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AB-1454 The California Beverage Container and Litter Reduction Act.(2021-2022)

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Date Published: 04/22/2021 09:00 PM
AB1454:v97#DOCUMENT

Amended  IN  Assembly  April 22, 2021
Amended  IN  Assembly  March 04, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1454


Introduced by Assembly Members Bloom and O’Donnell

February 19, 2021


An act to amend Sections 14509.4, 14571.1, 14572, and 14585 of, to add Sections 14506.4 and to add and repeal Section 14575.2 to, and to add Chapter 4.5 (commencing with Section 14557) to Division 12.1 of, the Public Resources Code, relating to solid waste.


LEGISLATIVE COUNSEL'S DIGEST


AB 1454, as amended, Bloom. The California Beverage Container and Litter Reduction Act.
(1) The California Beverage Container Recycling and Litter Reduction Act, which is administered by the Department of Resources Recycling and Recovery, is established to promote beverage container recycling and provides for the payment, collection, and distribution of certain payments and fees based on minimum refund values established for beverage containers.

This bill would establish the Beverage Container Recycling Program Advisory Board, consisting of 9 members in specified categories appointed by the Director of Resources Recycling and Recovery, and would require the department to consult with the board when initiating, reviewing, or expanding policies, guidelines, or budgetary changes impacting the beverage container recycling program. The bill would provide that board members are entitled to payment of necessary traveling expenses, to be paid, upon appropriation by the Legislature from the California Beverage Container Recycling Fund, to the board for that purpose. The bill would require the board to keep confidential all proprietary information that the board gathers or becomes aware of. The bill would require the director to adopt regulations and procedures to be used by the board to administer these provisions.

(2)The

The act requires the department to annually designate convenience zones on a statewide basis and requires that at least one certified recycling center or location that meets certain requirements be located within every convenience zone, with exemptions. The act defines convenience zone as either the area within a 1/2 mile radius of a supermarket or the area designated by the department in a rural region.
This bill would allow the department to designate a regional convenience zone serving multiple up to 5 unserved supermarket-based zones based on specified factors.

(3)

(2) The act requires a certified recycling center to accept from any consumer or dropoff or collection program any empty beverage container and to pay to the consumer or dropoff or collection program the refund value of the beverage container. A violation of the act is an infraction.
This bill would require a certified bottle drop recycling program to pay the refund value to be paid onsite at the time of redemption, through a voucher, or through an electronic payment of the beverage container as an electronic payment within 5 3 business days. days of redemption, if not paid onsite at the time of redemption. Because a violation of this requirement would be a crime under the act, the bill would impose a state-mandated local program.

(4)

(3) Under the act, the department is required to calculate a processing fee for each beverage container with a specified scrap value, which is required to be paid by beverage manufacturers for each beverage container sold or transferred to a distributor or dealer. The department is required to calculate the processing fee in a specified manner, so that the processing fee generally equals 65% of the processing payment that the department is required to pay to processors if the scrap value of the container having a refund value pursuant to the act is less than the cost of recycling. The department is required to determine the statewide weighted average cost to recycle each beverage container type, as described, for purposes of determining processing payments.
This bill would would, until January 1, 2025, authorize the director, upon appropriation by the Legislature from the California Beverage Container Recycling Fund, to increase processing payments to a certified recycling center by up to 50% higher than statewide rates for the first 40,000 glass containers and the first 200,000 plastic containers claimed by a certified recycling center each month. The bill would require the department, upon appropriation by the Legislature from the California Beverage Container Recycling Fund, to pay the first operator of a recycling center certified to operate in a convenience zone that, as of January 1, 2021, has been continuously unserved by a recycling center for at least 6 months a handling fee payment regardless of the physical location of the certified recycling center within that convenience zone.
This bill would express the intent of the Legislature to appropriate in a future Budget Act or other bill the sum of $25,000,000 from the California Beverage Container Recycling Fund to the department for plastic quality incentive payments and startup loans in the amount of $25,000 to entities that establish and operate certified recycling centers in unserved or underserved areas in the state. The bill would require a startup loan to be forgiven if the entity continually maintains operations for 18 months.

