BILL ANALYSIS
AB 7 X8
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 7 X8 (Budget Committee)
As Amended February 17, 2010
2/3 vote. Urgency
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|ASSEMBLY: | |(February 4, |SENATE: |31-6 |(February 18, |
| | |2010) | | |2010) |
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(vote not relevant)
Original Committee Reference: RLS.
SUMMARY : Makes statutory changes to provide fiscal solvency for
the California Beverage Container Recycling (Bottle Bill)
Program and make the Clean Water State Revolving Fund program
eligible for Federal funding.
The Senate amendments delete the Assembly version of this bill
and instead:
1)Change the requirement for the Department of Resource Recovery
and Recycling (Department) to review the Beverage Container
Recycling Fund (BCRF) for adequate funding for Bottle Bill
expenditures from periodically to quarterly.
2)Require that recipients of continuously appropriated Bottle
Bill expenditures receive a 90 day notice before proportional
reductions are enacted as a result of inadequate levels of
available revenues in the BCRF.
3)Accelerate by 30 days (from 90 to 60 days) payments by
beverage distributors of the California Redemption Value.
Result in approximately $100 million one-time revenue increase
in current year. Provide distributors with flexibility by not
requiring first accelerated CRV payments until April 30.
Additionally, place June 30, 2012, sunset on acceleration.
4)Set expenditure priorities by suspending various continuous
appropriations for calendar years 2010 and 2011, thus
achieving approximately $28 million in current year (CY)
savings, and approximately $56 million in fiscal year 2010-11
savings. The suspensions and estimated savings are as
follows:
AB 7 X8
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a) Nonprofit competitive grants - $1.5 million/year =
$825,000 CY savings;
b) Public Education & Information - $5 million/year = $2.75
million CY savings;
c) Market Development & Expansion - $20 million/year = $11
million CY savings;
d) Community Beverage Container Grants - $20 million/year =
$4.4 million CY savings;
5)Allow smaller distributors who receive a total redemption
payment of less than $75,000 per-year to make one processing
payment per year.
6)State legislative intent that BCRF monies shall not be loaned
or used for any other purpose than the Bottle Bill program.
7)Require that the Department account for a 2009-10 Budget
appropriation of $8.25 million to the Local Conservation Corps
when determining amounts to be continuously appropriated to
the Corps in 2009-10.
This language is intended to make sure that funding for Local
Corps is not double appropriated and is kept whole with other
program expenditures.
8)Cap processing fee offsets made by the Department to
manufacturers for the 2010 and 2011 calendar years at 2008
calendar year levels. Result in approximately $9 million in
savings in the current year and $18 million in the budget
year.
9)Increase market development payments for plastic containers
from $5 million to $10 million and reduces quality incentive
payments from $15 million to $10 million for glass containers
only in order to increase program performance.
10)Require that the Department publish quarterly on its website
a BCRF fund condition report.
11)Require the Department to retroactively pay in-full payments
that were proportionally reduced between January 1, 2010
through June 30, 2010 upon availability of funds in the BCRF.
12)Make various technical amendments to outdated code sections.
AB 7 X8
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13)Enable California to access an estimated $145 million in
federal funds by authorizing the State Water Resources Control
Board (Water Board) to issue grants, forgive loan principal
and provide other types of assistance from specified federal
State Water Pollution Control Revolving Funds (SWPCRF) funds,
in conformance with federal law. This amendment is narrowly
tailored to apply only to federal funds specifically allocated
for SWPCRF grants and would not authorize the use of future or
existing "revolving" funds for other purposes. SB 27 X3
(Negrete-McLeod), Chapter 25, Statutes of 2009-10 Third
Extraordinary Session, provided the Water Board with similar
authority with respect to American Recovery and Reinvestment
Act funds.
Comments: The BCRF, is currently insolvent due a combination of
loans made from the BCRF to the General Fund and Air Pollution
Control Account as well as the convergence of decreasing
beverage container sales and increasing recycling rates.
Currently, program insolvency has resulted in 100% reductions in
program expenditures (market development, processing fee
assistance, local conservation corps grants, etc.). Through the
acceleration of a processing payment, the freezing of some
program expenditures in near term, as well as planned repayments
of General and Special fund loans, this legislation will bring
the program into solvency and allow full program payments to
proceed in the current and budget year.
Additionally, a Letter to the Journal will be submitted with
this legislation to clarify that the intent of this bill is that
the processing fees assistance cap shall be applied separately
to calendar year 2010 and calendar year 2011 by material type of
the containers as was calculated by the dept for 2008. Also,
the cap does not apply to the processing payments made to
recyclers.
Analysis Prepared by : Keali'i Bright / BUDGET / (916)319-2099
FN: 0003687