The California Beverage Container Recycling and Litter Reduction Act, which is administered by the Department of Resources Recycling and Recovery, is established to promote beverage container recycling. The act authorizes the department, subject to the availability of funds, to pay a market development payment to a reclaimer for empty plastic beverage containers that have been collected for recycling in the state, and that the reclaimer washes and processes into flake, pellet, sheet, or any other form that is then usable as input for the manufacture of new plastic products by product manufacturers in the state. The act also authorizes the department, subject to the availability of funds, to pay a market development payment to a product manufacturer for plastic flake, pellet, sheet, or any other form of plastic purchased from a reclaimer and used by that product manufacturer to manufacture a plastic product in the state. The act makes this market development payment program inoperative on July 1, 2025. The act continuously appropriates redemption payments by distributors and other revenues received into the California Beverage Container Recycling Fund for market development program payments, among other purposes.

This bill would extend the inoperative date of the market development payment program to July 1, 2027, subject to the availability of funds, and would repeal the program as of January 1, 2028.

By authorizing the expenditure of continuously appropriated moneys for these purposes beyond July 1, 2025, the bill would make an appropriation.

The California Beverage Container Recycling and Litter Reduction Act, which is administered by the Department of Resources Recycling and Recovery, is established to promote beverage container recycling. The act authorizes the department, subject to the availability of funds, to pay a market development payment to a reclaimer for empty plastic beverage containers that have been collected for recycling in the state, and that the reclaimer washes and processes into flake, pellet, sheet, or any other form that is then usable as input for the manufacture of new plastic products by product manufacturers in the state. The act also authorizes the department, subject to the availability of funds, to pay a market development payment to a product manufacturer for plastic flake, pellet, sheet, or any other form of plastic purchased from a reclaimer and used by that product manufacturer to manufacture a plastic product in the state. The act makes this market development payment program inoperative on July 1, 2025. The act continuously appropriates redemption payments by distributors and other revenues received into the California Beverage Container Recycling Fund for market development program payments, among other purposes.

This bill would extend the inoperative date of the market development payment program to July 1, 2027, subject to the availability of funds, and would repeal the program as of January 1, 2028.

By authorizing the expenditure of continuously appropriated moneys for these purposes beyond July 1, 2025, the bill would make an appropriation.

The California Beverage Container Recycling and Litter Reduction Act, which is administered by the Department of Resources Recycling and Recovery, is established to promote beverage container recycling. The act authorizes the department, subject to the availability of funds, to pay a market development payment to a reclaimer for empty plastic beverage containers that have been collected for recycling in the state, and that the reclaimer washes and processes into flake, pellet, sheet, or any other form that is then usable as input for the manufacture of new plastic products by product manufacturers in the state. The act also authorizes the department, subject to the availability of funds, to pay a market development payment to a product manufacturer for plastic flake, pellet, sheet, or any other form of plastic purchased from a reclaimer and used by that product manufacturer to manufacture a plastic product in the state. The act makes this market development payment program inoperative on July 1, 2025. The act continuously appropriates redemption payments by distributors and other revenues received into the California Beverage Container Recycling Fund for market development program payments, among other purposes.

This bill would extend the inoperative date of the market development payment program to January 1, 2026, July 1, 2027, subject to the availability of funds, and would repeal the program as of July 31, 2026. January 1, 2028.

By authorizing the expenditure of continuously appropriated moneys for these purposes beyond July 1, 2025, the bill would make an appropriation.

The California Beverage Container Recycling and Litter Reduction Act, which is administered by the Department of Resources Recycling and Recovery, is established to promote beverage container recycling. The act authorizes the department, subject to the availability of funds, to pay a market development payment to a reclaimer for empty plastic beverage containers that have been collected for recycling in the state, and that the reclaimer washes and processes into flake, pellet, sheet, or any other form that is then usable as input for the manufacture of new plastic products by product manufacturers in the state. The act also authorizes the department, subject to the availability of funds, to pay a market development payment to a product manufacturer for plastic flake, pellet, sheet, or any other form of plastic purchased from a reclaimer and used by that product manufacturer to manufacture a plastic product in the state. The act makes this market development payment program inoperative on July 1, 2025. The act continuously appropriates redemption payments by distributors and other revenues received into the California Beverage Container Recycling Fund for market development program payments, among other purposes.

This bill would extend the inoperative date of the market development payment program to January 1, 2026, subject to the availability of funds, and would repeal the program as of July 31, 2026.

