BILL ANALYSIS �
AB 1149
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Date of Hearing: May 11, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1149 (Gordon) - As Introduced: February 25, 2011
Policy Committee: Natural
ResourcesVote:9-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill extends from 2012 to 2017, the plastic market
development program, through which the Department of Recycling
and Resources Recovery (Calrecycle) makes market development
payments to recyclers and manufacturers, and adds criteria by
which Calrecycle awards such payments.
FISCAL EFFECT
1)Continued annual payments of $10 million for plastic market
development, barring proportionate reduction of all payments
from the Beverage Container Recycling Fund resulting from a
fund shortfall.
2)Minor, absorbable costs to Calrecycle to continue to
administer the program.
COMMENTS
1)Rationale . The author contends it important to continue to
subsidize California businesses that manufacture products from
used plastic bottles and the firms that facilitate that
manufacturing. Otherwise, the author contends, used plastic
bottles will be shipped out of state for use in lower-cost
markets, thereby eliminating jobs in California and thwarting
development of California-based industry.
2)Background . The Division of Recycling (DOR) of Calrecycle
administers the Beverage Container Recycling Program, commonly
referred to as the bottle bill program. This program was
created more than 20 years ago by Chapter 1290, Statutes of
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1986 (AB 2020, Margolin). The program encourages the voluntary
recycling of most beverage containers by guaranteeing a
minimum payment (the "California Redemption Value" (CRV)) for
each container returned to a certified recycler. Beverage
containers are subject to the CRV based on both the content of
the container (the beverage type, such as water or sports
drinks) and the container material (such as glass or plastic).
Several years ago, the fund into which CRV deposits are
made-the Beverage Container Recycling Fund-had annual fund
balances that exceeded the yearly cost of the bottle bill
program by tens of millions of dollars. This is because
Californians recycled beverage containers at a rate well below
80%-the rate at which payments into the fund would equal
payments out of the fund. Much of the excess funds went to
pay for programs to support recycling. In addition, the
excess fund balance was repeatedly loaned, first to the GF and
then to the Air Pollution Control Fund (APCF) to pay for
implementation of the state's greenhouse gas emissions
reduction efforts.
More recently, recycling rates have increased well above 80%.
At the same time, purchases of beverage containers subject to
the CRV have declined. As a result, the BCRF is unable to
support the programs intended to facilitate recycling. In
response, in 2010, the Legislature provided a one-time influx
of $100 million dollars and temporarily suspended multiple
grant programs.
Calrecycle reports that, at present, the Beverage Container
Recycling Fund is solvent. That solvency, however, is
dependent upon continued repayment of loans made from the fund
to the GF and the APCF. The governor's proposed 2011-2012
budget anticipates loan repayments to the fund in the tens of
millions of dollars; however, the state's ongoing budget
difficulties makes these planned repayments uncertain.
Calrecycle indicates that, should it not receive these
repayments, it may need to make proportional reductions to all
programs funded from the BCRF, which includes the plastic
market development program.
3)Support. This bill is supported by the City and County of
San Francisco, the California State Association of Counties,
the Regional Council of Rural Counties, and industry
associations who benefit from Calrecycle's market development
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payments or the products made by those who receive the
payments.
4)There is no registered opposition to this bill.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081