BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 970|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: SB 970
Author: Leyva (D)
Amended: 5/10/16
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 4/20/16
AYES: Wieckowski, Gaines, Bates, Hill, Jackson, Leno, Pavley
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Greenhouse Gas Reduction Fund: grant program:
recyclable materials
SOURCE: Inland Empire Utilities Agency
DIGEST: This bill requires the Department of Resources
Recycling and Recovery (CalRecycle), in awarding a grant for
organics composting or anaerobic digestion via the Organics
Grant Program (OGP), to consider specified factors, such as the
amount of greenhouse gas emissions reductions that may result
from the project.
ANALYSIS:
Existing law:
1)Enacts the Integrated Waste Management Act of 1989 (Public
Resources Code (PRC) §40000 et seq.) which:
a) Establishes a statewide diversion goal of 75% by 2020.
b) Requires local agencies to divert, through source
reduction, recycling, and composting, 50% of solid waste
disposed by their jurisdictions.
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c) Requires a commercial waste generator, including
multi-family dwellings, to arrange for recycling services
and requires local governments to implement commercial
solid waste recycling programs designed to divert solid
waste from businesses.
d) Requires generators of specified amounts of organic
waste to arrange for recycling services for that material.
2)Establishes the Greenhouse Gas Reduction Fund (GGRF) in the
State Treasury, requires all moneys, except for fines and
penalties, collected pursuant to a market-based mechanism be
deposited in the fund and requires the Department of Finance,
in consultation with ARB and any other relevant state agency,
to develop, as specified, a three-year investment plan for the
moneys deposited in the GGRF. (Government Code §16428.8).
3)Prohibits the state from approving allocations for a measure
or program using GGRF moneys except after determining that the
use of those moneys furthers the regulatory purposes of AB 32,
and requires moneys from the GGRF be used to facilitate the
achievement of reductions of GHG emissions in California.
(Health and Safety Code §39712).
4)Requires the CalRecycle to administer a grant program to
provide financial assistance to reduce GHG emissions by
promoting in-state development and infrastructure to process
organics and other recyclable materials into new value-added
products, using funding from GGRF. Specifies that the funding
may be used for projects including organics composting,
anaerobic digestion, or recyclable material manufacturing
infrastructure projects or other related activities that
reduce GHG emissions. (PRC §42999).
This bill requires CalRecycle, in awarding a grant for organics
composting or anaerobic digestion via the Organics Grant Program
(OGP), to consider the following:
1)The amount of GHG emissions reductions that may result;
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2)The amount of organic material that may be diverted from
landfills;
3)If, and how, the project may benefit disadvantaged
communities;
4)Project readiness and permitting required; and,
5)Air and water quality benefits.
Background
1)Statewide waste diversion goals.
CalRecycle is tasked with diverting at least 75% of solid waste
statewide by 2020. Currently, an estimated 31 million tons of
waste are disposed of in California's landfills annually, of
which 37% is compostable organic materials, 20% is inert and
other construction and demolition debris, and 17% is paper and
paperboard, 10% plastics, 3% metal, with the remaining 12%
consisting of various materials such as glass and other waste.
In addition, CalRecycle is charged with implementing Strategic
Directive 6.1, which calls for reducing organic waste disposal
by 50% by 2020. According to CalRecycle, significant gains in
organic waste diversion (through recycling technologies or
organic waste, including composting and anaerobic digestion)
are necessary to meet the 75% goal and to implement Strategic
Directive 6.1.
2)Recycling organic waste.
For purposes of recycling, "organic waste" is defined as food
waste, green waste, landscape and pruning waste, nonhazardous
wood waste, and food-soiled paper waste that is mixed in with
food waste. Organic material represents over one-third of the
solid waste sent to landfills even though a large percentage
can be recycled or composted - Approximately 6 million tons of
food scraps are thrown away each year.
Recycling technologies for organic waste include anaerobic
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digestion, composting, and other types of processing that
generate renewable fuels, energy, soil amendments, and mulch.
Anaerobic digestion, which produces biogas that can be
processed into biomethane fuel, is particularly suited to
handle food waste.
3)Waste reduction and GHGs.
According to the California Air Resources Board (ARB), a total
reduction of 80 million metric tons (MMT), or 16% compared to
business as usual, is necessary to reduce statewide GHG
emissions to 1990 levels by 2020. ARB intends to achieve
approximately 78% of the reductions through direct
regulations. ARB proposes to achieve the balance of
reductions necessary to meet the 2020 limit (approximately 18
MMT) through its cap-and-trade program.
Landfill gas is generated by the anaerobic decomposition of
organic materials such as food, paper, wood, and green
material. 50% of landfill gas is methane, a GHG with a much
shorter life (also known as a short-lived climate pollutant),
but much higher global warming potential than carbon dioxide
(methane is approximately 25 times more efficient at trapping
heat than carbon dioxide over a 100-year time span).
