BILL ANALYSIS Ó
AB 2223
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Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2223 (Gray) - As Amended April 11, 2016
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|Policy |Natural Resources |Vote:|8 - 1 |
|Committee: | | | |
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| |Agriculture | |10 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill allocates up to $100 million from AB 32 cap-and-trade
revenues (Greenhouse Gas Reduction Fund) to the California
Department of Food and Agriculture (CDFA), upon appropriation,
to fund incentives for dairy digesters and other dairy methane
reduction projects.
FISCAL EFFECT:
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1)Cost pressures of up to $100 million (Greenhouse Gas Reduction
Fund) for CDFA to provide methane reduction incentives.
2)If this this funding is appropriated, CDFA estimates
requiring approximately $6 million to cover costs associated
with scientific and technical project oversight and grant
administration.
3)California Air Resources Board (ARB) costs are within existing
resources.
COMMENTS:
1)Purpose. According to the author, ARB's strategy to improve
manure management calls for putting digesters on more than
several hundred dairies in the state. Based on a CDFA
estimate, this bill is intended to provide the funding
necessary to support the development of a widespread manure
management infrastructure.
2)Methane. Short-lived climate pollutants (SCLPs) are GHGs that
remain in the atmosphere for less time than carbon dioxide,
but have a much greater climate impact. SLCPs include black
carbon, fluorinated gases, and methane, which is the primary
GHG emitted by dairies.
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According to ARB, methane is the principal component of
natural gas and is also produced biologically under anaerobic
conditions in ruminants, landfills, and waste handling. While
methane does not linger in the atmosphere as long as carbon
dioxide, it is over 80 times more potent than carbon dioxide
over the first 20 years. ARB identifies dairies as the source
of 35% of the state's methane emissions and pinpoints a number
of technologies and processes that have the potential to
greatly reduce dairy methane emissions.
3)Dairy Digesters. Dairy digesters are a renewable technology
that uses livestock manure to produce methane, which is a
renewable source of electrical energy generation and
transportation fuel. The technology has many environmental
and social benefits. CDFA has developed the Dairy Digester
Research and Development (DDRD) Program. Eleven million
dollars in competitive grant funding has been, and an
estimated $500,000 will be, made available for research and
demonstration projects that improve the economic performance
of dairy digesters in California. Governor Brown's 2016-17
budget proposes $35 million for the DDRD Program.
4)The California Global Warming Solutions Act of 2006 (AB 32) AB
32 requires ARB to adopt a statewide GHG emissions limit
equivalent to 1990 levels by 2020 and adopt regulations,
including market-based compliance mechanisms, to achieve
maximum technologically feasible and cost-effective GHG
emission reductions.
As part of the implementation of AB 32 market-based compliance
measures, ARB adopted a cap-and-trade program that caps the
allowable statewide emissions and provides for the auctioning
of emission credits, the proceeds of which are quarterly
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deposited into the GGRF available for appropriation by the
Legislature.
The 2014-15 Budget Act allocated cap-and-trade revenues for
the 2014-15 fiscal year and established a long-term plan for
the allocation of cap-and-trade revenues beginning in fiscal
year 2015-16.
The Budget continuously appropriates 35% of cap-and-trade
funds for investments in transit, affordable housing, and
sustainable communities. Twenty-five percent of the revenues
are continuously appropriated to continue the construction of
high-speed rail. The remaining 40% are to be appropriated
annually by the Legislature for investments in programs that
include low-carbon transportation, energy efficiency and
renewable energy, and natural resources and waste diversion.
An expenditure plan for the 40% was not included in the
2015-16 Budget Act, with the exception of $227 million
appropriated to continue funding for specified existing
programs. The remaining 2015-16 revenues, along with 2016-17
revenues totaling $3.1 billion, are available for
appropriation this year. The Governor's 2016-17 proposed
budget provides $35 million for the DDRD Program.
AB 2223
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Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081