BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2530| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 2530 Author: Gordon (D) Amended: 6/15/16 in Senate Vote: 21 SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 6/29/16 AYES: Wieckowski, Hill, Jackson, Leno, Pavley NOES: Gaines, Bates SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/1/16 AYES: Lara, Beall, Hill, McGuire, Mendoza NOES: Bates, Nielsen ASSEMBLY FLOOR: 59-11, 6/2/16 - See last page for vote SUBJECT: Recycling: beverage containers SOURCE: Californians Against Waste DIGEST: This bill requires manufacturers of beverages sold in plastic beverage containers subject to the California Redemption Value (CRV) to report the amount of virgin plastic and postconsumer recycled plastic used to the California Department of Resources Recycling and Recovery (CalRecycle) annually. ANALYSIS: AB 2530 Page 2 Existing law: 1) Enacts the California Beverage Container Recycling and Litter Reduction Act (Bottle Bill) which: a) Requires beverage containers, as defined, sold in-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 distributors to pay a redemption payment to CalRecycle for every beverage container sold in the state. These funds are continuously appropriated to CalRecycle for the payment of refund values and processing fees. b) Requires every glass manufacturer in the state to use at least 35% of postfilled glass in the manufacturing of their glass food, drink or beverage containers, as specified. 2)Enacts the Integrated Waste Management Act which: a) Requires that rigid plastic packaging containers sold in the state contain a minimum of 25% postconsumer recycled material and have a recycling rate of at least 45%. b) Requires that manufacturers of plastic trash bags that are at or above 0.70 mils thick to annually certify that they comply with one of the following: i) That the bags sold in California contain a minimum of 10% recycled content; or, ii) That all plastic products sold by the manufacturer in California contain a minimum of 30% recycled content. c) Requires that expanded polystyrene loosefill packaging (i.e., packing peanuts) sold in the state contain a minimum AB 2530 Page 3 of 60% recycled content. d) Prohibits a manufacturer or supplier from selling a plastic food or beverage container that is advertised with a specific recycling content amount unless the manufacturer or supplier is able to provide certification of that claim in a format that is easy to understand and scientifically accurate. e) Requires a manufacturer or supplier to provide information and documentation verifying the recycling content of a plastic food or beverage container within 90 days of a request for such information made by a member of the public or a state agency. This bill: 1) Requires a manufacturer of a plastic beverage container, beginning in March 1, 2018, to report the amount of virgin plastic and postconsumer recycled content in plastic used in their beverage containers subject to CRV sold in the state the previous calendar year. 2) Requires manufacturers submit the above information to CalRecycle under penalty of perjury. 3) Specifies that the requirements above do not apply to a refillable plastic beverage container. Background 1) Statutes requiring recycled content. California has several programs and statutes that require minimum levels of recycled content or "postconsumer" material in various products or purchases. Postconsumer material is generally defined as products that were bought, used, and recycled by consumers. For example, a plastic bottle that has been purchased, recycled, and used to make another product would be considered postconsumer material. a) Rigid plastic packaging container law. California's AB 2530 Page 4 Rigid Plastic Packaging Container (RPPC) law was enacted in 1991 as part of an effort to reduce the amount of plastic waste disposed in California landfills and to increase the use of recycled postconsumer plastic. The law mandates that rigid plastic packaging containers sold in the state contain a minimum of 25% postconsumer recycled material. Some products are exempt from compliance, including food, drugs, baby formula, and other materials. b) Glass beverage container recycled content. California state law requires in-state glass manufacturers to use a minimum of 35% postfilled glass (glass that had previously been filled with a beverage or food) in the manufacturing of their glass food drink, or beverage containers, measured in the aggregate on an annual basis, and a minimum of 25% postfilled glass if the manufacturers use at least half mixed-color cullet. Glass manufacturers are required to report each month to CalRecycle on the total tons of new glass food, drink and beverage containers made in California and the tons of California postfilled glass used in the manufacturing of those new containers. There is no similar statewide requirement for plastic beverage containers. c) State Agency Buy Recycled Campaign. Current state law establishes the State Agency Buy Recycled Campaign (SABRC), which requires state agencies and the Legislature to purchase recycled-content products and track those purchases. The SABRC requires minimum postconsumer material content for 11 specified product categories, including a minimum level of 10% postconsumer material for plastic products. All state agencies are mandated to require all businesses to certify in writing the percentage of postconsumer material in the products, materials, goods, or supplies offered or sold to the state. 