BILL ANALYSIS Ó
SB 842
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(Without Reference to File)
SENATE THIRD READING
SB
842 (Committee on Budget and Fiscal Review)
As Amended June 23, 2016
Majority vote
SENATE VOTE: Vote not relevant
SUMMARY: This is the Bottle Bill Trailer Bill for 2016-17. It
contains necessary changes related to the Budget Act of 2016.
This bill makes various statutory changes to implement the
2016-17 budget. Specifically, this bill:
1)Suspends all payments from the Beverage Container Recycling
Fund on April 1, 2017.
2)Provides an immediate adjustment of processing payments to
reflect the 2015 cost of recycling. This adjustment would
terminate on April 1, 2017.
3)Immediately prohibits the per-container handling fee from
dropping below the fee that was in effect on July 1, 2015.
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This adjustment would terminate on April 1, 2017.
4)Provides a suspension of penalties imposed on retailers for
those convenience zone locations that were closed between
January 1, 2016 and March 31, 2016. This suspension would
terminate on April 1, 2017.
5)Provides a suspension of penalties imposed on retailers for
those locations that closed as a result of CalRecycle action,
beginning July 1, 2016. This suspension would terminate on
April 1, 2017.
6)Provides CalRecycle the authority to expend up to $3 million
for supplemental payments to low-volume recycling centers for
the 2016-17 fiscal year.
7)Clarifies CalRecycle's current statutory authority to initiate
processing fee offset reductions if payments from the fund
exceed revenues. Prohibits the Department from reducing
processing fee offsets before April 1, 2017.
8)Requires the processing payments to be based on the scrap
values in the most recent available three-month period,
instead of 12-month period.
COMMENTS: Recycling rates have dropped to the lowest levels
since 2012, and are likely to continue to drop with decreased
access to recycling centers. The latest published CalRecycle
data suggests that the average recycling rate for all container
types was 7-8% lower than anticipated in the last quarterly
report. Every 1% drop in recycling rates costs consumers $12
million in reduced redemption.
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Approximately one-third of the total in-state convenience zone
recycling infrastructure has closed in the past 12 months,
caused by a combination of plummeting worldwide commodities
prices and an 11% reduction in state payments. It is
anticipated that 50% or more of the remaining infrastructure
could close once additional reduction in recycling payments take
effect on July 1, 2016. As a result, consumers are losing
access to redemption centers.
The last quarterly report for the Beverage Container Recycling
Fund (Fund) indicates a continued structural imbalance. Without
action by July 1, 2016, hundreds of retailers will be treated as
the recycler of last resort or face significant ($100/day per
impacted store site) penalties for noncompliance and more
convenience zone recycling centers will close.
This bill provides temporary funding for recycling centers and
grocers/retailers, and sunsets all payments from the Fund on
April 1, 2017. This provides nine months for the Legislature,
the Administration, and stakeholders to negotiate comprehensive
reform of the Beverage Container Recycling Program.
Analysis Prepared by:
Gabrielle Meindl / BUDGET / 916-319-2099 FN:
0003514
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