(5)Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

(6)

(4) 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: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 (a) Consistent with the recommendations in the report prepared by the Department of Resources Recycling and Recovery pursuant to paragraph (3) of subdivision (a) of Section 5 of Chapter 793 of the Statues of 2019, and with meeting the mandatory minimum content requirements put in statute by Chapter 115 of the Statutes of 2020, it is the intent of the Legislature in enacting this act to do all both of the following:
(1) Modernize the state’s beverage container recycling program.
(2) Promote efficiencies within the existing program by reconfiguring convenient zones and providing flexible payment methods for consumers to collect their refund.

(3)Create a nine-member advisory board that will consist of active stakeholders in the program.

(b) It is the intent of the Legislature that the state’s beverage container recycling program support a circular economy and to further enable the fulfillment of the state’s minimum recycled content requirements for beverage containers and that the department, when drafting regulations, rules, and payment schedules, prioritize activities that further those goals.
SEC. 2.Section 14506.4 is added to the Public Resources Code, to read:
14506.4.

“Board” means the Beverage Container Recycling Program Advisory Board established pursuant to Section 14557.

SEC. 3.SEC. 2.

 Section 14509.4 of the Public Resources Code is amended to read:

14509.4.
 “Convenience zone” means any of the following:
(a) The area within a one-half mile radius of a supermarket.
(b) The regional area designated by the department pursuant to Section 14571.1.
(c) The area designated by the department pursuant to Section 14571.5.

SEC. 4.Chapter 4.5 (commencing with Section 14557) is added to Division 12.1 of the Public Resources Code, to read:
4.5.Beverage Container Recycling Program Advisory Board
14557.

(a)The Beverage Container Recycling Program Advisory Board is hereby established.

(b)The board shall consist of nine members who actively participate in the beverage container recycling program established by this division. The board shall consist of one member from each of the following categories, appointed by the director:

(1)Beverage manufacturer.

(2)Certified recycler.

(3)Reclaimer.

(4)Nongovernmental organization.

(5)Waste hauler.

(6)A local government representative from a rural area.

(7)A local government representative from an urban area.

(8)Consumer advocate.

(9)A public member without a financial interest in the beverage container recycling program.

(c)The department shall consult with the board when initiating, reviewing, or expanding policies, guidelines, or budgetary changes impacting the beverage container recycling program.

(d)The board shall meet at a minimum of two times per year.

(e)The members of the board shall receive no salary, but are entitled to payment of necessary traveling expenses in accordance with applicable rules and regulations of the Department of Human Resources. These expenses shall be paid, upon appropriation by the Legislature from the fund, to the board for that purpose.

14557.2.

(a)The board shall advise the director and may make recommendations to the director concerning all of the following:

(1)Adoption, modification, and repeal of regulations and procedures.

(2)Procedures for employment, training, supervision, and compensation of inspectors and other personnel.

(3)Rate and collection of fees and related penalties.

(4)Posting and noticing changes in bylaws, general procedures, or orders.

(5)Calculation, distribution, and amending fees, payments, and program elements.

(6)All matters pertaining to this division, including, but not limited to, the inspection and enforcement program, annual budget, necessary fees to provide adequate services, and regulations required to accomplish the purposes of this chapter.

(b)The board shall keep accurate books and records of its activities, which shall be subject to annual audit by an auditing firm approved by the director. The audit shall be included in an annual report that the board shall submit to all persons certified under this division.

14557.4.

The board shall keep confidential all proprietary information that the board gathers or becomes aware of through the course of implementing this chapter, including, but not limited to, material test results, individual fee or license payments, rendering processes, or formula information. Proprietary information obtained pursuant to this chapter is not subject to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).

14557.6.

(a)The director shall adopt regulations and procedures to be used by the board to administer this chapter.

(b)In adopting regulations and procedures, the director shall accept the recommendations of the board if the director finds the recommendations to be practicable and in the interest of the beverage container recycling industry and the public.

14557.8.

The director shall, within 30 days of receiving a recommendation from the board in accordance with this chapter, provide the board with notice of the acceptance of the recommendation or with a written statement of the reasons for denial if the director does not accept the recommendation.

SEC. 5.SEC. 3.

