BILL NUMBER: SB 842	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 23, 2016
	AMENDED IN ASSEMBLY  MAY 25, 2016

INTRODUCED BY   Committee on Budget and Fiscal Review

                        JANUARY 7, 2016

    An act relating to the Budget Act of 2016.  
An act to amend Sections 14575 and 14585 of, to amend and repeal Se
  ction 14581 of, and to add and repeal Sections 14572.3 and
14575.2 of, the Public Resources Code, relating to recycling, and
making an appropriation therefor, to take effect immediately, bill
related to the budget. 



	LEGISLATIVE COUNSEL'S DIGEST


   SB 842, as amended, Committee on Budget and Fiscal Review.
 Budget Act of 2016.   California Beverage
Container Recycling and Litter Reduction Act.  
   (1) Existing law, the California Beverage Container Recycling and
Litter Reduction Act, requires a distributor to pay a redemption
payment for every beverage container sold or offered for sale in the
state. The act requires the Department of Resources Recycling and
Recovery to annually designate convenience zones, as defined,
statewide, and requires at least one certified recycling center or
location within every convenience zone that accepts all types of
empty beverage containers and pays the refund value, if any, at one
location, and that is open for business 30 hours per week.  

   This bill would exempt from the requirement that each convenience
zone be served by at least one certified recycling center a
convenience zone that was served by, or exempted because of, a
recycling center that closed between January 1, 2016, and March 31,
2016, inclusive, or that closed as a result of an action taken by the
department on or after July 1, 2016. 
   (2) Under the act, the department is required to calculate a
processing fee for each beverage container with a specified scrap
value, which is required to be paid by beverage manufacturers for
each beverage container sold or transferred to a distributor or
dealer. The department is required to calculate the processing fee in
a specified manner, so that the actual processing fee generally
equals 65% of the processing payment that the department is required
to pay to processors if the scrap value of the container having a
refund value pursuant to the act is less than the cost of recycling.
The department is required to establish a processing fee account in
the continuously appropriated California Beverage Container Recycling
Fund for each material type and to deposit processing fees and other
amounts in the applicable account.  
   This bill would, for purposes of calculating processing payments
on and after July 1, 2016, require the department, until April 1,
2017, to use the actual cost of recycling that was in effect on
December 30, 2015, to calculate processing fees. The bill would make
an appropriation by changing the terms and conditions under which the
department is authorized to make payments from a continuously
appropriated fund. The bill would provide that the processing fees
shall not be higher than they would be absent these provisions. 

   Existing law authorizes the department to reduce, subject to the
availability of funds, the processing fee based on the recycling rate
of the container by expending funds deposited in the processing fee
account for that material type, in accordance with a specified
formula.  
   This bill would provide a definition for the phrase, "subject to
the availability of funds," and state that definition is declaratory
of existing law. The bill would prohibit the department, until April
1, 2017, from finding that funds are unavailable for purposes of that
processing fee reduction.  
   Existing law authorizes the department to adjust the processing
payment upon making specified determinations with regard to, among
other things, the statewide scrap value for the most recent available
12-month period and the amount of funds in the processing fee
account.  
   This bill would instead require, for purposes of adjusting the
processing payment, use of the statewide scrap value as determined
for the most recent available 3-month period.  
   (3) The act continuously appropriates to the department the amount
necessary to pay handling fees to provide an incentive for the
redemption of empty beverage containers in convenience zones.
Existing law specifies procedures for determining the number of
containers for which a handling fee may be paid and requires the
department to set the amount of the handling fee using a specified
method, but formerly required the per-container handling fee to be
set until March 1, 2013, at an amount not less than the amount of the
per-container handling fee that was in effect on July 1, 2011. 

   This bill would require the per-container handling fee to be set
until April 1, 2017, at an amount that is not less than the amount of
the per-container handling fee that was in effect on July 1, 2015.
The bill would authorize the department to expend, once the
per-container handling fee is funded, up to $3,000,000 for the
2016-17 fiscal year for supplemental incentive handling fee payments
to low-volume recycling centers. The bill would make an appropriation
by changing the terms and conditions under which the department is
authorized to make payments from a continuously appropriated fund.
 