By authorizing the expenditure of continuously appropriated moneys for these purposes beyond July 1, 2025, the bill would make an appropriation.

 THIRD READING  

Bill No: AB 2511

Author: Berman (D)

Amended: 5/16/24 in Assembly

Vote: 27

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 6/19/24

AYES: Allen, Dahle, Gonzalez, Hurtado, Menjivar, Nguyen, Skinner

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/15/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 72-0, 5/21/24 - See last page for vote

SUBJECT: Beverage container recycling: market development payments

SOURCE: Author

DIGEST: This bill

extends the sunset date for the Plastic Market Development Payment Program (PMDP) from July 1, 2025, to July 1, 2027.

ANALYSIS:

Existing law:

1. Establishes the bottle bill administered by the Department of Resources Recycling and Recovery (CalRecycle). The bottle bill requires beverage containers 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. The bottle bill further sets a CRV of 25 cents for boxes, bladders, or pouches containing wine, distilled spirits, wine coolers, or distilled spirit coolers. (Public Resources Code (PRC) §14500 et seq.)
2. Defines “beverage container” as the individual, separate bottle, can, jar, carton, or other receptacle in which a beverage is sold, and which is constructed of metal, glass, plastic, or any other material, or any combination of these materials, and beginning January 1, 2024, includes wine and distilled spirits beverage containers. (PRC § 14505)
3. Requires plastic beverage containers subject to the bottle bill to contain the following percentages of post-consumer recycled plastic annually.
   1. From January 1, 2022, until December 31, 2024, no less than 15%;
   2. From January 1, 2025, until December 31, 2029, no less than 25%; and,
   3. On and after January 1, 2030, no less than 50%. (PRC 14547)
4. Establishes the PMDP, which authorizes CalRecycle to pay a market development payment to a reclaimer for empty plastic beverage containers collected and recycled and to a product manufacturer using recycled plastic from a reclaimer in the state. The PMDP sunsets on July 1, 2025.

This bill:

1. Extends the inoperative sunset date for PMDP from July 1, 2025, to July 1, 2027.
   
2. Repeals the PMDP on January 1, 2028.

Background

1. Bottle Bill Background. The bottle bill was established by the Legislature in 1986, with the twin goals of reducing litter and achieving a recycling rate of 80% for containers in the program. In 2023, the recycling rate for bottles in the program was 70%. This rate of recycling is only slightly higher than it was during the COVID-19 pandemic, where it dipped from higher than 75% in 2016-2019 down to 68% in 2021.

In broad strokes, the program operates by adding a small CRV (between 5-25 cents per container) on beverages which consumers pay at check out. That CRV can then be redeemed when the bottles are brought to a collection site or recycling center in the program. The CRV incentivizes consumers and businesses to bring bottles back into the recycling system, reducing the likelihood of bottles ending up as litter or in a landfill.

1. PMDP. The PMDP was established in 2006 to support markets for recycled empty plastic beverage containers in California. Keeping recycling in-state reduces landfill waste, plastic pollution, and greenhouse gas emissions. To support plastic recycling markets in state, CalRecycle can make payments of up to $10 million per year to plastic product manufacturers in California. These payments are available to reclaimers that wash and produce plastic feedstock from empty plastic beverage containers collected in the state for recycling. The payments are also available to product manufacturers that use this plastic feedstock to manufacture plastic products with recycled content in the state. The plastic recycled in this manner can only come from beverage containers in the bottle bill in order to be eligible for PMDP payments. Each entity that claims a payment is responsible for ensuring that they only claim payments for material that is in the bottle bill. To assist in determining the proper amount of CRV materials claimed for PMDP, CalRecycle determines a statewide average PMDP rate for polyethylene terephthalate (PET) and high-density polyethylene (HDPE) each year. The rates are used to determine the total eligible PMDP payments for certified entities and product manufacturers after excluding non-qualifying material.

The Budget Act of 2023, SB 101 (Skinner, Chapter 610, Statutes of 2023), appropriated $47 million for the PMDP to be available for encumbrance or expenditure until June 30, 2027. CalRecycle is authorized to award $10 million of this appropriation for payments in the 2023-24 Fiscal Year.

