Bill Text: CA AB457 | 2023-2024 | Regular Session | Enrolled

---

Bill Title: Beverage containers: recycling: redemption payment and refund value: annual redemption and processing fee payments.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2024-09-20 - Vetoed by Governor. [AB457 Detail]

Download: California-2023-AB457-Enrolled.html

---

Enrolled  September 04, 2024

Passed  IN  Senate  August 28, 2024

Passed  IN  Assembly  August 30, 2024

Amended  IN  Senate  August 23, 2024

Amended  IN  Senate  June 20, 2024

Amended  IN  Senate  June 06, 2024

Amended  IN  Senate  April 24, 2024

Amended  IN  Senate  September 08, 2023

Amended  IN  Senate  June 29, 2023

Amended  IN  Assembly  March 15, 2023

Amended  IN  Assembly  February 27, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 457

---

Introduced by Assembly Member Aguiar-Curry

February 06, 2023

---

An act to amend Sections 14574 and 14575 of, and to amend, repeal, and add Section 14560 of, the Public Resources Code, relating to beverage containers, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL'S DIGEST

AB 457, Aguiar-Curry. Beverage containers: recycling: redemption payment and refund value: annual redemption and processing fee payments.

The California Beverage Container Recycling and Litter Reduction Act, a violation of which is a crime, requires a distributor of beverage containers, as defined, to pay to the Department of Resources Recycling and Recovery a monthly redemption payment for every beverage container sold or transferred, as provided. The act requires the department to deposit those amounts into the California Beverage Container Recycling Fund. The fund is continuously appropriated to, among other things, pay refund values and administrative fees to processors that receive empty beverage containers from recyclers. The act specifies that a beverage container that is a box, bladder, or pouch, or similar container, containing wine or distilled spirits has a redemption payment and refund value of $0.25.

This bill would reduce the redemption payment and refund value for one of those wine or distilled spirit beverage containers, if it has a capacity of less than 24 fluid ounces, from $0.25 to $0.10, beginning January 1, 2025. By expanding the scope of a crime, the bill would impose a state-mandated local program.

The act authorizes a distributor that displays a pattern of operation in compliance with the act and regulations adopted pursuant to the act, to the satisfaction of the department, to make a single annual payment of redemption payments. The act requires a beverage manufacturer to pay to the department a specified processing fee for each beverage container sold or transferred within 40 days of the sale, as provided. The act authorizes a beverage manufacturer that displays a pattern of operation in compliance with the act and regulations adopted pursuant to the act, to the satisfaction of the department, to make a single annual payment of processing fees, if the beverage manufacturer meets certain conditions.

This bill would additionally authorize a distributor who sells or transfers not more than 375,000 beverage containers annually, as specified, to make a single annual payment of redemption payments, except as provided. The bill would additionally authorize a beverage manufacturer who sells or transfers not more than 375,000 beverage containers annually, as specified, to make a single annual payment of processing fees, except as provided.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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

Digest Key

Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

---

Bill Text

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

SECTION 1.

 Section 14560 of the Public Resources Code is amended to read:

14560.

 (a) (1) Except as provided in paragraph (3), a beverage distributor shall pay the department, for deposit into the fund, a redemption payment of four cents ($0.04) for a beverage container sold or offered for sale in the state by the distributor.

(2) A beverage container with a capacity of 24 fluid ounces or more shall be considered as two beverage containers for purposes of redemption payments paid pursuant to paragraph (1).

(3) (A) The amount of the redemption payment and refund value for a beverage container with a capacity of less than 24 fluid ounces sold or offered for sale in the state by a dealer shall equal five cents ($0.05), and the amount of redemption payment and refund value for a beverage container with a capacity of 24 fluid ounces or more shall be ten cents ($0.10), if the aggregate recycling rate reported pursuant to Section 14551 for all beverage containers subject to this division is less than 75 percent for the 12-month reporting period from January 1, 2006, to December 31, 2006, or for any calendar year thereafter.

(B) A distributor shall not be required to pay a redemption payment pursuant to this section for a beverage container used solely to pour wine, beer, or distilled spirits sold or offered to consumers for consumption on the premises by a wine, beer, or distilled spirits tasting room licensed pursuant to the Alcoholic Beverage Control Act (Division 9 (commencing with Section 23000) of the Business and Professions Code).