   (4) After setting aside funds for the payment of refund values and
administrative fees, and for a reserve for contingencies, existing
law continuously appropriates the remaining moneys in the fund to the
department for expenditure for designated programs, grants, and fee
payments, including, but not limited to, the processing fees and
payments specified in (2) and the handling fees specified in (3).
 
   This bill would make inoperative on April 1, 2017, the continuous
appropriations of the remaining moneys in the fund, and related
provisions.  
   (5) This bill would declare that it is to take effect immediately
as a bill providing for appropriations related to the Budget Bill.
 
   This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2016. 
   Vote: majority. Appropriation:  no   yes
 . Fiscal committee:  no   yes  .
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    (a) The Legislature finds and declares
all of the following:  
   (1) Recycling is critical to reducing the amount of materials sent
to landfills and reducing the amount of virgin materials necessary
to produce new products.  
   (2) The state's beverage container recycling program has achieved
significant success over the decades since it was enacted, including
a recycling rate as high as 85 percent in 2012-13.  
   (3) However, that success has been accompanied by significant
challenges, including reduced customer access to centers where they
can redeem their deposit, record low scrap prices, and a structural
deficit for the program's operating fund.  
   (4) The Department of Resources Recycling and Recovery projects
that the California Beverage Container Recycling Fund will have an
average annual structural deficit of $74.7 million for the fiscal
years 2015-16 to 2017-18, inclusive.  
   (5) In order to continue the success of the state's beverage
container recycling program, there must be a comprehensive
reprioritization of expenditures from the California Beverage
Container Recycling Fund and reconsideration of how the state
incentivizes the collection and reuse of recycled products. 

   (b) It is the intent of the Legislature to provide a limited-scope
temporary measure to preserve customer access to recycling while the
Legislature and the Department of Resources Recycling and Recovery
work with all stakeholders to restructure the state's beverage
container recycling program and the California Beverage Container
Recycling Fund. This restructure should include, but not be limited
to, all of the following:  
   (1) What containers should be included in the program.  
   (2) How to continue to raise recycling rates.  
   (3) How to preserve convenient customer access to recycling. 

   (4) How to incentivize the use of products made with recycled
materials.  
   (c) It is the intent of the Legislature to suspend all payments
from the California Beverage Container Recycling Fund on April 1,
2017, unless there is comprehensive reform of the program. 
   SEC. 2.    Section 14572.3 is added to the  
Public Resources Code   , to read:  
   14572.3.  (a) Notwithstanding Sections 14571.6, 14571.7, and
14571.8, commencing July 1, 2016, a convenience zone shall be exempt
from the requirements of Section 14571 if either of the following
apply:
   (1) The convenience zone was served by, or exempted because of, a
recycling center that closed between January 1, 2016, and March 31,
2016, inclusive.
   (2) The convenience zone was served by, or exempted because of, a
recycling center that closed as a result of an action taken by the
department on or after July 1, 2016.
   (b) Exemptions granted pursuant to subdivision (a) shall be in
addition to the total number of exemptions that the director may
grant pursuant to subdivision (d) of Section 14571.8.
   (c) This section shall become inoperative on April 1, 2017, and,
as of January 1, 2018, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2018, deletes or
extends the dates on which it becomes inoperative and is repealed.