2) Plastic recycling in California. California has around 10 reclaimers accepting plastic for washing and producing recycled flake or pellets and over 30 manufacturers that use AB 2530 Page 5 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. Roughly half of these plastic containers are at least partially processed in California. Comments 1) Purpose of Bill. According to the author, "Thirty years ago, the Legislature passed and the Governor signed the California Beverage Container Recycling and Litter Reduction Act, better known as the Bottle Bill. This Act established California's systems for the recycling of beverage containers. In the decades since the Bottle Bill was enacted, Californians have embraced recycling beverage containers and roughly 82% are returned for recycling. Given the public's embrace of recycling, consumers should be able to determine whether beverage companies are using recycled plastic in the beverages they purchase." 2) No postconsumer recycled content requirement. As noted in the background, several other programs in California, including the RPPC program, require minimum levels of postconsumer recycled material. This bill does not impose a mandate for postconsumer recycled content in beverage containers, but does require manufacturers who sell beverages in plastic containers in California, and that are subject to CVR, to report annually to CalRecycle on the level of postconsumer recycled material used for those plastic beverages. Related/Prior Legislation AB 1447 (Alejo, 2016) would have established minimum recycled content standards for polyethylene terephthalate (PET) food and beverage packing and expanded the recycled content requirement for glass food and beverage containers to containers AB 2530 Page 6 manufactured out of state. This bill was held in the Assembly Appropriations Committee. SB 732 (Pan, 2016) would have required every manufacturer of a beverage sold in any plastic container to demonstrate to CalRecycle that each type of a plastic beverage container sold in California contains no less than 10% postfilled material, and would have prohibited CalRecycle from reducing the processing fees for beverage manufacturers unless their beverage containers meet the required recycled content. This bill was held in Senate Environmental Quality Committee. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes According to the Senate Appropriations Committee: One-time costs of approximately $71,000 (California Beverage Container Recycling Fund) for CalRecycle to develop the reporting infrastructure. Minor ongoing costs. SUPPORT: (Verified8/2/16) Californians Against Waste (source) As You Sow CarbonLITE Industries Central Contra Costa Solid Waste Authority Clean Water Action EcoPET Plastics, Inc. Global PET Los Angeles Alliance for a New Economy Marin County Hazardous and Solid Waste Management Joint Power Authority AB 2530 Page 7 Marin Sanitary Service Napa Recycling &Waste Services Natural Resources Defense Council Northern California Recycling Association RePET Sierra Club California Sonoma County Waste Management Agency StopWaste Tri-CED Community Recycling UPSTREAM Verdeco Recycling, Inc. West Coast Chapter of the Institute of Scrap Recycling Industries Zanker Recycling OPPOSITION: (Verified8/2/16) American Beverage Association American Chemistry Council California Bottled Water Association California Chamber of Commerce California Grocer Association California League of Food Processors California Manufacturers and Technology Association California Nevada Beverage Association California Retailers Association Grocery Manufacturers Association International Bottled Water Association Plastic Recycling Corporation of California SPI - The Plastics Industry Trade Association ARGUMENTS IN SUPPORT: Proponents say that AB 2530 creates a voluntary market incentive for beverage producers to increase their use of recycled content. They note that while Californians have done a great job collecting beverage containers for recycling, the in-state plastic recycling market is facing considerable challenges, including the drastic drop in oil prices, which has lowered demand and price for California-generated recycled materials, and that this has many manufacturers reconsidering their commitments to using recycled content. They further state that AB 2530 will encourage the development of a closed-loop recycling system that supports a AB 2530 Page 8 robust in-state recycling industry that not only creates jobs but also provides a valuable raw material for the state's manufacturers. ARGUMENTS IN OPPOSITION:Opponents argue that AB 2530 would impose new, costly and unnecessary bureaucratic duties on the beverage industry that ignore the realities of today's regional beverage manufacturing and distribution marketplace. Specifically, they note that large beverage manufacturers have hundreds of specific product packages that would need an annual in-depth supply chain analysis to generate an accurate percentage of recycled content. They further argue that the bill fails to recognize alternative environmental commitments and packaging innovation, presents a potential for frivolous litigation, and fails to demonstrate a public policy rationale or purpose. ASSEMBLY FLOOR: 59-11, 6/2/16 AYES: Alejo, Arambula, Atkins, Baker, Bloom, Bonilla, Bonta, Brown, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, McCarty, Medina, Mullin, Nazarian, O'Donnell, Olsen, Patterson, Quirk, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon NOES: Achadjian, Travis Allen, Brough, Chávez, Harper, Mathis, Melendez, Obernolte, Wagner, Waldron, Wilk NO VOTE RECORDED: Bigelow, Burke, Cooper, Dahle, Beth Gaines, Gallagher, Kim, Ridley-Thomas, Rodriguez, Steinorth Prepared by:Rebecca Newhouse / E.Q. / (916) 651-4108 8/3/16 18:21:32 **** END **** AB 2530 Page 9