First on NBC Bay Area: Millions in CRV Fees Not Collected by CalRecycle

An NBC Bay Area investigation found hundreds of California stores owe the state millions of dollars combined in CRV redemption opt-out fees. Why aren't they paying?

NBCUniversal, Inc.

More than 400 California retailers owe the state of California a combined $12.2 million in CRV "opt-out" fees, according to records obtained by NBC Bay Area.

That discovery comes as California legislators are working on a number of proposed overhauls to the state's troubled recycling program, as more consumers find themselves unable to get back their five- and ten-cent deposits paid for every canned and bottled beverage.

NBC Bay Area first began investigating the recycling crisis last summer, after hundreds of recycling redemption centers closed when the state's largest operator went out of business. The sharp reduction in places to return cans and bottles for California Redemption Value (CRV) deposits has left avid recyclers like Victor Sheehan with stacks of plastic and aluminum piling up in his yard.

"Right now, I've got eight bags full of stuff," the San Jose retiree said. "Nowhere to take them. Nowhere."

State law requires many stores to take back cans and bottles and pay CRV for them in the absence of a nearby dedicated recycling center. However, the law also lets any store buy its way out, by paying a $100-per-day fee instead of accepting recyclables.

According to CalRecycle, the state agency that oversees the CRV program, 434 stores statewide have opted out, and agreed to pay the $100 daily fee. But records obtained by NBC Bay Area show 410 of those accounts were past due as of December 5, 2019, the most recent date for which data was available. Collectively, the stores owe the state $12,207,600.

Some major retailers were listed as being hundreds of thousands of dollars behind: Walmart owed the state $312,600; Safeway owed $256,000; and Walgreens owed $172,000.

NBC Bay Area reached out to all three companies about those payments. A Safeway spokesperson told us the grocery chain "...had some questions about the latest invoice from CalRecycle" and that it had "...reached out to them for clarification and/or correction."

A Walgreens spokesperson said the pharmacy chain "...self-identified this issue a few weeks ago" and that it has "...been working with the state to bring our account up to date."

Walmart did not respond to our request for comment.

It's not just big companies that are behind on payments to the state. Our investigation found many small liquor stores, gas station convenience stores, and other shops also owe tens of thousands of dollars. More than 100 such retailers are in the San Francisco Bay Area, 18 of which owe the state $94,200 each. At $100 per day in fines, our analysis indicates that would mean those retailers are each at least two-and-a-half years behind on CRV opt-out payments.

Retailers That Owe Money to CalRecycle

Certain beverage dealers who opt-out of accepting recyclables and paying CRV deposits must pay CalRecycle $100 per day. These data represent money owed to CalRecycle as of Dec. 5, 2019.

Source: CalRecycle
Credit: Sean Myers/NBC Bay Area

NBC Bay Area reached out to all 18 of those Bay Area stores. One, an Arco service station in San Lorenzo, told us it is disputing its bill with the state. Managers at a San Francisco market and an Oakland Valero gas station both said they didn't know they owe more than $90,000 each. The rest did not respond to our inquiries, or could not be reached.

A CalRecycle spokesperson told us it mails out official notices to retailers who owe CRV opt-out payments, and that the agency can ultimately take legal action if they don't pay. That's what it did late last year, when it accused pharmacy chain CVS of not paying more than $1.8 million in CRV fees. At the time, a CVS spokesperson said the company was "reviewing the state of California's filing."

What about the additional $12 million that other stores owe the state? Why hasn't CalRecycle pursued them more aggressively?

CalRecycle declined to provide anyone for an on-camera interview with NBC Bay Area. By email, a spokesperson told us: “Legal action against California retailers is an extraordinary step because it requires resources and a great deal of time to see through to completion.”

Meanwhile, lawmakers in Sacramento are running out of patience. Assemblymember Phil Ting, D-San Francisco, said he expects CalRecycle to hold all those stores accountable.

“People may say, ‘Hey, these fines, I haven’t had to pay them; it’s okay,’" Asm. Ting said. "But unfortunately, when the state calls, they’re going to have to pay all of it.”

Asm. Ting is pushing the California Legislature for a total CRV overhaul. It could take years, but Ting says it's necessary.

"The program is stuck in the mud," he said. "We really need to re-think this program, and completely redesign this program."

Already, efforts to do so have run into opposition from various beverage industry interests. The Beverage Container Recycling Act of 2020, sponsored by State Sen. Bob Wieckowski of Fremont, cleared a key Senate committee earlier this month, but failed in a general Senate vote on Wednesday. California Beer & Beverage Distributors, the Wine Institute, Family Winemakers of California, and the Institute of Scrap Recycling Industries voiced concerns about the bill's possible impact on their members' businesses.

Back in San Jose, Victor Shaheen just wants lawmakers to do something. Like many others who've complained to us about CRV, he's running out of space -- and patience.

"The problem is now," Shaheen said. "It's going to get worse down the road.

If you have bottles and cans you'd like to redeem for CRV deposits, you can find a CRV redemption center near you by clicking here. If you find that a listed location refuses to accept your recycling and pay you for CRV, please let us know: call 888-996-TIPS or click here to contact us.

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