   SEC. 3.    Section 14575 of the   Public
Resources Code   is amended to read: 
   14575.  (a) If any type of empty beverage container with a refund
value established pursuant to Section 14560 has a scrap value less
than the cost of recycling, the department shall, on January 1, 2000,
and on or before January 1 annually thereafter, establish a
processing fee and a processing payment for the container by the type
of the material of the container.
   (b) The processing payment shall be at least equal to the
difference between the scrap value offered to a statistically
significant sample of recyclers by willing purchasers, and except for
the initial calculation made pursuant to subdivision (d), the sum of
both of the following:
   (1) The actual cost for certified recycling centers, excluding
centers receiving a handling fee, of receiving, handling, storing,
transporting, and maintaining equipment for each container sold for
recycling or, only if the container is not recyclable, the actual
cost of disposal, calculated pursuant to subdivision (c). The
department shall determine the statewide weighted average cost to
recycle each beverage container type, which shall serve as the actual
recycling costs for purposes of paragraph (2) of subdivision (c), by
conducting a survey of the costs of a statistically significant
sample of certified recycling centers, excluding those recycling
centers receiving a handling fee, for receiving, handling, storing,
transporting, and maintaining equipment.
   (2) A reasonable financial return for recycling centers.
   (c) The department shall base the processing payment pursuant to
this section upon all of the following:
   (1) Except as provided in paragraph (2), for calculating
processing payments that will be in effect on and after January 1,
2004, the department shall determine the actual costs for certified
recycling centers, every second year, pursuant to paragraph (1) of
subdivision (b). The department shall adjust the recycling costs
annually to reflect changes in the cost of living, as measured by the
Bureau of Labor Statistics of the United States Department of Labor
or a successor agency of the United States government.
   (2) On and after January 1, 2010, the department shall use the
most recently published, measured actual costs of recycling for a
specific beverage material type if the department determines the
number of beverage containers for that material type that is returned
for recycling pursuant to Section 14551, based on the most recently
published calendar year number of beverage containers returned for
recycling, is less than 5 percent of the total number of beverage
containers returned for recycling for all material types. The
department shall determine the actual recycling cost to be used for
calculating processing payments for those beverage containers in the
following manner:
   (A) The department shall adjust the costs of recycling that
material type every second year by the percentage change in the most
recently measured cost of recycling HDPE plastic beverage containers,
as determined by the department. The department shall use the
percentage change in costs of recycling HDPE plastic beverage
containers for this purpose, even if HDPE plastic beverage containers
are less than 5 percent of the total volume of returned beverage
containers.
   (B) The department shall adjust the recycling costs annually for
that material type to reflect changes in the cost of living, as
measured by the Bureau of Labor Statistics of the United States
Department of Labor or a successor agency of the United States
government.
   (d) Except as specified in subdivision (e), the actual processing
fee paid by a beverage manufacturer shall equal 65 percent of the
processing payment calculated pursuant to subdivision (b).
   (e)  (1)    The department, consistent with
Section 14581 and subject to the availability of funds, shall reduce
the processing fee paid by beverage manufacturers by expending funds
in each material processing fee account, in the following manner:

   (1) 
    (A)  On January 1, 2005, and annually thereafter, the
processing fee shall equal the following amounts: 
   (A) 
    (i)  Ten percent of the processing payment for a
container type with a recycling rate equal to or greater than 75
percent. 
   (B) 
    (ii)  Eleven percent of the processing payment for a
container type with a recycling rate equal to or greater than 65
percent, but less than 75 percent. 
   (C) 
    (iii)  Twelve percent of the processing payment for a
container type with a recycling rate equal to or greater than 60
percent, but less than 65 percent. 
   (D) 
    (iv)  Thirteen percent of the processing payment for a
container type with a recycling rate equal to or greater than 55
percent, but less than 60 percent. 
   (E) 
    (v)  Fourteen percent of the processing payment for a
container type with a recycling rate equal to or greater than 50
percent, but less than 55 percent. 
   (F) 
    (vi)  Fifteen percent of the processing payment for a
container type with a recycling rate equal to or greater than 45
percent, but less than 50 percent. 
   (G) 
    (vii)  Eighteen percent of the processing payment for a
container type with a recycling rate equal to or greater than 40
percent, but less than 45 percent. 
   (H) 
    (viii)  Twenty percent of the processing payment for a
container type with a recycling rate equal to or greater than 30
percent, but less than 40 percent. 
   (I) 
    (ix)  Sixty-five percent of the processing payment for a
container type with a recycling rate less than 30 percent. 
   (2) 
    (B)  The department shall calculate the recycling rate
for purposes of paragraph (1) based on the 12-month period ending on
June 30 that directly precedes the date of the January 1 processing
fee determination. 
   (2) For purposes of this subdivision, "subject to the availability
of funds" means subject to the projected annual program revenues
being equal to or exceeding projected annual program expenditures in
the most recent fund condition statement provided to the Legislature
pursuant to Section 14556. This paragraph is declaratory of existing
law.  
   (3) Notwithstanding paragraph (2), the department shall not, until
April 1, 2017, find that funds are unavailable for purposes of
paragraph (1). 
   (f) Not more than once every three months, the department may make
an adjustment in the amount of the processing payment established
pursuant to this section notwithstanding any change in the amount of
the processing fee established pursuant to this section, for any
beverage container, if the department makes the following
determinations:
   (1) The statewide scrap value paid by processors for the material
type for the most recent available  12-month  
three-month  period directly preceding the quarter in which the
processing payment is to be adjusted is 5 percent more or 5 percent
less than the average scrap value used as the basis for the
processing payment currently in effect.
   (2) Funds are available in the processing fee account for the
material type.
   (3) Adjusting the processing payment is necessary to further the
objectives of this division.
   (g) (1) Except as provided in paragraphs (2) and (3), every
beverage manufacturer shall pay to the department the applicable
processing fee for each container sold or transferred to a
distributor or dealer within 40 days of the sale in the form and in
the manner which the department may prescribe.
   (2) (A) Notwithstanding Section 14506, with respect to the payment
of processing fees for beer and other malt beverages manufactured
outside the state, the beverage manufacturer shall be deemed to be
the person or entity named on the certificate of compliance issued
pursuant to Section 23671 of the Business and Professions Code. If
the department is unable to collect the processing fee from the
person or entity named on the certificate of compliance, the
department shall give written notice by certified mail, return
receipt requested, to that person or entity. The notice shall state
that the processing fee shall be remitted in full within 30 days of
issuance of the notice or the person or entity shall not be permitted
to offer that beverage brand for sale within the state. If the
person or entity fails to remit the processing fee within 30 days of
issuance of the notice, the department shall notify the Department of
Alcoholic Beverage Control that the certificate holder has failed to
comply, and the Department of Alcoholic Beverage Control shall
prohibit the offering for sale of that beverage brand within the
state.
   (B) The department shall enter into a contract with the Department
of Alcoholic Beverage Control, pursuant to Section 14536.5,
