Wieckowski bill to reduce fraud in beverage container recycling system sent to Governor

SB 38 eliminates cash payments from processors to recyclers

August 30, 2022

SACRAMENTO – The California State Senate today approved a bill by Senator Bob Wieckowski (D-Fremont) to help reduce fraud in the beverage container recycling system by prohibiting cash payments from processors to recyclers. Senate Bill 38 also requires the Department of Resources Recycling and Recovery (CalRecycle) to study and develop a system to address glass contamination in the recycling process.

SB 38 now heads to Governor Newsom for his signature.

“Modernizing our 35-year-old beverage container recycling program so that it matches the best practices of high performing systems in the world, has been one of my priorities for several years,” said Sen. Wieckowski, chair of the Senate Budget and Fiscal Review’s Subcommittee on Resources, Environmental Protection and Energy. “Our program no longer possesses the capabilities or technologies available to maximize collection and redemption, or meet our circular economy goals. No other programs have suffered the extensive loss of infrastructure and drop in redemption rates or deal with fraud and contamination as California. SB 38 addresses fraud in the system by prohibiting cash payments from processors to recyclers.  This will modernize the system to give CalRecycle better oversight and enforcement capabilities. The bill also directs the agency to develop a system to decrease the amount of glass contamination. Single-stream recycling systems result in substantial cross-contamination and a high percentage of glass ending up in our landfills.”

In Consumer Watchdog’s 2022 report Cash for Trash, it noted that annual estimates of fraud lost in the state’s beverage container recycling program range from $40 million to $200 million. Allowing cash payments allows greater opportunities for tax evasion and scams that defraud the state, according to the report.

“The California bottle bill needs many changes and SB 38 is taking steps in the right direction,” said Jeff Donlevy, general manager of Mings Resources – East Bay. “SB 38 will help identify quality improvements needed to improve the quality of glass in the program and will put all recycling centers and processors on a level field requiring payments from processors to recycling centers to be made by check or electronic transfer, rather than by cash. Processors paying by cash are promoting a cash economy that could lead some sites to under report revenue or pay employees or vendors by cash and avoid having to pay all required taxes or other required payments. SB 38 will help improve the program for the long term.”

SB 38 is supported by the Container Recycling Institute, Consumer Watchdog, Mings Resources Bay Area, DC Metals and Recycling, Story of Stuff, Clynk and Tomra.

Senator Wieckowski represents the 10th District, which includes southern Alameda County and parts of Santa Clara County.