BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
737 (Chesbro)
Hearing Date: 07/15/2010 Amended: 06/02/2010
Consultant: Brendan McCarthy Policy Vote: N/A
AB 737 (Chesbro), page 2
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BILL SUMMARY: AB 737 requires the Department of Resources
Recycling and Recovery to increase the diversion of solid waste
from the currently required level of 50 percent to 75 percent by
2020. The bill requires certain businesses to arrange for
recycling services and requires local governments to implement a
commercial recycling program. The bill also makes a number of
technical and procedural changes to the laws governing solid
waste facility regulation.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Cost to increase Unknown, potentially in the
millionsSpecial *
diversion rate per year
Reduced fee revenues Up to $22,000 per year by 2020 Special
*
* Integrated Waste Management Account.
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Under current law, local governments are required divert 50
percent of solid waste through source reduction, recycling, and
composting. The Department of Resources Recycling and Recovery
is required to determine whether local governments are in
compliance with this requirement. Local governments that are not
in compliance or are not making a good faith effort to come into
compliance are subject to fines.
Current law authorizes the Department to designate local
enforcement agencies to permit solid waste facilities and
enforce permit or other requirements. Current law requires local
governments to adopt and submit non-disposal facility elements
to the Department. These non-disposal facility elements must
include a description of new facilities and expansions of
existing facilities and all solid waste facility expansions that
recover for reuse more than five percent of total disposed
AB 737 (Chesbro), page 2
volume.
AB 737 requires local governments to update existing
non-disposal facility elements as conditions change and provide
that information to the Department.
The bill requires the Department to "ensure" that 75 percent of
generated solid waste is diverted through source reduction,
recycling, or composting. The bill prohibits the Department from
imposing any enforceable requirements on local governments or
solid waste enterprises and explicitly states that the bill does
not confer any additional authority on the Department.
The bill requires businesses that contract for solid waste
disposal and generate more than four cubic yards of solid waste
and recyclable materials per week to arrange for recycling
services. Such businesses are required to either separate
recyclable materials from solid waste and arrange for their
collection or to contract with a recycling service that provides
mixed waste processing services. The bill requires local
governments to implement a commercial recycling program, unless
a jurisdiction already has established such a program. The
Department is required to review such local commercial recycling
programs.
(Under authority granted pursuant to AB 32 (Nunez, Chapter 488,
Statutes of 2006), the Department is administratively developing
commercial recycling requirements.)
The bill also makes a variety of technical changes to the code
sections governing solid waste.
Because the bill appears to require the Department to increase
the diversion rate to 75 percent while prohibiting it from
imposing requirements on local governments, the bill will likely
create substantial cost pressure on the Department. The current
statewide diversion rate is 58 percent. Requiring commercial
recycling should increase the diversion rate, probably to
between 65 and 70 percent. Further increasing the diversion rate
to 75 percent will likely require the Department to create
incentives for local governments, businesses, or individuals to
encourage additional source reduction, recycling, or composting.
The costs to do so are unknown, but could be substantial.
In addition, the Department collects a "tipping fee" of $1.40
per ton of solid waste disposed of in the state. This fee is
AB 737 (Chesbro), page 2
capped in statute. Staff estimates that increasing diversion
rates from the current statewide average of 58 percent to 75
percent, as required in the bill, will reduce tipping fee
revenues by about $22 million per year by 2020. Staff also notes
that the Integrated Waste Management Account has a structural
deficit of about $5 million in the current year and a projected
year end fund balance of only $9.7 million.
While the bill imposes state mandates on local governments,
those mandates are not reimbursable because local governments
are authorized to levy fees to pay for the costs required under
the bill.
SB 25 (Padilla) increases the required diversion rate to 60
percent by 2015 and also generally requires businesses to
contract for recycling services. SB 25 is in the Assembly
Natural Resources Committee.
SB 1020 (Padilla, 2007) would have required the Waste Board to
develop a plan to achieve a 75 percent diversion rate by 2020.
That bill was held in the Assembly Appropriations Committee.
AB 479 (Chesbro) is substantially similar to this bill. AB 479
was held on this committee's suspense file.