Comments

1. Purpose of Bill. According to the author, “AB 2511 would simply extend the Plastic Market Development program sunset date to more closely align with the budget appropriation date. This successful program incentivizes reuse of California-generated recycled beverage containers, creates and maintains jobs in California, and helps close the loop on plastic beverage container recycling. Prior to the enactment of this incentive program, virtually all of the plastic collected for recycling in California was exported overseas. However, as a result of this incentive program, there has been a significant increase in the in-state reuse of California-generated material. Reusing California-generated material here is not only environmentally beneficial; it creates and maintains jobs in California.”
   
2. 18 years of market development. The PMDP has served an important role in establishing and perpetuating recycling of plastic beverage containers in the state. However, as the name implies, the PMDP is intended to jumpstart the development of the in-state plastic recycling industry. AB 2511 sensibly extends the program operations to match the funding expenditure already allocated for this program in the 2023-2024 budget and beyond to make sure appropriated funds can be spent. However, it is worth considering at what point the use of payments to support the in-state recycling industry can be deemed successful as a market development tool if they are needed in perpetuity to maintain the industry.

Related/Prior Legislation

SB 854 (Committee on Budget and Fiscal Review Chapter 51, Statutes of 2018) among other provisions, extends the PMDP until July 1, 2022, and allows for up to $15 million for fiscal year 2018-19, and $10 million for the following fiscal years until 2022. In addition, the law redefines “Plastic Product” under this program.

AB 3056 (Committee on Natural Resources, Chapter 907, Statutes 2006) creates the Plastic Market Development Payment Program to develop California markets for recycled empty plastic beverage containers.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

Cost pressure, likely in the millions or tens of millions of dollars per year in fiscal years 2025-26 and 2026-27 BCRF. The PMD program statutorily sunsets on July 1, 2025. Absent this bill, any unspent funds from the $47 million appropriation for this program (see staff comments for more details) would presumably revert back to BCRF and be available to CalRecycle for other spending priorities. By extending the sunset date for the program by an additional two years and providing CalRecycle more time to make additional PMD payments, this bill likely reduces the amount that would revert back to BCRF absent the sunset extension

SUPPORT: (Verified 8/15/24)

Californians Against Waste
Evergreen Recycling LLC
Global Plastics Recycing INC.
Indorama
Repet INC.
Rplanet Los Angeles

OPPOSITION: (Verified 8/15/24)

None received

ASSEMBLY FLOOR: 72-0, 5/21/24

AYES: Addis, Aguiar-Curry, Alanis, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Alvarez, Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Luz Rivas

Prepared by: Brynn Cook / E.Q. / (916) 651-4108

8/18/24 9:19:15

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2511 (Berman) - Beverage container recycling: market development payments

Bill Summary:

This bill would extend the sunset date for the Plastic Market Development (PMD) Payment Program from July 1, 2025, to July 1, 2027.

Fiscal Impact:

• Cost pressure, likely in the millions or tens of millions of dollars per year in fiscal years 2025-26 and 2026-27 (Beverage Container Recycling Fund [BCRF]). The PMD program statutorily sunsets on July 1, 2025. Absent this bill, any unspent funds from the $47 million appropriation for this program (see staff comments for more details) would presumably revert back to BCRF and be available to the Department of Resources Recycling and Recovery (CalRecycle) for other spending priorities. By extending the sunset date for the program by an additional two years and providing CalRecycle more time to make additional PMD payments, this bill likely reduces the amount that would revert back to BCRF absent the sunset extension.

Background:

The BCRP was established over 30 years ago with the enactment of Chapter 1290, Statutes of 1986 (AB 2020, Margolin). The purpose of the program is to be a self–funded program that encourages consumers to recycle certain beverage containers. The program accomplishes this goal by first requiring consumers to pay a deposit for each eligible container purchased. Then the program guarantees consumers repayment of that deposit—the California Redemption Value, or “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 percent for eligible containers.

Eligible beverage containers. Only certain beverage containers containing certain beverages are part of the CRV program. Most containers made from glass, plastic, aluminum, and bimetal (consisting of one or more metals) are eligible. Wine, spirits, milk, fruit juices (over 46 ounces), vegetable juice (over 16 ounces), and soy drinks are not eligible for CRV. Container types that are not included in the CRV program are cartons, pouches, and any container that holds 64 ounces or more.

Flow of CRV containers and payments. The CRV program involves the flow of beverage containers and payments between several sets of parties, including consumers, retailers, recyclers, and manufacturers. At each stage, beverage containers and CRV are exchanged between participants. The Beverage Container Recycling Fund (BCRF) is the state’s fund used to collect and distribute payments for the CRV program.

