BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1104
                                                                  Page  1

          Date of Hearing:   January 23, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                   AB 1104 (Salas) - As Amended:  January 16, 2014

          Policy Committee:                              Natural  
          ResourcesVote:6-1

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill expands an existing California Environmental Quality  
          Act (CEQA) exemption for liquid pipelines to include pipelines  
          used to transport dairy biogas in Fresno, Kern, Kings, or Tulare  
          counties.  This bill sunsets January 1, 2018.

           FISCAL EFFECT  

          Negligible state costs.

           COMMENTS  

           1)Rationale  .  According to the author, California has the United  
            States' largest dairy industry, which includes approximately  
            1,600 dairies that house about 1.8 million cows that produce  
            3.6 million dry tons of manure per year. The manure can be  
            processed by anaerobic digesters into biogas, which can be  
            converted into electricity or upgraded biomethane. 

            The author further states that expensive, uncertain and  
            complex interconnection and permitting obstacles, high  
            environmental compliance costs, lack of long-term economical  
            energy purchase agreements, and high financial risks and cost  
            have contributed to the lack of success. As a result,  
            commercialization of the dairy biogas industry has not  
            occurred and project development has stalled.

            This bill addresses the time and cost associated with CEQA  
            compliance by exempting diary biogas piplelines in the four  
            county region.









                                                                  AB 1104
                                                                  Page  2

          2)  Background  .  CEQA requires the principal public agency with  
            responsibility for carrying out or approving a proposed  
            project-known as the lead agency- to prepare a negative  
            declaration, mitigated negative declaration, or environmental  
            impact report for the action, unless the project is exempt  
            from CEQA.  Existing law exempts from CEQA a pipeline project  
            consisting of inspection, maintenance, repair, restoration,  
            reconditioning, relocation, replacement, or removal of an  
            existing intrastate liquid pipeline subject to the Pipeline  
            Safety Act, subject to specified conditions:

             a)   The project is less than eight miles in length.

             b)   Construction and excavation activities are not  
               undertaken over more than one half mile at a time.

             c)   The section of pipeline is not less than eight miles  
               from any section that has received an exemption in the past  
               12 months.

             d)   Project activities are undertaken within an existing  
               right-of-way and the right-of-way is restored to its  
               pre-project condition.

             e)   The diameter of the pipeline is not increased.

           1)Prior CEQA Exemption.   This bill reinstates an identical  
            exemption that was provided in SB 605 (Ashburn) Chapter 599,  
            Statues of 2009 that was in effect from 2010 to 2012.   It is  
            unknown whether this exemption was ever used.  
           
           2)Related Legislation.   In 2012, SB 1122 (Rubio) was signed into  
            law to encourage the development of dairy digesters by  
            providing much higher prices for electricity produced by dairy  
            biogas projects than prices historically paid to these  
            projects. 


           Analysis Prepared by  :    Jennifer Galehouse / APPR. / (916)  
          319-2081