BILL ANALYSIS
AB 2718
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Date of Hearing: April 12, 2010
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 2718 (Adams) - As Amended: April 5, 2010
SUBJECT : Recycling: beverage containers: recycling centers.
SUMMARY : Establishes a definition of "unserved zone" for
purposes of the California Beverage Container Recycling and
Litter Reduction Act (Bottle Bill) and revises the requirements
for certified recycling centers operating in unserved zones.
EXISTING LAW , under the Bottle Bill:
1)Establishes refund value and redemption payments for beverage
containers.
2)Requires a distributor to pay a redemption payment for every
beverage container sold or offered for sale in the state to
the Department of Resources Recycling and Recovery
(Department), which is required to deposit those amounts in
the California Beverage Container Recycling Fund (Fund). The
money in the Fund is continuously appropriated for the payment
of refund values and processing fees.
3)Specifies that every convenience zone must be served by at
least one certified recycling center, with specified operating
hours. If a zone is "unserved" by a certified recycling
center, existing law requires that the dealer (store) redeem
beverage containers from consumers.
4)Authorizes a dealer that redeems beverage containers to become
certified as a recycling center by the Department and receive
related handling fees to cover related costs. Limits handling
fees to one recycling center per convenience zone.
THIS BILL :
1)Defines "unserved convenience zone" as a convenience zone
where there is not an operating certified recycling center, as
specified.
2)Requires the Department to provide assistance and incentives
to reduce the number of unserved convenience zones to less
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than five percent of the total number of convenience zones by
January 1, 2012.
3)Exempts dealers located in a convenience zone that was
unserved on July 1, 2009 from the requirement to redeem
beverage containers until December 31, 2011.
4)Requires the Department to pay handling fees to any dealer
located in an unserved zone that redeems beverage containers,
regardless of certification.
5)Authorizes the Department to allow a certified recycling
center to be open for less than 30 hours, but not less than 20
hours, per week if the center is located in an unserved
convenience zone that has been unserved for at least six
continuous months.
6)Authorizes the Department to certify and pay handling fees to
a recycling center that is not located in a supermarket site
if it is located in an unserved zone.
7)Authorizes the Department to pay handling fees at a rate of
120 percent if the certified recycling center is located in an
unserved convenience zone that has been unserved for six or
more continuous months.
FISCAL EFFECT : Unknown; however, this bill will increase cost
pressures to the Fund.
COMMENTS :
1)California's Bottle Bill
The Bottle Bill is designed to provide consumers with a
financial incentive for recycling and to make recycling
convenient to consumers so that the beverage container
component of the solid waste stream will decrease. The
centerpiece of the Bottle Bill Program is the California
Redemption Value (CRV). Consumers pay a deposit, the CRV, on
each beverage container they purchase. Retailers collect the
CRV from consumers when they buy beverages. The dealer
retains a small percentage of the deposit for administration
and remits the remainder to the distributor, who also retains
a small portion for administration before remitting the
balance to the Department. When consumers return their empty
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beverage containers to a recycler (or donate them to a
curbside or other program), the deposit is paid back as a
refund.
To provide convenient recycling opportunities to consumers,
certified recycling centers are located on the site of a
supermarket (dealer) and accept beverage containers for
recycling and remit the CRV refund to consumers. There must
be one certified recycling center in each convenience zone,
which is typically a half-mile radius circle around a dealer.
In order to assist these centers cover their operating costs,
the Bottle Bill allocates handling fees. In spite of this
assistance, there are approximately 585 convenience zones that
have been unserved for at least six months out of 3,765 total
convenience zones. Unserved zones create challenges for
consumers because they may have to travel significantly
farther to redeem their deposit, and for dealers, who are
responsible for taking back containers in the absence of a
certified recycler.
In 2008, the Department estimated a $180 million surplus in the
Fund. In April 2009 the Department indicated in Budget
hearings that the Fund would have an $81 million surplus at
the end of the 2009-10 Fiscal Year. However, less than two
months later the Department notified the Legislature that the
Fund was facing a $160 million shortfall by the end of the
09-10 Fiscal Year and initiated an 85% proportional reduction
for all expenditures except CRV payments to consumers. In
October, the Department increased this reduction to 100%.
These deep cuts damaged the state's recycling infrastructure
and directly contributed to the loss of at least 500 jobs
statewide.
In order to temporarily alleviate this funding shortfall, the
Legislature passed AB 8X 7 (Budget Committee) in March, which
provides a one time influx of $100 million dollars and
temporary suspends multiple grant programs to provide funding
through the 2010 calendar year.
2)This bill
AB 2718 is intended to address the challenge of unserved zones
by exempting dealers from take-back requirements for one year,
providing incentives for dealers that redeem beverage
containers, increasing the handling fees awarded to certified
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recyclers that begin operating in an unserved zone, and
allowing recyclers that are located off-site to become
certified recyclers.
Unserved zones do pose a significant problem within the Bottle
Bill program. Provisions in this bill would encourage new
certified recycling centers within these zones. However, this
bill includes requirements that would increase cost pressures
to a Fund that is already facing program cuts.
3)Suggested amendments
In order to address the potential cost pressures associated with
this bill, the committee may wish to amend the bill to:
a) Eliminate the provision requiring the Department to
provide assistance and incentives to reduce the number of
unserved convenience zones;
b) Eliminate exempting dealers from accepting beverage
containers for redemption in unserved convenience zones;
c) Clarify that a dealer located in an unserved zone may be
certified as recycling center and receive handling fees;
d) Eliminate the provision making off-site recyclers
eligible for handling fees;
e) Eliminate the provision authorizing the Department to
award handling fees at a rate of 120 percent for certified
recycling centers located in an unserved zone.
REGISTERED SUPPORT / OPPOSITION :
Support
California Grocers Association (sponsor)
Opposition
None on file
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092
AB 2718
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