BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 479 (Chesbro) Hearing Date: 08/27/2009 Amended: 08/17/2009 Consultant: Brendan McCarthy Policy Vote: EQ 5-2 AB 479 (Chesbro) Page 2 _________________________________________________________________ ____ BILL SUMMARY: This bill makes a number of changes to the laws governing solid waste disposal and recycling. The bill requires the Integrated Waste Management Board to increase the diversion of solid waste from the currently required level of 50 percent to 75 percent by 2020. The bill requires certain businesses to arrange for recycling services and requires local governments to implement a commercial recycling program. The bill requires the Waste Board to study whether required business recycling programs are achieving the state's greenhouse gas reduction targets and requires local governments to adopt a commercial recycling ordinance if the targets are not being met. The bill also makes a number of technical and procedural changes to the laws governing solid waste facility regulation. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2009-10 2010-11 2011-12 Fund Cost pressure due to Unknown, potentially in the millionsSpecial * increased diversion rates per year Reduced fee revenues Up to $22,000 per year by 2020 Special * Greenhouse gas study Up to $500 in 2014 and 2019 Special ** * Integrated Waste Management Account. ** Integrated Waste Management Account. Potentially offset with AB 32 fees. _________________________________________________________________ ____ STAFF COMMENTS: Suspense file. As proposed to be amended. Under current law, local governments are required divert 50 percent of solid waste through source reduction, recycling, and composting. The Integrated Waste Management Board (Waste Board) is required to determine whether local governments are in compliance with this requirement. Local governments that are not in compliance or are not making a good faith effort to come into compliance are subject to fines. AB 479 (Chesbro) Page 3 Current law authorizes the Waste Board to designate local enforcement agencies to carry out permitting of solid waste facilities and enforcement of permit or other requirements. Current law requires local governments to adopt and submit non-disposal facility elements to the Waste Board. These non-disposal facility elements must include a description of new facilities and expansions of existing facilities and all solid waste facility expansions that recover for reuse more than 5 percent of total disposed volume. This bill requires local governments to update existing non-disposal facility elements as conditions change and provide that information to the Waste Board. The bill requires the Waste Board to "ensure" that 75 percent of generated solid waste is diverted through source reduction, recycling, or composting. The bill prohibits the Waste Board from imposing any enforceable requirements on local governments or solid waste enterprises. Because the bill appears to require the Waste Board to further increase diversion rates while prohibiting the Waste Board from imposing requirements on local governments, the bill will create substantial cost pressure on the Waste Board. The bill does not specify methods the Waste Board shall use to increase diversion rates, but it is likely that in order to ensure that diversion rates increase, the Waste Board will need to create incentives for local governments, businesses, or individuals to encourage additional source reduction, recycling, or composting. The costs to do so are unknown, but could be substantial. In addition, the Waste Board collects a "tipping fee" of $1.40 per ton of solid waste disposed of in the state. This fee is capped in statute. To the extent that the bill requires the Waste Board to increase the diversion of solid waste, it will lead to lower tipping fee revenues. Any reduction in tipping fee revenues will be proportional to the increase in diversion rates. Beginning in January 2011, the bill requires businesses that contract for solid waste disposal and generate more than four cubic yards of solid waste and recyclable materials per week to arrange for recycling services. Such businesses are required to either separate recyclable materials from solid waste and arrange for the collection of recyclable materials, or to contract with a recycling service that provides mixed waste processing services. The bill requires local governments to implement a commercial recycling program, unless a jurisdiction already has established such a program. The Waste Board is required to review such local commercial recycling programs. AB 479 (Chesbro) Page 4 In 2014 and 2019, the bill requires the Waste Board to conduct a statewide study of the amount of greenhouse gas emissions that have been avoided due to commercial recycling programs that are required in the bill. If the Waste Board determines that the greenhouse gas emission reductions due to commercial recycling programs are not sufficient to meet the relevant targets included in the Air Resources Board's AB 32 Scoping Plan, the Waste Board may require local governments that have not already done so to adopt a mandatory commercial recycling ordinance. The costs to conduct the required studies are uncertain, but could be up to $500,000 per study in 2014 and 2019. The bill changes the procedures under which local enforcement agencies may approve changes to existing solid waste facility permits. The bill also makes a variety of technical changes to the code sections governing solid waste. While the bill imposes state mandates on local governments, those mandates are not reimbursable because local governments are authorized to levy fees to pay for the costs required under the bill. SB 25 (Padilla) increases the required diversion rate to 60 percent by 2015 and also generally requires businesses to contract for recycling services. SB 25 is in the Assembly Natural Resources Committee. SB 1020 (Padilla, 2007) would have required the Waste Board to develop a plan to achieve a 75 percent diversion rate by 2020. That bill was held in the Assembly Appropriations Committee. The author's proposed amendments specify that the increased diversion rate requirement does not confer additional authority on the Waste Board. The amendments direct the Waste Board to include information on avoided greenhouse gas emissions from commercial recycling in a currently required report. The amendments remove the Waste Board's authority to impose new commercial waste recycling requirements on local jurisdictions. The amendments also make several technical changes to the bill.