concerning the implementation of this paragraph, which shall include
a provision reimbursing the Department of Alcoholic Beverage Control
for its costs incurred in implementing this paragraph.
   (3) (A) Notwithstanding paragraph (1), if a beverage manufacturer
displays a pattern of operation in compliance with this division and
the regulations adopted pursuant to this division, to the
satisfaction of the department, the beverage manufacturer may make a
single annual payment of processing fees, if the beverage
manufacturer meets either of the following conditions:
   (i) If the redemption payment and refund value is not increased
pursuant to paragraph (3) of subdivision (a) of Section 14560, the
beverage manufacturer's projected processing fees for a calendar year
total less than ten thousand dollars ($10,000).
   (ii) If the redemption payment and refund value is increased
pursuant to paragraph (3) of subdivision (a) of Section 14560, the
beverage manufacturer's projected processing fees for a calendar year
total less than fifteen thousand dollars ($15,000).
   (B) An annual processing fee payment made pursuant to this
paragraph is due and payable on or before February 1 for every
beverage container sold or transferred by the beverage manufacturer
to a distributor or dealer in the previous calendar year.
   (C) A beverage manufacturer shall notify the department of its
intent to make an annual processing fee payment pursuant to this
paragraph on or before January 31 of the calendar year for which the
payment will be due.
   (4) The department shall pay the processing payments on redeemed
containers to processors, in the same manner as it pays refund values
pursuant to Sections 14573 and 14573.5. The processor shall pay the
recycling center the entire processing payment representing the
actual costs and financial return incurred by the recycling center,
as specified in subdivision (b).
   (h) When assessing processing fees pursuant to subdivision (a),
the department shall assess the processing fee on each container
sold, as provided in subdivisions (d) and (e), by the type of
material of the container, assuming that every container sold will be
redeemed for recycling, whether or not the container is actually
recycled.
   (i) The container manufacturer, or a designated agent, shall pay
to, or credit, the account of the beverage manufacturer in an amount
equal to the processing fee.
   (j) If, at the end of any calendar year for which glass recycling
rates equal or exceed 45 percent and sufficient surplus funds remain
in the glass processing fee account to make the reduction pursuant to
this subdivision or if, at the end of any calendar year for which
PET recycling rates equal or exceed 45 percent and sufficient surplus
funds remain in the PET processing fee account to make the reduction
pursuant to this subdivision, the department shall use these surplus
funds in the respective processing fee accounts in the following
calendar year to reduce the amount of the processing fee that would
otherwise be due from glass or PET beverage manufacturers pursuant to
this subdivision.
   (1) The department shall reduce the glass or PET processing fee
amount pursuant to this subdivision in addition to any reduction for
which the glass or PET beverage container qualifies under subdivision
(e).
   (2) The department shall determine the processing fee reduction by
dividing two million dollars ($2,000,000) from each processing fee
account by an estimate of the number of containers sold or
transferred to a distributor during the previous calendar year, based
upon the latest available data.
   SEC. 4.    Section 14575.2 is added to the  
Public Resources Code   , to read:  
   14575.2.  (a) Notwithstanding Section 14575, for purposes of
calculating processing payments on and after July 1, 2016, the
department shall use the actual cost of recycling that was in effect
on December 30, 2015. The department shall adjust the recycling costs
annually to reflect changes in the cost of living, as measured by
the Bureau of Labor Statistics of the United States Department of
Labor or a successor agency of the United States government.
   (b) Notwithstanding subdivisions (d) and (e) of Section 14575, on
and after July 1, 2016, the department shall not impose a processing
fee on a beverage manufacturer that is higher than the processing fee
that would be imposed without this section.
   (c) This section shall become inoperative on April 1, 2017, and,
as of January 1, 2018, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2018, deletes or
extends the dates on which it becomes inoperative and is repealed.

