BILL ANALYSIS �
AB 2467
Page 1
ASSEMBLY THIRD READING
AB 2467 (Nestande)
As Amended May 5, 2014
Majority vote
NATURAL RESOURCES 8-0
--------------------------------
|Ayes:|Chesbro, Dahle, Bigelow, |
| |Garcia, Muratsuchi, |
| |Patterson, Stone, |
| |Williams |
|-----+--------------------------|
| | |
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SUMMARY : Specifies that the Plastic Market Development Payment
(PMDP) must be paid to both certified entities (collection and
processing operations/recyclers) and recycled-content product
manufacturers.
EXISTING LAW establishes the California Beverage Container
Recycling and Litter Reduction Act (Bottle Bill), which:
1)Requires beverage containers sold in this state to have a
California redemption value (CRV) of $0.05 for containers that
hold fewer than 24 ounces and $0.10 for containers that hold
24 ounces or more and requires a distributor to pay a
redemption payment to the California Department of Resources
Recycling and Recovery (CalRecycle). Continuously
appropriates these funds to CalRecycle for the payment of
refund values and processing fees.
2)Requires CalRecycle to:
a) Certify recycling centers and promulgate regulations
establishing a procedure for certification of recycling
centers. Specifies that these regulations shall include,
as a condition for certification, that if one or more
certified entities have operated at the same location
within the past five years, the recycling center must
demonstrate to CalRecycle that its operations exhibit a
pattern of compliance with the Bottle Bill and its related
regulations.
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b) Pay handling fees to supermarket sites, nonprofit
convenience zone recyclers, or rural region recyclers to
provide an incentive for the redemption of empty beverage
containers in convenience zones, and adopt guidelines and
methods specifying a procedure for the payment of these
fees.
c) After deducting refund values, administrative fees, and
a reserve for contingencies, appropriate remaining monies
to designated programs, grants, and fee payments (Public
Resources Code Section 14581).
d) Among these payments, authorizes CalRecycle to award up
to $10 million for PMDPs to "certified entities"
(collection and processing operations/recyclers) and
"product manufacturers." Beginning in 2012, authorizes
CalRecycle to allocate an amount greater than $10 million,
as prescribed.
e) Specifies that CalReycle may set different payment
amounts for certified entities and product manufacturers,
but neither payment shall exceed $150 per ton, according to
the following considerations:
i) The minimum funding level needed to encourage
in-state washing and processing of empty plastic beverage
containers collected for recycling;
ii) The minimum funding level needed to encourage
in-state manufacturing that uses empty plastic beverage
containers collected for recycling; and,
iii) The total amount of funds projected to be available
(currently $10 million annually) for plastic market
development payments and the desire to maintain the
minimum funding level needed throughout the year.
f) Sunsets the PMDP on January 1, 2017.
FISCAL EFFECT : None. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS :
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1)Background on the PMDP. 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 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 PMDP was established in 2006 and extended in 2011. The
2011 extension also authorized CalRecycle to expend an amount
greater than $10 million annually if it makes specified
determinations. Existing law is explicit that CalRecycle may
expend "up to" $10 million, and that PMDPs "shall not exceed"
$150 per ton; both of these provisions allow CalRecycle to
expend lesser amounts. Existing law further specifies that
when determining the amount of the PMDP for certified entities
and product manufacturers, it must consider the amount of
funds projected to be available and "the desire to maintain
the minimum funding level throughout the year."
The PMDP is designed to encourage the in-state recycling of
plastic beverage containers. While the number of certified
entities has remained fairly constant, the number of product
manufacturers has more than doubled since the beginning of the
program. In 2013, eight certified entities and 46
manufacturers received the PMDP. Five companies are both
certified entities and product manufacturers, which enables
them to receive the PMPD for both processing and
manufacturing.
2)Proposed regulatory changes. In spite of the broad authority
granted to CalRecycle to adjust the amount of the PMDP and
statutory guidance that CalRecycle should consider "the desire
to maintain the minimum funding level throughout the year,"
CalRecycle held a workshop in October 2013 because PMDP
funding had been depleted by the second quarter "for the past
several years." The purpose of the workshop was to discuss
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proposed emergency regulatory changes to limit payments to
product manufacturers only and cease all payments to certified
entities. After the workshop, a number of certified entities
expressed concern to CalRecycle about the proposed changes and
the use of the emergency regulations process, which would
reduce the public comment period from 45 days to only five.
In January 2014, CalRecycle issued a notice to PMDP
participants stating that, as in previous years, the PMDP
would be $150 per ton for certified entities and product
manufacturers. This notice did not reference emergency
regulations. In February, CalRecycle issued a notice stating
that it will allocate $2.5 million per quarter for PMDPs, and
stated that "the Department's plans are to enact new emergency
regulations to issue PMDP payments to manufacturers only."
The notice indicated that certified entities would stop
receiving the PMDP after the first quarter. CalRecycle has
not released draft regulations or any additional notices
related to the program.
3)This bill. According to the author, "elimination of this
payment to [certified] entities will be detrimental to
businesses that have developed a business model that is
supported by those payments." This bill preserves
CalRecycle's broad authority to establish the amount of the
PMDP, but ensures that it will continue to be made to both
certified entities and product manufacturers.
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092
FN: 0003310