BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 402|
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VETO
Bill No: SB 402
Author: Wolk (D)
Amended: 9/11/09
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SENATE FLOOR : 22-14, 9/11/09
AYES: Alquist, Calderon, Cedillo, Corbett, DeSaulnier,
Ducheny, Florez, Hancock, Kehoe, Leno, Liu, Lowenthal,
Oropeza, Padilla, Pavley, Price, Romero, Simitian,
Steinberg, Wiggins, Wolk, Yee
NOES: Aanestad, Ashburn, Benoit, Cogdill, Correa, Cox,
Denham, Harman, Hollingsworth, Maldonado, Negrete McLeod,
Runner, Walters, Wyland
NO VOTE RECORDED: Dutton, Huff, Strickland, Wright
ASSEMBLY FLOOR : 58-16, 9/11/09 - See last page for vote
SUBJECT : Recycling: beverage containers: redemption
payments
SOURCE : Author
DIGEST : This bill addresses the insolvency in the
California Beverage Container Recycling and Litter
Reduction Act (Bottle Bill) by expanding the California
Beverage Container Recycling Program, closing the loophole
for large juice containers, moving the threshold for the
10-cent California Redemption Value (CRV) from 24 ounces to
CONTINUED
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20 ounces, accelerating the CRV payment to the Department
of Conservation from 90 to 60 days. This bill also
authorizes the Department of Conservation to reduce the
number of unserved supermarket-based recycling centers.
Assembly Amendments (1) delete the prior version which
dealt with the Franchise Tax Board collections process, (2)
insert language which makes changes to the California
Beverage Container Recycling Program, and (3) add an
urgency clause.
ANALYSIS : Existing law, under the California Beverage
Container Recycling and Litter Reduction Act (Act) (Section
14500, et seq. of the Public Resources Code):
1. Requires every beverage container, as defined, sold or
offered for sale in this state to have a minimum refund
value.
2. Requires a distributor to pay a CRV payment for every
beverage container (five cents for less than 24 ounces
and 10 cents for more than 24 ounces) sold or offered
for sale in the state to the Department of Conservation
(DOC) and DOC is required to deposit those amounts in
the California Beverage Container Recycling Fund (Fund).
The money in the Fund is continuously appropriated to
DOC for the payment of refund values and processing
fees.
3. Defines "beverage" to include, among other things, beer
and other malt beverages, wine and distilled spirit
coolers, carbonated mineral and soda waters,
noncarbonated fruit drinks, and vegetable juices, in
liquid form that are intended for human consumption.
4. Excludes from the definition of "beverage", among other
things, vegetable drinks in beverage containers of more
than 16 ounces, milk, medical food, and any product sold
in a container that is not an aluminum beverage
container, a glass container, a plastic beverage
container, or a bimetal container.
5. Defines "beverage manufacturer" as any person who
bottles, cans, or otherwise fills beverage containers,
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or imports filled beverage containers, for sale to
distributors, dealers, or consumers.
6. Defines "processor" as any person, including a scrap
dealer, certified by DOC who purchases empty aluminum
beverage containers, bimetal beverage containers, glass
beverage containers, plastic beverage containers, or any
other beverage containers, including any one or more of
those beverage containers, which have a refund value
established pursuant to this division, from recycling
centers in this state for recycling, or, if the
container is not recyclable, not for recycling, and who
cancels, or who certifies to DOC the cancellation of,
the refund value of these empty beverage containers by
processing empty beverage containers, in any manner
which DOC may prescribe.
7. Requires distributors to pay the redemption payment not
later than the last day of the third month following the
sale and authorizes a distributor, to elect to make a
single annual payment if the distributor meets specified
conditions and notifies DOC of its intent to make annual
redemption payments.
8. Requires DOC to calculate a processing fee and a
processing payment for each beverage container with a
specified scrap value. The processing fee is required
to be paid by beverage manufacturers for each beverage
container sold or transferred to a dealer.
9. Authorizes funding for specified purposes to increase
beverage container recycling (see
http://www.consrv.ca.gov/DOR/gpi/webcon.pdf for
California Beverage Container Recycling and Litter
Reduction Act flow chart).