Other program expenditures. Not all CRV–eligible containers are recycled, and therefore the CRV deposit paid when a consumer purchased these containers is never redeemed. This means that distributors pay more CRV into the BCRF than is claimed by consumers. In 2018–19, for example, the BCRF received roughly $1.3 billion in deposits, but only about $1.1 billion—or over 80 percent—was spent on redemption payments. State law requires that much of the unredeemed CRV be spent on specified recycling–related programs. These supplemental programs are not directly involved in the exchange of CRV, but they are intended to help achieve the programmatic goals of increased recycling and reduced litter.

PMD Program. The PMDP was established in 2006 to support markets for recycled empty plastic beverage containers in California. Keeping recycling in-state reduces landfill waste, plastic pollution, and greenhouse gas emissions. To support plastic recycling markets in state, CalRecycle can make payments of up to $10 million per year to plastic product manufacturers in California. These payments are available to reclaimers that wash and produce plastic feedstock from empty plastic beverage containers collected in the state for recycling. The payments are also available to product manufacturers that use this plastic feedstock to manufacture plastic products with recycled content in the state. The plastic recycled in this manner can only come from beverage containers in the bottle bill in order to be eligible for PMDP payments. Each entity that claims a payment is responsible for ensuring that they only claim payments for material that is in the bottle bill. To assist in determining the proper amount of CRV materials claimed for PMDP, CalRecycle determines a statewide average PMDP rate for polyethylene terephthalate (PET) and high-density polyethylene (HDPE) each year. The rates are used to determine the total eligible PMDP payments for certified entities and product manufacturers after excluding non-qualifying material.

The Budget Act of 2023, SB 101 (Budget), Chapter 610, Statutes of 2023, appropriated $47 million for the PMDP to be available for encumbrance or expenditure until June 30, 2027. CalRecycle is authorized to award $10 million of this appropriation for payments in the 2023-24 Fiscal Year.

Proposed Law:

This bill would:

1. Extend the inoperative sunset date for PMDP from July 1, 2025, to July 1, 2027.
2. Repeal the PMDP on January 1, 2028.

Related Legislation:

SB 1013 (Atkins), Chapter 610, Statutes of 2022, authorized CalRecycle to make PMD payments from BCRF through June 30, 2025.

The Budget Act of 2023, SB 101 (Budget), Chapter 610, Statutes of 2023, appropriated $47 million for the PMDP to be available for encumbrance or expenditure until June 30, 2027. CalRecycle is authorized to award $10 million of this appropriation for payments in the 2023-24 Fiscal Year.

SB 854 (Chapter 51, statutes of 2018) among other provisions, extends the PMDP until July 1, 2022, and allows for up to $15 million for fiscal year 2018-19, and $10 million for the following fiscal years until 2022. In addition, the law redefines “Plastic Product” under this program.

AB 3056 (Chapter 907, Stat. 2006) creates the Plastic Market Development Payment Program to develop California markets for recycled empty plastic beverage containers.

Staff Comments:

SB 1013 (Atkins), Chapter 610, Statutes of 2022, authorized CalRecycle to make PMD payments from BCRF through June 30, 2025. Prior to the enactment of SB 1013, the PMD program had expired as of June 30, 2022. Subsequently, the Budget Act of 2023 appropriated $47 million from BCRF for PMD payments through June 30, 2027. CalRecycle posted a notice on its website in late 2023 announcing it will provide $10 million of this appropriation for payments in fiscal year 2023-24. According to CalRecycle, it is holding $2 million in a “reserve” and it provided $5 million in the third and fourth quarters of 2023. Beginning January 1, 2024, the department plans to expend the remaining $40 million and issue payments to reclaimers and manufacturers via quarterly payments using a new three-tier payment structure. However, while the funds appropriated in the Budget Act of 2023 are available for encumbrance or expenditure until June 30, 2027, the PMD program statutorily sunsets on July 1, 2025.

This bill would extend the sunset by two years to allow CalRecycle additional time to award the funds that have been appropriated for the PMD program.

-- END --

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Gonzalez, Chair

2023 - 2024 Regular

SUBJECT: Beverage container recycling: market development payments

DIGEST: Extends the sunset date for the Plastic Market Development Payment Program (PMDP) from July 1, 2025, to July 1, 2027.