(4) (A) Notwithstanding Section 14511, with respect to the payment of redemption payments for beverages manufactured outside the state and sold directly to consumers within the state with a direct shipper permit, the distributor shall be deemed to be the person or entity named on the direct shipper permit issued pursuant to Section 23661.3 of the Business and Professions Code, and shall be responsible for paying to the department the total redemption payment for all sales and transfers made directly to consumers in the state. If the department is unable to collect the redemption payment from the person or entity named on the direct shipper permit, the department shall give written notice by certified mail, return receipt requested, to that person or entity. The notice shall state that the person or entity shall not be permitted to offer that beverage brand for sale within the state. If the person or entity fails to remit the redemption payment within 30 days of issuance of the notice, the department shall notify the Department of Alcoholic Beverage Control that the permitholder has failed to comply, and the Department of Alcoholic Beverage Control shall prohibit the offering for sale of that beverage brand within the state.

(B) The department and the Department of Alcoholic Beverage Control shall enter into a contract, pursuant to Section 14536.5, concerning the implementation of this paragraph, which shall include a provision reimbursing the Department of Alcoholic Beverage Control for its costs incurred in implementing this paragraph. The department may expend the amount necessary for that reimbursement from the fund.

(b) Except as provided in paragraph (3) of subdivision (a), a beverage container sold or offered for sale in the state has a refund value of four cents ($0.04) if the beverage container has a capacity of less than 24 fluid ounces and eight cents ($0.08) if the beverage container has a capacity of 24 fluid ounces or more.

(c) Commencing January 1, 2024, and notwithstanding subdivisions (a) and (b), a beverage container that is a box, bladder, or pouch, or similar container, containing wine or distilled spirits, as described in paragraph (12) of subdivision (a) of Section 14504, sold or offered for sale in the state shall have a redemption payment and refund value of twenty-five cents ($0.25).

(d) This section does not apply to a refillable beverage container.

(e) This section shall remain in effect only until January 1, 2025, and as of that date is repealed.

SEC. 2.

 Section 14560 is added to the Public Resources Code, to read:

14560.

 (a) (1) Except as provided in paragraph (3), a beverage distributor shall pay the department, for deposit into the fund, a redemption payment of four cents ($0.04) for a beverage container sold or offered for sale in the state by the distributor.

(2) A beverage container with a capacity of 24 fluid ounces or more shall be considered as two beverage containers for purposes of redemption payments paid pursuant to paragraph (1).

(3) (A) The amount of the redemption payment and refund value for a beverage container with a capacity of less than 24 fluid ounces sold or offered for sale in the state by a dealer shall equal five cents ($0.05), and the amount of redemption payment and refund value for a beverage container with a capacity of 24 fluid ounces or more shall be ten cents ($0.10), if the aggregate recycling rate reported pursuant to Section 14551 for all beverage containers subject to this division is less than 75 percent for the 12-month reporting period from January 1, 2006, to December 31, 2006, or for any calendar year thereafter.

(B) A distributor shall not be required to pay a redemption payment pursuant to this section for a beverage container used solely to pour wine, beer, or distilled spirits sold or offered to consumers for consumption on the premises by a wine, beer, or distilled spirits tasting room licensed pursuant to the Alcoholic Beverage Control Act (Division 9 (commencing with Section 23000) of the Business and Professions Code).

(4) (A) Notwithstanding Section 14511, with respect to the payment of redemption payments for beverages manufactured outside the state and sold directly to consumers within the state with a direct shipper permit, the distributor shall be deemed to be the person or entity named on the direct shipper permit issued pursuant to Section 23661.3 of the Business and Professions Code, and shall be responsible for paying to the department the total redemption payment for all sales and transfers made directly to consumers in the state. If the department is unable to collect the redemption payment from the person or entity named on the direct shipper permit, the department shall give written notice by certified mail, return receipt requested, to that person or entity. The notice shall state that the person or entity shall not be permitted to offer that beverage brand for sale within the state. If the person or entity fails to remit the redemption payment within 30 days of issuance of the notice, the department shall notify the Department of Alcoholic Beverage Control that the permitholder has failed to comply, and the Department of Alcoholic Beverage Control shall prohibit the offering for sale of that beverage brand within the state.

(B) The department and the Department of Alcoholic Beverage Control shall enter into a contract, pursuant to Section 14536.5, concerning the implementation of this paragraph, which shall include a provision reimbursing the Department of Alcoholic Beverage Control for its costs incurred in implementing this paragraph. The department may expend the amount necessary for that reimbursement from the fund.

