Existing law, the California Beverage Container Recycling and Litter Reduction Act, requires that every beverage container sold or offered for sale in this state have a minimum refund value. A beverage distributor is required to pay a redemption payment to the Department of Resources Recycling and Recovery for every beverage container sold or offered for sale in the state to a dealer, and the department is required to deposit those amounts in the California Beverage Container Recycling Fund. The money in the fund is continuously appropriated to the department to, among other things, pay handling fees to certified recycling centers. The act requires processors to pay refund values, administrative costs, and processing payments to certified recycling centers, dropoff or collection programs, and curbside programs.

The act requires the department to annually designate convenience zones, as defined, statewide and requires at least one certified recycling center or location within every convenience zone that accepts all types of empty beverage containers and pays the refund value, if any, at one location, and that is open for business 30 hours per week.

This bill would, until January 1, 2020, authorize up to 5 limited-term recycling pilot projects, subject to department approval, that are designed to improve redemption opportunities in unserved convenience zones. The bill would subject the pilot projects to certain requirements, including, among others, that the pilot project is served by a pilot project recycler meeting certain requirements. The bill would require dealers within the jurisdiction of a pilot project to post certain information relating to pilot project locations, as specified, and a department-established toll-free number for information relating to beverage container recycling opportunities. The bill would authorize the department to issue a probationary certificate of operation to a pilot project recycler, to be valid for no more than 3 years, and would make that pilot project recycler eligible to apply for handling fees from the department and to receive refund values, administrative costs, and processing payments from processors. By authorizing the use of moneys in a continuously appropriated fund for a new purpose, this bill would make an appropriation. The bill would require dealers in a convenience zone served by a pilot project to comply with general act requirements if a pilot project ceases to operate or if the pilot projects certification is revoked.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the California Beverage Container Recycling and Litter Reduction Act, requires that every beverage container sold or offered for sale in this state have a minimum refund value. A beverage distributor is required to pay a redemption payment to the Department of Resources Recycling and Recovery for every beverage container sold or offered for sale in the state to a dealer, and the department is required to deposit those amounts in the California Beverage Container Recycling Fund. The money in the fund is continuously appropriated to the department to, among other things, pay handling fees to certified recycling centers. The act requires processors to pay refund values, administrative costs, and processing payments to certified recycling centers, dropoff or collection programs, and curbside programs.

The act requires the department to annually designate convenience zones, as defined, statewide and requires at least one certified recycling center or location within every convenience zone that accepts all types of empty beverage containers and pays the refund value, if any, at one location, and that is open for business 30 hours per week.

This bill would, until January 1, 2020, authorize up to 5 limited-term recycling pilot projects, subject to department approval, that are designed to improve redemption opportunities in unserved convenience zones. The bill would subject the pilot projects to certain requirements, including, among others, that the pilot project is served by a pilot project recycler meeting certain requirements. The bill would require dealers within the jurisdiction of a pilot project to post certain information relating to pilot project locations, as specified, and a department-established toll-free number for information relating to beverage container recycling opportunities. The bill would authorize the department to issue a probationary certificate of operation to a pilot project recycler, to be valid for no more than 3 years, and would make that pilot project recycler eligible to apply for handling fees from the department and to receive refund values, administrative costs, and processing payments from processors. By authorizing the use of moneys in a continuously appropriated fund for a new purpose, this bill would make an appropriation. The bill would require dealers in a convenience zone served by a pilot project to comply with general act requirements if a pilot project ceases to operate or if the pilot projects certification is revoked.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the California Beverage Container Recycling and Litter Reduction Act, requires that every beverage container sold or offered for sale in this state have a minimum refund value. A beverage distributor is required to pay a redemption payment to the Department of Resources Recycling and Recovery for every beverage container sold or offered for sale in the state to a dealer, and the department is required to deposit those amounts in the California Beverage Container Recycling Fund. The money in the fund is continuously appropriated to the department to, among other things, pay handling fees to certified recycling centers. The act requires processors to pay refund values, administrative costs, and processing payments to certified recycling centers, dropoff or collection programs, and curbside programs.

The act requires the department to annually designate convenience zones, as defined, statewide and requires at least one certified recycling center or location within every convenience zone that accepts all types of empty beverage containers and pays the refund value, if any, at one location, and that is open for business 30 hours per week.

This bill would, until January 1, 2020, authorize up to 5 limited-term recycling pilot projects, subject to department approval, that are designed to improve redemption opportunities in unserved convenience zones. The bill would subject the pilot projects to certain requirements, including, among others, that the pilot project is served by a pilot project recycler meeting certain requirements. The bill would require dealers within the jurisdiction of a pilot project to post certain information relating to pilot project locations, as specified, and a department-established toll-free number for information relating to beverage container recycling opportunities. The bill would authorize the department to issue a probationary certificate of operation to a pilot project recycler, to be valid for no more than 3 years, and would make that pilot project recycler eligible to apply for handling fees from the department and to receive refund values, administrative costs, and processing payments from processors. By authorizing the use of moneys in a continuously appropriated fund for a new purpose, this bill would make an appropriation. The bill would require dealers in a convenience zone served by a pilot project to comply with general act requirements if a pilot project ceases to operate or if the pilot projects certification is revoked.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the California Beverage Container Recycling and Litter Reduction Act, requires that every beverage container sold or offered for sale in this state have a minimum refund value. A beverage distributor is required to pay a redemption payment to the Department of Resources Recycling and Recovery for every beverage container sold or offered for sale in the state to a dealer, and the department is required to deposit those amounts in the California Beverage Container Recycling Fund. The money in the fund is continuously appropriated to the department to, among other things, pay handling fees to certified recycling centers. The act requires processors to pay refund values, administrative costs, and processing payments to certified recycling centers, dropoff or collection programs, and curbside programs.

The act requires the department to annually designate convenience zones, as defined, statewide and requires at least one certified recycling center or location within every convenience zone that accepts all types of empty beverage containers and pays the refund value, if any, at one location, and that is open for business 30 hours per week.

This bill would, until July January 1, 2020, authorize up to 5 limited-term recycling pilot projects, subject to department approval, that are designed to improve redemption opportunities in unserved convenience zones. The bill would subject the pilot projects to certain requirements, including, among others, that the pilot project is served by a pilot project recycler meeting certain requirements. The bill would require dealers within the jurisdiction of a pilot project to post certain information relating to pilot project locations, as specified, and a department-established toll-free number for information relating to beverage container recycling opportunities. The bill would authorize the department to issue a probationary certificate of operation to a pilot project recycler, to be valid for no more than 3 years, and would make that pilot project recycler eligible to apply for handling fees from the department and to receive refund values, administrative costs, and processing payments from processors. By authorizing the use of moneys in a continuously appropriated fund for a new purpose, this bill would make an appropriation. The bill would require dealers in a convenience zone served by a pilot project to comply with general act requirements if a pilot project ceases to operate or if the pilot projects certification is revoked.

This bill would declare that it is to take effect immediately as an urgency statute.

The act requires a distributor to pay a redemption payment for every beverage container sold or offered for sale in the state. The act requires the Department of Resources Recycling and Recovery the department to annually designate convenience zones, as defined, statewide and requires at least one certified recycling center or location within every convenience zone that accepts all types of empty beverage containers and pays the refund value, if any, at one location, and that is open for business 30 hours per week. The act authorizes the department to certify one operator that meets specified qualifications to establish the Pacific Beach Mobile Recycling Program, incorporating all convenience zones in the Pacific Beach area of San Diego County, as defined. Existing law specifies requirements for the recycling center operator and the dealers within the program area.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the California Beverage Container Recycling and Litter Reduction Act, requires a distributor to pay a redemption payment for every beverage container sold or offered for sale in the state. The act requires the Department of Resources Recycling and Recovery to annually designate convenience zones, as defined, statewide and requires at least one certified recycling center or location within every convenience zone that accepts all types of empty beverage containers and pays the refund value, if any, at one location, and that is open for business 30 hours per week. The act authorizes the department to certify one operator that meets specified qualifications to establish the Pacific Beach Mobile Recycling Program, incorporating all convenience zones in the Pacific Beach area of San Diego County, as defined. Existing law specifies requirements for the recycling center operator and the dealers within the program area.

This bill would authorize the department to certify one operator or more operators to establish the San Francisco Mobile Recycling Program that incorporates all convenience zones in the City and County of San Francisco and would impose similar program requirements. The bill would authorize the department to change the number of recycling center locations required by the program, as specified, as long as convenient recycling opportunities are still available under the program. The bill would provide that, for purposes of the program, a recycling center may include an uncertified automated payment beverage container system. The bill would require the department to consider ways to certify additional types of automated payment beverage container systems for purposes of this program.

This bill would make legislative findings and declarations as to the necessity of a special statute for the City and County of San Francisco.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the California Beverage Container Recycling and Litter Reduction Act, requires a distributor to pay a redemption payment for every beverage container sold or offered for sale in the state. The act requires the Department of Resources Recycling and Recovery to annually designate convenience zones, as defined, statewide and requires at least one certified recycling center or location within every convenience zone that accepts all types of empty beverage containers and pays the refund value, if any, at one location, and that is open for business 30 hours per week. The act authorizes the department to certify one operator that meets specified qualifications to establish the Pacific Beach Mobile Recycling Program, incorporating all convenience zones in the Pacific Beach area of San Diego County, as defined. Existing law specifies requirements for the recycling center operator and the dealers within the program area.

This bill would authorize the department to certify one operator to establish the San Francisco Mobile Recycling Program that incorporates all convenience zones in the City and County of San Francisco and would impose similar program requirements.

This bill would make legislative findings and declarations as to the necessity of a special statute for the City and County of San Francisco.

This bill would declare that it is to take effect immediately as an urgency statute.

 UNFINISHED BUSINESS  

Bill No: SB 458

Author:

:

Vote:

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 6-0, 6/21/17

AYES: Wieckowski, Stone, Hill, Lara, Skinner, Stern

NO VOTE RECORDED: Gaines

SENATE APPROPRIATIONS COMMITTEE: 7-0, 7/10/17

AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener

SENATE FLOOR: 39-0, 7/13/17

AYES: Allen, Anderson, Atkins, Bates, Beall, Berryhill, Bradford, Cannella, De León, Dodd, Fuller, Gaines, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Newman, Nguyen, Pan, Portantino, Roth, Skinner, Stern, Stone, Vidak, Wieckowski, Wiener, Wilk

NO VOTE RECORDED: Nielsen

ASSEMBLY FLOOR: 77-0, 9/13/17 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill authorizes the California Department of Resources Recycling and Recovery (CalRecycle) to approve, on or before July 1, 2020, up to five recycling pilot projects designed to improve redemption opportunities in unserved convenience zones if specified conditions are met.

Assembly Amendments (1) define “pilot project recycler” as specified; (2) require dealers within the jurisdiction of a pilot project to post certain information relating to pilot project locations, as specified; (3) require dealers in a convenience zone served by a pilot project to comply with general act requirements if a pilot project ceases to operate or if the pilot project’s certification is revoked; and (4) sunset the provisions of this bill on January 1, 2022.

