BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
2718 (Adams)
Hearing Date: 07/15/2010 Amended: 04/14/2010
Consultant: Brendan McCarthy Policy Vote: EQ 7-0
AB 2718 (Adams), page 2
_________________________________________________________________
____
BILL SUMMARY: AB 2718 requires the Department of Resources
Recycling and Recovery to pay "handling fees" to dealers that
accept used bottles and cans for recycling, provided that the
dealer is located in an area where there is no dedicated
recycling center. The bill also authorizes recycling centers in
unserved areas to be open less than thirty hours per week.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Processing applicationsUp to $280 per year Special
*
Fraud investigations $150 $240 $240 Special
*
* California Beverage Container Recycling Fund.
_________________________________________________________________
____
STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Under current law, the Department of Resources Recycling and
Recovery manages the Beverage Container Recycling Fund (often
referred to as the "bottle bill program"). The Fund is supported
by fees assessed on bottles and cans at the time of sale and
fees charged to bottle and can manufacturers. The fund is used
to support the recovery and recycling of bottles and cans by
paying redemption value payments to consumers that recycle
bottles and cans and to provide subsidies to the recycling
industry. For example, the Department pays handling fees of
$0.00859 per container to recyclers to encourage them to operate
collection centers.
The Department designates convenience zones, where members of
the public are able to bring bottles and cans for recycling.
Typically, a recycler certified by the department will set up a
collection point in a supermarket parking lot within the
convenience zone. Only one certified recycling center per
convenience zone is eligible to receive handling payments from
the Department. If there is no certified recycling center in the
AB 2718 (Adams), page 2
convenience zone, the Department may certify a single dealer
(typically a grocery store) to receive handling fees for
collecting bottles and cans.
AB 2718 defines an "unserved convenience zone" as a convenience
zone that has no certified recycling center or certified dealer.
The bill allows any dealer in an unserved convenience zone to
apply for certification, allowing the dealer to receive handling
fees.
AB 2718 also authorizes the Department to allow certified
recycling centers to operate less than thirty hours per week
(but not less than 20 hours per week), if the recycling center
is located in an unserved convenience zone that has been
unserved for at least six months.
Unlike current law, the bill allows for multiple dealers to
apply for certification and receive handling fees, if they are
located in an unserved convenience zone. According to the
Department, there are about 2,500 dealers located in unserved
convenience zones. The Department anticipates that a large
number of dealers are likely to apply for certification under
the bill. Depending on the number of dealers that apply for
certification, the Department anticipates needing up to three
additional positions to process those applications. In addition,
a large increase in the number of certified dealers will
increase the Department's oversight and fraud investigation
workload.
While the number of certified dealers that can collect bottles
and cans may increase under the bill, the Department does not
anticipate a significant overall increase in the numbers of
bottles and cans being recycled. Thus, the Department does not
anticipate a significant increase in total handling fee
payments.
Staff notes that current economic conditions have reduced the
amounts of bottles and cans purchased by consumers, while at the
same time driving increased levels of recycling. This has
reduced the available balance in the Beverage Container
Recycling Fund. In response, the Legislature enacted AB x8 7
(Assembly Budget Committee, Chapter 5, 2009). AB x8 7 made a
variety of changes to the operation of the program, to ensure
its fiscal stability, including accelerating payments to the
fund and reducing certain expenditures.