SACRAMENTO, Calif. (AP) — California would add wine and distilled spirits containers to its struggling recycling program, while giving beverage dealers another option to collect empty bottles and cans, under a measure lawmakers approved Wednesday. But critics say the bill would also give hundreds of millions of dollars to corporations they say don’t need the incentives.

It’s “a huge opportunity” to divert hundreds of additional tons of waste from landfills, said Democratic Assemblyman Phil Ting, who carried the bill in the Assembly. “This bill will be a huge leap.”

In addition, dealers could form a cooperative organization to collect the containers as an alternative to the current law that requires stores to take back the empties, under the proposal by Senate President pro Tempore Toni Atkins.

Fewer people have been able to claim their deposit refunds in recent years as many neighborhood recycling centers closed. The advocacy group Consumer Watchdog has said many grocery stores have been refusing to take back empties in-store as required.

The measure cleared the Assembly 54-0 and the Senate 38-0. It will have an effective date of July 1, 2024, if Gov. Gavin Newsom signs the bill into law.

The bill doesn’t spell out how the cooperative would work, but would require dealers to submit their plan to state regulators for approval. It would also increase the penalty for violating the law from the current $1,000 to $5,000 per day and for intentional violations from $5,000 to $10,000 per day.

California consumers pay a nickel each time they buy a 12-ounce (355-milliliter) bottle or can, and a dime for containers over 24 ounces (709 milliliters).

They’re supposed to get that money back by returning the bottles and cans, an incentive so the containers don’t go into landfills but can be recycled into new products.

The proposal would include a 25-cent deposit and refund for wine and distilled spirits sold in a box, bag or pouch.

Hawaii, Iowa, Maine and Vermont already have deposit programs including those containers, according to the National Conference of State Legislatures.

Adam Smith, Distilled Spirits Council of the United States’ vice president of state government relations, praised the bill’s passage in a statement.

“The spirits industry believes that sustainable environmental practices are critical to the continued production of the high-quality spirits that consumers enjoy,” he said.

Adding wine and spirits would bring nearly $18 million more annually to the state’s recycling fund starting in 2024, along with annual costs topping $6 million, projects the California Department of Resources Recycling and Recovery, generally known as CalRecycle.

Newsom’s administration has proposed grants for automated recycling machines, also known as reverse vending machines, at high schools, colleges and retailers, and state-funded mobile recycling programs in rural areas and other places with few recycling options. It also has proposed temporarily doubling the refunds to encourage recycling and give back a portion of nearly $600 million in unclaimed deposits, but that double refund is not in the current proposal.

Consumer Watchdog, Container Recycling Institute and The Story of Stuff Project objected that Atkins’ proposal contains too much pork for corporations, costing nearly $400 million over the next five years for market development and quality incentives that the groups argue aren’t needed.

Of that, $300 million would go to glass container makers including E&J Gallo Winery’s Gallo Glass Company, the nation’s largest glass container plant, they said.

Consumers’ deposits “shouldn’t underwrite enormously profitable companies such as Gallo,” Liza Tucker of Consumer Watchdog said in a statement. “These grants do not help existing redemption centers that are dying on the vine, they only help manufacturers and the biggest recyclers.”

The recycling institute withdrew its support, saying the grants would put “a strain on the ability of the program to operate with financial sustainability.”

Consumer Watchdog backed the distributors’ cooperative portion of the bill, which is similar to previous legislative proposals. That option “could work to create better access if the rules are drafted correctly and enforced,” the group said.

“This is an issue done what I call the right way” with intensive negotiations over several years, said Democratic Assemblyman Adam Gray. “We’ve come to a solution … good for the industry, good for the state of California.”

Without addressing the grants, Atkins said her bill would “reduce consumer confusion” by adding wine and spirits containers, while potentially more than doubling the recycling of those containers from the current 30%. She said her bill also gives dealers “a new path to compliance” with the state’s recycling law.

A second bill heading to Newsom is designed to help reduce recycling fraud by barring cash payments from processors to recyclers.

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This story has been corrected to show that dealers, not distributors, can form cooperatives.