(b) Except as provided in paragraph (3) of subdivision (a), a beverage container sold or offered for sale in the state has a refund value of four cents ($0.04) if the beverage container has a capacity of less than 24 fluid ounces and eight cents ($0.08) if the beverage container has a capacity of 24 fluid ounces or more.

(c) (1) Notwithstanding subdivisions (a) and (b), a beverage container that is a box, bladder, or pouch, or similar container, containing wine or distilled spirits, as described in paragraph (12) of subdivision (a) of Section 14504, sold or offered for sale in the state shall have a redemption payment and refund value of ten cents ($0.10) if the beverage container has a capacity of less than 24 fluid ounces and twenty-five cents ($0.25) if the beverage container has a capacity of 24 fluid ounces or more.

(2) A dealer shall have until January 15, 2025, to comply with the provisions of subdivision (c) of Section 14560.5 regarding shelf labels for a beverage that has a different redemption payment on January 1, 2025, than it had on December 31, 2024.

(d) This section does not apply to a refillable beverage container.

(e) This section shall become operative on January 1, 2025.

SEC. 3.

 Section 14574 of the Public Resources Code is amended to read:

14574.

 (a) (1) A distributor of beverage containers shall pay to the department the redemption payment for every beverage container, other than a refillable beverage container, sold or transferred to a dealer, less 1.5 percent for the distributor’s administrative costs.

(2) The payment made by a distributor shall be made not later than the last day of the month following the sale. The distributor shall make the payment in the form and manner that the department prescribes.

(b) (1) Notwithstanding subdivision (a), a distributor may make a single annual payment of redemption payments if any of the following conditions are met:

(A) A distributor displays a pattern of operation in compliance with this division and the regulations adopted pursuant to this division, to the satisfaction of the department, and the distributor’s projected redemption payment for a calendar year totals less than seventy-five thousand dollars ($75,000).

(B) Subject to the provisions of paragraph (4), a distributor has been in operation for one or more years and sold or transferred to a dealer not more than 375,000 beverage containers in the prior calendar year.

(C) Subject to the provisions of paragraph (4), a distributor has not been in operation for one or more calendar years and projects to sell or transfer to a dealer not more than 375,000 beverage containers in the current calendar year.

(2) An annual redemption payment made pursuant to this subdivision is due and payable on or before February 1 for every beverage container sold or transferred by the distributor to a dealer in the previous calendar year.

(3) A distributor shall notify the department of its intent to make an annual redemption payment pursuant to this subdivision on or before January 31 of the calendar year for which the payment will be due.

(4) The department may revoke a distributor’s option to make a single annual payment of redemption payments who otherwise meets the criteria in subparagraph (B) or (C) of paragraph (1) if the department determines the distributor is not in compliance with paragraph (2) or (3) or associated reporting requirements.

SEC. 4.

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

14575.

 (a) If any type of empty beverage container with a refund value established pursuant to Section 14560 has a scrap value less than the cost of recycling, the department shall, on January 1, 2000, and on or before January 1 annually thereafter, establish a processing fee and a processing payment for the container by the type of the material of the container.

(b) The processing payment shall be at least equal to the difference between the scrap value offered to a statistically significant sample of recyclers by willing purchasers, and except for the initial calculation made pursuant to subdivision (d), the sum of both of the following:

(1) The actual cost for certified recycling centers, excluding centers receiving a handling fee, of receiving, handling, storing, transporting, and maintaining equipment for each container sold for recycling or, only if the container is not recyclable, the actual cost of disposal, calculated pursuant to subdivision (c). The department shall determine the statewide weighted average cost to recycle each beverage container type, which shall serve as the actual recycling costs for purposes of paragraph (2) of subdivision (c), by conducting a survey of the costs of a statistically significant sample of certified recycling centers, excluding those recycling centers receiving a handling fee, for receiving, handling, storing, transporting, and maintaining equipment.

(2) A reasonable financial return for recycling centers.

(c) The department shall base the processing payment pursuant to this section upon all of the following:

(1) Except as provided in paragraph (2), for calculating processing payments that will be in effect on and after January 1, 2004, the department shall determine the actual costs for certified recycling centers, every second year, pursuant to paragraph (1) of subdivision (b). The department shall adjust the recycling costs annually to reflect changes in the cost of living, as measured by the Bureau of Labor Statistics of the United States Department of Labor or a successor agency of the United States government.