   SEC. 5.    Section 14581 of the   Public
Resources Code   is amended to read: 
   14581.  (a) Subject to the availability of funds and in accordance
with subdivision (b), the department shall expend the moneys set
aside in the fund, pursuant to subdivision (c) of Section 14580, for
the purposes of this section in the following manner:
   (1)  (A)    For each fiscal year, the department
may expend the amount necessary to make the required handling fee
payment pursuant to  subdivisions (f) and (g) of  Section
14585. 
   (B) Only after subparagraph (A) is funded for the 2016-17 fiscal
year, the department may expend up to three million dollars
($3,000,000) for supplemental incentive handling fee payments to
low-volume recycling centers pursuant to subdivision (h) of Section
14585. 
   (2) Fifteen million dollars ($15,000,000) shall be expended
annually for payments for curbside programs and neighborhood dropoff
programs pursuant to Section 14549.6.
   (3) (A) Ten million five hundred thousand dollars ($10,500,000)
may be expended annually for payments of five thousand dollars
($5,000) to cities and ten thousand dollars ($10,000) for payments to
counties for beverage container recycling and litter cleanup
activities, or the department may calculate the payments to counties
and cities on a per capita basis, and may pay whichever amount is
greater, for those activities.
   (B) Eligible activities for the use of these funds may include,
but are not necessarily limited to, support for new or existing
curbside recycling programs, neighborhood dropoff recycling programs,
public education promoting beverage container recycling, litter
prevention, and cleanup, cooperative regional efforts among two or
more cities or counties, or both, or other beverage container
recycling programs.
   (C) These funds shall not be used for activities unrelated to
beverage container recycling or litter reduction.
   (D) To receive these funds, a city, county, or city and county
shall fill out and return a funding request form to the department.
The form shall specify the beverage container recycling or litter
reduction activities for which the funds will be used.
   (E) The department shall annually prepare and distribute a funding
request form to each city, county, or city and county. The form
shall specify the amount of beverage container recycling and litter
cleanup funds for which the jurisdiction is eligible. The form shall
not exceed one double-sided page in length, and may be submitted
electronically. If a city, county, or city and county does not return
the funding request form within 90 days of receipt of the form from
the department, the city, county, or city and county is not eligible
to receive the funds for that funding cycle.
   (F) For the purposes of this paragraph, per capita population
shall be based on the population of the incorporated area of a city
or city and county and the unincorporated area of a county. The
department may withhold payment to any city, county, or city and
county that has prohibited the siting of a supermarket site, caused a
supermarket site to close its business, or adopted a land use policy
that restricts or prohibits the siting of a supermarket site within
its jurisdiction.
   (4) One million five hundred thousand dollars ($1,500,000) may be
expended annually in the form of grants for beverage container
recycling and litter reduction programs.
   (5) (A) The department shall expend the amount necessary to pay
the processing payment established pursuant to Section 14575. The
department shall establish separate processing fee accounts in the
fund for each beverage container material type for which a processing
payment and processing fee are calculated pursuant to Section 14575,
or for which a processing payment is calculated pursuant to Section
14575 and a voluntary artificial scrap value is calculated pursuant
to Section 14575.1, into which account shall be deposited both of the
following:
   (i) All amounts paid as processing fees for each beverage
container material type pursuant to Section 14575.
   (ii) Funds equal to the difference between the amount in clause
(i) and the amount of the processing payments established in
subdivision (b) of Section 14575, and adjusted pursuant to paragraph
(2) of subdivision (c) of, and subdivision (f) of, Section 14575, to
reduce the processing fee to the level provided in subdivision (e) of
Section 14575, or to reflect the agreement by a willing purchaser to
pay a voluntary artificial scrap value pursuant to Section 14575.1.
   (B) Notwithstanding Section 13340 of the Government Code, the
moneys in each processing fee account are hereby continuously
appropriated to the department for expenditure without regard to
fiscal years, for purposes of making processing payments pursuant to
Section 14575.
   (6) Up to five million dollars ($5,000,000) may be annually
expended by the department for the purposes of undertaking a
statewide public education and information campaign aimed at
promoting increased recycling of beverage containers.
   (7) Up to ten million dollars ($10,000,000) may be expended
annually by the department for quality incentive payments for empty
glass beverage containers pursuant to Section 14549.1.
   (8) (A) Up to ten million dollars ($10,000,000) may be expended
annually by the department for market development payments for empty
plastic beverage containers pursuant to Section 14549.2, until
January 1, 2017.
   (B) In addition to the amount specified in subparagraph (A), the
department may expend the amount calculated pursuant to subparagraph
(C) for market development payments for empty plastic beverage
containers pursuant to Section 14549.2.
   (C) The department shall calculate the amount authorized for
expenditure pursuant to subparagraph (B) in the following manner:
   (i) The department shall determine, on or before January 1, 2012,
and annually thereafter, whether the amount of funds estimated to be
necessary pursuant to clause (ii) of subparagraph (A) of paragraph
(6) for deposit to a processing fee account established by the
department for plastic beverage containers to make processing
payments for plastic beverage containers for the current calendar
year is less than the total amount of funds that were estimated to be
necessary the previous calendar year pursuant to clause (ii) of
subparagraph (A) of paragraph (6) for deposit to that processing fee
account.
   (ii) If the amount estimated to be necessary for the current
calendar year, as specified in clause (i), is less than the amount
estimated to be necessary for the previous calendar year, the
department shall calculate the amount of that difference.
   (iii) The department shall expend an amount that is not greater
than 50 percent of the amount calculated pursuant to clause (ii) for
purposes of subparagraph (B).
   (iv) If the department determines that the amount of funds
authorized for expenditure pursuant to this subparagraph is not
needed to make plastic market development payments pursuant to
subparagraph (B) in the calendar year for which that amount is
allocated, the department may expend those funds during the following
year.
   (v) If the department determines that there are insufficient funds
to both make the market development payments pursuant to
subparagraph (B) and to deposit the amount required by clause (ii) of
subparagraph (A) of paragraph (6), for purposes of making the
processing payments and reducing the processing fees pursuant to
Section 14575 for plastic beverage containers, the department shall
suspend the implementation of this subparagraph and subparagraph (B).

