BILL ANALYSIS Ó SB 970 Page 1 Date of Hearing: June 27, 2016 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair SB 970 (Leyva) - As Amended June 20, 2016 SENATE VOTE: 27-4 SUBJECT: Greenhouse Gas Reduction Fund: grant program: recyclable materials SUMMARY: Requires CalRecycle to consider various factors when awarding grants for organic waste projects funded by the Greenhouse Gas Reduction Fund (GGRF.) EXISTING LAW: 1)Pursuant to the Integrated Waste Management Act: a) Establishes a statewide recycling 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; c) Requires commercial waste generators, including SB 970 Page 2 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; and, d) Requires generators of specified amounts of organic waste to arrange for recycling services for that material. 2)Requires the Air Resources Board (ARB), pursuant to California Global Warming Solutions Act of 2006 [AB 32 (Nunez), Chapter 488, Statutes of 2006], to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. AB 32 authorizes ARB to permit the use of market-based compliance mechanisms to comply with GHG reduction regulations, once specified conditions are met. 3)Establishes the GGRF in the State Treasury, requires all moneys, except for fines and penalties, collected pursuant to a market-based mechanism be deposited in the GGRF and requires the Department of Finance, in consultation with ARB and any other relevant state agency, to develop a three-year investment plan for the moneys deposited in the GGRF. 4)Specifies that allocations for a measure or program using GGRF moneys must further 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. 5)Requires the Department of Resources Recycling and Recovery SB 970 Page 3 (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 the GGRF. Specifies that the funding may be used for projects including organics composting, anaerobic digestion, recyclable material manufacturing infrastructure projects, or other related activities that reduce GHG emissions. THIS BILL: 1)Requires CalRecycle, in awarding a grant for organics composting or anaerobic digestion to reduce GHG emissions using GGRF funding, to consider the following: a) The amount of GHG emissions reductions that may result from the project; b) The amount of organic material that may be diverted from landfills as a result of the project; c) If, and how, the project may benefit disadvantaged communities; d) If, and how, the project leverages existing waste water treatment infrastructure; e) If, and how, the project maximizes resource recovery, including the production of clean energy or low-carbon or carbon negative transportation fuels; SB 970 Page 4 f) If, and how, the project encourages and results in broad regional solutions that maximize environmental and economic potential; g) Project readiness and permitting that the project may require; and, h) Air and water quality benefits that the project may provide. 2)To the extent funds are available, authorizes CalRecycle to provide larger grant awards for large-scale regional integrated projects that provide cost-effective organic waste diversion and maximize environmental benefits. FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, this bill has negligible state costs. COMMENTS: 1)Meeting the state's recycling goals. CalRecycle is tasked with diverting at least 75% of solid waste statewide by 2020. Organic materials make up one-third of the waste stream and food continues to be the greatest single item disposed, making up over 15% of materials landfilled. 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 to implement Strategic Directive 6.1. Recycling technologies for organic SB 970 Page 5 waste include composting, anaerobic digestion, and other types of processing that generate renewable fuels, energy, soil amendments, and mulch. California's state agencies play an essential role in meeting the state's waste reduction requirements. 2)Waste reduction and GHGs. Recycling provides significant GHG reductions over landfilling. ARB's First Update to the Climate Change Scoping Plan identifies waste management as a key sector for GHG emissions reductions and states, "Meeting the [state's] 75% recycling goal is the best path forward to maximizing GHG emission reductions from the Waste Management Sector and putting California on the path for even greater GHG emission reductions in the future." 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. Landfill gas is generated by the decomposition of organic materials such as food, paper, wood, and yard waste. Short-lived climate pollutants (SLCPs) 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. 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. Methane is responsible for about 20% of current climate change, and methane concentrations continue to increase globally. Fifty percent of landfill gas is methane. While most modern landfills have systems in place to capture methane, significant amounts continue to escape into the atmosphere. According to ARB, landfills generated 20% of the state's methane emissions in 2013. In addition to organic waste, source reduction and recycling reduce GHG emissions associated with the production and transportation of products. SB 970 Page 6 3)Author statement: SB 970 would prioritize grant funding for projects that reduce GHG emissions, divert organic material, provide benefits to disadvantaged communities, require minimal siting and permitting, and provide air and water quality benefits. This bill would help the state meet multiple environmental goals as organics are diverted from landfills and methane is recovered and repurposed as clean energy and fuels. Most importantly, this bill [would] provide an example of how these prioritized projects can reduce criteria pollutants in disadvantaged communities and improve local health outcomes throughout the state. 4)Suggested amendment. This bill includes certain provisions that have the potential to grant funding preference to anaerobic digesters located at waste water treatment facilities. The committee may wish to amend the bill to ensure that the bill maintains a level playing field for organic materials recycling facilities. REGISTERED SUPPORT / OPPOSITION: Support California Association of Sanitation Agencies Inland Empire Utilities Agency Sanitation Districts of Los Angeles County SB 970 Page 7 Opposition California Compost Coalition Analysis Prepared by:Elizabeth MacMillan / NAT. RES. / (916) 319-2092