(2) On and after January 1, 2010, the department shall use the most recently published, measured actual costs of recycling for a specific beverage container material type if the department determines the number of beverage containers for that material type that is returned for recycling pursuant to Section 14551, based on the most recently published calendar year number of beverage containers returned for recycling, is less than 5 percent of the total number of beverage containers returned for recycling for all material types. The department shall determine the actual recycling cost to be used for calculating processing payments for those beverage containers in the following manner:

(A) The department shall adjust the costs of recycling that material type every second year by the percentage change in the most recently measured cost of recycling HDPE plastic beverage containers, as determined by the department. The department shall use the percentage change in costs of recycling HDPE plastic beverage containers for this purpose, even if HDPE plastic beverage containers are less than 5 percent of the total volume of returned beverage containers.

(B) The department shall adjust the recycling costs annually for that material type to reflect changes in the cost of living, as measured by the Bureau of Labor Statistics of the United States Department of Labor or a successor agency of the United States government.

(d) Except as specified in subdivision (e), the actual processing fee paid by a beverage manufacturer shall equal 65 percent of the processing payment calculated pursuant to subdivision (b).

(e) The department, consistent with Section 14581 and subject to the availability of funds, shall reduce the processing fee paid by beverage manufacturers by expending funds in each material processing fee account, in the following manner:

(1) On January 1, 2005, and annually thereafter, the processing fee shall equal the following amounts:

(A) Ten percent of the processing payment for a container type with a recycling rate equal to or greater than 75 percent.

(B) Eleven percent of the processing payment for a container type with a recycling rate equal to or greater than 65 percent, but less than 75 percent.

(C) Twelve percent of the processing payment for a container type with a recycling rate equal to or greater than 60 percent, but less than 65 percent.

(D) Thirteen percent of the processing payment for a container type with a recycling rate equal to or greater than 55 percent, but less than 60 percent.

(E) Fourteen percent of the processing payment for a container type with a recycling rate equal to or greater than 50 percent, but less than 55 percent.

(F) Fifteen percent of the processing payment for a container type with a recycling rate equal to or greater than 45 percent, but less than 50 percent.

(G) Eighteen percent of the processing payment for a container type with a recycling rate equal to or greater than 40 percent, but less than 45 percent.

(H) Twenty percent of the processing payment for a container type with a recycling rate equal to or greater than 30 percent, but less than 40 percent.

(I) Sixty-five percent of the processing payment for a container type with a recycling rate less than 30 percent.

(2) The department shall calculate the recycling rate for purposes of paragraph (1) based on the 12-month period ending on June 30 that directly precedes the date of the January 1 processing fee determination.

(f) Not more than once every three months, the department may make an adjustment in the amount of the processing payment established pursuant to this section for any beverage container, based on the applicable preceding 12-month average scrap value or the preceding 3-month average scrap value, whichever is lower. Quarterly adjustments made pursuant to this subdivision shall not cause a change in the annual January 1 processing fee established by this section.

(g) (1) Except as provided in paragraphs (2) and (3), every beverage manufacturer shall pay to the department the applicable processing fee for each container sold or transferred to a distributor or dealer within 40 days of the sale in the form and in the manner that the department may prescribe.

(2) (A) Notwithstanding Section 14506, with respect to the payment of processing fees for beer and other malt beverages manufactured outside the state, the beverage manufacturer shall be deemed to be the person or entity named on the certificate of compliance issued pursuant to Section 23671 of the Business and Professions Code. With respect to the payment of processing fees for beverages manufactured outside the state and sold directly to consumers within the state with a direct shipper permit, the beverage manufacturer shall be deemed to be the person or entity named on the direct shipper permit issued pursuant to Section 23661.3 of the Business and Professions Code, and shall be responsible for paying to the department the total processing fee payment for all sales and transfers made directly to consumers in the state. If the department is unable to collect the processing fee from the person or entity named on the certificate of compliance or direct shipper permit, the department shall give written notice by certified mail, return receipt requested, to that person or entity. The notice shall state that the processing fee shall be remitted in full within 30 days of issuance of the notice or the person or entity shall not be permitted to offer that beverage brand for sale within the state. If the person or entity fails to remit the processing fee within 30 days of issuance of the notice, the department shall notify the Department of Alcoholic Beverage Control that the certificate holder has failed to comply, and the Department of Alcoholic Beverage Control shall prohibit the offering for sale of that beverage brand within the state.

