BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1063


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          Date of Hearing:  April 27, 2015


                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES


                                 Das Williams, Chair


          AB 1063  
          (Williams) - As Amended April 20, 2015


          SUBJECT:  Solid waste:  disposal facility:  fees


          SUMMARY:  Requires the Department of Resources Recycling and  
          Recovery (CalRecycle) to hold public hearings and workshops to  
          develop a proposal to revise the state's solid waste tipping  
          fee.  


          EXISTING LAW, pursuant to the California Integrated Waste  
          Management Act (Act): 


          1)Specifies a state policy goal that 75% of solid waste  
            generated be diverted from landfill disposal by 2020 through  
            source reduction, recycling, or composting. 

          2)Requires each local jurisdiction to divert 50% of solid waste  
            from landfill disposal.

          3)Authorizes CalRecycle to collect a solid waste tipping fee of  
            up to $1.40 per ton of solid waste disposed of in California.   


          THIS BILL:  









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          1)On or before July 1, 2016, requires CalRecycle to hold a  
            public hearing and a workshop to develop a proposal for the  
            Legislature regarding a new solid waste management fee to  
            provide CalRecycle adequate funding to: 


             a)   Develop financial incentives to promote the recycling of  
               organic material; 


             b)   Provide resources to develop infrastructure and  
               incentives necessary to achieve the statewide policy goal  
               of 75%; and,


             c)   Provide a sustainable funding structure that ensures  
               CalRecycle's ability to carry out its responsibilities  
               under the Act.  


          2)Requires CalRecycle to seek public input from interested  
            groups, including, but not limited to, representatives of the  
            solid waste industry, local government, disadvantaged  
            communities, and environmental groups.  


          3)Within six months of the public hearing and workshop, requires  
            CalRecycle to submit the proposal to the Legislature.  


          FISCAL EFFECT:  Unknown


          COMMENTS:  


          1)Author statement. 









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               Achieving California's 75% recycling goal will eliminate  
               50% of CalRecycle's revenue, while demanding additional  
               resources to expand and oversee additional recycling and  
               waste management infrastructure.  Specifically, achieving  
               75% recycling will reduce CalRecycle's current revenue by  
               $29 million annually.  The immediate loss of revenue does  
               not account for the statewide investment that will be  
               needed to develop the infrastructure and capacity necessary  
               to recycle an additional 22 million tons of material by  
               2020.  CalRecycle estimates that at least $125 million will  
               be needed annually to develop the market and infrastructure  
               necessary to achieve the 75% goal.  Finally, CalRecycle  
               will need an additional $11 million to properly manage and  
               regulate the new infrastructure.  


          2)History of the state's tipping fee.  The current cap on the  
            tipping fee was established over two decades ago in 1993.  At  
            that time, the tipping fee was set at $1.34 per ton, and  
            authorized the California Integrated Waste Management Board  
            (now CalRecycle) to increase the fee as needed, to a maximum  
            of $1.40, beginning with the 1995-1996 fiscal year.  CIWMB  
            acted on this authority six years later, and raised the state  
            tipping fee to the maximum $1.40 on July 1, 2001.  

          3)CalRecycle's expanded jurisdiction and shrinking revenues.   
            Over the last few years, a number of bills have increased  
            recycling requirements in the state.  CalRecycle is tasked  
            with diverting at least 75% of solid waste statewide by 2020.   
            Currently, organic materials make up one-third of the waste  
            stream and food continues to be the highest single item  
            disposed at over 15% of disposal.  CalRecycle is also charged  
            with implementing its Strategic Directive 6.1, which calls for  
            reducing organic waste disposal by 50% by 2020.  According to  
            CalRecycle, significant gains in organic waste diversion are  
            necessary to meet the 75% goal and implement Strategic  
            Directive 6.1.  Recycling technologies for organic waste  
            include composting, anaerobic digestion, and other types of  








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            processing that generate renewable fuels, energy, soil  
            amendments, and mulch.  Other states have taken similar  
            actions, and 23 have banned the disposal of green waste (i.e.,  
            yard trimmings and landscape waste) in landfills.  

