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AB-178 California Beverage Container Recycling and Litter Reduction Act.(2017-2018)

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Date Published: 04/24/2017 09:00 PM
AB178:v97#DOCUMENT

Amended  IN  Assembly  April 24, 2017
Amended  IN  Assembly  March 21, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 178


Introduced by Assembly Member Eggman

January 18, 2017


An act to amend Sections 14504, 14505, 14506.3, 14515.6, 14573.5, 14575, and 14596 of, and to add Section 14573.8 to, the Public Resources Code, relating to recycling, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 178, as amended, Eggman. California Beverage Container Recycling and Litter Reduction Act.
(1) Under existing law, the California Beverage Container Recycling and Litter Reduction Act, every beverage container sold or offered for sale in this state is required to have a minimum refund value. A distributor is required 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 for deposit in the California Beverage Container Recycling Fund. The money in the fund is continuously appropriated to the department for, among other things, the payment of refund values. The act defines the term “beverage” for purposes of the act to include certain types of products in liquid, ready-to-drink form, as specified. The act excludes from the definition of “beverage,” among other products, any product sold in a container that is not an aluminum beverage container, a glass container, a plastic beverage container, or a bimetal container.
This bill would eliminate reference to the material from which a beverage container is made in defining the term “beverage.” The bill would specify that any portion of a redemption payment paid to the department for deposit into the fund that exceeds the amount that would otherwise have been deposited absent this change to existing law shall not be continuously appropriated and instead shall be subject to appropriation by the Legislature. terms “beverage” and “beverage container.” Because redemption payments for the previously excluded beverage container material types made subject to the act by this bill would be deposited in a continuously appropriated fund, the bill would make an appropriation.
(2) The act defines “other beverage container” as a beverage container which has a body consisting of metal, glass, plastic, other materials, or a combination of these, but which is not an aluminum, bimetal, glass, or plastic beverage container. The act requires any person importing into the state more than 25 pounds of empty aluminum, bimetal, or plastic beverage container material, or more than 250 pounds of empty glass beverage container material, among other requirements, to report the material to the department and to provide certain documentation, including the destination of the material.
This bill would subject to those requirements a person importing into the state more than 25 pounds of other empty beverage container material.
(3) The act requires the department to calculate a processing fee and processing payment for each beverage container type with a scrap value less than the cost of recycling. The act requires the processing payment to be at least equal to the difference between the scrap value offered to a statistically significant sample of recyclers by willing purchasers and the sum of the actual cost of recycling containers by certified recycling centers and a reasonable financial return.
This bill would, for purposes of calculating the processing payment, exclude certified curbside programs from the sampling of recyclers.
(4) The act requires a processor to pay to a certified recycling center, dropoff or collection program, or curbside program for all types of empty beverage containers received by the processor the refund value, 3/4 of 1% of the refund value for administrative costs, and the processing payment.
This bill would prohibit a processor from making those payments for a load of empty beverage containers, or a commingled load of empty beverage containers and other containers of the same material type, if more than 5% of the load is made up of material other than empty beverage containers of one material type and other containers of the same material type.
(5) This bill would also make conforming changes.
(6) A violation of the act is a crime.
This bill would impose a state-mandated local program by creating new crimes relating to beverage containers.
(7) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY2/3   Appropriation: NOYES   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 14504 of the Public Resources Code is amended to read:

14504.
 (a) Except as provided in subdivision (b), “beverage” means any of the following products if those products are in liquid, ready-to-drink form, and are intended for human consumption:
(1) Beer and other malt beverages.
(2) Wine and distilled spirit coolers.
(3) Carbonated water, including soda and carbonated mineral water.
(4) Noncarbonated water, including noncarbonated mineral water.
(5) Carbonated soft drinks.
(6) Noncarbonated soft drinks and “sport” drinks.
(7) Except as provided in paragraph (3) of subdivision (b), noncarbonated fruit drinks that contain any percentage of fruit juice.
(8) Coffee and tea drinks.
(9) Carbonated fruit drinks.
(10) Vegetable juice in beverage containers of 16 ounces or less.
(b) “Beverage” does not include any of the following:
(1) Wine, or wine from which alcohol has been removed, in whole or in part, whether or not sparkling or carbonated.
(2) Milk, medical food, or infant formula.
(3) One hundred percent fruit juice in containers that are 46 ounces or more in volume.
(c) For purposes of this section, the following definitions shall apply:
(1) “Infant formula” means any liquid food described or sold as an alternative for human milk for the feeding of infants.
(2) (A) “Medical food” means a food or beverage that is formulated to be consumed, or administered enterally under the supervision of a physician, and that is intended for specific dietary management of diseases or health conditions for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation.
(B) A “medical food” is a specially formulated and processed product, for the partial or exclusive feeding of a patient by means of oral intake or enteral feeding by tube, and is not a naturally occurring foodstuff used in its natural state.
(C) “Medical food” includes any product that meets the definition of “medical food” in the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 360ee(b)(3)).
(3) “Noncarbonated soft drink” means a nonalcoholic, noncarbonated naturally or artificially flavored water containing sugar or sweetener or trace amounts of various elements from both natural and synthetic sources.

