BILL ANALYSIS
AB 338
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Date of Hearing: April 27, 2005
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Judy Chu, Chair
AB 338 (Levine) - As Amended: April 19, 2005
Policy Committee: Transportation
Vote: 8-4
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires Caltrans, to the extent feasible, to phase-in
the use of crumb rubber asphalt (CRA) on its highway
construction and repair projects.
FISCAL EFFECT
1)Substantial costs, perhaps $2 million in FY 2006-07, $5
million in FY 2007-08, and potentially higher annual costs
starting in FY 2009-10, to Caltrans to have at least 20% of
its highway paving project needs filled by CRA. To the extent
Caltrans would have achieved these CRA use goals without the
requirements mandated by this bill, these costs will be
substantially reduced. (State Highway Account (SHA).)
2)Substantial savings, at least $2 million annually in future
fiscal years, to Caltrans since CRA generally is more durable
and has a significantly longer lifespan than conventional
asphalt in certain areas and under certain conditions. (SHA.)
3)Minor costs, probably less than $10,000 annually starting in
FY 2008-09, to the BT&H Agency to prepare the cost
differential analysis between CRA and conventional asphalt.
(GF or Motor Vehicle Account.)
4)Minor costs, probably less than $50,000 in FY 2006-07, to
Caltrans and the CIWMB to develop procedures for using crumb
rubber and other derived tire products in other projects.
SUMMARY CONTINUED
AB 338
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Specifically, this bill:
1)Requires Caltrans to use CRA at the following levels on its
highway construction and repair projects:
a) Starting January 1, 2007, at least 20% of the total
weight of asphalt paving materials must be CRA.
b) Starting January 1, 2010, this minimum requirement
increases to 25%.
c) Starting January 1, 2013, this minimum requirement
increases to 35%.
2)Requires the Secretary of the Business, Transportation, and
Housing (BT&H) Agency, by January 1, 2009 and annually
thereafter, to analyze the cost differences between CRA and
conventional asphalt in terms of lifespan, maintenance costs,
and quantity of product needed per mile paved. When the
Secretary determines the cost of CRA is no more than 10% more
than the cost of conventional asphalt, the annual analysis
would no longer be required.
3)Specifies that, if the BT&H Agency's annual analysis indicates
that CRA costs at least 10% more than conventional asphalt,
Caltrans is precluded from increasing CRA use beyond 20% or
25%, whichever CRA level Caltrans is required to use at the
time of the analysis.
4)Requires Caltrans to require the construction or repair
project to use crumb rubber manufactured in the United States
from waste tires taken from vehicles owned and operated in
this country, unless Caltrans determines the use of this
material is not cost effective.
5)Requires Caltrans and the California Integrated Waste
Management Board (CIWMB) to develop procedures for using crumb
rubber and other derived tire products in other projects.
6)Requires Caltrans to notify and confer with the East Bay
Municipal Utility District (EBMUD) before use CRA on a highway
construction or repair project that overlays EBMUD
infrastructure.
COMMENTS
1)Rationale . The author argues that the use of greater volumes
AB 338
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of CRA (paving material containing at least 15% granules of
rubber made from scrap tires) should be mandated in order to
better manage the substantial number of scrap tires being
generated in California and the rest of the country and to
reduce the number of scrap tires destined for long-term
storage. The author also argues that crumb rubber has proven
to be an effective component for asphalt paving materials and
that crumb rubber actually enhances the qualities of
pavement's flexibility and durability, qualities that
partially mitigate CRA's significantly higher initial cost.
2)Background . An estimated 32 million scrap tires are generated
annually in California. The CIWMB administers a program, in
an effort to control the volume of scrap tires stockpiled
throughout the state, and supported by revenue generated by
excise fees imposed on the purchase of new tires, to develop
and support a broad range of recycling options for rubber and
other materials contained in these scrap tires. One of the
major recycling options for these tires in CRA, also known as
rubberized asphalt concrete. Caltrans starting experimenting
with CRA in 1978 and continues to use it on many highway
paving projects, finding that the material increases the life
of the roadway and reduces maintenance costs because CRA does
not crack as much as regular pavement. Caltrans has
determined that use of CRA is not appropriate in some regions,
primarily those characterized by severe temperature
variations. CRA can cost substantially more than conventional
asphalt and its increased use in California has been slowed by
recent highway budget constraints.
3)Crumb Rubber Sources . Statutorily requiring 20% use of CRA in
state highway construction and repair projects adds more
predictability to the market for crumb rubber, which, due to a
continuing production glut and the impacts of heavily
subsidized Canadian crumb rubber, is currently suffering from
prices so low as to make its production in California not
cost-effective. In addition, due to quality requirements of
the CRA production process, scrap tires from California
stockpiles cannot be utilized because corroded rubber is
unsuitable. Increased use of CRA in paving projects,
therefore, will support a manufacturing process that can
divert larger volumes of scrap tires from adding to stockpiles
but will not address the need to reduce the stockpiles that
already exist in California.
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Crumb rubber is produced from scrap tires which are shredded
and run through magnets and filters to separate steel belting
and nylon mesh from the rubber. Continued shredding and
filtering reduces the rubber to particles no more than an inch
in diameter. These particles can be mixed with other
materials to produce CRA.
4)Prior Legislation . Last year, AB 338 (Levine), very similar
to this year's AB 338, was vetoed by the governor, who was
concerned that limiting use of CRA to crumb rubber from United
States-only sources could violate trade agreements and invite
sanctions from Canada and other nations against California
products. Since this veto message, the CIWMB has determined
that, since cheap Canadian crumb rubber is subsidized by the
country, it is exempted from trade agreements such as the
North American Free Trade Agreement (NAFTA). AB 338's
condition that crumb rubber be derived from U.S. sources only,
thus, does not violate these trade agreements. (Crumb rubber
sources cannot be limited to California scrap tires because
for any paving project that is funded in whole or in part with
federal money, which is around 85% of all projects, federal
transportation law forbids the state from restricting
materials on the basis of state of origin.)
5)Mandate vs. Caltrans Discretion . If CRA proves to be a
cost-effective paving material compared to conventional paving
materials and its availability allows it to be used to the
maximum extent for paving projects, Caltrans is likely, on its
own, to continue to increase the percentage of paving miles
using CRA, assuming adequate funding is available to pay
somewhat higher initial costs for CRA. AB 338's mandates are
designed more to help guarantee a predictable and stable
demand for CRA and to encourage its continued and increased
manufacture.
Analysis Prepared by : Steve Archibald / APPR. / (916)
319-2081