Chamber Blows the Whistle|on Sticky-Fingered California

OAKLAND, Calif. (CN) - The California Chamber of Commerce wants California to return more than $480 million it took as "loans" from the Beverage Container Recycling fund and put into the General Fund and Air Pollution Control fund. Lack of money in the recycling fund has driven up processing fees by 700 percent, the Chamber claims in Superior Court.

The Beverage Container Recycling and Litter Reduction Act requires beverage manufacturers to pay a processing fee on certain beverage containers sold in California.

Beverage distributors also have to make redemption payments, known as the California Redemption Value, which is ultimately passed on to consumers.

Both fees are deposited into the recycling fund, which is used to pay people who return empty bottles. The revenue is also used to pay recyclers to help cover the costs of collecting and sorting bottles and containers.

The fund is also used to offset processing fees paid by manufacturers.

The size of the processing fees paid by manufacturers and the payments made to recyclers depends upon the availability of revenue in the recycling fund.

From fiscal years 2002-03 through 2009-10 more than $560 million was transferred from the Beverage Container Recycling Act fund as "loans" that were supposed to be paid back, the Chamber says.

The Legislature's Budget Conference Committee has reported that by June 2010, the recycling fund will have a negative balance of $160 million, according to the complaint. In July 2009, the California Department of Conservation responded by increasing the processing fees for glass and plastic by as much as 700 percent. It also substantially reduced the processing payments to recyclers.

The Chamber wants fund transfers funds from fiscal years 2002-03 through 2009-10 declared invalid, and it seeks writ of mandate ordering California Controller John Chiang and Director of Finance Michael Genest to return the "loaned" money.

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