BILL ANALYSIS �
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Date of Hearing: April 18, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1933 (Gordon) - As Introduced: February 22, 2012
Policy Committee: Natural
ResourcesVote:8-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill increases the stringency of requirements for the
importation of beverage container material. Specifically, this
bill:
1)Decreases, from 100 pounds to 25 pounds of aluminum, bimetal
or plastic, or from 1000 pounds to 250 pounds of glass
beverage container material, the weight above which a person
importing beverage container material into the state must
report the importation to Calrecycle.
2)Specifies that such person must provide to Calrecycle
documentation on the source of the material and an opportunity
for inspection.
FISCAL EFFECT
Negligible direct fiscal effect upon Calrecycle.
This bill will likely result in greater reporting of importation
of beverage container material to Calrecycle. It is, therefore,
reasonable to assume the bill will increase Calrecycle's
inspection workload. Calrecycle, however, does not anticipate
an increase in workload resulting from this bill because it
currently lacks staffing at or near border checkpoints at which
the inspections would occur. In addition, Calrecycle reports it
lacks the regulatory authority to enforce the reporting
standards required by this bill.
The department is in the initial phases of developing
regulations that, if adopted by the department, would provide it
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the authority to enforce the reporting requirements. In
addition, the department has submitted a budget change proposal
that would authorize an interagency agreement with the
California Department of Food and Agriculture (CDFA) to require
CDFA to conduct border inspections of beverage container
imports. Calrecycle would use the data gathered from the CDFA
inspections to build a case for prosecution of fraudulent
activity by the Attorney General.
COMMENTS
1)Rationale. The author intends this bill to better deter and
prevent the illegal importation of beverage containers, which
are fraudulently redeemed for the California Redemption Value
(CRV).
2)Background. Calrecycle administers the Beverage Container
Recycling Program, commonly referred to as the Bottle Bill
program. Created over 25 years ago, the program encourages the
voluntary recycling of most beverage containers by
guaranteeing a minimum payment-the CRV-for each container
returned to certified recyclers. Beverages are subject to the
CRV based on the content of the container, not the container
material. For example, glass soda bottles are subject to the
CRV while glass wine bottles are not.
Funding for the program flows through the Beverage Container
Recycling Fund (BCRF), which Calrecycle administers.
Generally, for each beverage container subject to the CRV
distributors sell to retailers, they make redemption payments
that are deposited into the recycling fund, the cost of the
CRV being passed on to retailers. Retailers sell beverages
directly to consumers, collecting the CRV from consumers for
each applicable beverage container sold. Consumers can redeem
empty recyclable beverage containers with recyclers, from whom
they recoup the cost of the CRV they paid at the time of
purchase. Recyclers sell the recyclable materials to
processors in exchange for the scrap value of the material and
for the CRV. Processors, who are reimbursed from the
recycling fund for these CRV pass-throughs, then collect,
sort, clean, and consolidate the recyclable materials and sell
them to container manufacturers or other end users who make
new bottles, cans, and other products from these materials.
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Approximately a billion dollars flows through the Beverage
Container Recycling Fund each year. In the past, recycling
rates were low enough that a substantial balance accumulated
in the fund. In response, the Legislature doubled redemption
rates in 2007. Soon thereafter, recycling rates increased and
beverage container sales dropped. As a result, the fund has
been unable to pay for the various programs that support
recycling, leading to reductions in program funding.
As the author notes, a 1996 episode television's Seinfeld
featured the efforts of supporting character, Newman, to
smuggle a mail truck loaded with beverage cans out of New
York, which did not offer a beverage container redemption, and
into Michigan, where the cans could be turned in for a
five-cent redemption value. Calrecycle does not know how much
beverage container material is imported into the state in
attempts to fraudulently receive CRV for the material, a la
Newman. However, the department has evidence to suspect the
practice happens large scale.
As described in the policy committee analysis, in 2010, an
enforcement effort of Calrecycle and the Department of Justice
resulted in arrest of 31 people for importation of millions of
cans and bottles from Arizona and Nevada, which do not offer
redemption for beverage containers. In 2011, Calrecycle and
CDFA conducted a pilot program to document vehicles entering
the state with beverage container material. During the first
60 days of the program, the departments recorded 2,500
vehicles, including 378 packed rental trucks, entering the
state with non-California beverage containers.
3)Support. This bill is supported by Californians Against
Waste, a group that advocates for recycling, waste reduction
and better waste management.
4)There is no opposition formally registered to this bill.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081
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