BILL ANALYSIS Ó AB 1419 Page 1 Date of Hearing: April 27, 2015 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair AB 1419 (Eggman) - As Introduced February 27, 2015 SUBJECT: Recycling centers SUMMARY: Authorizes the Department of Resources Recycling and Recovery (CalRecycle) to revoke certification of a certified recycling center if it determines that the recycling center is not open during its posted hours on two consecutive inspections, and the recycling center has no reportable volumes for a period of 30 consecutive days. Authorizes the holder of a certificate that is revoked to request a hearing to be conducted in the same manner as a hearing for an application that was denied. 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 California refund value (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: AB 1419 Page 2 a) "Beverage" to include, among other things, soda, beer and other malt beverages, wine and distilled spirit 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 AB 1419 Page 3 pattern of compliance with the Bottle Bill and its related regulations. 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 Act 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, AB 1419 Page 4 g) Comply with all regulations adopted by CalRecycle. FISCAL EFFECT: Unknown COMMENTS: 1)Background on the Bottle Bill. California's Bottle Bill has achieved an overall recycling rate over 80 percent - 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. 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. Consumers that wish to redeem the CRV can turn their containers in to a recycling center, which is certified by CalRecycle to accept beverage containers and pay the CRV to consumers to serve a convenience zone. CalRecycle pays 'handling fees' based on the number of containers accepted to certified AB 1419 Page 5 recycling centers. CalRecycle maintains a list of certified recycling centers to assist the public in locating convenient recycling opportunities. 2)This bill. According to the author: Currently, a certified operator of a recycling center is required to notify CalRecycle 10 days prior to the discontinuance of an operation. However, there is no penalty associated with failing to adhere to this requirement. As a result, many operators abandon recycling businesses without informing CalRecycle, which is problematic for various reasons. First, this results in incorrect information being provided to the public that a recycling center is operational when it may not be open for business. Second, with the perceived existence of more than one recycling center operating in a convenience zone, an operational recycling center is unable to receive [the] handling fee revenue that the site would otherwise be eligible for as the sole recycler in the convenience zone. Finally, the current process to declare that a non-probationary, certified recycling center is abandoned is unnecessarily cumbersome and negatively impacts already limited CalRecycle staffing resources. 3 Revoking certification. The process for revoking the certification of an abandoned recycling center takes a minimum of 60 days, following an inspection process that takes six to eight weeks. While certified recycling centers are required to notify CalRecycle if they close or change ownership, revoking the certification of a closed recycling center only occurs if CalRecycle receives a complaint that the center is not operating or if a center is closed when CalRecycle conducts an inspection, which generally happens once each year. This bill would streamline this process by creating a rebuttable presumption that a recycling center is abandoned, under specified conditions, while preserving due process if the owner of a certified recycling center wishes to continue operation. AB 1419 Page 6 3 Suggested amendment. This bill streamlines CalRecycle's authority to revoke the certification of an abandoned recycling center, which is an enforcement action. The committee may wish to amend the bill to move the bill's provisions from the chapter relating to administration (Chapter 3, commencing with section 14530) to the chapter relating to enforcement (Chapter 8, commencing with section 14590). REGISTERED SUPPORT / OPPOSITION: Support Californians Against Waste West Coast Chapter of the Institute of Scrap Recycling Industries, Inc. Opposition None on file AB 1419 Page 7 Analysis Prepared by:Elizabeth MacMillan / NAT. RES. / (916) 319-2092