   (D) Subparagraphs (B) and (C) shall remain operative only until
January 1, 2017.
   (b) (1) If the department determines, pursuant to a review made
pursuant to Section 14556, that there may be inadequate funds to pay
the payments required by this division, the department shall
immediately notify the appropriate policy and fiscal committees of
the Legislature regarding the inadequacy.
   (2) On or before 180 days, but not less than 80 days, after the
notice is sent pursuant to paragraph (1), the department may reduce
or eliminate expenditures, or both, from the funds as necessary,
according to the procedure set forth in subdivision (c).
   (c) If the department determines that there are insufficient funds
to make the payments specified pursuant to this section and Section
14575, the department shall reduce all payments proportionally.
   (d) Prior to making an expenditure pursuant to paragraph (6) of
subdivision (a), the department shall convene an advisory committee
consisting of representatives of the beverage industry, beverage
container manufacturers, environmental organizations, the recycling
industry, nonprofit organizations, and retailers to advise the
department on the most cost-effective and efficient method of the
expenditure of the funds for that education and information campaign.

   (e) Subject to the availability of funds, the department shall
retroactively pay in full any payments provided in this section that
have been proportionally reduced during the period of January 1,
2010, through June 30, 2010. 
   (f) This section shall become inoperative on April 1, 2017, and,
as of January 1, 2018, is repealed, unless a later enacted statute,
that becomes operative on or before January 1,
                    2018, deletes or extends the dates on which it
becomes inoperative and is repealed. 
   SEC. 6.    Section 14585 of the   Public
Resources Code   is amended to read: 
   14585.  (a) The department shall adopt guidelines and methods for
paying 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. The
guidelines shall include, but not be limited to, all of the
following:
   (1) Handling fees shall be paid on a monthly basis, in the form
and manner adopted by the department. The department shall require
that claims for the handling fee be filed with the department not
later than the first day of the second month following the month for
which the handling fee is claimed as a condition of receiving any
handling fee.
   (2) The department shall determine the number of eligible
containers per site for which a handling fee will be paid in the
following manner:
   (A) Each eligible site's combined monthly volume of glass and
plastic beverage containers shall be divided by the site's total
monthly volume of all empty beverage container types.
   (B) If the quotient determined pursuant to subparagraph (A) is
equal to, or more than, 10 percent, the total monthly volume of the
site shall be the maximum volume which is eligible for a handling fee
for that month.
   (C) If the quotient determined pursuant to subparagraph (A) is
less than 10 percent, the department shall divide the volume of glass
and plastic beverage containers by 10 percent. That quotient shall
be the maximum volume that is eligible for a handling fee for that
month.
   (3)  (A)    On and after the
effective date of the act amending this section during the 
2011-12   2015-16  Regular Session, and until
 March   April  1,  2013, 
 2017,  the department shall pay a handling fee per
eligible container in the amount determined pursuant to subdivisions
(f) and (g). 
   (B) On and after July 1, 2014, the department shall pay a handling
fee per eligible container in the amount determined pursuant to
subdivision (f). 
   (4) If the eligible volume in any given month would result in
handling fee payments that exceed the allocation of funds for that
month, as provided in subdivision (b), sites with higher eligible
monthly volumes shall receive handling fees for their entire eligible
monthly volume before sites with lower eligible monthly volumes
receive any handling fees.
   (5) (A) If a dealer where a supermarket site, nonprofit
convenience zone recycler, or rural region recycler is located ceases
operation for remodeling or for a change of ownership, the operator
of that supermarket site nonprofit convenience zone recycler, or
rural region recycler shall be eligible to apply for handling fees
for that site for a period of three months following the date of the
closure of the dealer.
   (B) Every supermarket site operator, nonprofit convenience zone
recycler, or rural region recycler shall promptly notify the
department of the closure of the dealer where the supermarket site,
nonprofit convenience zone recycler, or rural region recycler is
located.
   (C) Notwithstanding subparagraph (A), any operator who fails to
provide notification to the department pursuant to subparagraph (B)
shall not be eligible to apply for handling fees.
   (b) The department may allocate the amount authorized for
expenditure for the payment of handling fees pursuant to 
subparagraph (A) of  paragraph (1) of subdivision (a) of Section
14581 on a monthly basis and may carry over any unexpended monthly
allocation to a subsequent month or months. However, unexpended
monthly allocations shall not be carried over to a subsequent fiscal
year for the purpose of paying handling fees but may be carried over
for any other purpose pursuant to Section 14581.
   (c) (1) The department shall not make handling fee payments to
more than one certified recycling center in a convenience zone. If a
dealer is located in more than one convenience zone, the department
shall offer a single handling fee payment to a supermarket site
located at that dealer. This handling fee payment shall not be split
between the affected zones. The department shall stop making handling
fee payments if another recycling center certifies to operate within
the convenience zone without receiving payments pursuant to this
section, if the department monitors the performance of the other
recycling center for 60 days and determines that the recycling center
is in compliance with this division. Any recycling center that
locates in a convenience zone, thereby causing a preexisting