ANALYSIS: Existing law, under the California Beverage Container Recycling and Litter Reduction Act:

1. Requires beverage containers, as defined, sold in-state to have a California redemption value (CRV) of five cents for containers that hold fewer than 24 ounces and 10 cents for containers that hold 24 ounces or more, and requires distributors to pay a redemption payment to CalRecycle for every beverage container sold in the state. These funds are continuously appropriated to CalRecycle for the payment of refund values and processing fees. (Public Resources Code (PRC) §14500 et seq.).
2. Defines “convenience zone” as either the area within one-half mile radius of a supermarket or the area designated by CalRecycle in a rural region that meets specified criteria pursuant to PRC §14571.5. (PRC §14509.4).
3. Defines “dealer” as a retail establishment which offers the sale of beverages in beverage containers to consumers, e.g. a supermarket. However, any lodging, eating, or drinking establishment, or soft drink vending machine operator who engages in the sale of beverages in beverage containers to consumers are not deemed a dealer for purposes of the Bottle Bill. (PRC §14510).
4. Defines “recycling center” as an operation which is certified by CalRecycle and which accepts from consumers, and pays or provides the refund value for empty beverage containers intended to be recycled. (PRC §14520).
5. Defines “recycling location” as a place, mobile unit, reverse vending machine, or other device where a certified recycling center accepts one or more types of empty beverage containers from consumers, and pays or provides refund value for one or more types of empty beverage containers. (PRC §14520.5)
   
6. Requires CalRecycle to annually designate all convenience zones. (PRC §14571.1).
   
7. Requires, in a convenience zone where a recycling location does not exist and until one has been established in that zone, all dealers in the zone to either: a) redeem empty beverage containers; or, b) pay CalRecycle an in-lieu fee of $100/day until a recycling location is established. (PRC §14571.6).
   
8. Authorizes CalRecycle to grant an exemption for a convenience zone based on specified conditions, such as: whether the zone is within a curbside service area which collects CRV containers at least twice a month, whether there is a sufficient number of recycling centers in the area, and whether the volume collected by the last recycler in the zone was below 60,000 containers in the past 12 months. (PRC §14571.8).
   
9. Establishes the Pacific Beach Mobile Recycling Program, which incorporates all convenience zones in the Pacific Beach area of San Diego County, and includes specified requirements for the recycling center operator and dealers in Pacific Beach. (PRC §14571.4).
   

This bill:

1. Authorizes CalRecycle, on or before January 1, 2020, to approve up to five pilot projects that improve beverage container redemption opportunities in unserved convenience zones.
2. Requires CalRecycle to hold at least one public workshop within 90 days of the effective date of the bill to solicit feedback on the pilot project program.
3. Specifies that the requirements of the pilot project program include, but are not limited to, the following:
   1. A pilot project serve one of the following:
      1. At least three unserved convenience zones;
      2. One or more convenience zones impacting a total of at least 30 dealers located in unserved convenience zones; or,
      3. A rural region.
   2. A pilot project shall be located in a jurisdiction that, on the effective date of the bill, had at least six unserved convenience zones, had 75% of the convenience zones in the jurisdiction unserved, or is located in a rural region.
   3. Require that pilot projects meet specified requirements.
   4. Additional requirements as determined by CalRecycle.
4. Clarifies that stationary dropoff locations and mobile collection programs are eligible.
5. Requires a jurisdiction that wishes to operate a pilot project to submit its proposal to CalRecycle that include specified requirements.
6. Authorizes CalRecycle to issue probationary certificates of operation to pilot project operators to be valid for three years or until the end of the pilot project program.
7. Requires CalRecycle to consider a number of specified factors when approving proposals.
8. Authorizes CalRecycle to revoke a pilot project's certification if at any time the pilot project fails to meet the conditions established by this bill or by CalRecycle.
9. Specifies that pilot project recyclers are eligible to receive handling fees.
10. Authorizes CalRecycle to adopt emergency regulations to implement the program.
11. Sunsets the bill's provisions on January 1, 2022.
12. Declares that this bill is an urgency measure.

Background

Previous pilot program: Pacific Beach. According to CalRecycle, AB 3752 (Alpert, Chapter 620, Statutes of 1994) established the Pacific Beach Mobile Recycling Program (PBMRP) for the Pacific Beach area of San Diego County. Pacific Beach is a beachfront community with dense development and few open spaces that could accommodate a recycling center.

PBMRP started operating in August, 1995 and authorized five convenience zones be served by a combination of mobile and standard recycling centers and operated through 2011. After decertification in 2011, a new recycling center operator attempted to serve two of the five zones in Pacific Beach. The operator was decertified in one zone in 2013 and the second zone in 2014.

Since 2014, CalRecycle has not received applications for certification under PBMRP and the five zones in Pacific Beach remain unserved.

CalRecycle notes that during the pilot, recycling center operators were constrained and pressured to close due to homeless and nuisance complaints. Initially, dealers were cooperative and the mobile operator could find a site in a supermarket or pharmacy parking lot. As the program progressed, property owners became less cooperative and sought eviction.

CalRecycle states that the primary reason that PBMRP is not working is that eventually there were no local recycling center operators willing to operate in accordance with the program. The only feasible operator from outside of the area was rePlanet, which was not interested. In addition, the Pacific Beach pilot program failed because of the following: eventually some property owners became resistant to supporting recycling centers, even if for one day per week; sustained, strong community resistance to any recycling center due to perceived nuisance; and with strong opposition, there were no feasible locations for recycling centers to operate in Pacific Beach.

Currently, the five zones in Pacific Beach remain unserved and 19 dealers are either responsible for in-store redemption or paying the in-lieu fee of $100/day to not take back empty beverage containers in-store.

Comments

Purpose of Bill. According to the author:

“In light of recent and widespread recycling center closures across San Francisco, Senate Bill 458 authorizes a pilot “mobile recycling” program which would relieve small grocery and convenience stores of the burden of having to redeem recycling for cash. The authorization would apply to San Francisco only.

“Over 93% of San Francisco lies more than one half-mile from a recycling center, the highest percentage of any major city in the state. This means that 579 corner stores and small supermarkets lacking a recycling center within their half-mile convenience zone must redeem large volumes cans and bottles for cash, regardless of capacity or cleanliness, or be subject to in-lieu fees totaling nearly $40,000 per year location.

“SB 458 would allow the San Francisco Department of the Environment to pursue a pilot mobile recycling program. Forms of mobile recycling include temporary locations and “reverse vending machines.” Under these proposed revisions, San Francisco mobile recycling sites will qualify as full recycling centers for purposes of modifying existing convenience zones and relieving businesses of their redemption obligations.”

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Assembly Appropriations Committee, this bill has costs of approximately $250,000 annually to CalRecycle for staffing.

SUPPORT: (Verified 9/11/17)

Arab American Grocers Association
California Association of Conservation Corps
California Grocers Association
Californians Against Waste
Castro Merchants
City and County of San Francisco
Rural County Representatives of California
San Francisco Council of District Merchants Associations
Small Business California
Small Business Network of San Francisco

OPPOSITION: (Verified 9/11/17)

None received

ASSEMBLY FLOOR: 77-0, 9/13/17

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Chu, Nazarian

Prepared by:

9/14/17 10:07:59

**** END ****

SENATE THIRD READING

STR Bill Id:SB 458

Author:(Wiener)

As Amended Ver:September 8, 2017

2/3 vote. Urgency

SENATE VOTE: 39-0

SUMMARY: Authorizes the Department of Resources Recycling and Recovery (CalRecycle) to approve up to five pilot projects designed to improve beverage container recycling opportunities in local areas that are unserved by existing recycling centers. Specifically, this bill:

1. On or before January 1, 2020, authorizes CalRecycle to approve up to five pilot projects that improve beverage container redemption opportunities in unserved convenience zones.
2. Requires CalRecycle to hold at least one public workshop within 90 days of the effective date of the bill to solicit feedback on the pilot project program.
3. Specifies that the requirements of the pilot project program include, but are not limited to, the following:
   1. A pilot project serve one of the following:
      1. At least three unserved convenience zones;
      2. One or more convenience zones impacting a total of at least 30 dealers located in unserved convenience zones; or,
      3. A rural region.
   2. A pilot project shall be located in a jurisdiction that, on the effective date of the bill, had at least six unserved convenience zones, had 75% of the convenience zones in the jurisdiction unserved, or is located in a rural region.
   3. Require that pilot projects meet specified requirements.
   4. Additional requirements as determined by CalRecycle.
4. Clarifies that stationary dropoff locations and mobile collection programs are eligible.
5. Requires a jurisdiction that wishes to operate a pilot project to submit its proposal to CalRecycle that include specified requirements.
6. Authorizes CalRecycle to issue probationary certificates of operation to pilot project operators to be valid for three years or until the end of the pilot project program.
7. Requires CalRecycle to consider a number of specified factors when approving proposals.
8. Authorizes CalRecycle to revoke a pilot project's certification if at any time the pilot project fails to meet the conditions established by this bill or by CalRecycle.
9. Specifies that pilot project recyclers are eligible to receive handling fees.
10. Authorizes CalRecycle to adopt emergency regulations to implement the program.
11. Sunsets the bill's provisions on January 1, 2022.
12. Declares that this bill is an urgency measure.

FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill has costs of approximately $250,000 annually to CalRecycle for staffing.

COMMENTS: The Bottle Bill was created to establish a financial incentive for recycling and to decrease the beverage container component of the solid waste stream by making recycling more convenient for consumers. The CRV is the centerpiece of the Bottle Bill. Retailers collect a small deposit, the CRV, on each beverage container purchased. The dealer retains a small percentage of the deposit for administration and remits the remainder to the distributor, who also retains a small portion for administration before remitting the balance to CalRecycle. When consumers return their empty beverage containers to a recycler (or donate them to a curbside or other program), the deposit is paid back as a refund.

A "convenience zone" is typically the half-mile radius surrounding a supermarket that: 1) is identified in the Progressive Grocer Marketing Guidebook; 2) has gross annual sales of $2 million or more; and, 3) is considered a "full-line" store that sells a line of dry groceries, canned goods, or non-food items and perishable items. In some instances, such as certain rural areas, a convenience zone may be larger than a half mile. Convenience zones are intended to provide consumers opportunities to redeem containers near where beverages are purchased.

Recycling centers are privately owned and operated by individuals, for-profit, and nonprofit organizations. They are certified by CalRecycle and must adhere to standards to help provide the public the service they need (e.g., operate at least 30 hours per week and have signage indicating prices paid for beverage containers).

Overlapping convenience zones are common in commercial zoning areas. If a recycler is on-site at one convenience zone where one or more convenience zones overlap, each of these zones are served by this recycler. Accordingly, it is not necessary for each convenience zone to support its own recycling center.

A convenience zone may not be required to have a recycling center within its boundaries if certain conditions related to access to redemption centers is met. For example, a convenience zone may be deemed "exempt" if the next closest recycling center is within a reasonable distance, if consumers in area predominantly use the curbside program for recycling, or if recycling centers in the area fail to meet a sufficient volume for economic viability.

