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

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Date Published: 06/29/2021 04:00 AM
AB1454:v96#DOCUMENT

Amended  IN  Senate  June 28, 2021
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 14501, 14509.4, 14513.4, 14514.7, 14515.5, 14538, 14549.1, 14549.5, 14571.1, 14571.6, 14572, 14572.5, 14573, 14573.5, 14581, 14581.1, and 14585 of, to add Sections 14503.5.1, 14526.7, 14526.8, 14571.95, and 14581.2 to, and to add and repeal Section 14575.2 of, the Public Resources Code, relating to solid waste. waste, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.


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. The act establishes the California Beverage Container Recycling Fund, moneys in which, except for civil penalties or fines, are continuously appropriated to the department to, among other things, pay refund values, processing payments, and handling fees, as prescribed.
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 up to 5 adjacent unserved supermarket-based zones based on specified factors. The bill would require the department to certify bag drop redemption programs, as defined, and dealers under certain conditions and would require those certified entities to be eligible for handling fees and processing payments, as provided, thereby making an appropriation.
(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 bag drop recycling program redemption program, as defined, to pay the refund value of the beverage container as an electronic payment within 3 business 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. The bill would impose or prohibit other requirements on bag drop redemption programs relating to staffing, operating hours, locations, reporting, and refund values. The bill would authorize a certified bag drop redemption program to charge a consumer a service fee to cover the cost of sorting empty beverage containers, as specified.
(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, commencing July 1, 2021, until January 1, 2025, authorize require the director, upon appropriation by the Legislature from the California Beverage Container Recycling Fund, director 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. month and to provide additional processing payments for certified recycling centers in rural regions, as provided. 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. By increasing payments from a continuously appropriated fund, the bill would make an appropriation.
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 authorize the department to establish a program to provide startup loans in the amount of $25,000 $50,000 to entities that establish and operate certified recycling centers in unserved or underserved areas in the state. The bill state, as provided, and would require authorize a startup loan to be entirely forgiven if the entity continually maintains operations for 18 months. 36 months. The bill would authorize the department to expend up to $15,000,000 for those purposes, thereby making an appropriation. The bill also would authorize the department to expend up to $10,000,000 each fiscal year from the fund to provide plastic quality incentive payments, as provided, thereby making an appropriation. The bill would require, commencing with the 2021–22 fiscal year, the department to expend an additional $5,000,000 each fiscal year from the fund for community conservation corps staffing and transportation services, as specified, thereby making an appropriation.
(4) A violation of the act is an infraction.
Because a violation of certain requirements of this bill would be a crime under the act, the bill would impose a state-mandated local program.

(4)

(5) 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.
(6) This bill would declare that it is to take effect immediately as an urgency statute.
Vote: MAJORITY2/3   Appropriation: NOYES   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 both all of the following:
(1) Modernize Modernize, simplify, and ensure financial sustainability in the state’s beverage container recycling program.
(2) Ensure sufficient and convenient opportunities for consumers to recycle and to collect the refund value on their empty beverage containers in every region and community in the state.

(2)

(3) Promote efficiencies and innovation within the existing program by reconfiguring convenient zones and providing flexible payment methods for consumers to collect their refund.
(b) It is the intent of the Legislature that the state’s beverage container recycling program better be able to achieve market resiliency and 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 14501 of the Public Resources Code is amended to read:

14501.
 The Legislature finds and declares as follows:
(a) Experience in this state and others demonstrates that financial incentives and convenient return systems ensure the efficient and large-scale recycling of beverage containers. Accordingly, it is the intent of the Legislature to encourage increased, and more convenient, beverage container redemption opportunities for all consumers. These redemption opportunities shall consist of dealer and other shopping center locations, independent and industry operated industry-operated recycling centers, curbside programs, and other recycling systems that assure all consumers, in every region of the state, the opportunity to return beverage containers conveniently, efficiently, and economically.
(b) California grocery, beer, soft drink, container manufacturing, labor, agricultural, consumer, environmental, government, citizen, recreational, taxpayer, and recycling groups have joined together in calling for an innovative program to generate large-scale redemption and recycling of beverage containers.
(c) This division establishes a minimum beverage container recycling goal of 80 percent. 85 percent overall and a minimum recycling goal of 75 percent for each beverage container material type.
(d) It is the intent of the Legislature to ensure that every container type proves its own recyclability.
(e) It is the intent of the Legislature to make redemption and recycling convenient to consumers, and the Legislature hereby urges cities and counties, when exercising their zoning authority, to act favorably on the siting of multimaterial recycling centers, reverse vending machines, mobile recycling units, or other types of recycling opportunities, as necessary for consumer convenience, and the overall success of litter abatement and beverage container recycling in the state.
(f) The purpose of this division 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.
(g) The responsibility to provide convenient, efficient, and economical redemption opportunities rests jointly with manufacturers, distributors, dealers, recyclers, processors, and the Department of Conservation. Resources Recycling and Recovery.
(h) It is the intent of the Legislature, in enacting this division, that all empty beverage containers redeemed shall be recycled, and that the responsibilities and regulations of the department shall be determined and implemented in a manner that favors the recycling of redeemed containers, as opposed to their disposal.
(i) Nothing in this division shall be interpreted as affecting the current business practices of scrap dealers or recycling centers, except that, to the extent they function as a recycling center or processor, they shall do so in accordance with this division.
(j) The program established by this division will contribute significantly to the reduction of the beverage container component of litter in this state.