ANALYSIS:

Existing law:

1. Establishes the bottle bill administered by the Department of Resources Recycling and Recovery (CalRecycle). The bottle bill requires beverage containers 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. The bottle bill further sets a CRV of 25 cents for boxes, bladders, or pouches containing wine, distilled spirits, wine coolers, or distilled spirit coolers. (Public Resources Code (PRC) §14500 et seq.)
2. Defines “beverage container” as the individual, separate bottle, can, jar, carton, or other receptacle in which a beverage is sold, and which is constructed of metal, glass, plastic, or any other material, or any combination of these materials, and beginning January 1, 2024, includes wine and distilled spirits beverage containers. (PRC § 14505)
3. Requires plastic beverage containers subject to the bottle bill to contain the following percentages of post-consumer recycled plastic annually.
   1. From January 1, 2022, until December 31, 2024, no less than 15%;
   2. From January 1, 2025, until December 31, 2029, no less than 25%; and,
   3. On and after January 1, 2030, no less than 50%. (PRC 14547)
4. Establishes the PMDP, which authorizes CalRecycle to pay a market development payment to a reclaimer for empty plastic beverage containers collected and recycled and to a product manufacturer using recycled plastic from a reclaimer in the state. The PMDP sunsets on July 1, 2025.

This bill:

1. Extends the inoperative sunset date for PMDP from July 1, 2025, to July 1, 2027.
   
2. Repeals the PMDP on January 1, 2028.

Background

1. Bottle Bill Background. The bottle bill was established by the Legislature in 1986, with the twin goals of reducing litter and achieving a recycling rate of 80% for containers in the program. In 2023, the recycling rate for bottles in the program was 70%. This rate of recycling is only slightly higher than it was during the COVID-19 pandemic, where it dipped from higher than 75% in 2016-2019 down to 68% in 2021.

In broad strokes, the program operates by adding a small CRV (between 5-25 cents per container) on beverages which consumers pay at check out. That CRV can then be redeemed when the bottles are brought to a collection site or recycling center in the program. The CRV incentivizes consumers and businesses to bring bottles back into the recycling system, reducing the likelihood of bottles ending up as litter or in a landfill.

1. PMDP. The PMDP was established in 2006 to support markets for recycled empty plastic beverage containers in California. Keeping recycling in-state reduces landfill waste, plastic pollution, and greenhouse gas emissions. To support plastic recycling markets in state, CalRecycle can make payments of up to $10 million per year to plastic product manufacturers in California. These payments are available to reclaimers that wash and produce plastic feedstock from empty plastic beverage containers collected in the state for recycling. The payments are also available to product manufacturers that use this plastic feedstock to manufacture plastic products with recycled content in the state. The plastic recycled in this manner can only come from beverage containers in the bottle bill in order to be eligible for PMDP payments. Each entity that claims a payment is responsible for ensuring that they only claim payments for material that is in the bottle bill. To assist in determining the proper amount of CRV materials claimed for PMDP, CalRecycle determines a statewide average PMDP rate for polyethylene terephthalate (PET) and high-density polyethylene (HDPE) each year. The rates are used to determine the total eligible PMDP payments for certified entities and product manufacturers after excluding non-qualifying material.

The Budget Act of 2023, SB 101 (Budget), Chapter 610, Statutes of 2023, appropriated $47 million for the PMDP to be available for encumbrance or expenditure until June 30, 2027. CalRecycle is authorized to award $10 million of this appropriation for payments in the 2023-24 Fiscal Year.

Comments

1. Purpose of Bill. According to the author, “AB 2511 would simply extend the Plastic Market Development program sunset date to more closely align with the budget appropriation date. This successful program incentivizes reuse of California-generated recycled beverage containers, creates and maintains jobs in California, and helps close the loop on plastic beverage container recycling. Prior to the enactment of this incentive program, virtually all of the plastic collected for recycling in California was exported overseas. However, as a result of this incentive program, there has been a significant increase in the in-state reuse of California-generated material. Reusing California-generated material here is not only environmentally beneficial; it creates and maintains jobs in California.”
   
2. 18 years of market development. The PMDP has served an important role in establishing and perpetuating recycling of plastic beverage containers in the state. However, as the name implies, the PMDP is intended to jumpstart the development of the in-state plastic recycling industry. AB 2511 sensibly extends the program operations to match the funding expenditure already allocated for this program in the 2023-2024 budget and beyond to make sure appropriated funds can be spent. However, it is worth considering at what point the use of payments to support the in-state recycling industry can be deemed successful as a market development tool if they are needed in perpetuity to maintain the industry.