This bill creates a new approach to developing pilot projects. This bill was prompted by recent and widespread recycling center closures across San Francisco. Over 93% of San Francisco lies more than one half-mile from a recycling center, the highest percentage of any major city in the state. This means that 579 corner stores and small supermarkets lacking a recycling center within their half-mile convenience zone must redeem large volumes of cans and bottles for cash, regardless of capacity or cleanliness, or be subject to in-lieu fees totaling nearly $40,000 per year location. The previous version of this bill was limited to San Francisco. The closures have occurred statewide, including in rural areas. The current version of this bill expands eligibility statewide.

This bill would allow new recycling options in California that have shown success in other states, including mobile collection centers, reverse vending machines, and beverage container drop off programs, which allow consumers to drop off a bag of beverage containers and redeem their deposit electronically.

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0002088

SENATE THIRD READING

STR Bill Id:SB 458

Author:(Wiener)

As Amended Ver:September 5, 2017

2/3 vote. Urgency

SENATE VOTE: 39-0

SUMMARY: Authorizes the Department of Resources Recycling and Recovery (CalRecycle) to approve up to five pilot projects designed to improve beverage container recycling opportunities in local areas that are unserved by existing recycling centers. Specifically, this bill:

1. On or before January 1, 2020, authorizes CalRecycle to approve up to five pilot projects that improve beverage container redemption opportunities in unserved convenience zones.
2. Requires CalRecycle to hold at least one public workshop within 90 days of the effective date of the bill to solicit feedback on the pilot project program.
3. Specifies that the requirements of the pilot project program include, but are not limited to, the following:
   1. A pilot project serve one of the following:
      1. At least three unserved convenience zones;
      2. One or more convenience zones impacting a total of at least 30 dealers located in unserved convenience zones; or,
      3. A rural region.
   2. A pilot project shall be located in a jurisdiction that, on the effective date of the bill, had at least six unserved convenience zones, had 75% of the convenience zones in the jurisdiction unserved, or is located in a rural region.
   3. Require that pilot projects meet specified requirements.
   4. Additional requirements as determined by CalRecycle.
4. Clarifies that stationary dropoff locations and mobile collection programs are eligible.
5. Requires a jurisdiction that wishes to operate a pilot project to submit its proposal to CalRecycle that include specified requirements.
6. Authorizes CalRecycle to issue probationary certificates of operation to pilot project operators to be valid for three years or until the end of the pilot project program.
7. Requires CalRecycle to consider a number of specified factors when approving proposals.
8. Authorizes CalRecycle to revoke a pilot project's certification if at any time the pilot project fails to meet the conditions established by this bill or by CalRecycle.
9. Specifies that pilot project recyclers are eligible to receive handling fees.
10. Authorizes CalRecycle to adopt emergency regulations to implement the program.
11. Sunsets the bill's provisions on January 1, 2022.
12. Declares that this bill is an urgency measure.

FISCAL EFFECT: According to the Assembly Appropriations Committee, increased annual CalRecycle administrative costs of approximately $250,000 (Beverage Container Recycling Fund)

COMMENTS: The Bottle Bill was created to establish a financial incentive for recycling and to decrease the beverage container component of the solid waste stream by making recycling more convenient for consumers. The CRV is the centerpiece of the Bottle Bill. Retailers collect a small deposit, the CRV, on each beverage container purchased. The dealer retains a small percentage of the deposit for administration and remits the remainder to the distributor, who also retains a small portion for administration before remitting the balance to CalRecycle. When consumers return their empty beverage containers to a recycler (or donate them to a curbside or other program), the deposit is paid back as a refund.

A "convenience zone" is typically the half-mile radius surrounding a supermarket that: a) is identified in the Progressive Grocer Marketing Guidebook; b) has gross annual sales of $2 million or more; and, c) is considered a "full-line" store that sells a line of dry groceries, canned goods, or non-food items and perishable items. In some instances, such as certain rural areas, a convenience zone may be larger than a half mile. Convenience zones are intended to provide consumers opportunities to redeem containers near where beverages are purchased.

Recycling centers are privately owned and operated by individuals, for-profit, and nonprofit organizations. They are certified by CalRecycle and must adhere to standards to help provide the public the service they need (e.g., operate at least 30 hours per week and have signage indicating prices paid for beverage containers).

Overlapping convenience zones are common in commercial zoning areas. If a recycler is on-site at one convenience zone where one or more convenience zones overlap, each of these zones are served by this recycler. Accordingly, it is not necessary for each convenience zone to support its own recycling center.

A convenience zone may not be required to have a recycling center within its boundaries if certain conditions related to access to redemption centers is met. For example, a convenience zone may be deemed "exempt" if the next closest recycling center is within a reasonable distance, if consumers in area predominantly use the curbside program for recycling, or if recycling centers in the area fail to meet a sufficient volume for economic viability.

This bill creates a new approach to developing pilot projects. This bill was prompted by recent and widespread recycling center closures across San Francisco. Over 93% of San Francisco lies more than one half-mile from a recycling center, the highest percentage of any major city in the state. This means that 579 corner stores and small supermarkets lacking a recycling center within their half-mile convenience zone must redeem large volumes of cans and bottles for cash, regardless of capacity or cleanliness, or be subject to in-lieu fees totaling nearly $40,000 per year location. The previous version of this bill was limited to San Francisco. The closures have occurred statewide, including in rural areas. The current version of this bill expands eligibility statewide.

This bill would allow new recycling options in California that have shown success in other states, including mobile collection centers, reverse vending machines, and beverage container drop off programs, which allow consumers to drop off a bag of beverage containers and redeem their deposit electronically.

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /(916) 319-2092 FN: 0001701

Date of Hearing: August 30, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

SBPCA Bill Id:SB 458

Author:(Wiener) – As Amended Ver:June 22, 2017

Urgency: Yes State Mandated Local Program: No Reimbursable: No

SUMMARY:

This urgency bill authorizes CalRecycle, on or before January 1, 2020, to approve up to five pilot projects designed to improve beverage container recycling opportunities in local areas that are unserved by existing recycling centers. Specifically, this bill:

1. Requires CalRecycle to hold at least one public workshop within 90 days of the effective date of the bill to solicit feedback on the pilot project program.
2. Requires a jurisdiction that wishes to operate a pilot project to submit its proposal to CalRecycle that include specified requirements.
3. Authorizes CalRecycle to issue probationary certificates of operation to pilot project operators to be valid for three years or until the end of the pilot project program.
4. Authorizes CalRecycle to revoke a pilot project's certification if at any time the pilot project fails to meet the conditions established by this bill or by CalRecycle.
5. Specifies that pilot project recyclers are eligible to receive handling fees.

FISCAL EFFECT:

Increased annual CalRecycle administrative costs of approximately $250,000 (Beverage Container Recycling Fund)

COMMENTS:

1. Purpose. According to the Legislative Analyst's Office, over one-fifth of all recycling centers in the state have closed since January 2016. According to the author, “While 61% of California is now considered "unserved" by a nearby recycling center, certain jurisdictions, such as Fresno, San Francisco, and many rural areas have been hit especially hard. In the wake of the mass closures, supermarkets and corner stores are forced to process increasingly unmanageable volumes of recycling material.” This bill is designed to improve redemption opportunities in unserved areas.
2. Background. The Bottle Bill was created to establish a financial incentive for recycling and to decrease the beverage container component of the solid waste stream by making recycling more convenient for consumers. The California redemption value (CRV) is the centerpiece of the Bottle Bill. Retailers collect a small deposit, the CRV, on each beverage container purchased. The dealer retains a small percentage of the deposit for administration and remits the remainder to the distributor, who also retains a small portion for administration before remitting the balance to CalRecycle. When consumers return their empty beverage containers to a recycler (or donate them to a curbside or other program), the deposit is paid back as a refund.

Recycling centers are privately owned and operated by individuals, for-profit, and nonprofit organizations. They are certified by CalRecycle and must adhere to specified standards to help provide the public the service they need (e.g., operate at least 30 hours per week and have signage indicating prices paid for beverage containers).

A “convenience zone” is typically the half-mile radius surrounding a supermarket that: a) is identified in the Progressive Grocer Marketing Guidebook; b) has gross annual sales of $2 million or more; and, c) is considered a “full-line” store that sells a line of dry groceries, canned goods, or non-food items and perishable items. In some instances, such as rural areas, a convenience zone may be larger than a half mile. Convenience zones are intended to provide consumers opportunities to redeem containers near where beverages are purchased.

Overlapping convenience zones are common in commercial zoning areas. If a recycler is on-site at one convenience zone where one or more convenience zones overlap, each of these zones are served by this recycler. Accordingly, it is not necessary for each convenience zone to support its own recycling center.

A convenience zone may not be required to have a recycling center within its boundaries if certain conditions related to access to redemption centers are met. For example, a convenience zone may be deemed "exempt" if the next closest recycling center is within a reasonable distance, if consumers in the area predominantly use the curbside program for recycling, or if recycling centers in the area fail to meet a sufficient volume for economic viability

1. Pacific Beach Pilot Program. AB 3752 (Alpert), Chapter 620, Statutes of 1994, established the Pacific Beach Mobile Recycling Program in five convenience zones in San Diego County. By 2014, all recyclers serving the five convenience zones were decertified. To date, CalRecycle has not received any new applications for certification.

CalRecycle indicates the program likely failed because of sustained, strong community resistance to recycling centers that prevented the citing of recycling centers. Nuisance complaints forced many operators to close and eventually discouraged property owners from participating. Currently, the 5 zones in Pacific Beach remain unserved and 19 dealers are either responsible for in-store redemption or paying the in-lieu fee.

1. Related Legislation. SB 168 (Wieckowski) would have established the Beverage Container Recycling Act of 2017 and created an industry-run bottle and can recycling program by January 1, 2021, to replace the current Bottle Bill. This bill contained mobile recycling center provisions but failed on the Senate floor.
2. Author’s Amendments. The author has proposed significant amendments which were unable to be adopted by the Natural Resources Committee due to time limitations. The Committee may wish to consider the following amendments while the bill is on suspense. The amendments:
   1. Specify that the operator of a pilot project comply with all requirements and operational standards for recycling centers.
   2. Authorize CalRecycle to approve additional pilot projects if one or more cease operations before the end of the pilot project program, so long as there are no more than five pilot projects operating concurrently.
   3. Specify that if a pilot project ceases operation or CalRecycle revokes certification, CalRecycle shall notify the affected dealers within seven days.
   4. Require every dealer served by a pilot project to display appropriate signage, as specified.
   5. Authorize alternative payment mechanisms.
   6. Require pilot project operators to maintain separate records for each location.
   7. Specify that stationary drop off locations and mobile collection programs are eligible for the pilot project program.
   8. Require CalRecycle to notify each applicant and appropriate pilot project contact within 30 calendar days of receipt of the proposal regarding the completeness of the proposal.
3. Upon determining that a proposal is complete, require CalRecycle to notify the applicant and appropriate pilot project contact in writing within 30 days that the proposal is approved or denied. If denied, the reason for the denial.
4. Sunset the bill's provisions on January 1, 2022.
5. Authorize CalRecycle to adopt emergency regulations if necessary to implement the bill.
6. Make additional related technical and clarifying changes.