SEC. 3.

 Section 14503.5.1 is added to the Public Resources Code, to read:

14503.5.1.
 “Bag drop redemption program” means a program described in Section 14571.95 certified by the department to accept from consumers at one or more locations consumer identifiable bags of unsorted empty beverage containers for subsequent sorting and credit of refund values.

SEC. 2.SEC. 4.

 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 subdivision (b) of Section 14571.1.
(c) The area designated by the department pursuant to Section 14571.5.

SEC. 5.

 Section 14513.4 of the Public Resources Code is amended to read:

14513.4.
 “Handling fee” means an amount paid to an any of the following:
(a) An operator of a supermarket site, a rural region recycler, as defined in Section 14525.5.1, or a nonprofit convenience zone recycler, as defined in Section 14514.7, that is located in a convenience zone, for every beverage container redeemed by the operator at the supermarket or within the zone in which the supermarket site is located, by the rural region recycler, or by the nonprofit convenience zone recycler.
(b) An operator of a bag drop redemption program for every beverage container collected by the program at a location within a convenience zone as demonstrated to the department.

SEC. 6.

 Section 14514.7 of the Public Resources Code is amended to read:

14514.7.
 “Nonprofit convenience zone recycler” means a recycling center that meets the criteria described in subdivision (a) or (b):
(a) The recycling center is all of the following:
(1) Operated by an organization established under Section 501(c) or 501(d) of Title 26 of the United States Code.
(2) Certified by the department pursuant to Section 14538.
(3) Located within a convenience zone, but is not necessarily a supermarket site.
(b) The recycling center is all of the following:
(1) Operated by an organization established under Section 501(c) or 501(d) of Title 26 of the United States Code and has operated in the same location for a period of not less than five years.
(2) Certified by the department pursuant to Section 14538.
(3) Located within one mile two miles of a supermarket that is in a an unserved convenience zone that is exempt from the requirements of subdivision (a) of Section 14571. zone.

SEC. 7.

 Section 14515.5 of the Public Resources Code is amended to read:

14515.5.
 “PET container” means a plastic beverage container labeled with a “1” pursuant to Section 18015 and subject to this division. For the purposes of this division, “PET container” does not include a thermoform plastic container.

SEC. 8.

 Section 14526.7 is added to the Public Resources Code, to read:

14526.7.
 “Thermoform plastic container” means a plastic container, such as a clamshell, cup, tub, lid, box, tray, egg carton, or similar rigid, nonbottle packaging, of any resin type pursuant to Section 18015, formed from sheets of extruded resin and used to package items such as, but not limited to, fresh produce, baked goods, nuts, and deli items.

SEC. 9.

 Section 14526.8 is added to the Public Resources Code, to read:

14526.8.
 (a) “Underserved area” means any of the following:
(1) A city, not in a rural region, with fewer than one certified recycling center for every 30,000 people.
(2) An unincorporated community or county, not in a rural region, with fewer than one certified recycling center for every 25,000 people.
(3) A city or county in a rural region with fewer than one certified recycling location for every 15,000 people.
(b) For the purposes of this section, “rural region” has the same meaning as in subparagraph (A) of paragraph (2) of subdivision (b) of Section 14571.

SEC. 10.

 Section 14538 of the Public Resources Code is amended to read:

14538.
 (a) (1) The department shall certify an operator of a recycling center pursuant to this section.
(2) The department shall review whether an application for certification or renewal is complete within 30 working days of receipt, including compliance with subdivision (c). If the department deems an application complete, the department shall approve or deny the application no later than 60 calendar days after the date when the application was deemed complete.
(b) The director shall adopt, by regulation, a procedure for the certification of recycling centers, including standards and requirements for certification. These regulations shall require that all information be submitted to the department under penalty of perjury. A recycling center shall meet all of the standards and requirements contained in the regulations for certification. The regulations shall require, but shall not be limited to requiring, that all of the following conditions be met for certification:
(1) The operator of the recycling center demonstrates, to the satisfaction of the department, that the operator will operate in accordance with this division.
(2) If one or more certified entities have operated at the same location within the past five years, the operations at the location of the recycling center exhibit, to the satisfaction of the department, a pattern of operation in compliance with the requirements of this division and regulations adopted pursuant to this division.
(3) The operator of the recycling center notifies the department promptly of any material change in the nature of his or her the operator’s operations that conflicts with information submitted in the operator’s application for certification.
(c) (1) An applicant for certification as a recycling center, and a recycling center applying for renewal of a certification, shall complete the precertification training program required by this subdivision and meet all other qualification requirements prescribed by the department, which may include, but are not limited to, requiring the applicant to obtain a passing score on an examination administered by the department.
(2) The department may use staff or industry experts, or may seek expertise available in other state agencies, to provide the training program required by this subdivision, which shall include providing technical assistance to better prepare recycling centers for successful participation in this division, thereby reducing the potential for errors, fraud, or other activities that compromise the integrity of the implementation of this division.
(d) A certified recycling center shall comply with all of the following requirements for operation:
(1) The operator of the recycling center shall not pay a refund value for, or receive a refund value from any processor for, any food or drink packaging material or any beverage container or other product that does not have a refund value established pursuant to Section 14560.
(2) The operator of a recycling center shall take actions that satisfy the department to prevent the payment of a refund value for any food or drink packaging material or any beverage container or other product that does not have a refund value established pursuant to Section 14560.
(3) Unless exempted pursuant to subdivision (b) of Section 14572, a certified recycling center shall accept, and pay at least the refund value for, all empty beverage containers, regardless of type.
(4) A certified recycling center shall not pay any refund values, processing payments, or administrative fees to a noncertified recycler.
(5) A certified recycling center shall not pay any refund values, processing payments, or administrative fees on empty beverage containers or other containers that the certified recycling center knew, or should have known, were coming into the state from out of the state, or are otherwise ineligible for redemption.
(6) A certified recycling center shall not claim refund values, processing payments, or administrative fees on empty beverage containers that the certified recycling center knew, or should have known, were received from noncertified recyclers or on beverage containers that the certified recycling center knew, or should have known, come from out of the state, or are otherwise ineligible for redemption.
(7) A certified recycling center shall prepare and maintain the following documents involving empty beverage containers, as specified by the department by regulation:
(A) Shipping reports that are required to be prepared by the recycling center, or that are required to be obtained from other recycling centers.
(B) Consumer transaction receipts.
(C) Consumer transaction logs.
(D) Rejected container receipts on materials subject to this division.
(E) Receipts for transactions with beverage manufacturers on materials subject to this division.
(F) Receipts for transactions with beverage distributors on materials subject to this division.
(G) Documents authorizing the recycling center to cancel empty beverage containers.
(H) Weight tickets.
(8) In addition to the requirements of paragraph (7), a certified recycling center shall cooperate with the department and make available its records of scrap transactions when the review of these records is necessary for an audit or investigation by the department.
(e) The department may recover, in restitution pursuant to paragraph (5) of subdivision (c) of Section 14591.2, payments made from the fund to the certified recycling center pursuant to Section 14573.5 that are based on the documents specified in paragraph (7), (7) of subdivision (d), that are not prepared or maintained in compliance with the department’s regulations, and that do not allow the department to verify claims for program payments.
(f) The department may certify a recycling center that will operate less than 30 hours a week, as specified in paragraph (2) of subdivision (b) of Section 14571.
(g) (1) A dealer that provides an affidavit to the department and demonstrates to the department that it is in compliance with the redemption requirements pursuant to Section 14571.6, and operates in compliance with this division shall be deemed a certified dealer by the department, with all authorities and responsibilities of a certified recycling center.
(2) The department shall designate appropriate forms and reporting requirements for certified dealers to ensure that empty beverage containers redeemed by a certified dealer are recycled and eligible for payment to the certified dealer of the refund value, administrative payment, and any applicable processing payment by a certified processor pursuant to Section 14573.5.
(3) A certified dealer may contract with a community conservation corps or other entity to transport empty beverage containers to a certified processor for subsequent recycling.
(h) (1) The department may certify a bag drop redemption program pursuant to Section 14571.95 as a certified recycling center.
(2) The department shall designate appropriate forms and reporting requirements for certified bag drop redemption programs to ensure that empty beverage containers redeemed by a certified bag drop redemption program are eligible for payment of refund value, administrative payment, and any applicable processing payment by a certified processor pursuant to Section 14573.5.

SEC. 11.