 Section 14571.1 of the Public Resources Code is amended to read:

14571.1.
 (a) On or before January 1 of each year, the department shall, on a statewide basis, designate all convenience zones as of that date, including convenience zones in underserved areas, and shall prepare a map or maps showing these convenience zones.
(b) The department may designate a regional convenience zone serving multiple up to five unserved supermarket-based zones based on community need.
(c) In designating a regional convenience zone, the department shall consider the following factors:
(1) Population density.
(2) Distance between recycling centers.
(3) Geography.
(4) Consumer transportation times.

SEC. 6.SEC. 4.

 Section 14572 of the Public Resources Code is amended to read:

14572.
 (a) (1) Except as provided in subdivision (b), a certified recycling center shall accept from any consumer or dropoff or collection program any empty beverage container, and shall pay to the consumer or dropoff or collection program the refund value of the beverage container onsite at the time of redemption, through a voucher or electronic payment. An electronic payment shall be provided within five of the recycling center’s business days. A reasonable administrative fee of up to 2 percent of the transaction amount may be deducted from the electronic transaction to cover banking and sorting fees. container.
(2) Except as provided in paragraph (3), the recycling center may pay the refund value based on the weight of returned containers.
(3) On and after September 1, 2013, for beverage containers redeemed by consumers, a certified recycling center shall pay the refund value using the applicable segregated rate, as defined in paragraph (43) of subdivision (a) of Section 2000 of Title 14 of the California Code of Regulations, as that section read on September 1, 2013, which shall be based on the weight of the redeemed beverage containers.
(4) A certified bottle drop program shall pay the refund value of the beverage container onsite at the time of redemption or as an electronic payment within three business days of redemption.
(b) Any recycling center or processor that was in existence on January 1, 1986, and that refused, as of January 1, 1986, to accept at a particular location a certain type of empty beverage container may continue to refuse to accept at the location the type or types of empty beverage containers that the recycling center or processor refused to accept as of January 1, 1986. A certified recycling center that refuses, pursuant to this subdivision, to accept a certain type or types of empty beverage containers is not eligible to receive handling fees unless the center agrees to accept all types of empty beverage containers and is a supermarket site. This subdivision does not preclude the certified recycling center from receiving a handling fee for beverage containers redeemed at supermarket sites that do accept all types of containers.
(c) The department shall develop procedures by which recycling centers and processors that meet the criteria of subdivision (b) may recertify to change the material types accepted.
(d) (1) Only a certified recycling center may pay the refund value to consumers or dropoff or collection programs. A person shall not pay a noncertified recycler for empty beverage containers an amount that exceeds the current scrap value for each container type, which shall be determined in the following manner:
(A) For a plastic or glass beverage container, the current scrap value shall be determined by the department.
(B) For an aluminum beverage container, the current scrap value shall be not greater than the amount paid to the processor for that aluminum beverage container, on the date the container was purchased, by the location of end use, as defined in the regulations of the department.
(2) A person shall not receive or retain, for empty beverage containers that come from out of state, any refund values, processing payments, or administrative fees for which a claim is made to the department against the fund.
(3) Paragraph (1) does not affect curbside programs under contract with cities or counties.

SEC. 7.SEC. 5.

 Section 14575.2 is added to the Public Resources Code, to read:

14575.2.
 (a) The Legislature finds and declares all of the following:
(1) Ten years of biannual recycling cost surveys conducted by the department have demonstrated that the statutorily required “weighted average” cost calculation pursuant to Section 14575 has consistently resulted in a processing payment that is insufficient to cover the actual, surveyed cost of recycling for a majority of the state’s certified recycling centers.
(2) The current statutorily required cost calculation methodology is inadvertently failing to satisfy the Legislature’s intent in establishing this division, as expressed in Section 14501, which is to “create and maintain a marketplace where it is profitable to establish sufficient recycling centers and locations to provide consumers with convenient recycling opportunities through the establishment of minimum refund values and processing fees and, through the proper application of these elements, to enhance the profitability of recycling centers, recycling locations, and other beverage container recycling programs.”
(3) As a result of these insufficient payments, the state has lost more than 600 certified recycling centers in the last five years, equivalent to one-third of the certified recycling centers that existed in 2015.
(4) The beverage container recycling rate in California has dropped from 81 percent in 2015 to 70 percent in fiscal year 2019–20.
(5) The department’s recycling cost surveys demonstrate that the cost to recycle the same type of beverage container is twice as high at a recycling center in a community that is only able to collect a low volume of beverage containers for recycling versus a recycling center in a community that is able to collect a high volume of beverage containers for recycling.
(6) The department, in its June 1, 2020, “2018 Processing Fee Cost Survey: Final Report,” recognizes that the “cost to recycle varies between large, medium, and small recyclers,” and that small recyclers face higher costs, which, on average, are not covered by processing payments.
(7) Therefore, it is the intent of the Legislature to require the department to establish processing payments to groupings of certified recycling centers that reflect the actual cost of recycling at those centers based on the relative monthly volume of beverage containers collected for recycling.
(8) It is further the intent of the Legislature that the methodology for calculating processing fees remain as set forth in Section 14575.
(b) (1) Notwithstanding Section 14575, the director may, upon appropriation by the Legislature from the fund for purposes of this paragraph, increase processing payments to a certified recycling center by up to 50 percent higher than statewide rates for the first 40,000 glass containers and the first 200,000 plastic containers claimed by the certified recycling center each month. Notwithstanding this paragraph, the department shall not impose a processing fee on beverage container manufacturers that is higher than the processing fee that would be imposed without this paragraph.
(2) All actions taken by the department to implement this subdivision prior to April 1, 2022, are exempt from the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(c) This section shall remain in effect only until January 1, 2025, and as of that date is repealed.

SEC. 8.SEC. 6.

 Section 14585 of the Public Resources Code is amended to read:

14585.
 (a) The department shall adopt guidelines and methods for paying 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. The guidelines shall include, but not be limited to, all of the following:
(1) Handling fees shall be paid on a monthly basis, in the form and manner adopted by the department. The department shall require that claims for the handling fee be filed with the department not later than the first day of the second month following the month for which the handling fee is claimed as a condition of receiving any handling fee.
(2) The department shall determine the number of eligible containers per site for which a handling fee will be paid in the following manner:
(A) Each eligible site’s combined monthly volume of glass and plastic beverage containers shall be divided by the site’s total monthly volume of all empty beverage container types.
(B) If the quotient determined pursuant to subparagraph (A) is equal to, or more than, 10 percent, the total monthly volume of the site shall be the maximum volume that is eligible for a handling fee for that month.
(C) If the quotient determined pursuant to subparagraph (A) is less than 10 percent, the department shall divide the volume of glass and plastic beverage containers by 10 percent. That quotient shall be the maximum volume that is eligible for a handling fee for that month.
(3) The department shall pay a handling fee per eligible container in the amount determined pursuant to subdivision (f).
(4) If the eligible volume in any given month would result in handling fee payments that exceed the allocation of funds for that month, as provided in subdivision (b), sites with higher eligible monthly volumes shall receive handling fees for their entire eligible monthly volume before sites with lower eligible monthly volumes receive any handling fees.
(5) (A) If a dealer where a supermarket site, nonprofit convenience zone recycler, or rural region recycler is located ceases operation for remodeling or for a change of ownership, the operator of that supermarket site, nonprofit convenience zone recycler, or rural region recycler shall be eligible to apply for handling fees for that site for a period of three months following the date of the closure of the dealer.
(B) Every supermarket site operator, nonprofit convenience zone recycler, or rural region recycler shall promptly notify the department of the closure of the dealer where the supermarket site, nonprofit convenience zone recycler, or rural region recycler is located.
(C) Notwithstanding subparagraph (A), any operator who fails to provide notification to the department pursuant to subparagraph (B) shall not be eligible to apply for handling fees.
(b) The department may allocate the amount authorized for expenditure for the payment of handling fees pursuant to paragraph (1) of subdivision (a) of Section 14581 on a monthly basis and may carry over any unexpended monthly allocation to a subsequent month or months. However, unexpended monthly allocations shall not be carried over to a subsequent fiscal year for the purpose of paying handling fees but may be carried over for any other purpose pursuant to Section 14581.
(c) (1) The department shall not make handling fee payments to more than one certified recycling center in a convenience zone. If a dealer is located in more than one convenience zone, the department shall offer a single handling fee payment to a supermarket site located at that dealer. This handling fee payment shall not be split between the affected zones. The department shall stop making handling fee payments if another recycling center certifies to operate within the convenience zone without receiving payments pursuant to this section, if the department monitors the performance of the other recycling center for 60 days and determines that the recycling center is in compliance with this division. Any recycling center that locates in a convenience zone, thereby causing a preexisting recycling center to become ineligible to receive handling fee payments, is ineligible to receive any handling fee payments in that convenience zone.
(2) The department shall offer a single handling fee payment to a rural region recycler located anywhere inside a convenience zone, if that convenience zone is not served by another certified recycling center and the rural region recycler does either of the following:
(A) Operates a minimum of 30 hours per week in one convenience zone.
(B) Serves two or more convenience zones, and meets all of the following criteria:
(i) Is the only certified recycler within each convenience zone.
(ii) Is open and operating at least eight hours per week in each convenience zone and is certified at each location.
(iii) Operates at least 30 hours per week in total for all convenience zones served.
(3) Notwithstanding Section 14513.4, upon appropriation by the Legislature from the fund for purposes of this paragraph, the department shall pay the first operator of a recycling center certified to operate in a convenience zone that, as of January 1, 2021, has been continuously unserved by a recycling center for at least six months a handling fee payment pursuant to this section regardless of the physical location of the certified recycling center within that convenience zone.
(d) The department may require an operator of a supermarket site, or an operator of a rural region recycler, receiving handling fees to maintain records for each location where beverage containers are redeemed, and may require the supermarket site or rural region recycler to take any other action necessary for the department to determine that the supermarket site or rural region recycler does not receive an excessive handling fee.
(e) The department may determine and use a standard container per pound rate, for each material type, for purposes of calculating volumes and making handling fee payments.
(f) (1) On or before January 1, 2008, and every two years thereafter, the department shall conduct a survey pursuant to this subdivision of a statistically significant sample of certified recycling centers that receive handling fee payments to determine the actual cost incurred for the redemption of empty beverage containers by those certified recycling centers. The department shall conduct these cost surveys in conjunction with the cost surveys performed by the department pursuant to subdivision (b) of Section 14575 to determine processing payments and processing fees. The department shall include, in determining the actual costs, only those allowable costs contained in the regulations adopted pursuant to this division that are used by the department to conduct cost surveys pursuant to subdivision (b) of Section 14575.
(2) Using the information obtained pursuant to paragraph (1), the department shall then determine the statewide weighted average cost incurred for the redemption of empty beverage containers, per empty beverage container, at recycling centers that receive handling fees.
(3) The department shall determine the amount of the handling fee to be paid for each empty beverage container by subtracting the amount of the statewide weighted average cost per container to redeem empty beverage containers by recycling centers that do not receive handling fees from the amount of the statewide weighted average cost per container determined pursuant to paragraph (2).
(4) The department shall adjust the statewide average cost determined pursuant to paragraph (2) for each beverage container 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.
(5) The cost information collected pursuant to this section at recycling centers that receive handling fees shall not be used in the calculation of the processing payments determined pursuant to Section 14575.
(g) The department may 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 those certified recycling centers.