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

Date of Hearing: August 28, 2017

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Cristina Garcia, Chair

SBPCA Bill Id:SB 458

Author:(Wiener) – As Amended Ver:June 22, 2017

SENATE VOTE: 39-0

SUBJECT: Beverage container recycling: pilot projects

SUMMARY: Authorizes the Department of Resources Recycling and Recovery (CalRecycle) to approve up to five pilot projects designed to improve beverage container recycling opportunities in local areas that are unserved by existing recycling centers.

EXISTING LAW, under the California Beverage Container Recycling and Litter Reduction Act (Bottle Bill):

1. Requires beverage containers, as defined, sold in-state to have a California redemption value (CRV) of 5 cents for containers that hold fewer than 24 ounces and 10 cents for containers that hold 24 ounces or more, and requires distributors to pay a redemption payment to CalRecycle for every beverage container sold in the state. These funds are continuously appropriated to CalRecycle for the payment of refund values and processing fees.
   
2. Defines “convenience zone” as either the area within one-half mile radius of a supermarket or the area designated by CalRecycle in a rural region that meets specified criteria.
   
3. Defines “dealer” as a retail establishment that offers the sale of beverages in beverage containers to consumers. However, any lodging, eating, or drinking establishment, or soft drink vending machine operator who engages in the sale of beverages in beverage containers to consumers are not deemed a dealer for purposes of the Bottle Bill.
   
4. Defines “recycling center” as an operation which is certified by CalRecycle and that accepts from consumers, and pays or provides the refund value for empty beverage containers intended to be recycled.
   
5. Defines “recycling location” as a place, mobile unit, reverse vending machine, or other device where a certified recycling center accepts one or more types of empty beverage containers from consumers, and pays or provides refund value for one or more types of empty beverage containers.
   
6. Requires CalRecycle to annually designate all convenience zones.
   
7. In a convenience zone where a recycling location does not exist and until one has been established in that zone, requires all dealers in the zone to either: a) redeem empty beverage containers; or, b) pay CalRecycle an in-lieu fee of $100/day until a recycling location is established.
   
8. Authorizes CalRecycle to grant an exemption for a convenience zone based on specified conditions, such as whether the zone is within a curbside service area which collects CRV containers at least twice a month, whether there is a sufficient number of recycling centers in the area, and whether the volume collected by the last recycler in the zone was below 60,000 containers in the past 12 months.
   
9. Establishes the Pacific Beach Mobile Recycling Program, which incorporates all convenience zones in the Pacific Beach area of San Diego County, and includes specified requirements for the recycling center operator and dealers in Pacific Beach.
   

THIS BILL:

1. On or before January 1, 2020, authorizes CalRecycle to approve up to five pilot projects that improve beverage container redemption opportunities in unserved convenience zones.
2. Requires CalRecycle to hold at least one public workshop within 90 days of the effective date of the bill to solicit feedback on the pilot project program.
3. Specifies that the requirements of the pilot project program include, but are not limited to, the following:
   1. A pilot project serve one of the following:
      1. At least three unserved convenience zones;
      2. One or more convenience zones impacting a total of at least 30 dealers located in unserved convenience zones; or,
      3. A rural region.
   2. A pilot project shall be located in a jurisdiction that, on the effective date of the bill, had at least six unserved convenience zones, had 75% of the convenience zones in the jurisdiction unserved, or is located in a rural region.
   3. Require that pilot projects meet specified requirements.
   4. Additional requirements as determined by CalRecycle.
4. Requires a jurisdiction that wishes to operate a pilot project to submit its proposal to CalRecycle that include specified requirements.
5. Authorizes CalRecycle to issue probationary certificates of operation to pilot project operators to be valid for three years or until the end of the pilot project program.
6. Requires CalRecycle to consider the following when selecting pilot projects:
   1. The number of unserved convenience zones served;
   2. The total number of hours per week the pilot project will operate;
   3. The total number of locations that will be served by the pilot project;
   4. Whether the jurisdiction has actively prevented the siting or operation of certified recycling centers;
   5. Completeness of the application;
   6. The geographic distribution of jurisdictions proposing a pilot project;
   7. Potential impacts to existing certified recycling centers; and,
   8. Additional factors deemed relevant by CalRecycle.
7. Authorizes CalRecycle to revoke a pilot project's certification if at any time the pilot project fails to meet the conditions established by this bill or by CalRecycle.
8. Specifies that pilot project recyclers are eligible to receive handling fees.
9. Declares that this bill is an urgency measure.

FISCAL EFFECT: According to the Senate Appropriations Committee, this bill has costs of approximately $250,000 annually to CalRecycle for staffing.

COMMENTS:

1. Author's statement:

Over the past decade, California has seen a wave of recycling center closures due to falling scrap metal prices and rising real estate values, among other factors. According to the Legislative Analyst's Office, over one-fifth of all recycling centers in the state have closed since January 2016 alone. While 61% of California is now considered "unserved" by a nearby recycling center, certain jurisdictions, such as Fresno, San Francisco, and many rural areas have been hit especially hard. In the wake of the mass closures, supermarkets and corner stores are forced to process increasingly unmanageable volumes of recycling material.

In order to address the burdens placed on small businesses, local government agencies, such as the San Francisco Department of the Environment, have explored the possibility of mobile recycling in recent years. They have found themselves unable to act on any proposals, however, as such programs are prohibited under state law.

1. Background. The Bottle Bill was created to establish a financial incentive for recycling and to decrease the beverage container component of the solid waste stream by making recycling more convenient for consumers. The CRV is the centerpiece of the Bottle Bill. Retailers collect a small deposit, the CRV, on each beverage container purchased. The dealer retains a small percentage of the deposit for administration and remits the remainder to the distributor, who also retains a small portion for administration before remitting the balance to CalRecycle. When consumers return their empty beverage containers to a recycler (or donate them to a curbside or other program), the deposit is paid back as a refund.

A “convenience zone” is typically the half-mile radius surrounding a supermarket that: a) is identified in the Progressive Grocer Marketing Guidebook; b) has gross annual sales of $2 million or more; and, c) is considered a “full-line” store that sells a line of dry groceries, canned goods, or non-food items and perishable items. In some instances, such as certain rural areas, a convenience zone may be larger than a half mile. Convenience zones are intended to provide consumers opportunities to redeem containers near where beverages are purchased.

Recycling centers are privately owned and operated by individuals, for-profit, and nonprofit organizations. They are certified by CalRecycle and must adhere to standards to help provide the public the service they need (e.g., operate at least 30 hours per week and have signage indicating prices paid for beverage containers).

Overlapping convenience zones are common in commercial zoning areas. If a recycler is on-site at one convenience zone where one or more convenience zones overlap, each of these zones are served by this recycler. Accordingly, it is not necessary for each convenience zone to support its own recycling center.

A convenience zone may not be required to have a recycling center within its boundaries if certain conditions related to access to redemption centers is met. For example, a convenience zone may be deemed "exempt" if the next closest recycling center is within a reasonable distance, if consumers in area predominantly use the curbside program for recycling, or if recycling centers in the area fail to meet a sufficient volume for economic viability.

1. Pacific Beach pilot program. AB 3752 (Alpert, Chapter 620, Statutes of 1994) established the Pacific Beach Mobile Recycling Program in five convenience zones in San Diego County. By 2014, all recyclers serving the five convenience zones were decertified. To date, CalRecycle has not received any new applications for certification.

CalRecycle notes that the program likely failed because of sustained, strong community resistance to recycling centers that prevented the citing of recycling centers. Nuisance complaints forced many operators to close and eventually discouraged property owners from participating. Currently, the 5 zones in Pacific Beach remain unserved and 19 dealers are either responsible for in-store redemption or paying the in-lieu fee.

1. New solutions to an old problem. While the previous pilot program was unsuccessful, SB 458 creates a new approach to developing pilot projects. This bill was prompted by recent and widespread recycling center closures across San Francisco. Over 93% of San Francisco lies more than one half-mile from a recycling center, the highest percentage of any major city in the state. This means that 579 corner stores and small supermarkets lacking a recycling center within their half-mile convenience zone must redeem large volumes of cans and bottles for cash, regardless of capacity or cleanliness, or be subject to in-lieu fees totaling nearly $40,000 per year location. The previous version of this bill was limited to San Francisco. The closures have occurred statewide, including in rural areas. The current version of this bill expands eligibility statewide.

This bill would allow new recycling options in California that have shown success in other states, including mobile collection centers, reverse vending machines, and beverage container drop off programs, which allow consumers to drop off a bag of beverage containers and redeem their deposit electronically.

1. Suggested amendments. The author has proposed amendments to the bill that incorporate changes requested by CalRecycle and the San Francisco Department of the Environment. In order to meet legislative deadlines, the amendments will be adopted in the Assembly Appropriations Committee. The amendments:
   1. Specify that the operator of a pilot project comply with all requirements and operational standards for recycling centers.
   2. Authorize CalRecycle to approve additional pilot projects if one or more cease operations before the end of the pilot project program, so long as there are no more than five pilot projects operating concurrently.
   3. Specify that if a pilot project ceases operation or CalRecycle revokes certification, CalRecycle shall notify the affected dealers within seven days.
   4. Require every dealer served by a pilot project to display appropriate signage, as specified.
   5. Authorize alternative payment mechanisms.
   6. Require pilot project operators to maintain separate records for each location.
   7. Specify that stationary drop off locations and mobile collection programs are eligible for the pilot project program.
   8. Establish the following timelines:
      1. Require CalRecycle to notify each applicant and appropriate pilot project contact within 30 calendar days of receipt of the proposal regarding the completeness of the proposal.
      2. Upon determining that a proposal is complete, require CalRecycle to notify the applicant and appropriate pilot project contact in writing within 30 days that the proposal is approved or denied. If denied, the reason for the denial.
   9. Sunset the bill's provisions on January 1, 2022.
   10. Authorize CalRecycle to adopt emergency regulations if necessary to implement the bill.
   11. Make related technical and clarifying changes.

REGISTERED SUPPORT / OPPOSITION:

Support

Rural County Representatives of California

Opposition

None on file

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /

 THIRD READING  

Bill No: SB 458

Author:

:

Vote:

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 6-0, 6/21/17

AYES: Wieckowski, Stone, Hill, Lara, Skinner, Stern

NO VOTE RECORDED: Gaines

SENATE APPROPRIATIONS COMMITTEE: 7-0, 7/10/17

AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener

SUBJECT:

SOURCE: Author

DIGEST:

This bill authorizes the California Department of Resources Recycling and Recovery (CalRecycle) to, on or before July 1, 2020, approve up to five recycling pilot projects designed to improve redemption opportunities in unserved convenience zones if specified conditions are met.