Depending on the types of solid waste, the chemical makeup of
landfill biogas can vary greatly from the biogas produced from
dairy farms, municipal solid waste, and wastewater treatment
facilities. While most modern landfills have systems in place
to capture methane, significant amounts continue to escape
into the atmosphere. According to ARB's GHG inventory,
approximately 7 million tons of carbon dioxide equivalent are
released annually by landfills. That number is expected to
increase to 8.5 million tons of carbon dioxide equivalent by
2020.
Composting and other organics processing technologies, including
anaerobic digestion, reduce GHGs by avoiding the emissions
that would be generated by the material's decomposition in a
landfill. For example, in the case of anaerobic digestion,
the process produces methane from the organic waste in a
controlled environment for use as a renewable fuel, and
results in climate benefits by both reducing GHGs from
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landfills, and displacing fossil fuels. Recycling organic
waste provides significant GHG reductions over landfilling.
4)Organics Grant Program (OGP).
OGP includes a competitive grant program created for the purpose
of lowering overall GHG emissions by expanding existing
capacity or establishing new facilities in the state to reduce
the amount of California-generated green materials, food
materials, or alternative daily cover being sent to landfills.
Eligible projects include construction, renovation or
expansion of facilities in California that compost,
anaerobically digest, or use other related digestion or
fermentation processes to turn green or food materials into
value-added projects. The projects must result in permanent,
annual, and measurable: i) reductions in GHG emissions from
the handling and landfilling of California-generated green and
food materials; and, ii) increases in quantity (tons) of
California-generated green materials, food materials, or
alternative daily cover diverted from landfills and composted,
digested or diverted to other fermentation processes.
5)Cap-and-trade auction revenue.
Since November 2012, ARB has conducted 14 cap-and-trade
auctions, generating over $4 billion in proceeds to the state.
State law specifies that the auction revenues must be used to
facilitate the achievement of GHG emissions reductions and
outlines various categories of allowable expenditures.
Statute further requires the Department of Finance, in
consultation with ARB and any other relevant state agency, to
develop a three-year investment plan for the auction proceeds,
which are deposited in the GGRF.
Disadvantaged communities.
SB 535 (de León, Chapter 830, Statutes of 2012) requires the
Department of Finance, in the investment plan, to allocate at
least 25% of available moneys in the GGRF to projects that
provide benefits to disadvantaged communities, and at least
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10% to projects located within disadvantaged communities.
To meet the SB 535 mandate, the Office of Environmental Health
Hazard Assessment, under CalEPA's guidance, developed a tool
(termed CalEnviroScreen) to assess and rank census tracts
across the state that are disproportionately affected by
multiple types of pollution and areas with vulnerable
populations. CalEPA has designated 25% of census tracts in
California as disadvantaged communities for the purpose of
investing cap-and-trade proceeds.
Additionally, SB 862 (Committee on Budget and Fiscal Review,
Chapter 36, Statutes of 2014) requires ARB to develop
guidelines on maximizing benefits for disadvantaged
communities by agencies administering GGRF funds.
Legal consideration of cap-and-trade auction revenues.
The 2012-13 Budget analysis of cap-and-trade auction revenue
by the Legislative Analyst's Office noted that, based on an
opinion from the Office of Legislative Counsel, the auction
revenues should be considered mitigation fee revenues, and
their use requires that a clear nexus exist between an
activity for which a mitigation fee is used and the adverse
effects related to the activity on which that fee is levied.
Therefore, in order for their use to be valid as mitigation
fees, revenues from the cap-and-trade auction must be used to
mitigate GHG emissions or the harms caused by GHG emissions.
In 2012, the California Chamber of Commerce filed a lawsuit
against the ARB claiming that cap-and-trade auction revenues
constitute illegal tax revenue. In November 2013, the
superior court ruling declined to hold the auction a tax,
concluding that it is more akin to a regulatory fee. In
February of 2014, the plaintiffs filed an appeal with the 3rd
District Court of Appeal in Sacramento. That case is currently
pending.
Comments
Purpose of Bill.
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According to the author, "California must achieve deep
reductions in short-lived climate pollutants by 2030 in order to
meet future greenhouse gas emission targets and air quality
goals. Short lived climate pollutants (SLCP), also known as
"Super Pollutants," have a much greater warming effect than CO2.
This means that reducing SLCPs such as methane will have a
significant impact on reducing our greenhouse gas emissions.
Cutting methane emissions from solid waste disposal is a key
state strategy to slow global warming and reduce the impacts of
climate change."
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified5/18/16)
Inland Empire Utilities Agency (source)
OPPOSITION: (Verified5/18/16)
None received
Prepared by:Joanne Roy / E.Q. / (916) 651-4108
5/18/16 16:27:51
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