Related/Prior Legislation

SB 854 (Chapter 51, statutes of 2018) among other provisions, extends the PMDP until July 1, 2022, and allows for up to $15 million for fiscal year 2018-19, and $10 million for the following fiscal years until 2022. In addition, the law redefines “Plastic Product” under this program.

AB 3056 (Chapter 907, Stat. 2006) creates the Plastic Market Development Payment Program to develop California markets for recycled empty plastic beverage containers.

SOURCE:

SUPPORT:

None received

OPPOSITION:

None received

Positions reflect letters received by noon one week prior to the hearing.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2511

Author:(Berman)

As Amended Ver:May 16, 2024

2/3 vote

SUMMARY

Extends the sunset date for the Plastic Market Development Payment Program (PMDP) from July 1, 2025 to July 1, 2027.

Major Provisions

COMMENTS

The Bottle Bill was established in 1986 to be a self-funded program that encourages consumers to recycle beverage containers and 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 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. Containers recycled through the Bottle Bill's certified recycling centers also provides a consistent, clean, uncontaminated stream of recycled materials with minimal processing.

The PMDP was established in 2006 facilitate the development of California markets for recycled empty plastic beverage containers. Recycling plastic containers in-state reduces landfill waste, reduced plastic pollution, and reduced greenhouse gas emissions. Subject to the availability of funds, CalRecycle makes payments of up to $10 million annually, to certified entities and California product manufacturers. Payments are available to certified entities that wash and produce flake, pellet, or other form usable for a product manufacturer from empty plastic beverage containers collected in the state for recycling; and, product manufacturers using the plastic material from a certified entity to manufacture plastic products in the state.

Only plastic beverage containers subject to the Bottle Bill are eligible for the PMDP, and each entity is responsible for ensuring that only CRV material is claimed. To assist in determining the proper amount of CRV materials claimed for PMDP, CalRecycle determines a statewide average PMDP rate for polyethylene terephthalate (PET) and high-density polyethylene (HDPE) annually. The rates are used to determine the total eligible PMDP payments for certified entities ad product manufacturers after excluding non-qualifying material.

The Budget Act of 2023, SB 101 (Budget), Chapter 610, Statutes of 2023, appropriated $47 million for the PMDP to be available for encumbrance or expenditure until June 30, 2027. CalRecycle is awarding $10 million of this appropriation for payments in the 2023-24 Fiscal Year.

This bill extends the sunset on the program to allow CalRecycle additional time to award the funds that have been appropriated for the PMDP.

According to the Author

AB 2511 would simply extend the Plastic Market Development program sunset date to more closely align with the budget appropriation date. This successful program incentivizes reuse of California-generated recycled beverage containers, creates and maintains jobs in California, and helps close the loop on plastic beverage container recycling. Prior to the enactment of this incentive program, virtually all of the plastic collected for recycling in California was exported overseas. However, as a result of this incentive program, there has been a significant increase in the in-state reuse of California-generated material. Reusing California-generated material here is not only environmentally beneficial; it creates and maintains jobs in California.

Arguments in Support

A coalition of supporters state:

The reclaiming industry needs the PMDP more than ever and are grateful that the Legislature authorized $47 million to the PMDP through the Senate Bill 101, Budget Act of 2023. While the appropriations allowed for the fund to be expended June 30, 2027, pursuant to Public Resources Code 14549.2, the PMD program sunsets July 1, 2025.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, this bill creates cost pressure of an unknown amount, likely in the low millions of dollars, on the Beverage Container Recycling Fund (BCRF). The PMDP statutorily sunsets on July 1, 2025. Absent this bill, any unspent funds from the $47 million appropriation for this program would presumably revert back to BCRF and be available to CalRecycle for other spending priorities. By extending the sunset date for the program and providing CalRecycle more time to make additional PMDP payments, this bill likely reduces the amount that would revert back to BCRF absent the sunset extension.