ANALYSIS: Existing law, under the California Beverage Container Recycling and Litter Reduction Act:

1. Requires beverage containers, as defined, sold in-state to have a California redemption value (CRV) of five cents for containers that hold fewer than 24 ounces and 10 cents for containers that hold 24 ounces or more, and requires distributors to pay a redemption payment to CalRecycle for every beverage container sold in the state. These funds are continuously appropriated to CalRecycle for the payment of refund values and processing fees. (Public Resources Code (PRC) §14500 et seq.).
2. Defines “convenience zone” as either the area within one-half mile radius of a supermarket or the area designated by CalRecycle in a rural region that meets specified criteria pursuant to PRC Section 14571.5. (PRC §14509.4).
3. Defines “dealer” as a retail establishment which offers the sale of beverages in beverage containers to consumers, e.g. a supermarket. However, any lodging, eating, or drinking establishment, or soft drink vending machine operator who engages in the sale of beverages in beverage containers to consumers are not deemed a dealer for purposes of the Bottle Bill. (PRC §14510).
4. Defines “recycling center” as an operation which is certified by CalRecycle and which accepts from consumers, and pays or provides the refund value for empty beverage containers intended to be recycled. (PRC §14520).
5. Defines “recycling location” as a place, mobile unit, reverse vending machine, or other device where a certified recycling center accepts one or more types of empty beverage containers from consumers, and pays or provides refund value for one or more types of empty beverage containers. (PRC §14520.5)
6. Requires CalRecycle to annually designate all convenience zones. (PRC §14571.1).
7. Requires, in a convenience zone where a recycling location does not exist and until one has been established in that zone, all dealers in the zone to either: a) redeem empty beverage containers; or, b) pay CalRecycle an in-lieu fee of $100/day until a recycling location is established. (PRC §14571.6).
8. Authorizes CalRecycle to grant an exemption for a convenience zone based on specified conditions, such as: whether the zone is within a curbside service area which collects CRV containers at least twice a month, whether there is a sufficient number of recycling centers in the area, and whether the volume collected by the last recycler in the zone was below 60,000 containers in the past 12 months. (PRC §14571.8).
9. Establishes the Pacific Beach Mobile Recycling Program, which incorporates all convenience zones in the Pacific Beach area of San Diego County, and includes specified requirements for the recycling center operator and dealers in Pacific Beach. (PRC §14571.4).

This bill:

1. Authorizes CalRecycle to approve up to five pilot programs on or before July 1, 2020, for the purpose of improving redemption opportunities in unserved convenience zones.
2. Provides that a convenience zone located in the area of a pilot project is deemed served while the pilot project is operational.
3. Requires, within 90 days after the effective date of this bill, CalRecycle to hold at least one public workshop with stakeholders to solicit feedback on the pilot project program, including feedback on the process and factors that may be considered in the approval process of a pilot project.
4. Requires a pilot project to include specified criteria.
5. Requires, when submitting a proposal to establish a pilot project to CalRecycle, a jurisdiction to include specified information in its proposal.
6. Authorizes CalRecycle to issue probationary certificates of operation to pilot project recyclers participating in an approved pilot project and specifies that the certificate will be valid for a period of no more than three years or until the end of the pilot project, whichever comes first.
7. Requires, when selecting pilot projects, CalRecycle to consider specified factors.
8. Authorizes CalRecycle to revoke the approval of a pilot project and/or the associated probationary certification of a pilot project recycler participating in the pilot project at any time if the jurisdiction or operator of the pilot project recycler fails to meet the conditions outlined in CalRecycle’s approval of the project or violates provisions of the division pertaining to beverage container recycling. If the approval of the pilot project is revoked, requires CalRecycle to engage in a review process described in PRC Section 14571.7 for each convenience zone that was a part of the pilot project.
9. Authorizes a pilot project recycler that has been certified by CalRecycle on a probationary basis pursuant to a pilot program to be eligible to apply for handling fees and receive from certified processors refund values, administrative costs, and processing payments. For handling fee eligibility, authorizes the recycler to be located anywhere within a convenience zone.

Background

1. Recycling convenience zones. According to CalRecycle, a convenience zone is typically a half-mile radius within the center point originating at a supermarket that: a) Is identified in the Progressive Grocer Marketing Guidebook; b) Has gross annual sales of $2 million or more; and, c) Is considered a “full-line” store that sells a line of dry groceries, canned goods, or non-food items and perishable items.

In some instances, a convenience zone may be larger than a half mile. For example, an interested person may petition CalRecycle for a three-mile convenience zone to be created in a rural region when there are at least two dealers within three miles of a singular recycling center, and where the dealers are a mile or less apart and have an aggregate sales volume of at least $2 million gross annual sales. Convenience zones are intended to provide consumers opportunities to redeem containers near where beverages are purchased.

Recycling centers are privately owned and operated by individuals, profit, and nonprofit organizations. They are certified by CalRecycle and must adhere to standards to help provide the public the service they need, e.g. operating at least 30 hours per week and signs depicting prices paid for beverage containers.

Overlapping convenience zones are common in commercial zoning areas throughout the state. If a recycler is on-site at one convenience zone where one or more convenience zones overlap, each of these zones are served by this recycler. Accordingly, it is not necessary in such cases for each convenience zone to support its own recycling center.

A convenience zone may be exempt from the requirement to have a recycling center within its boundaries if one or more conditions are met, including: Ease of access to redemption center by consumers, reasonable distance to next closest recycling center, consumers in area predominantly use curbside program for recycling, and recycling centers in the area fail to meet a sufficient volume for economic viability.

1. Previous pilot program: Pacific Beach. According to CalRecycle, AB 3752 (Alpert, Chapter 620, Statutes of 1994) established the Pacific Beach Mobile Recycling Program (PBMRP) for the Pacific Beach area of San Diego County. Pacific Beach is a beachfront community with dense development and few open spaces that could accommodate a recycling center.

PBMRP started operating in August, 1995 and authorized five convenience zones be served by a combination of mobile and standard recycling centers and operated through 2011. After decertification in 2011, a new recycling center operator attempted to serve two of the five zones in Pacific Beach. The operator was decertified in one zone in 2013 and the second zone in 2014.

Since 2014, CalRecycle has not received applications for certification under PBMRP and the five zones in Pacific Beach remain unserved.

CalRecycle notes that during the pilot, recycling center operators were constrained and pressured to close due to homeless and nuisance complaints. Initially, dealers were cooperative and the mobile operator could find a site in a supermarket or pharmacy parking lot. As the program progressed, property owners became less cooperative and sought eviction.

CalRecycle states that the primary reason that PBMRP is not working is that eventually there were no local recycling center operators willing to operate in accordance with the program. The only feasible operator from outside of the area was rePlanet, which was not interested. In addition, the Pacific Beach pilot program failed because of the following: eventually some property owners became resistant to supporting recycling centers, even if for one day per week; sustained, strong community resistance to any recycling center due to perceived nuisance; and with strong opposition, there were no feasible locations for recycling centers to operate in Pacific Beach.

Currently, the five zones in Pacific Beach remain unserved and 19 dealers are either responsible for in-store redemption or paying the in-lieu fee of $100/day to not take back empty beverage containers in-store.

Comments

1. Purpose of bill. According to the author:

In light of recent and widespread recycling center closures across San Francisco, Senate Bill 458 authorizes a pilot “mobile recycling” program which would relieve small grocery and convenience stores of the burden of having to redeem recycling for cash. The authorization would apply to San Francisco only.

Over 93% of San Francisco lies more than one half-mile from a recycling center, the highest percentage of any major city in the state. This means that 579 corner stores and small supermarkets lacking a recycling center within their half-mile convenience zone must redeem large volumes cans and bottles for cash, regardless of capacity or cleanliness, or be subject to in-lieu fees totaling nearly $40,000 per year location.

SB 458 would allow the San Francisco Department of the Environment to pursue a pilot mobile recycling program. Forms of mobile recycling include temporary locations and “reverse vending machines.” Under these proposed revisions, San Francisco mobile recycling sites will qualify as full recycling centers for purposes of modifying existing convenience zones and relieving businesses of their redemption obligations.

1. Recent recycling center closures statewide. In June 2016, CalRecycle sent out 1,074 letters notifying stores that they were in unserved convenience zones. Of the 1,074 letters, 416 of them were unserved zone dealers prior to January 1, 2016; 478 recipients were around the rePlanet closures in early 2016.

One reason for recycling center closures may be attributed to subsidies allocated to recycling centers. According to the Legislative Analyst’s Office, the state subsidizes recycling by making “processing payments” to recyclers and processors. Processing payments are intended to cover the difference between a container’s scrap value (the worth of a physical asset’s components when the asset itself is deemed no longer usable) and the cost of recycling it (including a reasonable rate of return). Both the costs of recycling and the scrap value of beverage containers can fluctuate significantly based on changing market prices. As a result, processing payments vary over time. Some contend that they have failed to keep up with real time pricing and includes a minimum three-month gap – this gap results in recycling centers receiving insufficient state payments to make up for the income they may lose from the decline in scrap value.

rePlanet runs the largest recycling network in California. On January 31, 2016, the company announced that it closed 191 of its 350 recycling centers and laid off 278 of its 800 employees throughout the state. In an announcement on February 1, 2016, rePlanet stated, “Following the most recent reduction in State fees on January 1, 2016 and after enduring twelve months of unprecedented declines in commodities pricing of aluminum and PET plastic, coupled with the mandated rise in operating costs as a result of minimum wage increases and required health and workers compensation insurance, the Company has concluded that operation of these recycling centers is no longer sustainable.”

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, there is approximately $250,000 annually to CalRecycle for staffing costs.

SUPPORT: (Verified 7/10/17)

Arab American Grocers Association

California Association of Conservation Corps

California Grocers Association

Californians Against Waste

Castro Merchants

City and County of San Francisco

Rural County Representatives of California

San Francisco Council of District Merchants Associations

Small Business California

Small Business Network of San Francisco

OPPOSITION: (Verified 7/10/17)

None received

Prepared by:

7/12/17 9:07:08

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

SB 458 (Wiener) - Beverage container recycling: pilot projects

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

SB 458 authorizes the California Department of Resources Recycling and Recovery (CalRecycle) to, on or before July 1, 2020, approve up to five recycling pilot projects (pilots) designed to improve redemption opportunities in unserved convenience zones if specified conditions are met.

Fiscal Impact:

Approximately $250,000 annually to CalRecycle for staffing costs.

Background:

Existing law establishes the California Beverage Container Recycling and Litter Reduction Act (Bottle Bill) to create a financial incentive for recycling and to decrease the beverage container component of the solid waste stream by making recycling more convenient for consumers.

California Redemption Value. The California Redemption Value (CRV) is the centerpiece of the Bottle Bill. Retailers collect a small deposit, the CRV, on each beverage container purchased. The dealer retains a small percentage of the deposit for administration and remits the remainder to the distributor, who also retains a small portion for administration before remitting the balance to CalRecycle. When consumers return their empty beverage containers to a recycler (or donate them to a curbside or other program), the deposit is paid back as a refund.

Recycling convenience zones. A “convenience zone” is typically the half-mile radius surrounding a supermarket that: a) is identified in the Progressive Grocer Marketing Guidebook; b) has gross annual sales of $2 million or more; and, c) is considered a “full-line” store that sells a line of dry groceries, canned goods, or non-food items and perishable items. In some instances, such as certain rural areas, a convenience zone may be larger than a half mile. Convenience zones are intended to provide consumers opportunities to redeem containers near where beverages are purchased.