 Section 14549.1 of the Public Resources Code is amended to read:

14549.1.
 (a) In order to improve the quality and marketability of empty beverage containers collected for recycling in the state by curbside recycling programs or dropoff or collection programs, the department may, consistent with Section 14581 and subject to the availability of funds, pay a quality incentive payment for each material type, as specified in subdivision (c).
(b) The department may make a quality incentive payment pursuant to this section to either an operator of a curbside recycling program registered pursuant to Section 14551.5, or to any other entity certified pursuant to this division.
(c) Subject to subdivision (a), the department shall pay a quality incentive payment for each type of beverage container material in accordance with the following conditions:
(1) For quality incentive payments for empty glass beverage containers, all of the following shall apply:
(A) The department may make a quality incentive payment only for color-sorted glass beverage containers that are substantially free of contamination.
(B) The department may make a quality incentive payment for empty glass beverage containers that are either collected color sorted by curbside recycling programs or dropoff or collection programs, or that are collected mixed color by curbside recycling programs or dropoff or collection programs and are subsequently color sorted by the collector or any other entity certified pursuant to this division.
(C) The amount of the quality incentive payment for empty glass beverage containers shall be up to sixty dollars ($60) per ton, as determined by the department.
(2) For quality incentive payments for empty plastic beverage containers, both all of the following shall apply:
(A) The department may make a quality incentive payment only for plastic beverage containers collected by curbside recycling programs or dropoff or collection programs, that are sorted by resin type, consistent with any quality specifications that the department may adopt.
(B) The amount of the quality plastic incentive payment shall be up to one hundred eighty dollars ($180) per ton, as determined by the department.
(C) For PET containers, as defined in Section 14515.5, the department may make quality incentive payments for loads of commingled PET containers to be shipped to a willing purchaser that meet established market quality standards for recycling back into a PET container, including, but not limited to, the Plastic Recycling Corporation of California (PRCC) Grade B bale specification, as determined by the department.
(3) For quality payments for empty aluminum beverage containers, all of the following shall apply:
(A) The department may make a quality incentive payment only for aluminum beverage containers that are free of any and all metallic and nonmetallic items, other than used aluminum containers.
(B) The department may make a quality incentive payment for empty aluminum beverage containers that are collected commingled by curbside recycling programs or dropoff or collection programs, and subsequently cleaned by the collector or any other entity certified pursuant to this division, of any and all metallic and nonmetallic items, other than used aluminum containers, consistent with any quality specifications that the department may adopt.
(C) The amount of the quality incentive payment for empty aluminum beverage containers shall be up to one hundred twenty-five dollars ($125) per ton, as determined by the department.
(d) An operator of a curbside recycling program or any other certified entity receiving a quality incentive payment shall make available for inspection and review any relevant record that the department determines is necessary to verify the accuracy of data upon which the quality incentive payment is based and the operator’s or certified entity’s compliance with any applicable regulation.
(e) The department may make only one quality incentive payment for each empty beverage container collected pursuant to this section.
(f) This section shall become operative on January 1, 2007.

SEC. 12.

 Section 14549.5 of the Public Resources Code is amended to read:

14549.5.
 (a) On or before April 1, 2004, and annually thereafter, or more frequently as determined to be necessary by the department, the department shall review and, if necessary in order to ensure payment of the most accurate commingled rate feasible, recalculate commingled rates paid for beverage containers and postfilled containers paid to curbside recycling programs and collection programs. Prior to Before recalculating a commingled rate pursuant to this section, the department shall do all of the following:

(a)

(1) Consult with private and public operators of curbside recycling programs and collection programs concerning the size of the statewide sample, appropriate sampling methodologies, and alternatives to exclusive reliance on a statewide commingled rate.

(b)

(2) At least 60 days prior to before the effective date of any new commingled rate, hold a public hearing, after giving notice, to make available to the public and affected parties the department’s review and any proposed recalculations of the commingled rate.

(c)

(3) At least 60 days prior to before the effective date of any new commingled rate, and upon the request of any party, make available documentation or studies which that were prepared as part of the department’s review of a commingled rate.
(b) For purposes of calculating the commingled rate for each type of plastic container, the department shall exclude thermoform plastic.

(d)

(1)Notwithstanding this division, the department may calculate a curbside recycling program commingled rate pursuant to this subdivision for bimetal containers and a combined commingled rate for all plastic beverage containers displaying the resin identification code “3,” “4,” “5,” “6,” or “7” pursuant to Section 18015.

(2)The department may enter into a contract for the services required to implement the amendments to this section made by Chapter 753 of the Statutes of 2003. The department may not expend more than two hundred fifty thousand dollars ($250,000) for each year of the contract. The contract shall be paid only from revenues derived from redemption payments and processing fees paid on plastic beverage containers displaying the resin identification code “3,” “4,” “5,” “6,” or “7” pursuant to Section 18015. If the department determines that insufficient funds will be available from these revenues, after refund values are paid to processors and the reduction is made in the processing fee pursuant to subdivision (e) of Section 14575 for these containers, the department may determine not to calculate a commingled rate pursuant to this subdivision.