This bill:
1. States legislative intent that projects under contract
with DOC be fully completed for the $35 million in
market development grants awarded during the 2008-09
fiscal year for which partial or complete encumbrance of
funds has taken place by September 1, 2009.
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2. Regarding the definition of "beverage" effective July 1,
2010:
A. Redefines the term "beverage" to include
vegetable, nut, grain, or soy drinks.
B. Deletes the exclusion from the term "beverage",
for a product that is not sold in aluminum, glass,
plastic, or bimetal container, thus including aseptic
and paperboard type beverage containers.
C. Exempts beverages in a flexible foil, plastic
pouch, or aseptic container that holds seven fluid
ounces or less.
3. Adds a definition of "paper beverage container" that
means a paperboard carton, gable-top, aseptic,
poly-coated paperboard, or other beverage container made
primarily of paper.
4. Adds a definition of "unserved convenience zone" to mean
a convenience zone where this is not an operating
certified recycling center or other locations that meet
the requirements of the Act.
5. Changes the threshold for the 10-cent CRV payment paid
by the distributor and the refund value from containers
that hold 20 ounces or more.
6. Requires beverage distributors to make the CRV payment
no later than the last day of the second month following
the sale of the beverages instead of the third month.
7. Establishes, for fiscal years 2010 and 2011, the
processing payment for paper beverage containers at $135
per ton and the processing fee equivalent to 35 percent
of $135 per ton.
8. Increases the amount for grant funds to certified
community conservation corps for beverage container
litter reduction programs and recycling programs from
$15 million to $22 million.
9. Clarifies that $20 million in unencumbered funds
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currently held by DOC may be expended to close the
shortfall.
10.Adjusts funding in various market development programs
to maximize market development efficiencies and
effectiveness.
11.Suspends, for the 2009-10 fiscal year, expenditures for
grants for beverage container recycling and litter
reduction programs and a statewide public education and
information campaign aimed at promoting increased
recycling of beverage containers.
12.Provides assistance and incentives to reduce the number
of zones not serviced by a certified recycling center.
13.Deletes obsolete provisions and make conforming changes.
Comments
According to the author's office, current law provides
consumers with a recycling incentive of five cents on most
beverage containers (10 cents on containers 24 ounces and
larger. Over the last two decades, this program has
stimulated recycling levels in the 60-80 percent range.
However, as a result of increased recycling and general
fund loans, there are insufficient funds available in the
Beverage Container Recycling Fund to pay ongoing costs of
the recycling infrastructure. This bill contains
provisions to rectify those issues.
This bill intends to balance program funding and
expenditures by suspending and/or eliminating
outdated/unnecessary program expenditures, closing
container exemption loopholes, increasing recycling
incentives on higher cost/larger containers, and
accelerating the time frame for beverage distributor CRV
payments.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 9/11/09)
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Anheuser-Busch Companies, Inc.
CALCC
California Bottled Water Association
California Coastal Coalition
California Refuse Recycling Council
California Small Brewers Association
California State Association of Counties
Cities of Napa and San Jose
City and County of San Francisco Dept. of the Environment
Civicorps Schools
Conservation Corps
Conservation Corps of Long Beach
Crown Imports
ECO2 Plastic Inc
Ecoplast
eCullet Glass Recycler
Fresno Local Conservation Corps
Heineken USA
LA Conservation Corps
League of California Cities
Merlin Plastics
MillerCoors
NexCycle
Orange County Conservation Corps
Peninsula Packaging Co.
Peninsula Plastics Recycling Inc.
Regional Council of Rural Counties
Sacramento Regional Conservation Corps
San Francisco Conservation Corps
San Gabriel Valley Conservation Corps
San Jose Conservation Corps - Charter School
Sequoia Community Corps
Service Employees International Union
Strategic Materials Inc.
Talco Plastics, Inc.
Tri-CED Community Recycling
Urban Corps - San Diego County
Urban Counties Caucus
Urban Ore
Waste Management
Yuba Sutter Community Conservation Corps
OPPOSITION : (Verified 9/11/09)
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California League of Food Processors
California Nevada Soft Drink Association
Grocery Manufactures Association
GOVERNOR'S VETO MESSAGE:
"I am returning Senate Bill 402 without my signature.