Recycling centers are privately owned and operated by individuals, for-profit, and nonprofit organizations. They are certified by CalRecycle and must adhere to standards to help provide the public the service they need (e.g., operate at least 30 hours per week and have signage indicating prices paid for beverage containers).

Overlapping convenience zones are common in commercial zoning areas. If a recycler is on-site at one convenience zone where one or more convenience zones overlap, each of these zones are served by this recycler. Accordingly, it is not necessary for each convenience zone to support its own recycling center.

A convenience zone may not be required to have a recycling center within its boundaries if certain conditions related to access to redemption centers is met. For example, if the next closest recycling center is within a reasonable distance, consumers in area predominantly use the curbside program for recycling, or recycling centers in the area fail to meet a sufficient volume for economic viability.

Pacific Beach pilot program. AB 3752 (Alpert, Chapter 620, Statutes of 1994) established the Pacific Beach Mobile Recycling Program in five convenience zones in San Diego County. By 2014, all recyclers serving the five convenience zones were decertified. To date, CalRecycle has not received any applications for certification.

CalRecycle notes that the program likely failed because of sustained, strong community resistance to recycling centers that prevented the citing of recycling centers. Nuisance complaints forced many operators to close and eventually discouraged property owners from participating. Currently, the five zones in Pacific Beach remain unserved and 19 dealers are either responsible for in-store redemption or paying the in-lieu fee.

Proposed Law: This bill:

1. Requires CalRecycle to hold at least one public workshop within 90 days after the bill is enacted.
2. Authorizes CalRecycle, on or before July 1, 2020, to approve up to five recycling pilot projects (pilots) designed to improve redemption opportunities in unserved convenience zones if the following conditions are met:
   1. Serves at least three unserved convenience zones, one or more convenience zones impacting a total of at least 30 dealers in unserved convenience zones, or a rural region.
   2. Is in a jurisdiction that, as of the effective date of this section, had at least six unserved convenience zones, had 75 percent of the convenience zones in the jurisdiction unserved, or is located in a rural region.
   3. Prohibits a pilot from establishing a location for redeeming a beverage container for its refund value that is outside of a convenience zone.
   4. Prohibits a pilot project from being served by more than one pilot project recycler, and requires recyclers to be open for at least 30 hours per week, be open for a minimum of one day per week for at least eight hours, and be open at least five hours per week during periods other than from Monday through Friday from 9 a.m. to 5 p.m.
   5. Requires the recycler to accept and pay the refund value for all eligible beverage container types during hours of operation.
   6. Requires the operator of the pilot project recycler (recycler) to notify CalRecycle within 10 days of any storage location changes.
   7. Prohibits a recycler from accepting material from any certified or noncertified person or entity, including, but not limited to, recycling centers, collection programs, and processors.
   8. Prohibits a processor from issuing an authorization to cancel a pilot project recycler.
3. Requires interested jurisdictions to submit a proposal to CalRecycle that includes (1) a map of the pilot project area, (2) a list of proposed operators of pilot project recyclers, (3) the jurisdiction’s contact information, (4) planned dates of operation, (5) a description of how the pilot will meet statutory requirements, and (6) additional elements required by CalRecycle.
4. Authorizes CalRecycle to issue probationary certificates of operation to recyclers participating in a pilot that are valid up to three years
5. Requires CalRecycle to consider, among other things, the following when evaluating pilot proposals: (1) the number of unserved convenience zones the pilot serves; (2) hours of operation per week; (3) the number of locations served by the pilot; (4) whether the jurisdiction has actively prevented the siting or operation of a certified recycling center at a supermarket site; (5) completeness of the application; (6) the geographic distribution of jurisdictions pilot proposals; (7) potential impacts to existing certified recycling centers; and (8) any additional factors deemed relevant by the department.
6. Authorizes CalRecycle to revoke a pilot’s approval or the associated probationary certification of any recycler participating in the pilot, or both, at any time if the jurisdiction or recycler fails to meet the conditions outlined in the pilot approval or violates the bill’s provisions or implementing regulations.
7. Specifies the review process that applies to each convenience zone that was a part of the pilot project, when a pilot’s approval is revoked.
8. States that a recycler that has been certified by CalRecycle on a probationary basis is eligible to apply for handling fees and to receive from certified processors the amounts specified in statute for refund values, administrative costs, and processing payments. For purposes of handling fee eligibility, a pilot project recycler may be located anywhere within a convenience zone.
9. States that a convenience zone located within an approved pilot area is considered served.

Related Legislation: SB 168 (Wieckowski, 2017) establishes the Beverage Container Recycling Act of 2017 and creates an industry-run bottle and can recycling program by January 1, 2021, to replace the current Bottle Bill, which the bill revises and sunsets January 1, 2021.

-- END --

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2017 - 2018 Regular

Bill No: SB 458

SUBJECT: Beverage container recycling: San Francisco Mobile Recycling Program.

ANALYSIS:

Existing law, under the California Beverage Container Recycling and Litter Reduction Act (Act):

1. Requires beverage containers, as defined, sold in-state to have a California redemption value (CRV) of 5 cents for containers that hold fewer than 24 ounces and 10 cents for containers that hold 24 ounces or more, and requires distributors to pay a redemption payment to the Department of Resources Recycling and Recovery (CalRecycle) for every beverage container sold in the state. These funds are continuously appropriated to CalRecycle for the payment of refund values and processing fees. (Public Resources Code (PRC) §14500 et seq.).
2. Defines “convenience zone” as either the area within one-half mile radius of a supermarket or the area designated by CalRecycle in a rural region that meets specified criteria pursuant to PRC §14571.5. (PRC §14509.4).
3. Defines “dealer” as a retail establishment which offers the sale of beverages in beverage containers to consumers, e.g. a supermarket. However, any lodging, eating, or drinking establishment, or soft drink vending machine operator who engages in the sale of beverages in beverage containers to consumers are not deemed a dealer for purposes of the Bottle Bill. (PRC §14510).
4. Defines “recycling center” as an operation which is certified by CalRecycle and which accepts from consumers, and pays or provides the refund value for empty beverage containers intended to be recycled. (PRC §14520).
5. Defines “recycling location” as a place, mobile unit, reverse vending machine, or other device where a certified recycling center accepts one or more types of empty beverage containers from consumers, and pays or provides refund value for one or more types of empty beverage containers. (PRC §14520.5)
   
6. Requires CalRecycle to annually designate all convenience zones. (PRC §14571.1).
   
7. In a convenience zone where a recycling location does not exist and until one has been established in that zone, requires all dealers in the zone to either: a) redeem empty beverage containers; or, b) pay CalRecycle an in-lieu fee of $100/day until a recycling location is established. (PRC §14571.6).
   
8. Authorizes CalRecycle to grant an exemption for a convenience zone based on specified conditions, such as: whether the zone is within a curbside service area which collects CRV containers at least twice a month, whether there is a sufficient number of recycling centers in the area, and whether the volume collected by the last recycler in the zone was below 60,000 containers in the past 12 months. (PRC §14571.8).
   
9. Establishes the Pacific Beach Mobile Recycling Program, which incorporates all convenience zones in the Pacific Beach area of San Diego County, and includes specified requirements for the recycling center operator and dealers in Pacific Beach. (PRC §14571.4).
   

This bill:

1. Authorizes CalRecycle to certify one or more operator to establish the San Francisco Mobile Recycling Program that incorporates all convenience zones in the City and County of San Francisco.
   
2. Provides that all convenience zones in San Francisco will be deemed served if specified conditions are met.
   
3. Provides an appropriation of some of the moneys paid into the California Beverage Container Recycling Fund by dealers in San Francisco if CalRecycle determines that the cost of operating the program exceeds the income generated by the program plus a reasonable return for recycling center operators in order to support the continued operation of the program.
   
4. Declares this bill an urgency measure.
   

Background

1. Background on the Bottle Bill program. The Bottle Bill was established by AB 2020 (Margolin, Chapter 1290, Statutes of 1986). The purpose of the program is to be a self-funded program that encourages consumers to recycle beverage containers to prevent littering. The program accomplishes this goal by requiring consumers to pay a deposit for each eligible container purchased. Then the program guarantees consumers repayment of that deposit, the California Redemption Value (CRV), for each eligible container returned to a certified recycler. Statute includes two main goals for the program: (1) reducing litter; and, (2) achieving a recycling rate of 80% for eligible containers.
   
   Over the years, various concerns about the program have been raised such as the structural deficit, the effectiveness of some supplemental programs supported by the program, fraud, and whether some offsets support the goals of the program.
   
   Currently, the Administration is collaborating with stakeholders on a comprehensive reform of the Bottle Bill program that is intended to align with the state’s climate change goals and the state’s 75% solid waste reduction, recycling, and composting goal, as well as be fiscally sustainable. CalRecycle has proposed a policy framework for modernizing the program based on the following principles: a) Improving recycling and remanufacturing; b) Sharing responsibility; and, c) Enhancing adaptability and sustainability.
   
2. Recycling convenience zones. According to CalRecycle, a convenience zone is typically a half-mile radius within the center point originating at a supermarket that: a) Is identified in the Progressive Grocer Marketing Guidebook; b) Has gross annual sales of $2 million or more; and, c) Is considered a “full-line” store that sells a line of dry groceries, canned goods, or non-food items and perishable items.
   
   In some instances, a convenience zone may be larger than a half mile. For example, an interested person may petition CalRecycle for a three-mile convenience zone to be created in a rural region when there are at least two dealers within three miles of a singular recycling center, and where the dealers are a mile or less apart and have an aggregate sales volume of at least $2 million gross annual sales. Convenience zones are intended to provide consumers opportunities to redeem containers near where beverages are purchased.
   
   Recycling centers are privately owned and operated by individuals, profit, and nonprofit organizations. They are certified by CalRecycle and must adhere to standards to help provide the public the service they need, e.g. operating at least 30 hours per week and signs depicting prices paid for beverage containers.
   
   Overlapping convenience zones are common in commercial zoning areas throughout the state. If a recycler is on-site at one convenience zone where one or more convenience zones overlap, each of these zones are served by this recycler. Accordingly, it is not necessary in such cases for each convenience zone to support its own recycling center.
   

A convenience zone may be exempt from the requirement to have a recycling center within its boundaries if one or more conditions are met, including: Ease of access to redemption center by consumers, reasonable distance to next closest recycling center, consumers in area predominantly use curbside program for recycling, and recycling centers in the area fail to meet a sufficient volume for economic viability.

1. Previous pilot program: Pacific Beach. According to CalRecycle, AB 3752 (Alpert, Chapter 620, Statutes of 1994) established the Pacific Beach Mobile Recycling Program (PBMRP) for the Pacific Beach area of San Diego County. Pacific Beach is a beachfront community with dense development and few open spaces that could accommodate a recycling center.
   