(B) The department shall enter into a contract with the Department of Alcoholic Beverage Control, pursuant to Section 14536.5, concerning the implementation of this paragraph, which shall include a provision reimbursing the Department of Alcoholic Beverage Control for its costs incurred in implementing this paragraph.

(3) (A) Notwithstanding paragraph (1), a beverage manufacturer may make a single annual payment of processing fees, if the beverage manufacturer meets any of the following conditions:

(i) A beverage manufacturer displays a pattern of operation in compliance with this division and the regulations adopted pursuant to this division, to the satisfaction of the department, and the beverage manufacturer meets either of the following:

(I) If the redemption payment and refund value is not increased pursuant to paragraph (3) of subdivision (a) of Section 14560, the beverage manufacturer’s projected processing fees for a calendar year total less than ten thousand dollars ($10,000).

(II) If the redemption payment and refund value is increased pursuant to paragraph (3) of subdivision (a) of Section 14560, the beverage manufacturer’s projected processing fees for a calendar year total less than fifteen thousand dollars ($15,000).

(ii) Subject to the provisions of subparagraph (D), a beverage manufacturer has been in operation for one or more years and sold or transferred to a distributor or dealer not more than 375,000 beverage containers in the prior calendar year.

(iii) Subject to the provisions of subparagraph (D), a beverage manufacturer has not been in operation for one or more years and projects to sell or transfer to a distributor or dealer not more than 375,000 beverage containers in the current calendar year.

(B) An annual processing fee payment made pursuant to this paragraph is due and payable on or before February 1 for every beverage container sold or transferred by the beverage manufacturer to a distributor or dealer in the previous calendar year.

(C) A beverage manufacturer shall notify the department of its intent to make an annual processing fee payment pursuant to this paragraph on or before January 31 of the calendar year for which the payment will be due.

(D) The department may revoke a beverage manufacturer’s option to make a single annual payment of processing fees who otherwise meets the criteria in clause (ii) or (iii) of subparagraph (A) if the department determines the beverage manufacturer is not in compliance with subparagraph (B) or (C) or associated reporting requirements.

(4) The department shall pay the processing payments on redeemed containers to processors, in the same manner as it pays refund values pursuant to Sections 14573 and 14573.5. The processor shall pay the recycling center the entire processing payment representing the actual costs and financial return incurred by the recycling center, as specified in subdivision (b).

(h) When assessing processing fees pursuant to subdivision (a), the department shall assess the processing fee on each container sold, as provided in subdivisions (d) and (e), by the type of material of the container, assuming that every container sold will be redeemed for recycling, whether or not the container is actually recycled.

(i) The container manufacturer, or a designated agent, shall pay to, or credit, the account of the beverage manufacturer in an amount equal to the processing fee.

(j) If, at the end of any calendar year for which glass recycling rates equal or exceed 45 percent and sufficient surplus funds remain in the glass processing fee account to make the reduction pursuant to this subdivision or if, at the end of any calendar year for which PET recycling rates equal or exceed 45 percent and sufficient surplus funds remain in the PET processing fee account to make the reduction pursuant to this subdivision, the department shall use these surplus funds in the respective processing fee accounts in the following calendar year to reduce the amount of the processing fee that would otherwise be due from glass or PET beverage manufacturers pursuant to this subdivision.

(1) The department shall reduce the glass or PET processing fee amount pursuant to this subdivision in addition to any reduction for which the glass or PET beverage container qualifies under subdivision (e).

(2) The department shall determine the processing fee reduction by dividing two million dollars ($2,000,000) from each processing fee account by an estimate of the number of containers sold or transferred to a distributor during the previous calendar year, based upon the latest available data.

(k) (1) Commencing January 1, 2024, a processing fee equivalent to the processing fee applied to HDPE beverage containers shall be applied to a beverage container that is a box, bladder, or pouch, or similar container, containing wine or distilled spirits, as described in paragraph (12) of subdivision (a) of Section 14504.

(2) Commencing January 1, 2024, a processing payment equal to the processing payment applied to HDPE beverage containers shall be applied to a beverage container that is a box, bladder, or pouch, or similar container, containing wine or distilled spirits, as described in paragraph (12) of subdivision (a) of Section 14504.

(3) This subdivision shall become inoperative on January 1, 2026.

SEC. 5.

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

SEC. 6.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:

In order to encourage the recycling of beverage containers, thereby protecting the public health and safety and the environment, and to support the health of small beverage container manufacturer businesses by making compliance easier, it is necessary that this act take effect immediately.