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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-20</ns0:ActionDate>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Cabaldon</ns0:AuthorText>
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<ns0:Name>Cabaldon</ns0:Name>
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<ns0:Title> An act to amend Section 14575 of the Public Resources Code, relating to beverage containers. </ns0:Title>
<ns0:RelatingClause>beverage containers</ns0:RelatingClause>
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<ns0:Subject>Beverage containers: wine and distilled spirits: processing fees.</ns0:Subject>
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<html:p>The California Beverage Container Recycling and Litter Reduction Act requires a beverage manufacturer to pay to the Department of Resources Recycling and Recovery a processing fee for each beverage container, as defined, sold or transferred in this state. The act requires the department to deposit the fee into the California Beverage Container Recycling Fund, a continuously appropriated fund. The act requires the department to pay processing payments to processors and recycling centers from the fund, as specified. The act requires the processing payment to be at least equal to the difference between the scrap value of the beverage containers and the sum of certain actual operational costs for certified recycling centers and a reasonable financial return for recycling centers, as specified. The act requires the processing fee to be 65% of the processing payment, except as specified.</html:p>
<html:p>This bill would authorize the department to reduce the processing fee for a beverage container that is a box, bladder, or pouch, or similar container containing wine or distilled spirits if the department determines the aggregate amount forecasted to be collected from that processing fee will exceed by at least an unspecified percentage the aggregate amount needed to pay the corresponding processing payment.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 14575 of the
<ns0:DocName>Public Resources Code</ns0:DocName>
is amended to read:
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<html:p>
(a)
<html:span class="EnSpace"/>
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 or before January 1 of each year, establish a processing fee and a processing payment for the container by the type of the material of the container.
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<html:p>
(b)
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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:
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<html:p>
(1)
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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.
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<html:p>
(2)
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A reasonable financial return for recycling centers.
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<html:p>
(c)
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The department shall base the processing payment pursuant to this section upon all of the following:
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<html:p>
(1)
<html:span class="EnSpace"/>
Except as provided in paragraph (2), for calculating processing payments, the department shall determine the actual costs for certified recycling centers, every two years, 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.
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<html:p>
(2)
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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:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
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.
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<html:p>
(B)
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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.
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<html:p>
(d)
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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).
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<html:p>
(e)
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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:
</html:p>
<html:p>
(1)
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On January 1 of each year, the processing fee shall equal the following amounts:
</html:p>
<html:p>
(A)
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Ten percent of the processing payment for a container type with a recycling rate equal to or greater than 75 percent.
</html:p>
<html:p>
(B)
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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.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(D)
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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.
</html:p>
<html:p>
(E)
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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.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(H)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(I)
<html:span class="EnSpace"/>
Sixty-five percent of the processing payment for a container type with a recycling rate less than 30 percent.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Notwithstanding paragraph (1), if 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, the beverage manufacturer may make a single annual payment of processing fees, if the beverage manufacturer meets either of the following conditions:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
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).
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
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).
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
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).
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
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).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
The department may reduce the processing fee paid by a beverage manufacturer for 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, if the department determines the aggregate amount forecasted to be collected from that processing fee will exceed by at least ___ percent the aggregate amount needed to pay the corresponding processing payment.
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