BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 970|
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UNFINISHED BUSINESS
Bill No: SB 970
Author: Leyva (D)
Amended: 6/29/16
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
SENATE FLOOR: 27-4, 5/31/16
AYES: Allen, Beall, Block, De León, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,
Pan, Pavley, Roth, Wieckowski, Wolk
NOES: Anderson, Moorlach, Morrell, Vidak
NO VOTE RECORDED: Bates, Berryhill, Cannella, Fuller, Gaines,
Nguyen, Nielsen, Runner, Stone
ASSEMBLY FLOOR: 77-0, 8/23/16 - See last page for vote
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 projects funded with
AB 32 cap-and-trade revenues (Greenhouse Gas Reduction Fund) and
authorizes CalRecycle to provide larger grant awards for
large-scale regional projects.
SB 970
Page 2
Assembly Amendments add a provision authorizing CalRecycle to
provide bigger grant awards for large-scale regional integrated
projects that provide cost-effective organic waste diversion and
maximize environmental benefits.
ANALYSIS:
Existing law:
1) Enacts, pursuant to 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.
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).
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Page 3
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 Department of Resources Recycling and Recovery
(CalRecycle) to administer a grant program to provide
financial assistance to reduce greenhouse gas (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:
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) For anaerobic digestion projects, if, and how, the
project maximizes resource recovery, including the
production of clean energy or low-carbon or carbon negative
transportation fuels;
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e) Project readiness and permitting that the project may
require; and,
f) Air and water quality benefits that the project may
provide.
1)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.
Background
1)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
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.
2)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
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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
landfills, and displacing fossil fuels. Recycling organic
waste provides significant GHG reductions over landfilling.
3)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
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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.
4)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.
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
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Purpose of Bill. 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
According to the Assembly Appropriations Committee, "No
additional state costs. According to CalRecycle, this bill
codifies criteria that are already part of grant award
consideration for anaerobic digestion and composting projects.
Further, CalRecycle contends they have the ability to award
larger grants for large-scale projects under current law."
SUPPORT: (Verified8/15/16)
California Association of Sanitation Agencies
Carbon Cycle Institute
County Sanitation Districts of Los Angeles County
Inland Empire Utilities Agency
Sonoma County Water Agency
Southern California Gas Company
OPPOSITION: (Verified8/15/16)
None received
ASSEMBLY FLOOR: 77-0, 8/23/16
SB 970
Page 8
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Calderon,
Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Dababneh,
Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher,
Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gordon,
Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin,
Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk,
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,
Wood, Rendon
NO VOTE RECORDED: Burke, Cooper, Gonzalez
Prepared by: Joanne Roy / E.Q. / (916) 651-4108
8/29/16 10:34:45
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