SEC. 9.SEC. 7.

 It is the intent of the Legislature to appropriate in a future Budget Act or other bill the sum of $25,000,000 from the California Beverage Container Recycling Fund created pursuant to subdivision (a) of Section 14580 of the Public Resources Code to the Department of Resources Recycling and Recovery for relief for recycling infrastructure. Upon that appropriation, the Department of Resources Recycling and Recovery shall expend the moneys only as follows:
(a) Plastic quality incentive payments pursuant to Section 14549.1 of the Public Resources Code. For PET containers, as defined in Section 14515.5 of the Public Resources Code, loads eligible for payment shall be substantially free of PET thermoform and other contaminants to closed-loop recycling, as determined by the Department of Resources Recycling and Recovery.
(b) Startup loans in the amount of up to $25,000 for an entity that certifies and intends to establish and operate a recycling center in an unserved or underserved area of the state. If the entity continually maintains operations for 18 months, the loan shall be forgiven.
SEC. 10.

The Legislature finds and declares that Section 4 of this act, which adds Chapter 4.5 (commencing with Section 14557) to Division 12.1 of the Public Resources Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

In order to protect the proprietary information of participants in the state’s beverage container recycling program, it is necessary to limit access to the proprietary information of those participants that the Beverage Container Recycling Program Advisory Board gathers or becomes aware of through the course of implementing its duties.

SEC. 11.SEC. 8.

 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.