   PBMRP started operating in August, 1995 and authorized five convenience zones be served by a combination of mobile and standard recycling centers and operated through 2011. After decertification in 2011, a new recycling center operator attempted to serve two of the five zones in Pacific Beach. The operator was decertified in one zone in 2013 and the second zone in 2014.
   
   Since 2014, CalRecycle has not received applications for certification under PBMRP and the five zones in Pacific Beach remain unserved.
   
   CalRecycle notes that during the pilot, recycling center operators were constrained and pressured to close due to homeless and nuisance complaints. Initially, dealers were cooperative and the mobile operator could find a site in a supermarket or pharmacy parking lot. As the program progressed, property owners became less cooperative and sought eviction.
   
   CalRecycle states that the primary reason that PBMRP is not working is that eventually there were no local recycling center operators willing to operate in accordance with the program. The only feasible operator from outside of the area was rePlanet, which was not interested. In addition, the Pacific Beach pilot program failed because of the following: eventually some property owners became resistant to supporting recycling centers, even if for one day per week; sustained, strong community resistance to any recycling center due to perceived nuisance; and with strong opposition, there were no feasible locations for recycling centers to operate in Pacific Beach.
   
   Currently, the five zones in Pacific Beach remain unserved and 19 dealers are either responsible for in-store redemption or paying the in-lieu fee of $100/day to not take back empty beverage containers in-store.

Comments

1. Purpose of Bill. According to the author:
   

In light of recent and widespread recycling center closures across San Francisco, Senate Bill 458 authorizes a pilot “mobile recycling” program which would relieve small grocery and convenience stores of the burden of having to redeem recycling for cash. The authorization would apply to San Francisco only.

Over 93% of San Francisco lies more than one half-mile from a recycling center, the highest percentage of any major city in the state. This means that 579 corner stores and small supermarkets lacking a recycling center within their half-mile convenience zone must redeem large volumes cans and bottles for cash, regardless of capacity or cleanliness, or be subject to in-lieu fees totaling nearly $40,000 per year location.

SB 458 would allow the San Francisco Department of the Environment to pursue a pilot mobile recycling program. Forms of mobile recycling include temporary locations and “reverse vending machines.” Under these proposed revisions, San Francisco mobile recycling sites will qualify as full recycling centers for purposes of modifying existing convenience zones and relieving businesses of their redemption obligations.

1. Is San Francisco unique in the need to fix unserved convenience zones? CalRecycle has provided the following data on convenience zone status for the City & County of San Francisco:

As shown above, over 90% of San Francisco is in unserved convenience zones. According to the CalRecycle website, eight recycling centers are located in San Francisco.

Statewide, according to the CalRecycle website, 1,625 convenience zones are served, 928 are unserved, 1,216 are exempt, and 149 have a “hold” status (new instance or recycling center in zone recently closed).

Although San Francisco has very few served convenience zones, it is not alone in this conundrum. A significant number of convenience zones are unserved throughout the state. Although a pilot program pursuant to this bill may help provide opportunities for people to redeem their CRV in San Francisco, this problem is much more pervasive than one city and county.

1. Recent recycling center closures statewide. In June 2016, CalRecycle sent out 1,074 letters notifying stores that they were in unserved convenience zones. Of the 1,074 letters, 416 of them were unserved zone dealers prior to January 1, 2016; 478 recipients were around the rePlanet closures in early 2016.
   
   One reason for recycling center closures may be attributed to subsidies allocated to recycling centers. According to the Legislative Analyst’s Office, the state subsidizes recycling by making “processing payments” to recyclers and processors. Processing payments are intended to cover the difference between a container’s scrap value (the worth of a physical asset’s components when the asset itself is deemed no longer usable) and the cost of recycling it (including a reasonable rate of return). Both the costs of recycling and the scrap value of beverage containers can fluctuate significantly based on changing market prices. As a result, processing payments vary over time. Some contend that they have failed to keep up with real time pricing and includes a minimum three-month gap – this gap results in recycling centers receiving insufficient state payments to make up for the income they may lose from the decline in scrap value.
   
   rePlanet runs the largest recycling network in California. On January 31, 2016, the company announced that it closed 191 of its 350 recycling centers and laid off 278 of its 800 employees throughout the state. In an announcement on February 1, 2016, rePlanet stated, “Following the most recent reduction in State fees on January 1, 2016 and after enduring twelve months of unprecedented declines in commodities pricing of aluminum and PET plastic, coupled with the mandated rise in operating costs as a result of minimum wage increases and required health and workers compensation insurance, the Company has concluded that operation of these recycling centers is no longer sustainable.”
   
2. A solution for one city and county or a statewide solution? As noted above, hundreds of recycling centers have closed throughout the state resulting in unserved convenience zones. However, this bill only benefits San Francisco. Unserved convenience zones are a problem beyond this one city and county, and for reasons that may not be the same as San Francisco.
   
   In order to provide CalRecycle the opportunity to best evaluate and learn from a variety of situations and factors that may address issues facing unserved convenience zones, the Committee may wish to amend SB 458 by striking the contents of this bill (except the urgency clause) and replacing with provisions to require CalRecycle to approve up to five beverage container recycling pilot projects, as follows:
   
   1. Authorize CalRecycle to approve up to five pilot programs on or before July 1, 2020, for the purpose of improving redemption opportunities in unserved convenience zones.
      
   2. Provide that a convenience zone located in the area of a pilot project is deemed served while the pilot project is operational.
      
   3. Within 90 days after the effective date of this bill, require CalRecycle to hold at least one public workshop with stakeholders to solicit feedback on the pilot project program, including feedback on the process and factors that may be considered in the approval process of a pilot project.
      
   4. Require a pilot project to include, at a minimum, the following:
      
      1. Service of at least three unserved convenience zones, one or more convenience zones impacting a total of at least 30 dealers in unserved convenience zones, or serve a rural region.
         
      2. A jurisdiction that, as of the effective date of this bill, had at least six unserved convenience zones, had 75% of the convenience zones in the jurisdiction unserved, or is located in a rural region.
         
      3. No establishment of a redemption location outside of a convenience zone.
         
      4. A convenience zone is served by only one recycling center.
         
      5. In addition to other pilot project recycler requirements as may be determined by the department, the pilot project shall be served only by a pilot project recycler that meets all of the following requirements:
         
         1. Cumulatively open for a minimum of 30 hours per week.
            
         2. Open a minimum of one day per week for at least eight hours.
            
         3. Open at least five hours per week during a period other than from Monday through Friday from 9am to 5pm.
            
         4. Accept and pay the refund value for all eligible beverage container types during hours of operation.
            
         5. Only redeem eligible beverage container material purchased from consumers for recycling, and not accept material from any certified or noncertified person or entity, including, but not limited to, recycling centers, collection programs, and processors.
            
         6. Agree to notify CalRecycle within 10 days of any change of the location where redeemed empty beverage containers are stored.
            
      6. Prohibition of a processor from issuing an authorization to cancel pursuant to subdivision (b) of Section 2110 of Title 14 of the California Code of Regulations to a pilot project recycler.
         
      7. Additional factors deemed relevant by CalRecycle.
         
   5. When submitting a proposal to establish a pilot project to CalRecycle, require a jurisdiction to include in its proposal, at a minimum, the following:
      
      1. A map of the pilot project area, including potential locations for recycling centers.
         
      2. Contact information for the jurisdiction.
         
      3. A list of proposed recycling center operators.
         
      4. Planned dates of operation.
         
      5. A description of how the pilot project will meet requirements.
         
      6. Additional factors deemed relevant by CalRecycle.
         
   6. Authorize CalRecycle to issue probationary certificates of operation to pilot project recyclers participating in an approved pilot project and specify that the certificate will be valid for a period of no more than 3 years or until the end of the pilot project, whichever comes first.
      
   7. When selecting pilot projects, require CalRecycle to consider, at a minimum, the following:
      
      1. Number of unserved convenience zones that will be served by the pilot project.
         
      2. Total number of hours per week the pilot project recycler will operate.
         
      3. Total number of locations that will be served under the pilot project.
         
      4. Geographic distribution of jurisdictions proposing a pilot project.
         
      5. Potential impacts to existing certified recycling centers.
         
      6. Whether the jurisdiction has actively prevented the siting or operation of a certified recycling center at a supermarket site.
         
      7. Completeness of the proposed pilot project’s application.
         
      8. Additional factors deemed relevant by CalRecycle.
         
   8. Authorize CalRecycle to revoke the approval of a pilot project and/or the associated probationary certification of a pilot project recycler participating in the pilot project at any time if the jurisdiction or operator of the pilot project recycler fails to meet the conditions outlined in CalRecycle’s approval of the project or violates provisions of the division pertaining to beverage container recycling. If the approval of the pilot project is revoked, require CalRecycle to engage in a review process described in Public Resources Code §14571.7 for each convenience zone that was a part of the pilot project.
      
   9. Authorize a pilot project recycler that has been certified by CalRecycle on a probationary basis pursuant to a pilot program to be eligible to apply for handling fees and receive from certified processors refund values, administrative costs, and processing payments. For handling fee eligibility, authorize the recycler to be located anywhere within a convenience zone.
      

SOURCE:

Author

SUPPORT:

Arab American Grocers Association

Bi-Rite Markets

Cal Mart

California Association of Local Conservation Corps

California Grocers Association

Californians Against Waste

Canyon Market

Castro Merchants

City of San Francisco

County of San Francisco

Geary Wine & Spirits

George Market

Golden Natural

Marina Super Inc.

San Francisco Conservation Corps

San Francisco Council of District Merchants Associations

San Francisco Mayor Edwin M. Lee

Small Business California

Small Business Network, San Francisco

Sun Maxim’s

Ted’s Market & Deli

That’s It Liquors

The Good Life Grocery on Potrero Hill

OPPOSITION:

None received

-- END --

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2017 - 2018 Regular

Bill No: SB 458

SUBJECT: Beverage container recycling: San Francisco Mobile Recycling Program.

ANALYSIS:

Existing law, under the California Beverage Container Recycling and Litter Reduction Act (Act):

1. Requires beverage containers, as defined, sold in-state to have a California redemption value (CRV) of 5 cents for containers that hold fewer than 24 ounces and 10 cents for containers that hold 24 ounces or more, and requires distributors to pay a redemption payment to the Department of Resources Recycling and Recovery (CalRecycle) for every beverage container sold in the state. These funds are continuously appropriated to CalRecycle for the payment of refund values and processing fees. (Public Resources Code (PRC) §14500 et seq.).
2. Defines “convenience zone” as either the area within one-half mile radius of a supermarket or the area designated by CalRecycle in a rural region that meets specified criteria pursuant to PRC §14571.5. (PRC §14509.4).
3. Defines “dealer” as a retail establishment which offers the sale of beverages in beverage containers to consumers, e.g. a supermarket. However, any lodging, eating, or drinking establishment, or soft drink vending machine operator who engages in the sale of beverages in beverage containers to consumers are not deemed a dealer for purposes of the Bottle Bill. (PRC §14510).
4. Defines “recycling center” as an operation which is certified by CalRecycle and which accepts from consumers, and pays or provides the refund value for empty beverage containers intended to be recycled. (PRC §14520).
5. Defines “recycling location” as a place, mobile unit, reverse vending machine, or other device where a certified recycling center accepts one or more types of empty beverage containers from consumers, and pays or provides refund value for one or more types of empty beverage containers. (PRC §14520.5)
   
6. Requires CalRecycle to annually designate all convenience zones. (PRC §14571.1).
   
7. In a convenience zone where a recycling location does not exist and until one has been established in that zone, requires all dealers in the zone to either: a) redeem empty beverage containers; or, b) pay CalRecycle an in-lieu fee of $100/day until a recycling location is established. (PRC §14571.6).
   
