BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      AB 1063


                                                                      Page  1





          ASSEMBLY THIRD READING


          AB  
          1063 (Williams)


          As Amended  April 20, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                 |Noes                 |
          |                |      |                     |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Natural         |7-1   |Williams, Cristina   |Harper               |
          |Resources       |      |Garcia, Hadley,      |                     |
          |                |      |McCarty, Rendon,     |                     |
          |                |      |Mark Stone, Wood     |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Appropriations  |12-4  |Gomez, Bloom, Bonta, |Bigelow, Chang,      |
          |                |      |Calderon, Daly,      |Jones, Wagner        |
          |                |      |Eggman, Eduardo      |                     |
          |                |      |Garcia, Holden,      |                     |
          |                |      |Quirk, Rendon,       |                     |
          |                |      |Weber, Wood          |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |
           ------------------------------------------------------------------- 


          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.   
          Specifically, this bill: 








                                                                      AB 1063


                                                                      Page  2







          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 California Integrated Waste Management 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.  


          EXISTING LAW, pursuant to the California Integrated Waste  
          Management 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  








                                                                      AB 1063


                                                                      Page  3





            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.  


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, this bill has absorbable costs for CalRecycle to  
          develop the proposal and report to the Legislature.


          COMMENTS:  According to the author: 


            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.  


          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.  










                                                                      AB 1063


                                                                      Page  4





          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 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.


          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  








                                                                      AB 1063


                                                                      Page  5





          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%.  


          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).  


          Analysis Prepared by:                                               
                          Elizabeth MacMillan / NAT. RES. / (916) 319-2092    
                                                                      FN:  
          0000326