VOTES

ASM NATURAL RESOURCES: 11-0-0

YES: Bryan, Flora, Bauer-Kahan, Friedman, Hoover, Kalra, Mathis, Muratsuchi, Pellerin, Wicks, Wood

ASM APPROPRIATIONS: 11-0-4

YES: Wicks, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua

ABS, ABST OR NV: Sanchez, Dixon, Jim Patterson, Ta

UPDATED

VERSION: May 16, 2024

CONSULTANT: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0003352

Date of Hearing: April 10, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2511

Author:(Berman) – As Introduced Ver:February 13, 2024

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

SUMMARY:

This bill extends the sunset date for the Plastic Market Development (PMD) program by six months, from July 1, 2025, to January 1, 2026.

FISCAL EFFECT:

Cost pressure of an unknown amount, likely in the low millions of dollars, on the Beverage Container Recycling Fund (BCRF). The PMD program statutorily sunsets on July 1, 2025. Absent this bill, any unspent funds from the $47 million appropriation for this program (see background for more details) would presumably revert back to BCRF and be available to the Department of Resources Recycling and Recovery (CalRecycle) for other spending priorities. By extending the sunset date for the program by an additional six months and providing CalRecycle more time to make additional PMD payments, this bill likely reduces the amount that would revert back to BCRF absent the sunset extension.

COMMENTS:

1) Purpose. According to the author:

AB 2511 would simply extend the Plastic Market Development program sunset date to more closely align with the budget appropriation date…Prior to the enactment of this incentive program, virtually all of the plastic collected for recycling in California was exported overseas. However, as a result of this incentive program, there has been a significant increase in the in-state reuse of California-generated material.

2) Background.

Bottle Bill. The Bottle Bill was established in 1986 to be a self-funded program to prevent littering and achieve an 80% recycling rate for eligible containers. The program requires consumers to pay a deposit for each eligible container purchased. The program then guarantees consumers repayment of that deposit, known as the California Redemption Value or CRV, for each eligible container returned to a certified recycler. CalRecycle administers the program and handles all program payments, including CRV, through the BCRF. Despite paying the CRV deposit, not all consumers recycle their CRV-eligible containers. The BCRF retains unredeemed deposits, and state law requires much of the unredeemed CRV to be spent on specified recycling related programs, including the PMD program.

PMD Program. The PMD program was established in 2006 and authorizes payments for those California entities that wash and flake or pelletize plastic material in California and to California entities that manufacture new products out of California-based plastic flakes or pellets. According to CalRecycle, these payments help stabilize in-state recycling markets as global market conditions change; help increase the volume of clean recycled beverage container material available to California product manufacturers, thereby decreasing reliance on international markets; and encourage manufacturers outside of California to use post-consumer plastic from California.

SB 1013 (Atkins), Chapter 610, Statutes of 2022, authorized CalRecycle to make PMD payments from BCRF through June 30, 2025. Prior to the enactment of SB 1013, the PMD program had expired as of June 30, 2022. Subsequently, the Budget Act of 2023 appropriated $47 million from BCRF for PMD payments through June 30, 2027. CalRecycle posted a notice on its website in late 2023 announcing it will provide $10 million of this appropriation for payments in fiscal year 2023-24. According to CalRecycle, it is holding $2 million in a “reserve” and it provided $5 million in the third and fourth quarters of 2023. Beginning January 1, 2024, the department plans to expend the remaining $40 million and issue payments to reclaimers and manufacturers via quarterly payments using a new three-tier payment structure. However, while the funds appropriated in the Budget Act of 2023 are available for encumbrance or expenditure until June 30, 2027, the PMD program statutorily sunsets on July 1, 2025.

This bill extends the sunset by six months to allow CalRecycle additional time to award the funds that have been appropriated for the PMD program. It is not entirely clear why this bill does not align the program’s new sunset date with the longer 2027 encumbrance and expenditure deadline. The Alliance of Plastic Processors contends that extending the program beyond six months is not needed because while the law allows CalRecycle to provide up to $150/ton to participants, the program has always been oversubscribed and participants gets closer to $60/ton: “The California reclaiming industry needs a larger share of the Legislature’s increase in PMD incentives to compete with foreign market and virgin prices.” However, CalRecycle has not indicated that it can or plans to expend the remainder of the $47 million appropriation by the end of next year.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: March 19, 2024

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Isaac G. Bryan, Chair

ABPCA Bill Id:AB 2511 (

Author:Berman) – As Introduced Ver:February 13, 2024

SUBJECT: Beverage container recycling: market development payments

SUMMARY: Extends the sunset date for the Plastic Market Development Payment Program (PMDP) by six months, from July 1, 2025 to January 1, 2026.