SEC. 3.SEC. 13.

 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 up to five adjacent unserved supermarket-based zones based on community need. need and taking into account consumer convenience.
(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.
(d) (1) It is the intent of the Legislature, in creating the authority described in subdivisions (b) and (c), that the designation of a regional convenience zone creates a financially sustainable service area for a prospective certified recycling center to open in the zone.
(2) The establishment of a regional convenience zone pursuant to this section does not change the obligation of the dealers within the original zones to comply with the requirements of Section 14571.6, until or unless a certified recycling center is operating within the regional convenience zone.

SEC. 14.

 Section 14571.6 of the Public Resources Code is amended to read:

14571.6.
 In any convenience zone where no recycling location has been established which satisfies the requirements of Section 14571, and in any convenience zone which has exceeded the 60-day period for the establishment of a recycling center pursuant to Section 14571.7, all dealers within that zone shall, until a recycling location has been established in that zone, do one of the following:
(a) Submit to the department an affidavit form provided by the department stating that all of the following standards are being met by the dealer:
(1) The dealer redeems all empty beverage container types at all open cash registers or one designated location on the dealer’s premises, during all hours that the dealer is open for business.
(2) The dealer has posted signs which meet the size and location requirements specified in subdivision (b) of Section 14570, and which conform to paragraph (2) of that subdivision.
(3) The dealer is delivering, or having delivered, all empty beverage containers received from the public to a certified recycling center or processor for recycling.
(b) (1) Pay to the department for deposit in the fund the sum of one hundred dollars ($100) per day until a recycling location is established or until the standards for redemption specified in subdivision (a) are met.
(2) The department shall deposit any amount paid by dealers pursuant to this section in an account to be used by the department to provide incentives, technical assistance, or public education in the community where the payments were generated to assist in establishing, supporting, or promoting opportunities in that community for consumers to recycle and redeem containers.
(c) (1) (A) A dealer located in an unserved convenience zone is exempt from the requirements of subdivisions (a) and (b) if a completed application for a recycling center located anywhere in the convenience zone is pending before the department and the dealer and the recycling center submit a letter to the department stating that the recycling center intends to serve that convenience zone.
(B) The exemption specified in this paragraph no longer applies if the applicant recycling center withdraws the application or if the department denies the application. In either of these instances, the dealer in the convenience zone shall immediately comply with the requirements of subdivision (a) or (b) upon notification by the department.
(2) Notwithstanding Section 14513.4, a recycling center described in paragraph (1) shall be eligible as an operator to receive handling fees for redeemed beverage containers once its application is approved.
(3) This subdivision shall become inoperative on July 1, 2020.
(d) A dealer that submits to the department an affidavit pursuant to subdivision (a) and remains in compliance with this section and all applicable provisions of this division shall be deemed certified by the department, with the same authorities and responsibilities as a certified recycling center and subject to the requirements of subdivision (g) of Section 14538.

SEC. 15.

 Section 14571.95 is added to the Public Resources Code, to read:

14571.95.
 (a) The department may certify a bag drop redemption program with all of the authorities and responsibilities of a certified recycling center as specified in this division, except as provided in subdivision (b).
(b) A bag drop redemption program may accept from consumers at one or more staffed or unstaffed, fixed or mobile locations, consumer identifiable bags of unsorted empty beverage containers for subsequent sorting and credit of refund value to the consumer as provided in this section.
(c) A bag drop redemption program shall not be required to maintain a minimum number of hours at any single location, but shall accept empty beverage containers for a total of not less than 30 hours per week.
(d) A bag drop redemption program shall demonstrate to the department and operate a system to sort and accurately credit the appropriate refund value to the consumer for the quantity of empty beverage containers dropped off by the consumer.
(e) A bag drop redemption program shall demonstrate to the department and operate a system to provide the applicable refund value to the consumer by a means that ensures that refund value is available for payment to within 72 hours of dropoff by the consumer.
(f) A bag drop redemption program may provide a consumer with the means to contribute all or a portion of the refund value to the consumer’s identified 529 plan account, or to donate all or a portion of the refund value to one or more not-for-profit entities identified by the bag drop redemption program and selected by the consumer, including, but not limited to, schools, youth sports teams or programs, or other 501(c)(3) organizations.
(g) A bag drop redemption program shall not operate a fixed or mobile location for accepting empty beverage containers within one-half mile of a certified recycling center operated by another entity, except a certified recycling center may co-locate a collection point for a bag drop redemption program at their recycling location.
(h) (1) A bag drop redemption program may charge the consumer a service fee to cover the cost of sorting empty beverage containers.
(2) The service fee may be included in the price of collection bags or be deducted from the amount of refund value returned to the consumer.
(3) Any service fee to be charged shall be posted on collection bags provided to the consumer, at all drop off locations, and on any consumer facing internet website or device application associated with the program, in a form and manner approved by the department.
(i) In addition to all other reporting requirements for recycling centers specified by this division, the department may establish additional or modified reporting systems for bag drop redemption systems.