8. Authorizes CalRecycle to grant an exemption for a convenience zone based on specified conditions, such as: whether the zone is within a curbside service area which collects CRV containers at least twice a month, whether there is a sufficient number of recycling centers in the area, and whether the volume collected by the last recycler in the zone was below 60,000 containers in the past 12 months. (PRC §14571.8).
   
9. Establishes the Pacific Beach Mobile Recycling Program, which incorporates all convenience zones in the Pacific Beach area of San Diego County, and includes specified requirements for the recycling center operator and dealers in Pacific Beach. (PRC §14571.4).
   

This bill:

1. Authorizes CalRecycle to certify one or more operator to establish the San Francisco Mobile Recycling Program that incorporates all convenience zones in the City and County of San Francisco.
   
2. Provides that all convenience zones in San Francisco will be deemed served if specified conditions are met.
   
3. Provides an appropriation of some of the moneys paid into the California Beverage Container Recycling Fund by dealers in San Francisco if CalRecycle determines that the cost of operating the program exceeds the income generated by the program plus a reasonable return for recycling center operators in order to support the continued operation of the program.
   
4. Declares this bill an urgency measure.
   

Background

1. Background on the Bottle Bill program. The Bottle Bill was established by AB 2020 (Margolin, Chapter 1290, Statutes of 1986). The purpose of the program is to be a self-funded program that encourages consumers to recycle beverage containers to prevent littering. The program accomplishes this goal by requiring consumers to pay a deposit for each eligible container purchased. Then the program guarantees consumers repayment of that deposit, the California Redemption Value (CRV), for each eligible container returned to a certified recycler. Statute includes two main goals for the program: (1) reducing litter; and, (2) achieving a recycling rate of 80% for eligible containers.
   
   Over the years, various concerns about the program have been raised such as the structural deficit, the effectiveness of some supplemental programs supported by the program, fraud, and whether some offsets support the goals of the program.
   
   Currently, the Administration is collaborating with stakeholders on a comprehensive reform of the Bottle Bill program that is intended to align with the state’s climate change goals and the state’s 75% solid waste reduction, recycling, and composting goal, as well as be fiscally sustainable. CalRecycle has proposed a policy framework for modernizing the program based on the following principles: a) Improving recycling and remanufacturing; b) Sharing responsibility; and, c) Enhancing adaptability and sustainability.
   
2. Recycling convenience zones. According to CalRecycle, a convenience zone is typically a half-mile radius within the center point originating at a supermarket that: a) Is identified in the Progressive Grocer Marketing Guidebook; b) Has gross annual sales of $2 million or more; and, c) Is considered a “full-line” store that sells a line of dry groceries, canned goods, or non-food items and perishable items.
   
   In some instances, a convenience zone may be larger than a half mile. For example, an interested person may petition CalRecycle for a three-mile convenience zone to be created in a rural region when there are at least two dealers within three miles of a singular recycling center, and where the dealers are a mile or less apart and have an aggregate sales volume of at least $2 million gross annual sales. Convenience zones are intended to provide consumers opportunities to redeem containers near where beverages are purchased.
   
   Recycling centers are privately owned and operated by individuals, profit, and nonprofit organizations. They are certified by CalRecycle and must adhere to standards to help provide the public the service they need, e.g. operating at least 30 hours per week and signs depicting prices paid for beverage containers.
   
   Overlapping convenience zones are common in commercial zoning areas throughout the state. If a recycler is on-site at one convenience zone where one or more convenience zones overlap, each of these zones are served by this recycler. Accordingly, it is not necessary in such cases for each convenience zone to support its own recycling center.
   

A convenience zone may be exempt from the requirement to have a recycling center within its boundaries if one or more conditions are met, including: Ease of access to redemption center by consumers, reasonable distance to next closest recycling center, consumers in area predominantly use curbside program for recycling, and recycling centers in the area fail to meet a sufficient volume for economic viability.

1. Previous pilot program: Pacific Beach. According to CalRecycle, AB 3752 (Alpert, Chapter 620, Statutes of 1994) established the Pacific Beach Mobile Recycling Program (PBMRP) for the Pacific Beach area of San Diego County. Pacific Beach is a beachfront community with dense development and few open spaces that could accommodate a recycling center.
   
   PBMRP started operating in August, 1995 and authorized five convenience zones be served by a combination of mobile and standard recycling centers and operated through 2011. After decertification in 2011, a new recycling center operator attempted to serve two of the five zones in Pacific Beach. The operator was decertified in one zone in 2013 and the second zone in 2014.
   
   Since 2014, CalRecycle has not received applications for certification under PBMRP and the five zones in Pacific Beach remain unserved.
   
   CalRecycle notes that during the pilot, recycling center operators were constrained and pressured to close due to homeless and nuisance complaints. Initially, dealers were cooperative and the mobile operator could find a site in a supermarket or pharmacy parking lot. As the program progressed, property owners became less cooperative and sought eviction.
   
   CalRecycle states that the primary reason that PBMRP is not working is that eventually there were no local recycling center operators willing to operate in accordance with the program. The only feasible operator from outside of the area was rePlanet, which was not interested. In addition, the Pacific Beach pilot program failed because of the following: eventually some property owners became resistant to supporting recycling centers, even if for one day per week; sustained, strong community resistance to any recycling center due to perceived nuisance; and with strong opposition, there were no feasible locations for recycling centers to operate in Pacific Beach.
   
   Currently, the five zones in Pacific Beach remain unserved and 19 dealers are either responsible for in-store redemption or paying the in-lieu fee of $100/day to not take back empty beverage containers in-store.

Comments

1. Purpose of Bill. According to the author:
   

In light of recent and widespread recycling center closures across San Francisco, Senate Bill 458 authorizes a pilot “mobile recycling” program which would relieve small grocery and convenience stores of the burden of having to redeem recycling for cash. The authorization would apply to San Francisco only.

Over 93% of San Francisco lies more than one half-mile from a recycling center, the highest percentage of any major city in the state. This means that 579 corner stores and small supermarkets lacking a recycling center within their half-mile convenience zone must redeem large volumes cans and bottles for cash, regardless of capacity or cleanliness, or be subject to in-lieu fees totaling nearly $40,000 per year location.

SB 458 would allow the San Francisco Department of the Environment to pursue a pilot mobile recycling program. Forms of mobile recycling include temporary locations and “reverse vending machines.” Under these proposed revisions, San Francisco mobile recycling sites will qualify as full recycling centers for purposes of modifying existing convenience zones and relieving businesses of their redemption obligations.

1. Is San Francisco unique in the need to fix unserved convenience zones? CalRecycle has provided the following data on convenience zone status for the City & County of San Francisco:

As shown above, over 90% of San Francisco is in unserved convenience zones. According to the CalRecycle website, eight recycling centers are located in SanFrancisco.

Statewide, according to the CalRecycle website, 1,625 convenience zones are served, 928 are unserved, 1,216 are exempt, and 149 have a “hold” status (new instance or recycling center in zone recently closed).

Although San Francisco has very few served convenience zones, it is not alone in this conundrum. A significant number of convenience zones are unserved throughout the state. Although a pilot program pursuant to this bill may help provide opportunities for people to redeem their CRV in San Francisco, this problem is much more pervasive than one city and county.

1. Recent recycling center closures statewide. In June 2016, CalRecycle sent out 1,074 letters notifying stores that they were in unserved convenience zones. Of the 1,074 letters, 416 of them were unserved zone dealers prior to January 1, 2016; 478 recipients were around the rePlanet closures in early 2016.
   
   One reason for recycling center closures may be attributed to subsidies allocated to recycling centers. According to the Legislative Analyst’s Office, the state subsidizes recycling by making “processing payments” to recyclers and processors. Processing payments are intended to cover the difference between a container’s scrap value (the worth of a physical asset’s components when the asset itself is deemed no longer usable) and the cost of recycling it (including a reasonable rate of return). Both the costs of recycling and the scrap value of beverage containers can fluctuate significantly based on changing market prices. As a result, processing payments vary over time. Some contend that they have failed to keep up with real time pricing and includes a minimum three-month gap – this gap results in recycling centers receiving insufficient state payments to make up for the income they may lose from the decline in scrap value.
   
   rePlanet runs the largest recycling network in California. On January 31, 2016, the company announced that it closed 191 of its 350 recycling centers and laid off 278 of its 800 employees throughout the state. In an announcement on February 1, 2016, rePlanet stated, “Following the most recent reduction in State fees on January 1 2016 and after enduring twelve months of unprecedented declines in commodities pricing of aluminum and PET plastic, coupled with the mandated rise in operating costs as a result of minimum wage increases and required health and workers compensation insurance, the Company has concluded that operation of these recycling centers is no longer sustainable.”
   
2. Does this bill take away focus from current comprehensive Bottle Bill reform efforts? There have been several efforts over the years to revamp the Bottle Bill program. Currently, the Administration is working on comprehensively reforming the program with stakeholders at the table. It appears that most, if not all, stakeholders have concerns about the program and how it impacts their interests.
   
   This bill focuses on relieving unserved convenience zone issues facing the City and County of San Francisco. Although this bill makes a laudable effort to provide San Francisco residents with the opportunity to redeem their CRV for empty beverage containers, could the bill compromise efforts occurring now to reform the entire program? For example, could it unintentionally encourage other stakeholders to introduce their own bills for pilot programs in order to protect their interests rather than work together on a comprehensive plan?
   
   The Committee may wish to consider whether it is prudent to allow for a pilot program to accommodate the City and County of San Francisco while discussions are happening among all stakeholders, including San Francisco, for comprehensive reform of the Bottle Bill program.
   

Related/Prior Legislation

SB 60 (Glazer and McGuire) provides a temporary exemption from the requirement that each convenience zone be served by at least one certified recycling center that meets specified criteria. This bill was held in the Senate Environmental Quality Committee on February 15, 2017.

SB 168 (Wieckowski) serves as a placeholder for overall restructuring of the Bottle Bill program and will be heard in the Senate Environmental Quality Committee at a later date.

SOURCE:

Author

SUPPORT:

Arab American Grocers Association

Bi-Rite Markets

Cal Mart

California Association of Local Conservation Corps

California Grocers Association

Canyon Market

Castro Merchants

Geary Wine & Spirits

George Market

Golden Natural

Marina Super Inc.

San Francisco Conservation Corps

San Francisco Council of District Merchants Associations

San Francisco Mayor Edwin M. Lee

Small Business California

Sun Maxim’s

Ted’s Market & Deli

That’s It Liquors

The Good Life Grocery on Potrero Hill

OPPOSITION:

None received

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