This bill makes changes to California's Beverage
Container Recycling Program by adding new containers
to the fee program, increasing the California Refund
Value (CRV) fee on some existing containers, and
maintaining, suspending, or increasing funding for
ancillary programs that benefit from excess funds in
the CRV fund.
The Beverage Container Recycling Fund (Fund) is
facing a severe deficit at the end of the 2009-2010
Fiscal Year because Californians are recycling more
and because this fund has made loans to the General
Fund of several hundred million dollars over the past
several years. To combat this deficit, the
Department of Conservation has had to implement an
across the board cut of 85 percent to the funding
programs paid by the Fund. My Administration has
offered solutions for long-term repair of the Fund,
but unfortunately, SB 402 does not contain those
solutions.
SB 402 expands the Beverage Container Recycling
Program to include fruit and vegetable juices and soy
based drinks. This expansion is inappropriate given
that these products are often dietary necessities for
families; while wine and distilled spirits, which are
more like the products currently subject to the CRV
and are typically paid for from consumer's disposable
income, remain exempt from the program. While
consumers will have the opportunity to recover their
costs when they recycle their containers, they will
face a direct impact at the time of purchase, which
will be troubling for many in this economy.
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Furthermore, while the bill proposes to capture more
beverage containers for the recycling market rather
than the waste stream, there are, at present, no
known California end users for the material types SB
402 adds to the Program. This bill proposes that CRV
be applied to products that will likely end up in a
landfill.
This bill would also change the CRV threshold to
beverage containers carrying 20 fluid ounces or less
to $0.05 per container, and beverage containers
carrying 20 fluid ounces or more to $0.10 per
container, effective January 1, 2010. This change in
law, combined with the additional containers and
beverage types, would cost consumers about $300
million annually. Additionally, these changes are
merely a patch that provides relief for only one
fiscal year. The Fund cannot support the
expenditures continued by SB 402 beyond the first
half of Fiscal Year 2010-2011.
Finally, in addition to several other fatal flaws,
this bill unjustifiably uses the Fund to increase
grant amounts for some programs, guarantee payments
into the future for others, and decrease or eliminate
grant funding for still others, including public
education used to inform consumers of the program
expansion and fee increase.
SB 402 fails to make the hard choices that need to be
made with regard to providing a lasting solution for
the Fund. While I recognize that without this bill
there is an immediate hardship placed upon consumers
and businesses because of the across the board
funding reduction, the lasting effects of this bill
are far worse.
Consistent with a provision already included in SB
402 and in an effort to mitigate this hardship, I am
ordering the Department of Conservation to adopt
emergency regulations to accelerate the deposit paid
into the Fund by adjusting the payment schedule for
distributors from every three months to every two
months. I recognize this action will not solve the
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problems faced by the Fund, but, with the cooperation
of those who pay into and receive grants from the
Fund, it should smooth out the challenges in the
current fiscal year as we work on additional, long
term solutions.
Additionally, subsequent legislation on this issue
should contain provisions that prohibit any
additional loans to the General Fund in the future
and require the General Fund to repay past loans from
this program.
For these reasons, I am unable to sign this bill."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Beall, Bill Berryhill, Tom
Berryhill, Block, Blumenfield, Bradford, Brownley,
Buchanan, Caballero, Charles Calderon, Carter, Chesbro,
Coto, Davis, De La Torre, De Leon, Eng, Evans, Feuer,
Fong, Fuentes, Furutani, Galgiani, Gilmore, Hagman, Hall,
Hayashi, Hernandez, Hill, Huber, Huffman, Jones,
Krekorian, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza,
Monning, Nava, John A. Perez, V. Manuel Perez,
Portantino, Ruskin, Salas, Saldana, Skinner, Smyth,
Solorio, Swanson, Torlakson, Torres, Torrico, Yamada,
Bass
NOES: Anderson, Blakeslee, Conway, DeVore, Fletcher,
Fuller, Gaines, Garrick, Harkey, Knight, Nestande,
Niello, Nielsen, Silva, Tran, Villines
NO VOTE RECORDED: Cook, Emmerson, Jeffries, Miller, Audra
Strickland, Vacancy
TSM:mw 1/11/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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