(d)Any portion of a redemption payment paid to the department for deposit into the fund that exceeds the amount that would otherwise have been deposited absent the changes made to this section during the 2017–18 Regular Session shall not be continuously appropriated pursuant to Section 14580 and instead shall be subject to appropriation by the Legislature.

SEC. 2.

 Section 14505 of the Public Resources Code is amended to read:

14505.
 “Beverage container” means the individual, separate bottle, can, jar, carton, or other receptacle, however denominated, in which a beverage is sold. “Beverage container” does not include cups or other similar open or loosely sealed receptacles.

SEC. 3.

 Section 14506.3 of the Public Resources Code is amended to read:

14506.3.
 “Bimetal container” means a beverage container which consists of one or more metals and which is composed primarily of steel. For purposes of this division, “bimetal” is a material type.

SEC. 4.

 Section 14515.6 of the Public Resources Code is amended to read:

14515.6.
 “Physical recycling location” means the area in a convenience zone served by one or more reverse vending machines that accept all types of empty beverage containers and issue a cash refund or a redeemable credit slip and are located within 10 feet of each other. The physical recycling location shall redeem odd sized empty beverage containers in a manner approved by the department. “Physical recycling location” does not include a combination of reverse vending machines that accept less than all empty beverage containers and one or more dropoff bins.

SEC. 5.

 Section 14573.5 of the Public Resources Code is amended to read:

14573.5.
 (a) Except as provided in Sections 14573.6 and 14573.8, a processor shall pay to a certified recycling center, dropoff or collection program, or curbside program, for all types of empty beverage containers, by type of beverage container, received by the processor from a recycling center, curbside program, or dropoff or collection program, upon receipt by the certified processor of a shipping report from the supplier of the material, in the form adopted by the regulations adopted by the department, the sum of all of the following amounts:
(1) The refund value.
(2) Three-fourths of 1 percent of the refund value for administrative costs.
(3) The processing payment established pursuant to Section 14575.
(b) The processor shall make the payment required in subdivision (a) within two working days of the date that the processor receives these empty beverage containers, or within the time which the department determines to be necessary and adequate. Under the procedures authorized by the department, the department may authorize a certified recycling center to cancel containers, and a certified processor may authorize a certified recycling center to cancel containers on behalf of the certified processor.
(c) If the department has set up an accounts receivable procedure or other procedure for seeking the payment of money improperly obtained by a certified recycling center from the fund, the department may reimburse the processor for its payments to that certified recycling center.

SEC. 6.

 Section 14573.8 is added to the Public Resources Code, to read:

14573.8.
 A processor shall not make a payment pursuant to subdivision (a) of Section 14573.5 for a load of empty beverage containers, or a commingled load of empty beverage containers and other containers of the same material type, if more than 5 percent of the load is made up of material other than empty beverage containers of one material type and other containers of the same material type.

SEC. 7.

 Section 14575 of the Public Resources Code is amended to read:

14575.
 (a) If any type of empty beverage container with a refund value established pursuant to Section 14560 has a scrap value less than the cost of recycling, the department shall, on January 1, 2000, and on or before January 1 annually thereafter, establish a processing fee and a processing payment for the container by the type of the material of the container.
(b) The processing payment shall be at least equal to the difference between the scrap value offered to a statistically significant sample of recyclers, excluding certified curbside programs, by willing purchasers, and except for the initial calculation made pursuant to subdivision (d), the sum of both of the following:
(1) The actual cost for certified recycling centers, excluding centers receiving a handling fee, of receiving, handling, storing, transporting, and maintaining equipment for each container sold for recycling or, only if the container is not recyclable, the actual cost of disposal, calculated pursuant to subdivision (c). The department shall determine the statewide weighted average cost to recycle each beverage container type, which shall serve as the actual recycling costs for purposes of paragraph (2) of subdivision (c), by conducting a survey of the costs of a statistically significant sample of certified recycling centers, excluding those recycling centers receiving a handling fee, for receiving, handling, storing, transporting, and maintaining equipment.
(2) A reasonable financial return for recycling centers.
(c) The department shall base the processing payment pursuant to this section upon all of the following:
(1) Except as provided in paragraph (2), for calculating processing payments that will be in effect on and after January 1, 2004, the department shall determine the actual costs for certified recycling centers, every second year, pursuant to paragraph (1) of subdivision (b). The department shall adjust the recycling costs annually to reflect changes in the cost of living, as measured by the Bureau of Labor Statistics of the United States Department of Labor or a successor agency of the United States government.
(2) On and after January 1, 2010, the department shall use the most recently published, measured actual costs of recycling for a specific beverage material type if the department determines the number of beverage containers for that material type that is returned for recycling pursuant to Section 14551, based on the most recently published calendar year number of beverage containers returned for recycling, is less than 5 percent of the total number of beverage containers returned for recycling for all material types. The department shall determine the actual recycling cost to be used for calculating processing payments for those beverage containers in the following manner:
(A) The department shall adjust the costs of recycling that material type every second year by the percentage change in the most recently measured cost of recycling HDPE plastic beverage containers, as determined by the department. The department shall use the percentage change in costs of recycling HDPE plastic beverage containers for this purpose, even if HDPE plastic beverage containers are less than 5 percent of the total volume of returned beverage containers.
(B) The department shall adjust the recycling costs annually for that material type to reflect changes in the cost of living, as measured by the Bureau of Labor Statistics of the United States Department of Labor or a successor agency of the United States government.
(d) Except as specified in subdivision (e), the actual processing fee paid by a beverage manufacturer shall equal 65 percent of the processing payment calculated pursuant to subdivision (b).
(e) The department, consistent with Section 14581 and subject to the availability of funds, shall reduce the processing fee paid by beverage manufacturers by expending funds in each material processing fee account, in the following manner:
(1) On January 1, 2005, and annually thereafter, the processing fee shall equal the following amounts:
(A) Ten percent of the processing payment for a container type with a recycling rate equal to or greater than 75 percent.
(B) Eleven percent of the processing payment for a container type with a recycling rate equal to or greater than 65 percent, but less than 75 percent.
(C) Twelve percent of the processing payment for a container type with a recycling rate equal to or greater than 60 percent, but less than 65 percent.
(D) Thirteen percent of the processing payment for a container type with a recycling rate equal to or greater than 55 percent, but less than 60 percent.
(E) Fourteen percent of the processing payment for a container type with a recycling rate equal to or greater than 50 percent, but less than 55 percent.
(F) Fifteen percent of the processing payment for a container type with a recycling rate equal to or greater than 45 percent, but less than 50 percent.
(G) Eighteen percent of the processing payment for a container type with a recycling rate equal to or greater than 40 percent, but less than 45 percent.
(H) Twenty percent of the processing payment for a container type with a recycling rate equal to or greater than 30 percent, but less than 40 percent.
(I) Sixty-five percent of the processing payment for a container type with a recycling rate less than 30 percent.
(2) The department shall calculate the recycling rate for purposes of paragraph (1) based on the 12-month period ending on June 30 that directly precedes the date of the January 1 processing fee determination.
(f) Not more than once every three months, the department may make an adjustment in the amount of the processing payment established pursuant to this section notwithstanding any change in the amount of the processing fee established pursuant to this section, for any beverage container, if the department makes the following determinations:
(1) The statewide scrap value paid by processors for the material type for the most recent available 12-month period directly preceding the quarter in which the processing payment is to be adjusted is 5 percent more or 5 percent less than the average scrap value used as the basis for the processing payment currently in effect.
(2) Funds are available in the processing fee account for the material type.
(3) Adjusting the processing payment is necessary to further the objectives of this division.
(g) (1) Except as provided in paragraphs (2) and (3), every beverage manufacturer shall pay to the department the applicable processing fee for each container sold or transferred to a distributor or dealer within 40 days of the sale in the form and in the manner which the department may prescribe.
(2) (A) Notwithstanding Section 14506, with respect to the payment of processing fees for beer and other malt beverages manufactured outside the state, the beverage manufacturer shall be deemed to be the person or entity named on the certificate of compliance issued pursuant to Section 23671 of the Business and Professions Code. If the department is unable to collect the processing fee from the person or entity named on the certificate of compliance, the department shall give written notice by certified mail, return receipt requested, to that person or entity. The notice shall state that the processing fee shall be remitted in full within 30 days of issuance of the notice or the person or entity shall not be permitted to offer that beverage brand for sale within the state. If the person or entity fails to remit the processing fee within 30 days of issuance of the notice, the department shall notify the Department of Alcoholic Beverage Control that the certificate holder has failed to comply, and the Department of Alcoholic Beverage Control shall prohibit the offering for sale of that beverage brand within the state.
(B) The department shall enter into a contract with the Department of Alcoholic Beverage Control, pursuant to Section 14536.5, concerning the implementation of this paragraph, which shall include a provision reimbursing the Department of Alcoholic Beverage Control for its costs incurred in implementing this paragraph.
(3) (A) Notwithstanding paragraph (1), if a beverage manufacturer displays a pattern of operation in compliance with this division and the regulations adopted pursuant to this division, to the satisfaction of the department, the beverage manufacturer may make a single annual payment of processing fees, if the beverage manufacturer meets either of the following conditions:
(i) If the redemption payment and refund value is not increased pursuant to paragraph (3) of subdivision (a) of Section 14560, the beverage manufacturer’s projected processing fees for a calendar year total less than ten thousand dollars ($10,000).
(ii) If the redemption payment and refund value is increased pursuant to paragraph (3) of subdivision (a) of Section 14560, the beverage manufacturer’s projected processing fees for a calendar year total less than fifteen thousand dollars ($15,000).
(B) An annual processing fee payment made pursuant to this paragraph is due and payable on or before February 1 for every beverage container sold or transferred by the beverage manufacturer to a distributor or dealer in the previous calendar year.
(C) A beverage manufacturer shall notify the department of its intent to make an annual processing fee payment pursuant to this paragraph on or before January 31 of the calendar year for which the payment will be due.
(4) The department shall pay the processing payments on redeemed containers to processors, in the same manner as it pays refund values pursuant to Sections 14573 and 14573.5. The processor shall pay the recycling center the entire processing payment representing the actual costs and financial return incurred by the recycling center, as specified in subdivision (b).
(h) When assessing processing fees pursuant to subdivision (a), the department shall assess the processing fee on each container sold, as provided in subdivisions (d) and (e), by the type of material of the container, assuming that every container sold will be redeemed for recycling, whether or not the container is actually recycled.
(i) The container manufacturer, or a designated agent, shall pay to, or credit, the account of the beverage manufacturer in an amount equal to the processing fee.
(j) If, at the end of any calendar year for which glass recycling rates equal or exceed 45 percent and sufficient surplus funds remain in the glass processing fee account to make the reduction pursuant to this subdivision or if, at the end of any calendar year for which PET recycling rates equal or exceed 45 percent and sufficient surplus funds remain in the PET processing fee account to make the reduction pursuant to this subdivision, the department shall use these surplus funds in the respective processing fee accounts in the following calendar year to reduce the amount of the processing fee that would otherwise be due from glass or PET beverage manufacturers pursuant to this subdivision.
(1) The department shall reduce the glass or PET processing fee amount pursuant to this subdivision in addition to any reduction for which the glass or PET beverage container qualifies under subdivision (e).
(2) The department shall determine the processing fee reduction by dividing two million dollars ($2,000,000) from each processing fee account by an estimate of the number of containers sold or transferred to a distributor during the previous calendar year, based upon the latest available data.

