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