BILL ANALYSIS �
AB 1933
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1933 (Gordon)
As Amended August 24, 2012
2/3 vote. Urgency
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|ASSEMBLY: |74-0 |(April 26, |SENATE: |32-0 |(August 31, |
| | |2012) | | |2012) |
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Original Committee Reference: NAT. RES.
SUMMARY : Strengthens tracking provisions for beverage
containers transported into California. Temporarily increases
handling fees paid to certified recycling centers until March 1,
2013, and makes related changes to the method for calculating
handling fees.
The Senate amendments :
1)Repeal obsolete provisions relating to handling fee
eligibility.
2)Require that handling fees paid to certified recycling centers
not be less than the handling fee in effect on July 1, 2011,
until March 1, 2013.
3)Authorize Department of Resources Recycling and Recovery
(CalRecycle) to update the methodology and scrap values used
for calculating the handling fee from the most recent cost
survey if it finds that the handling fee resulting from the
most recent cost survey does not accurately represent the
actual cost incurred for the redemption of empty beverage
containers by certified recycling centers.
4)In addition to the inspections required pursuant to
regulations adopted by CalRecycle, require a vehicle entering
the state that has more than 25 pounds of empty beverage
container material to pass through the nearest plant
quarantine inspection station operated by the Department of
Food and Agriculture (CDFA).
5)Specify that the imposition of civil penalties for violations
of the rules relating to the transport of beverage containers
into California does not prohibit the imposition of a criminal
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penalty.
6)Add an urgency clause, allowing the bill to take effect
immediately upon enactment.
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
the Department of Resources Recycling and Recovery
(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)Authorizes funding for specified purposes to increase beverage
container recycling, including payments to cities and
counties.
4)Requires any person importing more than 100 pounds of
aluminum, bimetal, or plastic beverage container material, or
1,000 pounds of glass beverage container material, into
California to report the material to CalRecycle and to provide
an opportunity for inspection.
AS PASSED BY THE ASSEMBLY , this bill:
1)Reduced the threshold for reporting the importation of
beverage container material to CalRecycle from 100 pounds to
25 pounds for aluminum, bimetal or plastic beverage container
material, and from 1,000 pounds to 250 pounds for glass
beverage container material.
2)Required that any person required to report to CalRecycle on
the importation of beverage container material additionally
provide documentation of the source material and documentation
on the destination of the material.
3)Specified that no reimbursement is required by the bill.
FISCAL EFFECT : According to the Senate Appropriations
AB 1933
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Committee, this bill will result in increased costs to provide
handling fee payments to recyclers of about $2.65 million until
March 1, 2013, and unknown costs to the Department of
Agriculture and/or CalRecycle 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.
COMMENTS : The Bottle Bill is designed to provide consumers with
a financial incentive for recycling and to make recycling
convenient to consumers. 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.
The Bottle Bill also encourages recycling establishing a
handling fee that is paid per container to "convenience zone"
recyclers (for example, recyclers that collect bottles and cans
from consumers in grocery store parking lots). Handling fees
are set by CalRecycle, 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). According to the author, the
most recent cost survey data released in May does not accurately
reflect this cost differential and decreased handling fees by
13% beginning July 1st. This bill would temporarily increase
handling fees back to the level preceding that drop and allow
CalRecycle to reevaluate the recycling costs and scrap values to
address any inaccuracies.
According to the author, "?the very incentives that have spurred
high rates of recycling �in California] have also inspired
entrepreneurial criminals. No doubt inspired by a 1996 episode
of Seinfeld, some view California's redemption value as a quick
money-making opportunity." It is not known how prevalent
illegal redemption of out-of-state containers is, but in 2010,
31 people were arrested in an enforcement action involving the
Department of Justice and CalRecycle. Three separate fraud
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rings coordinated the importation of millions of cans and
bottles from Arizona and Nevada for redemption of the CRV.
According to the Attorney General, the rings stole more than
$3.5 million. California is at a significant risk for this
activity, because Arizona and Nevada do not have beverage
container redemption programs.
In the summer of 2011, CalRecycle, in coordination with the
California Department of Food and Agriculture (CDFA), initiated
a "no-cost" pilot program to survey and document vehicles
importing out-of-state beverage container material into
California through all 16 CDFA Border Protection Stations.
During the first 60 calendar days of the pilot program, the
information gathered indicated that over 2,500 vehicles
(including 378 rental trucks filled to capacity) imported
out-of-state beverage container material through these stations.
Based on the survey data referenced above, CalRecycle states
that a conservative estimate of fraud exposure to the Fund is $7
million annually.
This bill is intended to improve deterrents for the illegal
importation of out-of-state beverage containers for deposit
redemption by improving the documentation of the source
destination of the material.
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092
FN: 0005804