SEC. 8.

 Section 14596 of the Public Resources Code is amended to read:

14596.
 (a) Any person importing more than 25 pounds of empty aluminum, bimetal, plastic, or other beverage container material, or more than 250 pounds of empty glass beverage container material, into the state, shall report the material to the department and provide the department with all of the following:
(1) Documentation on the source of the material.
(2) Documentation on the destination of the material.
(3) Any other information deemed necessary by the department as it relates to the importation of empty beverage container material.
(4) An opportunity for inspection, in accordance with the regulations adopted by the department.
(b) (1) (A) In addition to inspections required by the regulations adopted by the department pursuant to subdivision (a), a vehicle entering the state that contains more than 25 pounds of empty beverage container material shall pass through the nearest plant quarantine inspection station maintained pursuant to Section 5341 of the Food and Agricultural Code, and shall obtain proof of inspection from the department.
(B) The department may enter into an interagency agreement with the Department of Food and Agriculture to implement the requirements of this subdivision.
(2) The operator of a vehicle that contains more than 25 pounds of empty beverage container material is in violation of this chapter if the operator does any of the following:
(A) Fails to stop the vehicle at a plant quarantine inspection station.
(B) Willfully avoids a plant quarantine inspection station.
(C) Fails to stop upon demand of a clearly identified plant quarantine inspection station officer, an officer of the California Highway Patrol, or an officer of a state or local law enforcement agency, when the officer orders the operator to stop for the purpose of determining whether this operator is in violation of this section.
(c) The department may impose civil penalties pursuant to Section 14591.1 or take disciplinary action pursuant to Section 14591.2 for a violation of this section.
(d) Subdivision (c) does not prohibit the imposition of a criminal penalty pursuant to subdivision (a) of Section 14591 for a violation of subdivision (b). A second or subsequent violation of subdivision (b) within three years of a prior conviction of a violation of subdivision (b) shall be punishable as a misdemeanor.

SEC. 9.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.