recycling center to become ineligible to receive handling fee
payments, is ineligible to receive any handling fee payments in that
convenience zone.
   (2) The department shall offer a single handling fee payment to a
rural region recycler located anywhere inside a convenience zone, if
that convenience zone is not served by another certified recycling
center and the rural region recycler does either of the following:
   (A) Operates a minimum of 30 hours per week in one convenience
zone.
   (B) Serves two or more convenience zones, and meets all of the
following criteria:
   (i) Is the only certified recycler within each convenience zone.
   (ii) Is open and operating at least eight hours per week in each
convenience zone and is certified at each location.
   (iii) Operates at least 30 hours per week in total for all
convenience zones served.
   (d) The department may require the operator of a supermarket site
or rural region recycler receiving handling fees to maintain records
for each location where beverage containers are redeemed, and may
require the supermarket site or rural region recycler to take any
other action necessary for the department to determine that the
supermarket site or rural region recycler does not receive an
excessive handling fee.
   (e) The department may determine and utilize a standard container
per pound rate, for each material type, for the purpose of
calculating volumes and making handling fee payments.
   (f) (1) On or before January 1, 2008, and every two years
thereafter, the department shall conduct a survey pursuant to this
subdivision of a statistically significant sample of certified
recycling centers that receive handling fee payments to determine the
actual cost incurred for the redemption of empty beverage containers
by those certified recycling centers. The department shall conduct
these cost surveys in conjunction with the cost surveys performed by
the department pursuant to subdivision (b) of Section 14575 to
determine processing payments and processing fees. The department
shall include, in determining the actual costs, only those allowable
costs contained in the regulations adopted pursuant to this division
that are used by the department to conduct cost surveys pursuant to
subdivision (b) of Section 14575.
   (2) Using the information obtained pursuant to paragraph (1), the
department shall then determine the statewide weighted average cost
incurred for the redemption of empty beverage containers, per empty
beverage container, at recycling centers that receive handling fees.
   (3) Except as provided in subdivision (g), the department shall
determine the amount of the handling fee to be paid for each empty
beverage container by subtracting the amount of the statewide
weighted average cost per container to redeem empty beverage
containers by recycling centers that do not receive handling fees
from the amount of the statewide weighted average cost per container
determined pursuant to paragraph (2).
   (4) The department shall adjust the statewide average cost
determined pursuant to paragraph (2) for each beverage container
annually to reflect changes in the cost of living, as measured by the
Bureau of Labor Statistics of the United States Department of Labor
or a successor agency of the United States government.
   (5) The cost information collected pursuant to this section at
recycling centers that receive handling fees shall not be used in the
calculation of the processing payments determined pursuant to
Section 14575.
   (g) (1) On and after the effective date of the act amending this
section during the  2011-12   2015-16 
Regular Session, and until  March   April 
1,  2013,   2017,  the per-container
handling fee shall not be less than the amount of the per-container
handling fee that was in effect on July 1,  2011. 
 2015. 
   (2) The department may update the methodology and scrap values
used for calculating the handling fee from the most recent cost
survey if it finds that the handling fee resulting from the most
recent cost survey does not accurately represent the actual cost
incurred for the redemption of empty beverage containers by those
certified recycling centers. 
   (h) (1) For the 2016-17 fiscal year, the department may expend up
to three million dollars ($3,000,000) from the fund for supplemental
incentive handling fee payments to low-volume recycling centers. The
department shall allocate the amount authorized for these
supplemental incentive handling fee payments into 12 equal monthly
allotments.  
   (2) Supplemental incentive handling fee payments shall be
distributed once per month in equal amounts to recycling centers that
are eligible for handling fees pursuant to subdivision (a), subject
to all of the following requirements:  
   (A) A recycling center shall not receive supplemental incentive
handling fee payments pursuant to this subdivision unless the
recycling center has no more than 600,000 beverage containers
eligible for handling fees per month.  
   (B) (i) Payments shall be distributed first to no more than 100
recycling centers with the lowest volumes of beverage containers that
are located in rural regions.  
   (ii) After payments are distributed pursuant to clause (i),
payments shall be distributed to other recycling centers with the
lowest volumes of beverage containers.  
   (iii) No more than 400 recycling centers shall receive
supplemental incentive handling fee payments pursuant to this
subdivision.  
   (3) The department may make the supplemental incentive handling
fee payments authorized pursuant to this subdivision by augmenting
handling fee payments received by recyclers pursuant to subdivision
(f) or (g) of this section.  
   (4) For the purposes of this subdivision, "rural region" has the
same meaning as in Section 14588.1. 
   SEC. 7.    This act is a bill providing for
appropriations related to the Budget Bill within the meaning of
subdivision (e) of Section 12 of Article IV of the California
Constitution, has been identified as related to the budget in the
Budget Bill, and shall take effect immediately.  
  SECTION 1.    It is the intent of the Legislature
to enact statutory changes, relating to the Budget Act of 2016.