          Recycling organic waste also has substantial greenhouse gas  
            emissions reduction benefits.  According to the Air Resources  
            Board, landfills emit nearly 8 million tons of carbon dioxide  
            equivalent every year produced by the decomposition of organic  
            materials.  A recent report by the Intergovernmental Panel on  
            Climate Change states that the global warming impact of  
            methane is 34 times that of carbon dioxide over a 100 year  
            period.  

          While increasing diversion has significant environmental  
            benefits, it results in decreasing revenues for CalRecycle,  
            which is funded by the state's solid waste tipping fee on  
            waste disposed of in landfills.  In order to address this  
            combination of increasing challenges and decreasing revenues,  
            CalRecycle will need to reevaluate its options for ongoing  
            funding that will be sustainable as the state moves toward 75%  
            recycling.

          4)Other state fees.  The total median tipping fee in California  
            for landfill disposal is $45 per ton, which includes the state  
            fee of $1.40, local fees, and landfill charges.  (California's  
            average landfill charge is $54 per ton, but according to  
            CalRecycle that figure is "inflated due to skewed data" based  
            on the survey methods used.  CalRecycle states that the median  
            cost is more representative of the state as a whole.)  While  
            this is fairly consistent with the national average of $49 per  
            ton, California's recycling rate of 66% far exceeds states  
            with similarly low disposal costs.  For example, the New  
            England area has average tipping fees of $77 per ton and a 76%  
            diversion rate.  Areas of the country with disposal fees  
            similar to California's have much lower rates of recycling;  
            the Great Lakes area has average disposal costs of $45 per  
            ton, and a recycling rate of only 24%.  









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            Several states have higher state tipping fees, including  
            Pennsylvania ($7.25 per ton), Wisconsin ($7.00 recycling fee  
            assessed on each ton of solid waste disposed), Ohio ($4.75 per  
            ton), and Missouri ($2.11 per ton).  

          5)Previous legislation.  
          
             a)   AB 1594 (Williams), Chapter 719, Statutes of 2014,  
               eliminates diversion credit for green material used as  
               alternative daily cover at a landfill, but exempts the  
               material from the state tipping fee.  

             b)   AB 1826 (Chesbro), Chapter 727, Statutes of 2014,  
               requires generators of specified amounts of organic waste  
               to arrange for recycling services and requires local  
               governments to implement organic waste recycling programs.   


             c)   AB 341 (Chesbro), Chapter 476, Statutes of 2011,  
               established a statewide 75% recycling goal and requires  
               commercial waste generators to arrange for recycling  
               services and requires local governments to implement  
               commercial solid waste recycling programs.

             d)   AB 2866 (DeLeon, 2008) would have increased the state's  
               tipping fee from $1.40 to $2.00 per ton for purposes of  
               establishing a trust fund to cover potential closure and  
               postclosure landfill costs.  This bill was held in the  
               Senate Appropriations Committee.  

             e)   AB 1610 (Nunez, 2007) would have raised the cap on the  
               tipping fee to $2.00 per ton.  This bill was subsequently  
               amended to address an unrelated issue.  

             f)   AB 712 (DeLeon, 2007) would have imposed a $0.50  
               surcharge on the tipping fee to establish a program within  
               the Air Resources Board to develop clean fuels from solid  
               waste and landfill gas.  This bill was held in the Senate  
               Appropriations Committee.  








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             g)   AB 1220 (Eastin) Chapter 656, Statutes of 1993, set the  
               tipping fee at $1.34 per ton and authorized CalRecycle to  
               increase the tipping fee to a maximum of $1.40, on or after  
               the 1995-96 fiscal year.  

             h)   AB 939 (Sher) Chapter 1095, Statutes of 1989,  
               established the Act and the tipping fee at $0.50 per ton  
               and capping the fee at $0.75 prior to June 30, 1991, and  
               $1.00 per ton thereafter.  

          REGISTERED SUPPORT / OPPOSITION:




          Support


          Californians Against Waste (sponsor)


          Rural County Representatives of California




          









          Opposition









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          Western Placer Waste Management Authority 




          Analysis Prepared by:Elizabeth MacMillan / NAT. RES. / (916)  
          319-2092