SEC. 4.SEC. 16.

 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.
(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 bag drop redemption 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. 17.

 Section 14572.5 of the Public Resources Code is amended to read:

14572.5.
 A certified recycling center, other than a reverse vending machine, machine or bag drop redemption program, shall accept from any consumer or any dropoff or collection program and pay the applicable deposit for any refillable empty beer and other malt beverage container. The certified recycling center shall return, or cause to be returned, the refillable beer and other malt beverage container to the beer and other malt beverage distributor or any willing purchaser, who shall then pay the deposit to the center. The beer and other malt beverage distributor or other purchaser shall also negotiate a handling fee with the recycling center for the return of these containers.

SEC. 18.

 Section 14573 of the Public Resources Code is amended to read:

14573.
 (a) The department shall pay to a processor, for every empty beverage container received by the processor from a certified recycling center, curbside program, or dropoff or collection program, upon presentation of a completed processor invoice accompanied by a shipping report from the supplier of the material, in the form adopted by the department, the sum of all of the following amounts:
(1) The refund value.
(2) Two and one-half percent of the refund value for administrative costs.
(3) The processing payment established pursuant to Section 14575. Sections 14575 and 14575.2.
(b) The department shall make the payment required in subdivision (a) within two working days of the date that the department is notified of the delivery or within the time determined by the department to be necessary and adequate. If the payment is not made by the Controller to the certified processor within 20 working days of receipt of the claims schedule, the Controller shall pay the processor interest at the current prime lending rate for any period in excess of these 20 working days.

SEC. 19.

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

14573.5.
 (a) Except as provided in Section 14573.6, a processor shall pay to a certified recycling center, dropoff or collection program, or curbside program, bag drop redemption program, or certified dealer for all types of empty beverage containers, by type of beverage container, received by the processor from a recycling center, curbside program, bag drop redemption program, certified dealer, 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. 14575 and 14575.2.
(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. 5.SEC. 20.

 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) Rural recycling centers often face higher transportation costs that are not captured in the single statewide average cost of recycling and subsequent processing payments.

(4)

(5) The beverage container recycling rate in California has dropped from 81 percent in 2015 to 70 percent in fiscal year 2019–20.

(5)

(6) 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)

(7) 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)

(8) 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. immediately establish supplemental processing payments to ensure that all of the state’s recycling centers receive processing payments sufficient to cover their costs as reflected in the most recent cost survey.

(8)

(9) 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, shall increase processing payments to a certified recycling center by up an amount equal to 50 percent higher than statewide rates the amount of the most recent processing payment established for each material type pursuant to Section 14575 for the first 40,000 glass containers and the first 200,000 plastic containers claimed by the certified recycling center each month. Processing payments on additional containers claimed shall remain the same as required pursuant to Section 14575. Notwithstanding
(2) Notwithstanding Section 14575, and in addition to paragraph (1), the director shall provide an additional processing payment increment for containers collected for recycling by a certified entity in a rural region equal to 10 percent of the processing payment established pursuant to Section 14575. For the purposes of this section, “rural region” has the same meaning as in subparagraph (A) of paragraph (2) of subdivision (b) of Section 14571.
(3) Notwithstanding this paragraph, subdivision, 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)

(4) This subdivision applies to claims for containers collected for recycling on and after July 1, 2021.
(5) All actions taken by the department to implement this subdivision prior to before 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. 21.

 Section 14581 of the Public Resources Code is amended to read:

