms, including:
a) "Beverage" to include, among other things, soda, beer
and other malt beverages, wine and distilled spirit
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coolers, carbonated mineral and soda waters, noncarbonated
fruit drinks, and vegetable juices in liquid form that are
intended for human consumption. Excludes from the
definition of 'beverage,' among other things, vegetable
drinks in beverage containers of more than 16 ounces, milk,
medical food, and any product sold in a container that is
not an aluminum beverage container, a glass container, a
plastic beverage container, or a bimetal container.
b) "Convenience zone" to mean either an area within a
one-half mile radius of a supermarket, or an area
designated by CalRecycle at a location where there is no
supermarket but there are two or more dealers located
within a one-mile radius of each other, and meet certain
specified criteria.
c) "Certified recycling center" to mean an operation that
is certified by CalRecycle and that accepts from consumers,
and pays or provides the CRV for, empty beverage containers
for recycling.
3)Requires CalRecycle to:
a) Establish reporting periods of six months each for
redemption rates and recycling rates for beverage
containers and requires them to determine and report the
redemption rates and recycling rates for those beverage
containers for each reporting period.
b) Certify recycling centers and promulgate regulations
establishing a procedure for certification of recycling
centers. Specifies that these regulations shall include,
as a condition for certification, that if one or more
certified entities have operated at the same location
within the past five years, the recycling center must
demonstrate to CalRecycle that its operations exhibit a
pattern of compliance with the Bottle Bill and its related
regulations.
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c) Pay handling fees to supermarket sites, nonprofit
convenience zone recyclers, or rural region recyclers to
provide an incentive for the redemption of empty beverage
containers in convenience zones, and adopt guidelines and
methods specifying a procedure for the payment of these
fees.
d) After deducting refund values, administrative fees, and
a reserve for contingencies, appropriate remaining Fund
monies to designated programs, grants, and fee payments
(PRC Section 14581).
4)Requires certified recycling centers to comply with the
requirements of the Bottle Bill and:
a) Operate during specified business hours;
b) Post signage that is at least two feet by two feet,
which includes the types of containers that can be redeemed
and the price paid by weight or per container;
c) Notify CalRecycle of any material change in the nature
of the operation;
d) Complete a precertification training program;
e) Accept and pay CRV for all Bottle Bill containers, and
not pay CRV for any container that is not included in the
Bottle Bill or any container that the center knows, or
should have known, is from out of state;
f) Prepare and maintain specified documentation; and,
g) Comply with all regulations adopted by CalRecycle.
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FISCAL EFFECT: Unknown
COMMENTS:
1)Author's statement.
AB 1108 prohibits a certified recycling center from
accepting or paying the CRV to a consumer for more than 50
pounds of aluminum beverage containers or plastic beverage
containers, or any combination thereof, or 500 pounds of
glass beverage containers, submitted by that consumer to
the certified recycling center in a single 24-hour period?
According to CalRecycle, lowering the limits is a
significant way to reduce fraud in the program. As a
result, importers of out-of-state containers, which are not
eligible for CRV, and scavenger fleets illegally removing
the contents of residential curbside recycling bins will
find it considerably more time-consuming and risky to reap
any fraudulent gains.
2)California's Bottle Bill. The Bottle Bill is designed to
provide consumers with a financial incentive for recycling and
to make recycling convenient to consumers. 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.
California's Bottle Bill has achieved an overall recycling rate
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over 80%- higher than any other bottle bill program in North
America. According to Californians Against Waste, since its
inception 25 years ago, the program has resulted in the
recycling of over 11.9 million tons of glass; 3 million tons
of aluminum; and, more than 2 million tons of plastic. In
addition to the diversion from landfill disposal, this
recycling has avoided an estimated 2 million metric tons of
CO2 equivalent greenhouse gas emissions over the last four
years.
Recycling in California also results in economic benefits to the
state. The Bottle Bill program has resulted in more than
10,000 jobs and over $100 million in reduced landfill disposal
fees.
