BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1933 (Gordon) - Beverage containers: handling fees:
enforcement.
Amended: August 21, 2012 Policy Vote: N/A
Urgency: Yes Mandate: Yes
Hearing Date: August 23, 2012
Consultant: Brendan McCarthy
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1933, an urgency measure, would increase the
handling fees paid to certain recyclers of beverage containers.
The bill would also require any vehicle entering the state with
more than 25 pounds of empty beverage containers to stop at an
agricultural inspection station.
Fiscal Impact:
Increased costs to provide handling fee payments to
recyclers of about $5.3 million per year over the next two
years.
Unknown costs to the Department of Agriculture and/or the
Department of Resources Recycling and Recovery to inspect
vehicles bringing beverage containers into the state.
Whether either of these departments will incur additional
inspection costs is unknown and will depend on the number of
vehicles that are required to be inspected under the bill.
Background: Under current law (referred to as the "Bottle Bill"
program) California consumers pay a deposit payment every time
they purchase a covered bottle or can. The funds collected are
used to provide a California Redemption Value payment when a
bottle or can is recycled. Because only about 60 to 70 percent
of covered bottle and cans are have been recycled historically,
excess revenues are used to support the collection and recycling
of bottles and cans through payments to processors and
collectors and other programs.
One type of payment made to encourage recycling is a handling
fee that is paid, per container, to "convenience zone" recyclers
(for example, recyclers that collect bottles and cans from
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consumers in grocery store parking lots). Handling fees are set
by the Department of Resources Recycling and Recovery, based on
the average difference in costs to collect bottles and cans by
convenience zone recyclers and other recyclers (for example,
large recycling centers not located in residential areas).
The Department is required to conduct biennial surveys of
recyclers, to determine actual average costs and then set the
appropriate handling fees to reflect the cost difference between
convenience zone recyclers and other recyclers. In July 2012,
the Department reduced the handling fee from $0.00890 to
$0.00773 per container, based on a survey completed in April of
this year.
Current law requires any person importing more than 100 pounds
of aluminum, bimetal, or plastic beverage containers, or more
than 1,000 pounds of glass beverage containers to report to the
Department. (The purpose of this requirement is to prevent out
of state containers, for which no deposit payment has been made,
from being used to collect recycling payments.)
Proposed Law: AB 1933 would require the Department to increase
handling fees paid to convenience zone recyclers, to the level
paid on July 1, 2011. The Department could increase handling
fees based on future cost studies, but the handling fees could
not be decreased until June 30, 2014.
The bill would also require any vehicle entering the state with
more than 25 pounds of empty beverage containers to stop at the
nearest agricultural inspection station and obtain proof that
the vehicle was inspected.
The bill is an urgency measure.
Staff Comments: Not all containers subject to a deposit are
recycled. The difference between the deposits paid by consumers
and California Redemption Value payments to recyclers is used to
make handling payments and undertake other activities to
encourage recycling. The break-even recycling rate in the
program is about 72 percent. At recycling rates above 72
percent, the total revenues collected from consumers is less
than the payments made to recyclers and other expenditures. The
current recycling rate is about 85 percent, leading to a
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structural deficit in the Beverage Container Recycling Fund. The
Legislature and the Department have taken certain actions in
recent years to reduce expenditures from the Fund. Nevertheless,
a structural deficit persists. Currently the Fund is only
solvent because of repayments of loans made from the Beverage
Container Recycling Fund to the General Fund in prior years. By
2014-15, the Beverage Container Recycling Fund is projected to
be insolvent.
No reimbursement is required under the bill, because the only
mandated activities on local governments relate to criminal
penalties.
This bill was referred to this committee pursuant to Senate Rule
29.10. Under that rule, this committee can only return the bill
to the Senate Floor or vote to hold it in committee. The bill
cannot be sent to the Suspense File.