(a) The department shall adopt guidelines and methods for paying handling fees to supermarket sites, nonprofit convenience zone recyclers, or rural region recyclers to provide an incentive for the redemption of empty beverage containers in convenience zones. The guidelines shall include, but not be limited to, all of the following:

1. (1) Handling fees shall be paid on a monthly basis, in the form and manner adopted by the department. The department shall require that claims for the handling fee be filed with the department not later than the first day of the second month following the month for which the handling fee is claimed as a condition of receiving any handling fee.

2. (2) The department shall determine the number of eligible containers per site for which a handling fee will be paid in the following manner:

   1. (A) Each eligible site’s combined monthly volume of glass and plastic beverage containers shall be divided by the site’s total monthly volume of all empty beverage container types.
   2. (B) If the quotient determined pursuant to subparagraph (A) is equal to, or more than, 10 percent, the total monthly volume of the site shall be the maximum volume that is eligible for a handling fee for that month.
   3. (C) If the quotient determined pursuant to subparagraph (A) is less than 10 percent, the department shall divide the volume of glass and plastic beverage containers by 10 percent. That quotient shall be the maximum volume that is eligible for a handling fee for that month.

3. (3)

   1. (A) On and after the effective date of the act amending this section during the 2023–24 Regular Session, and until June 30, 2026, the department shall pay a handling fee per eligible container in the amount determined pursuant to subdivisions (f) and (g).
   2. (B) On and after July 1, 2026, the department shall pay a handling fee per eligible container in the amount determined pursuant to subdivision (f).
4. (4) If the eligible volume in any given month would result in handling fee payments that exceed the allocation of funds for that month, as provided in subdivision (b), sites with higher eligible monthly volumes shall receive handling fees for their entire eligible monthly volume before sites with lower eligible monthly volumes receive any handling fees.

5. (5)

   1. (A) If a dealer where a supermarket site, nonprofit convenience zone recycler, or rural region recycler is located ceases operation for remodeling or for a change of ownership, the operator of that supermarket site, nonprofit convenience zone recycler, or rural region recycler shall be eligible to apply for handling fees for that site for a period of three months following the date of the closure of the dealer.
   2. (B) Every supermarket site operator, nonprofit convenience zone recycler, or rural region recycler shall promptly notify the department of the closure of the dealer where the supermarket site, nonprofit convenience zone recycler, or rural region recycler is located.
   3. (C) Notwithstanding subparagraph (A), any operator who fails to provide notification to the department pursuant to subparagraph (B) shall not be eligible to apply for handling fees.

(c)

1. (1) The department shall not make handling fee payments to more than one certified recycling center in a convenience zone. If a dealer is located in more than one convenience zone, the department shall offer a single handling fee payment to a supermarket site located at that dealer. This handling fee payment shall not be split between the affected zones. The department shall stop making handling fee payments if another recycling center certifies to operate within the convenience zone without receiving payments pursuant to this section, if the department monitors the performance of the other recycling center for 60 days and determines that the recycling center is in compliance with this division. Any recycling center that locates in a convenience zone, thereby causing a preexisting recycling center to become ineligible to receive handling fee payments, is ineligible to receive any handling fee payments in that convenience zone.

2. (2) The department shall offer a single handling fee payment to a rural region recycler located anywhere inside a convenience zone, if that convenience zone is not served by another certified recycling center and the rural region recycler does either of the following:

   1. (A) Operates a minimum of 30 hours per week in one convenience zone.

   2. (B) Serves two or more convenience zones, and meets all of the following criteria:

      1. (i) Is the only certified recycler within each convenience zone.
      2. (ii) Is open and operating at least eight hours per week in each convenience zone and is certified at each location.
      3. (iii) Operates at least 30 hours per week in total for all convenience zones served.

(f)

1. (1) On or before January 1, 2008, and every two years thereafter, the department shall conduct a survey pursuant to this subdivision of a statistically significant sample of handling fee payment recipients to determine the actual cost incurred for the redemption of empty beverage containers by those handling fee payment recipients. The department shall conduct these cost surveys in conjunction with the cost surveys performed by the department pursuant to subdivision (b) of Section 14575 to determine processing payments and processing fees. The department shall include, in determining the actual costs, only those allowable costs contained in the regulations adopted pursuant to this division that are used by the department to conduct cost surveys pursuant to subdivision (b) of Section 14575.
2. (2) Using the information obtained pursuant to paragraph (1), the department shall then determine the statewide weighted average cost incurred for the redemption of empty beverage containers, per empty beverage container, by handling fee payment recipients.

3. (3) Except as provided in subdivision (g), the department shall determine the amount of the handling fee to be paid for each empty beverage container as follows:

   1. (A) Until June 30, 2027, and except as provided in subparagraph (B), the amount shall be determined using a methodology established by the department reflecting the cost of providing and maintaining recycling in convenience zones by handling fee recipients, including transportation, labor, volume, consumer convenience, and increasing recycling rates. The methodology may include tiered handling fee rates reflecting differing costs within convenience zones or regions based on respective volume or location. This subparagraph shall become inoperative on July 1, 2027.
   2. (B) On and after June 30, 2026, and if the department has not established a method pursuant to subparagraph (A), the amount shall be determined by subtracting the amount of the statewide weighted average cost per container to redeem empty beverage containers by handling fee payment recipients that do not receive handling fees from the amount of the statewide weighted average cost per container determined pursuant to paragraph (2).
4. (4) The department shall adjust the statewide average cost determined pursuant to paragraph (2) for each beverage container 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.
5. (5) The cost information collected pursuant to this section for handling fee payment recipients shall not be used in the calculation of the processing payments determined pursuant to Section 14575.

(g)

1. (1) On and after the effective date of the act amending this section during the 2023–24 Regular Session, and until June 30, 2026, the per-container handling fee shall not be less than the amount of the per-container handling fee that was in effect on July 1, 2023. If the effective date of the act amending this section during the 2023–24 Regular Session is after July 1, 2024, the department shall pay eligible handling fee payment recipients the difference between the handling fee in effect on July 1, 2024, and the handling fee that was in effect on July 1, 2023, so that the per-container handling fee for the 2025–26 fiscal year is no less than the handling fee that was in effect on July 1, 2023.
2. (2) The department shall adjust the handling fee established by this subdivision 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.

(h)

1. (1) The department shall adopt emergency regulations that establish the methodology described in subparagraph (A) of paragraph (3) of subdivision (f) and to establish a handling fee calculated pursuant to the methodology. The regulations shall take effect no later than July 1, 2026.
2. (2) Until June 30, 2027, the adoption of regulations described in paragraph (1) shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the department is hereby exempted from the requirement that it describe facts showing the need for immediate action. Notwithstanding Section 11346.1 of the Government Code, the emergency regulations adopted pursuant to this subdivision shall remain in effect through June 30, 2027.