3)Preventing fraud. In some ways, the Bottle Bill program is a
victim of its own success. According to CalRecycle, the
Bottle Bill is currently operating under a structural deficit,
mainly caused by historically high recycling rates and
mandated program payments. The structural deficit means that
program expenditures exceed program revenues under the current
mandated expenditure and revenue structure. When the Bottle
Bill does not have adequate funding, CalRecycle is required to
"proportionally reduce" many of the program's expenditures
evenly among program participants, with the exception of CRV
redemption for consumers.
Fraud also contributes to the structural deficit. In the summer
of 2011, CalRecycle, in coordination with the California
Department of Food and Agriculture (CDFA), initiated a
"no-cost" pilot program to survey and document vehicles
importing out-of-state beverage container material into
California through all 16 CDFA Border Protection Stations.
During the first 60 calendar days of the pilot program, the
information gathered indicated that over 2,500 vehicles,
including 378 rental trucks filled to capacity, imported
out-of-state beverage container material through these
stations. Based on the survey data referenced above,
CalRecycle states that a conservative estimate of fraud
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exposure to the Bottle Bill Fund is $7 million annually.
In recent years, CalRecycle and the Department of Justice (DOJ)
have increased Bottle Bill fraud enforcement efforts, which
have resulted in several high profile prosecutions. Most
recently, last November, five people were arrested in the
Turlock area on charges of conspiracy, grand theft, and
recycling fraud after investigators found 250,000 pounds of
beverage containers (22 truckloads) unauthorized beverage
containers and $125,000 cash. In 2014, DOJ arrested a Los
Angeles recycling center owner for defrauding the state of
more than $500,000. In 2010, DOJ and CalRecycle participated
in a multi-state fraud investigation that resulted in the
arrest of 31 individuals for Bottle Bill fraud rings that took
in over $3.5 million.
CalRecycle has made administrative changes to combat fraud. In
January, 2014, CalRecycle reduced the number of containers an
individual can bring to recycling centers for CRV in a single
day from 500 pounds of aluminum or plastic to 100 pounds, and
from 2,500 pounds of glass to 1,000 pounds and required that
anyone transporting 25 pounds or more of aluminum beverage
containers or 250 pounds of glass beverage containers into the
state must pass through a CDFA quarantine inspection station
and obtain and carry a proof of inspection. According to
CalRecycle, the following table indicates the number of
beverage containers per pound by material type.
-------------------------------------------------
|Material Type |Containers per |
| |Pound |
|--------------------------------+----------------|
|Aluminum | 29.1 |
|--------------------------------+----------------|
|Glass | 1.89 |
|--------------------------------+----------------|
|#1 PET (Polyethylene | 20.2 |
|Terephthalate) | |
|--------------------------------+----------------|
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|#2 HDPE (High Density | 7.3 |
|Polyethylene) | |
|--------------------------------+----------------|
|#3 PVC (Polyvinyl Chloride) | 11.2 |
|--------------------------------+----------------|
|#4 LDPE (Low Density | 40.6 |
|Polyethylene) | |
|--------------------------------+----------------|
|#5 PP (Polypropylene) | 8.8 |
|--------------------------------+----------------|
|#6 PS (Polystyrene) | 113.8 |
|--------------------------------+----------------|
|# 7 Other | 3.1 |
-------------------------------------------------
This bill expands on CalRecycle's ongoing efforts to eliminate
fraud in the program by making it more difficult for
individuals to fraudulently redeem large quantities of
out-of-state beverage containers.
4)Suggested amendment. This bill prohibits certified recycling
centers from accepting or paying CRV for specified amounts of
beverage containers to improve fraud prevention; however, it
is legal to import recycled materials, including beverage
containers, into California for scrap value. The committee
may wish to amend the bill to strike out "accept or" on page
3, line 35 to clarify that certified recycling centers are
only prevented from paying CRV and can continue to accept and
pay scrap value for recycled materials.
REGISTERED SUPPORT / OPPOSITION:
Support
AB 1108
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None on file
Opposition
None on file
Analysis Prepared by:Elizabeth MacMillan / NAT. RES. / (916)
319-2092