BILL ANALYSIS Ó AB 2530 Page 1 Date of Hearing: May 11, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2530 (Gordon) - As Amended April 18, 2016 ----------------------------------------------------------------- |Policy |Natural Resources |Vote:|8 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill requires manufacturers of plastic beverage containers sold in the state to label the containers with the percentage of postconsumer recycled content. Specifically, this bill: 1)Beginning January 1, 2018, requires manufacturers a plastic beverage containers sold in the state to clearly indicate the average percentage of postconsumer recycled content in the beverage container, as specified. 2)For purposes of making a claim of postconsumer recycled AB 2530 Page 2 content and labeling the average percentage of postconsumer recycled content, requires the manufacturer to utilize one or more of the following approaches: a) The average percentage of postconsumer recycled content in all plastic beverage containers sold by the manufacturer in the state during the previous year. b) The average percentage of postconsumer recycled content in the plastic beverage containers sold by the manufacturer from a product line that carries the claim. c) Any other reasonable methodology consistent with the Federal Trade Commission's Guides for the Use of Environmental Marketing Claims. 3)Requires any claim of recycled content to be accurate and consistent with the Federal Trade Commission's Guides for the Use of Environmental Marketing Claims. 4)Allows a manufacturer to use an independent third-party certification entity to meet the requirements of the bill. 5)Requires a manufacturer to demonstrate compliance with the bill's requirements to CalRecycle on an annual basis. 6)Prohibits CalRecycle from reducing the processing fee requirements for a manufacturer of a plastic beverage container unless the manufacturer complies with the requirements of the bill. AB 2530 Page 3 FISCAL EFFECT: 1)Increased initial and ongoing annual enforcement costs of between $400,000 and $600,000 beginning in 2017-18 for CalRecycle to: a) review and determine label compliance; b) review and determine the accuracy of claimed recycled content; c) verify third-party certifications; d) perform periodic inspections at dealer locations; and e) communicate and process fee rate change to manufacturers. 2)Unknown potential processing fee increases if manufacturers fail to label their containers. COMMENTS: 1)Purpose. According to the author, consumers should be able to easily determine whether the beverages they purchase are made out of recycled plastic and know whether the beverage container material they have recycled is going back into new beverage containers. This bill provides consumers with that information. 2)Background. The California Beverage Container Recycling and Litter Reduction Act (Bottle Bill) 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. These funds are continuously appropriated to CalRecycle for the payment of refund values and processing fees. 3)Plastic recycling in California. California has around 10 AB 2530 Page 4 reclaimers accepting plastic for washing and producing recycled flake or pellets and 30 manufacturers that use recycled plastic to manufacture new products. While there has been significant growth in the use of recycled plastic in California, the vast majority of recycled plastic is sent overseas. In 2014, Californians returned approximately 17.7 billion (one million tons) beverage containers covered by the Bottle Bill. Plastic containers accounted for 220,000 tons. Approximately half of these were processed and recycled in California Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081