BILL ANALYSIS �
AB 1149
Page 1
ASSEMBLY THIRD READING
AB 1149 (Gordon and Wieckowski)
As Introduced February 18, 2011
Majority vote
NATURAL RESOURCES 9-0 APPROPRIATIONS 17-0
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|Ayes:|Chesbro, Knight, |Ayes:|Fuentes, Harkey, |
| |Brownley, Dickinson, | |Blumenfield, Bradford, |
| |Grove, Halderman, | |Charles Calderon, Campos, |
| |Huffman, Monning, Skinner | |Davis, Donnelly, Gatto, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
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| |
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SUMMARY : Extends for five years the Department of Resources
Recycling and Recovery's (CalRecycle)'s plastic market
development program, which provides Bottle Bill funds to support
recyclers and manufacturers using empty plastic beverage
containers. Specifically, 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.
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 CalRecycle 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
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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.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, 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, and minor, absorbable costs to CalRecycle
to continue to administer the program.
COMMENTS :
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 CalRecycle. 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 use 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 2009-10
Fiscal Year (FY) and initiated an 85% proportional reduction for
all expenditures except CRV payments to consumers. In October
2009, CalRecycle increased this reduction to 100%. These deep
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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 7 X8 (Budget Committee) Chapter 5,
Statutes of 2010 Eighth Extraordinary Session 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
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.
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092
FN: 0001064
AB 1149
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