BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 1108


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          Date of Hearing:  May 13, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          1108 (Low) - As Amended May 5, 2015


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          No


          SUMMARY:


          This bill prohibits certified recycling centers from accepting  
          or paying the California Refund Value (CRV) to a consumer for  
          more than 50 pounds of aluminum or plastic beverage containers  








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          or 500 pounds of glass beverage containers during a 24-hour  
          period.  


          FISCAL EFFECT:


          Unknown, annual costs savings, potentially in the hundreds of  
          thousands to of dollars, resulting from fraud deterrence  
          (Beverage Recycling Fund).  


          In the summer of 2011, CalRecycle, in coordination with the  
          California Department of Food and Agriculture (CDFA), initiated  
          a 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 days of the pilot program, the information  
          gathered revealed over 2,500 vehicles, including 378 rental  
          trucks filled to capacity, imported out-of-state beverage  
          container material through these stations.  According to  
          CalRecycle, a conservative estimate of fraud exposure is $7  
          million annually.  This bill makes it more difficult to redeem  
          large amounts of out-of-state beverage containers.



          COMMENTS:


          1)Purpose.  According to CalRecycle, lowering the limits is a  
            significant way to reduce fraud in the program.  As a result,  
            importers of out-of-state containers, which are not eligible  
            for CRV, and scavenger fleets illegally removing the contents  
            of residential curbside recycling bins will find it  
            considerably more time-consuming and risky to reap any  
            fraudulent gains.  








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            This bill prohibits a certified recycling center from  
            accepting or paying the CRV to a consumer for more than 50  
            pounds of aluminum beverage containers or plastic beverage  
            containers, or any combination thereof, or 500 pounds of glass  
            beverage containers, submitted by that consumer to the  
            certified recycling center in a single 24-hour period.

          2)Background. The California Beverage Container Recycling and  
            Litter Reduction Act (Bottle Bill) requires beverage  
            containers sold in this state to have a CRV of 5 cents for  
            containers that hold fewer than 24 ounces and 10 cents for  
            containers that hold 24 ounces or more. 






            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 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.  













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            According to CalRecycle, the Bottle Bill is currently  
            operating under a structural deficit, mainly caused by  
            historically high recycling rates and mandated program  
            payments. The structural deficit means that program  
            expenditures exceed program revenues under the current  
            mandated expenditure and revenue structure. When the Bottle  
            Bill does not have adequate funding, CalRecycle is required to  
            "proportionally reduce" many of the program's expenditures  
            evenly among program participants, with the exception of CRV  
            redemption for consumers.  


          3)Previous Redemption Limits.


            In January, 2014, CalRecycle reduced the number of containers  
            an individual can bring to recycling centers for CRV in a  
            single day from 500 pounds of aluminum or plastic to 100  
            pounds, and from 2,500 pounds of glass to 1,000 pounds and  
            required that anyone transporting 25 pounds or more of  
            aluminum beverage containers or 250 pounds of glass beverage  
            containers into the state must pass through a CDFA quarantine  
            inspection station and obtain and carry a proof of inspection.  
             


          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081



















                                                                    AB 1108


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