BILL ANALYSIS Ó AB 513 Page 1 Date of Hearing: April 15, 2013 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Wesley Chesbro, Chair AB 513 (Frazier) - As Introduced: February 20, 2013 SUBJECT : Tire recycling program: rubberized asphalt SUMMARY : Establishes the Rubberized Asphalt Concrete (RAC) Market Development Act, which codifies the Department of Resources Recycling and Recovery (CalRecycle) RAC grant program for local public works projects and requires CalRecycle to allocate $10 million for these grants annually. EXISTING LAW: 1)Pursuant to the California Integrated Waste Management Act of 1989, establishes a state policy goal that 75 percent of solid waste generated be diverted from landfill disposal by 2020. 2)Establishes the California Tire Recycling Act, which: a) Requires a person who purchases a new tire to pay a California tire fee of $1.75 for each new tire purchased in the state. One dollar of which is deposited into the Tire Recycling Fund for oversight, enforcement, and market development grants relating to waste tire management and recycling. The remaining $0.75 is deposited into the Air Pollution Control Fund for programs and projects that mitigate or remediate air pollution caused by tires. b) Reduces the fee on January 1, 2015 to $0.75 per tire, to be deposited into the Tire Recycling Fund. c) Authorizes CalRecycle to award grants, loans, subsidies, and rebates and pay incentives for various purposes related to reducing landfill disposal of waste tires. d) Requires CalRecycle to adopt a Five-Year Plan, which must be updated every two years, that establishes goals and priorities for the waste tire program. THIS BILL establishes the Rubberized Asphalt Concrete Market Development Act, which: AB 513 Page 2 1)Requires CalRecycle, in accordance with its tire recycling program, to award grants to cities, counties, and other local government agencies for public works projects that utilize RAC. 2)Specifies that CalRecycle shall annually expend $10 million from the Tire Recycling Fund for purposes of the grants. 3)Requires that the grants award $2 per 12 pounds of crumb rubber used. 4)If the requests for grants exceed the funding allocated, requires CalRecycle to "randomly select from all eligible applicants, with a preference for local agencies that have received less money in previous grant cycles." FISCAL EFFECT : Unknown COMMENTS : Tire management in California . According to CalRecycle, approximately 40 million waste tires are generated in California every year. Although CalRecycle's diversion goal is 90 percent, the most recent Five-Year Plan (2011) states that the current diversion rate is around 74 percent. According to the California Waste Tire Market Report: 2011, of the 40.8 million tires generated: 8.8 million were recycled as ground rubber, of which 4.9 million were used as RAC; 2 million were used in civil engineering projects; 6.9 million were reused (either sold as used tires or retreaded); 6.2 million were used as "tire derived fuel" in cement kilns or at co-generation facilities; and, 5 million were disposed in landfills. The remaining 2.1 million were otherwise recycled (generally other forms of reuse, such as dock bumpers), or used as landfill cover. California's sluggish economy and high unemployment rate has contributed to the decline in waste tires generated. The same factors, along with local government budget constraints and a decline in use by CalTrans has resulted in diminishing numbers of tires going to RAC. Export, generally for energy generation in Asia, has nearly tripled since 2009. Appropriate tire recycling in California, provides significant environmental benefits and creates green jobs. What is RAC? RAC is a road paving material made by blending AB 513 Page 3 ground-up recycled tires with asphalt to produce a binder, which is then mixed with conventional aggregate materials. There are two primary types of binders for RAC, asphalt-rubber and terminal blend. Asphalt-rubber is defined by American Society for Testing and Materials Standard D6114 as "a blend of paving grade asphalt cement, ground recycled tire rubber and other additives for use as binder in pavement construction." The asphalt-rubber binder is field blended (at the hot mix plant) and requires specialized mobile mixing equipment. The amount of recycled rubber content for asphalt-rubber is around 20 percent. Asphalt-rubber been successfully used in California for over 30 years. Terminal blends are binder materials that use finely ground crumb rubber and are typically blended at the asphalt refinery. Historically, terminal blend binders contained up to 10 percent crumb rubber. However, in recent years the crumb rubber modifier content has been increased to 15-20 percent in some projects. Terminal blend has 20 years of successful use in California. While there are a number of recycling technologies for waste tires, RAC continues to be among the highest and best uses. RAC has a number of benefits, both environmental and economic. RAC does not require as thick an application as conventional asphalt and has a longer life-span due to its resistance to cutting and cracking. Some studies suggest that RAC lasts up to 50 percent longer. RAC also provides significant noise reduction over conventional asphalt and concrete roads. Moreover, RAC uses a lot of tires. A two-inch thick resurfacing project uses about 2,000 waste tires per lane mile. CalRecycle currently allocates $3 million annually for RAC grants to local governments through its authority under the Tire Recycling Act, and as prescribed in its Five-Year Plan. This bill. This bill is intended to increase the use of RAC throughout California by expanding and codifying CalRecycle's existing RAC grant program. It specifies that the grants will pay $2 per 12 pounds of crumb rubber used (approximately the weight of one passenger tire) and eliminates the current administrative cap of only three grants per local entity. The unused balance in the Tire Recycling Fund is projected to be $32 million in the 2013-14 Fiscal Year. Suggested amendments . This bill contains an incorrect reference AB 513 Page 4 to paragraph (c) of Section 42889 on page 2, line 11. The current 42889 sunsets on January 1, 2015; this bill references the paragraph that includes the sunset provision. After January 1, 2015, paragraph (c) of Section 42889 will be the correct reference. The committee may wish to amend the bill to correct this reference. This bill requires CalReycle to "randomly select from all eligible applicants" when the requests for grants exceed available funds, but also directs CalRecycle to provide a "preference for local agencies that have received less money in previous grant cycles." The committee may wish to amend the bill to strike out the latter requirement and simply allow CalRecycle to randomly select from eligible applicants. The current budget challenges facing state and local agencies has created a significant need for park maintenance, including projects to comply with the Americans with Disabilities Act (ADA) and maintaining bicycle trails. The committee may wish to amend the bill to specify that state and local park ADA compliance and bicycle trail maintenance projects are eligible for grants. REGISTERED SUPPORT / OPPOSITION : Support Californians Against Waste (sponsor) California Association of Recycling Market Development Zones California State Association of Counties Opposition None on file Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916) 319-2092