EXISTING LAW establishes the Beverage Container Recycling and Litter Reduction Act (Bottle Bill) (Public Resources Code (PRC) 14500 et seq.), which:

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. Requires beverage distributors to pay a redemption payment to the Department of Resources Recycling and Recovery (CalRecycle) for every beverage container sold in the state. Provides that these funds are continuously appropriated to CalRecycle for, among other things, the payment of refund values and processing payments.
2. Defines “beverage” as:
   
   1. Beer and other malt beverages;
   2. Wine and distilled spirit coolers;
   3. Carbonated water;
   4. Noncarbonated water;
   5. Carbonated soft drinks;
   6. Noncarbonated soft drinks and sports drinks;
   7. Noncarbonated fruit juice drinks that contain any percentage of fruit juice;
   8. Coffee and tea drinks;
   9. Carbonated fruit drinks;
   10. Vegetable juice;
   11. Wine and sparkling wine; and,
   12. Distilled spirits. (PRC 14505)
       
3. Defines “beverage container” as the individual, separate bottle, can, jar, carton, or other receptacle in which a beverage is sold, and which is constructed of metal, glass, plastic, or any other material, or any combination of these materials. Specifies that “beverage container” does not include cups or other similar open or loosely sealed receptacles. (PRC 14505)
   
4. Requires plastic beverage containers subject to the Bottle Bill to contain the following percentages of postconsumer recycled plastic annually:
   
   1. From January 1, 2022 until December 31, 2024, no less than 15%;
   2. From January 1, 2025 until December 31, 2029, no less than 25%; and,
   3. On and after January 1, 2030, no less than 50%. (PRC 14547)
5. Establishes the PMDP, which authorizes CalRecycle to pay a market development payment to a reclaimer for empty plastic beverage containers collected and recycled and to a product manufacturer using recycled plastic from a reclaimer in the state, as specified. Sunsets this provision on July 1, 2025.

FISCAL EFFECT: Unknown

COMMENTS:

1. Bottle Bill. The Bottle Bill was established in 1986 to be a self-funded program that encourages consumers to recycle beverage containers and 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 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. Containers recycled through the Bottle Bill’s certified recycling centers also provides a consistent, clean, uncontaminated stream of recycled materials with minimal processing.
   
2. PMDP. The PMDP was established in 2006 facilitate the development of California markets for recycled empty plastic beverage containers. Recycling plastic containers in-state reduces landfill waste, reduced plastic pollution, and reduced greenhouse gas emissions. Subject to the availability of funds, CalRecycle makes payments of up to $10 million annually, to certified entities and California product manufacturers. Payments are available to certified entities that wash and produce flake, pellet, or other form usable for a product manufacturer from empty plastic beverage containers collected in the state for recycling; and, product manufacturers using the plastic material from a certified entity to manufacture plastic products in the state.

Only plastic beverage containers subject to the Bottle Bill are eligible for the PMDP, and each entity is responsible for ensuring that only CRV material is claimed. To assist in determining the proper amount of CRV materials claimed for PMDP, CalRecycle determines a statewide average PMDP rate for polyethylene terephthalate (PET) and high-density polyethylene (HDPE) annually. The rates are used to determine the total eligible PMDP payments for certified entities ad product manufacturers after excluding non-qualifying material.

The Budget Act of 2023, SB 101 (Budget), Chapter 610, Statutes of 2023, appropriated $47 million for the PMDP to be available for encumbrance or expenditure until June 30, 2027. CalRecycle is awarding $10 million of this appropriation for payments in the 2023-24 Fiscal Year.

1. This bill. This bill extends the sunset on the program to allow CalRecycle additional time to award the funds that have been appropriated for the PMDP.
2. Author’s statement:

AB 2511 would simply extend the Plastic Market Development program sunset date to more closely align with the budget appropriation date. This successful program incentivizes reuse of California-generated recycled beverage containers, creates and maintains jobs in California, and helps close the loop on plastic beverage container recycling. Prior to the enactment of this incentive program, virtually all of the plastic collected for recycling in California was exported overseas. However, as a result of this incentive program, there has been a significant increase in the in-state reuse of California-generated material. Reusing California-generated material here is not only environmentally beneficial; it creates and maintains jobs in California.

REGISTERED SUPPORT / OPPOSITION:

Support

Californians Against Waste

Opposition

None on file

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