BILL ANALYSIS �
AB 1149
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Date of Hearing: April 25, 2011
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 1149 (Gordon) - As Introduced: February 18, 2011
SUBJECT : Beverage containers: recycling and litter reduction:
funds
SUMMARY : Extends for five years CalRecycle's plastic market
development program, which provides Bottle Bill funds to support
recyclers and manufacturers using empty plastic beverage
containers.
EXISTING LAW , the Beverage Container Recycling and Litter
Reduction Act (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
CalRecycle, 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)Requires DRRR to review the status of the Fund every three
months to ensure that funds are adequate to make expenditures
according the Bottle Bill and make specified determinations.
4)Authorizes funding for specified purposes to increase beverage
container recycling, including up to $10 million annually for
market development payments for empty plastic beverage
containers until January 1, 2012.
THIS BILL extends the plastic market development program and
funding authority from January 1, 2012 to January 1, 2017 and
requires CalRecycle to consider specified factors when setting
payment amounts.
FISCAL EFFECT : Unknown
COMMENTS :
AB 1149
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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 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 beverage containers to a recycler (or donate
them to a curbside or other program), the deposit is paid back
as a refund.
For many years, surpluses have accumulated in the Fund as a
result of unredeemed deposits. Among other purposes, the
surplus funds have been used, per statute, to fund various
programs to reduce litter, increase recycling and promote used
of recycled materials, including the plastic market developments
program. Surplus funds have also been loaned to the General
Fund in prior Budget Acts.
In May 2009, CalRecycle 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 2009,
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 2010,
which provided a one-time influx of $100 million dollars and
temporary suspended multiple grant programs to provide funding
through 2010. According to CalRecycle's most recent report on
the Fund (April 8, 2011):
In general terms, the Recycling Fund Condition Summary
indicates that the Fund will be solvent as long as expected
loan repayments to the Recycling Fund continue. The
Recycling Fund Balance is not projected to reach a level that
would require proportionate reduction in FY2010-11 or
FY2011-2012. However, assessment is entirely dependent upon
continued repayment of historic loans made from the Recycling
Fund. The Governor's proposed FY2011-2012 Budget includes
AB 1149
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General Fund loan repayments of $98M in FY2010-2011 (of
which, $68M has already been transferred to the Recycling
Fund) and $88M in FY2011-2012. It also includes repayments
of approximately $21M in each of those fiscal years for loans
made from the Recycling Fund to the Air Resources Board. If
those loan repayments-beyond the $68M already repaid in the
current year-are not made in FY2010-2011 and FY2011-2012,
CalRecycle will need to revisit the question of proportionate
reduction for the FY2011-2012 period.
The plastic market development program uses surplus redemption
funds from the Fund to make payments of up to $150 per ton to
California-based processors and manufacturers that recycle and
utilize post-consumer plastic beverage containers. In 2007-09,
the total amount of funds authorized was $5 million. For 2010
and 2011, the legislature increased this payment authority to
$10 million annually. This bill would continue the $10 million
annual allocation until 2017.
According to the author:
While California's plastic market development program has
succeeded in increasing California processing and use of
recycled plastic in-state, California continues to export in
excess of 90% of plastic collected for recycling. In 2010,
Californians collected more than 250,000 tons of PET and HDPE
plastic beverage containers for recycling, with all but
25,000 tons exported overseas (primarily to China) for
processing and manufacturing.
Existing California-based manufacturers of products and
packaging could be utilizing this material, reducing
pollution and waste, and increase jobs and economic
opportunity in California. The program is needed to continue
building California's recycling infrastructure.
Currently, there are six California companies doing plastic
processing, and about a dozen CA manufacturers that can use
recycled plastic. Together, these companies are employing
about 750 people, whose jobs are supported by the current
program. Should the program sunset, a portion of these jobs
could be at risk.
REGISTERED SUPPORT / OPPOSITION :
AB 1149
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Support
California Nevada Soft Drink Association
California State Association of Counties
California Resource Recovery Association
Californians Against Waste
CarbonLITE Industries
City and County of San Francisco
Earthbound Farm
Epic Plastics
Peninsula Packaging Company
Regional Council of Rural Counties
Opposition
None on file
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092