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