14581.
 (a) Subject to the availability of funds and in accordance with subdivision (b), the department shall expend the moneys set aside in the fund, pursuant to subdivision (c) of Section 14580, for the purposes of this section in the following manner:
(1) For each fiscal year, the department may expend the amount necessary to make the required handling fee payment pursuant to Section 14585.
(2) Fifteen million dollars ($15,000,000) shall be expended annually for payments for curbside programs and neighborhood dropoff programs pursuant to Section 14549.6.
(3) (A) Ten million five hundred thousand dollars ($10,500,000) may be expended annually for payments of five thousand dollars ($5,000) to cities and ten thousand dollars ($10,000) for payments to counties for beverage container recycling and litter cleanup activities, or the department may calculate the payments to counties and cities on a per capita basis, and may pay whichever amount is greater, for those activities.
(B) Eligible activities for the use of these funds may include, but are not necessarily limited to, support for new or existing curbside programs, neighborhood dropoff programs, public education promoting beverage container recycling, litter prevention, and cleanup, cooperative regional efforts among two or more cities or counties, or both, or other beverage container recycling programs.
(C) These funds shall not be used for activities unrelated to beverage container recycling or litter reduction.
(D) To receive these funds, a city, county, or city and county shall fill out and return a funding request form to the department. The form shall specify the beverage container recycling or litter reduction activities for which the funds will be used.
(E) The department shall annually prepare and distribute a funding request form to each city, county, or city and county. The form shall specify the amount of beverage container recycling and litter cleanup funds for which the jurisdiction is eligible. The form shall not exceed one double-sided page in length, and may be submitted electronically. If a city, county, or city and county does not return the funding request form within 90 days of receipt of the form from the department, the city, county, or city and county is not eligible to receive the funds for that funding cycle.
(F) For the purposes of this paragraph, per capita population shall be based on the population of the incorporated area of a city or city and county and the unincorporated area of a county. The department may withhold payment to any city, county, or city and county that has prohibited the siting of a supermarket site, caused a supermarket site to close its business, or adopted a land use policy that restricts or prohibits the siting of a supermarket site within its jurisdiction.
(4) One million five hundred thousand dollars ($1,500,000) may be expended annually in the form of grants for beverage container recycling and litter reduction programs.
(5) (A) The department shall expend the amount necessary to pay the processing payment established pursuant to Section 14575. The department shall establish separate processing fee accounts in the fund for each beverage container material type for which a processing payment and processing fee are calculated pursuant to Section 14575, or for which a processing payment is calculated pursuant to Section 14575 and a voluntary artificial scrap value is calculated pursuant to Section 14575.1, into which account shall be deposited both of the following:
(i) All amounts paid as processing fees for each beverage container material type pursuant to Section 14575.
(ii) Funds equal to the difference between the amount in clause (i) and the amount of the processing payments established in subdivision (b) of Section 14575, and adjusted pursuant to paragraph (2) of subdivision (c) of, and subdivision (f) of, Section 14575, to reduce the processing fee to the level provided in subdivision (e) of Section 14575, or to reflect the agreement by a willing purchaser to pay a voluntary artificial scrap value pursuant to Section 14575.1.
(B) Notwithstanding Section 13340 of the Government Code, the moneys in each processing fee account are hereby continuously appropriated to the department for expenditure without regard to fiscal years, for purposes of making processing payments pursuant to Section 14575.
(6) Up to five million dollars ($5,000,000) may be annually expended by the department for the purposes of undertaking a statewide public education and information campaign aimed at promoting increased recycling of beverage containers.
(7) Up to ten million dollars ($10,000,000) may be expended annually by the department for quality incentive payments for empty glass beverage containers pursuant to Section 14549.1.
(8) Up to ten million dollars ($10,000,000) may be expended annually by the department for plastic quality incentive payments pursuant to Section 14549.1.

(8)

(9) (A) For the 2019–20 fiscal year to the 2021–22 fiscal year, inclusive, the department may expend up to ten million dollars ($10,000,000) each fiscal year for market development payments to reclaimers and product manufacturers, pursuant to Section 14549.2.
(B) For purposes of this paragraph, the definitions in subdivision (a) of Section 14549.2 apply.

(9)

(10) (A) For the 2019–20 fiscal year to the 2021–22 fiscal year, inclusive, the department may expend up to a total of five million dollars ($5,000,000) to support the pilot projects created pursuant to Section 14571.9.
(B) Taking into consideration the recent closure of many of California’s recycling centers, the Legislature finds and declares that the appropriation provided for in the act that added this paragraph during the 2019–20 Regular Session is necessary in order to ensure the continued support of, and to bolster, consumer redemption opportunities.
(b) (1) If the department determines, pursuant to a review made pursuant to Section 14556, that there may be inadequate funds to pay the payments required by this division, the department shall immediately notify the appropriate policy and fiscal committees of the Legislature regarding the inadequacy.
(2) On or before 180 days, but not less than 80 days, after the notice is sent pursuant to paragraph (1), the department may reduce or eliminate expenditures, or both, from the funds as necessary, according to the procedure set forth in subdivision (c).
(c) If the department determines that there are insufficient funds to make the payments specified pursuant to this section and Section 14575, the department shall reduce all payments proportionally.
(d) Before making an expenditure pursuant to paragraph (6) of subdivision (a), the department shall convene an advisory committee consisting of representatives of the beverage industry, beverage container manufacturers, environmental organizations, the recycling industry, nonprofit organizations, and retailers to advise the department on the most cost-effective and efficient method of the expenditure of the funds for that education and information campaign.

SEC. 22.

 Section 14581.1 of the Public Resources Code is amended to read:

14581.1.
 (a) The department shall expend in each fiscal year, from the moneys set aside in the fund pursuant to subdivision (c) of Section 14580, twenty million nine hundred seventy-four thousand dollars ($20,974,000), plus the cost-of-living adjustment, as provided in subdivision (c), less fifteen million dollars ($15,000,000), in the form of grants for beverage container litter reduction programs and recycling programs, including education and outreach, issued to either of the following:
(1) Certified community conservation corps that were in existence on September 30, 1999, or that are formed subsequent to that date, that are designated by a city or a city and county to perform litter abatement, recycling, and related activities, if the city or the city and county has a population, as determined by the most recent census, of more than 250,000 persons.
(2) Community conservation corps that are designated by a county to perform litter abatement, recycling, and related activities, and are certified by the California Conservation Corps as having operated for a minimum of two years and as meeting all other criteria of Section 14507.5.
(b) The grants provided pursuant to this section shall not comprise more than 75 percent of the annual budget of a community conservation corps.
(c) The amount of twenty million nine hundred seventy-four thousand dollars ($20,974,000) that is referenced in subdivision (a) is a base amount for the 2014–15 fiscal year, and the department shall adjust that amount annually to reflect any increases or decreases in the cost of living as measured by the Department of Labor or a successor agency of the federal government.

(d)For the 2014–15 fiscal year only, the amount to be expended from the fund for the purposes specified in subdivision (a) shall be increased by seven million five hundred thousand dollars ($7,500,000).

(d) Notwithstanding subdivision (a), beginning with the 2021–22 fiscal year, the base amount described in subdivision (a) shall be increased by five million dollars ($5,000,000) and adjusted annually thereafter pursuant to subdivision (a), for purposes of providing community conservation corps staffing and transportation services to do all of the following:
(1) Support or establish redemption centers, reverse vending machines, bag drop redemption, or other beverage container collection opportunities.
(2) Transport empty beverage containers from certified dealers and other certified redemption and recycling entities to certified processing centers.
(3) Undertake additional activities as necessary to further the objectives of this division.

SEC. 23.

 Section 14581.2 is added to the Public Resources Code, to read:

14581.2.
 (a) The department may establish a program to provide startup loans in the amount of up to fifty thousand dollars ($50,000) for an entity that certifies and intends to establish and operate a recycling center in an unserved zone, unserved regional zone, or underserved area of the state and that demonstrates that it will provide funds for purposes of establishing and operating the recycling center. If the entity continually maintains operations for 18 months, 50 percent of the loan balance may be forgiven. If the entity continually maintains operations for 36 months, the remaining loan balance may be forgiven.
(b) The department shall not provide more than two startup loans to a single entity in any one county and shall not provide more than five startup loans to a single entity in total statewide.
(c) A one-time expenditure of up to fifteen million dollars ($15,000,000) may be made by the department for purposes of this section.

SEC. 6.SEC. 24.

 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 Except as provided in paragraph (4), 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.
(4) (A) Any certified dealer that redeems empty beverage containers pursuant to Section 14571.6 shall be eligible for handling fees, and that eligibility shall not impact any other certified dealer or recycling center in the convenience zone from receiving handling fees.
(B) Notwithstanding the requirements of Section 14572 and this section, any certified bag drop redemption program that redeems empty beverage containers shall be eligible for handling fees, and that eligibility shall not impact any other certified dealer or recycling center in any convenience zone that the bag drop redemption program may be operating in from receiving handling fees.
(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.
(h) As a condition of handling fee eligibility, a recycling center or bag drop redemption program shall not pay scrap value or cash value over the state refund value to any consumer for empty beverage containers received.
(i) Notwithstanding subdivision (h), any dealer that provides cash or credit to a consumer for empty beverage containers redeemed by the dealer or by another certified entity may provide the consumer with an additional credit, coupon value, or other financial incentive for cashing a redemption value at the dealer.

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. 25.

 Except as provided in Section 14575.2 of the Public Resources Code, the Department of Resources Recycling and Recoivery may adopt emergency regulations to implement this act in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and for the purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of these regulations is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, including subdivision (e) of Section 11346.1 of the Government Code, any emergency regulations adopted pursuant to this section shall remain in effect for two years after their effective date or until permanent regulations are adopted, whichever is sooner.

SEC. 8.SEC. 26.

 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.

SEC. 27.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to address the shortage of recycling centers in several areas of the state and increase opportunities for consumers to redeem the refund value on empty beverage containers as soon as possible, it is necessary that this act take effect immediately.