AB 2223: Dairy methane reduction.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-05-27
The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation by the Legislature.
Existing law establishes the Department of Food and Agriculture under the administration of the Secretary of Food and Agriculture to promote and protect the agricultural industry of the state.
This bill would provide that up to $100,000,000 shall be made available, upon appropriation, from the fund appropriate $10,000,000 from the General Fund to the Department of Food and Agriculture to provide incentives loans for the implementation of dairy digesters and other dairy methane reduction projects and management practices.
The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation by the Legislature. Existing law continuously appropriates 60% of the annual proceeds of the fund for transit, affordable housing, sustainable communities, and high-speed rail purposes.
This bill would continuously appropriate provide that up to $100,000,000 annually shall be made available, upon appropriation, from the fund to the Department of Food and Agriculture to provide incentives for the implementation of dairy digesters and other dairy methane reduction projects and management practices, thereby making an appropriation. practices.
The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include in regulations implementing the act the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation by the Legislature. Existing law continuously appropriates 60% of the annual proceeds of the fund for transit, affordable housing, sustainable communities, and high-speed rail purposes.
Existing law defines a renewable electrical generation facility for purposes of the California Renewables Portfolio Standard Program to include facilities that use, among other renewable energy resources, digester gas.
This bill would continuously appropriate $100,000,000 annually from the Greenhouse Gas Reduction Fund fund to the state board to make manure digester market development payments for electricity produced from California-generated manure by California-based manure digesters. Department of Food and Agriculture to provide incentives for the implementation of dairy digesters and other dairy methane reduction projects and management practices, thereby making an appropriation.
The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include in regulations implementing the act the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation by the Legislature.
Existing law defines a renewable electrical generation facility for purposes of the California Renewables Portfolio Standard Program to include facilities that use, among other renewable energy resources, digester gas.
This bill would continuously appropriate $100,000,000 annually from the Greenhouse Gas Reduction Fund to the state board to make manure digester market development payments for electricity produced from California-generated manure by California-based manure digesters.
The Legislature finds and declares all of the following:
(a)The State Air Resources Board has embarked on an ambitious strategy to reduce dairy methane emissions. These voluntary reductions cannot begin to be achieved unless the state provides a substantial and ongoing financial commitment to offset the costs of achieving these reductions.
(b)Dairy methane reduction projects are among the most cost-effective investments the state can make to reduce greenhouse gas emissions.
(c)Investments in dairy digesters and other methane reduction projects on dairies in the state will provide significant greenhouse gas and short-lived climate pollutant emissions reductions, as well as all of the following:
(1)Significant benefits to disadvantaged communities, as identified pursuant to Section 39711 of the Health and Safety Code, including criteria pollutant reductions, water quality improvements, and nuisance and odor control.
(2)Help in achieving a 50 percent reduction in petroleum use by replacing diesel with renewable natural gas.
(3)Furtherance of the California Sustainable Freight Action Plan.
(4)Substantial clean energy production, including renewable electricity, renewable natural gas, and renewable carbon-negative transportation fuel.
(5)Increased decarbonization of the states natural gas system.
(6)Job creation and economic development in high-unemployment rural communities.
(7)Significant greenhouse gas emissions offsets and credit production pursuant to the Low Carbon Fuel Standard regulation (Subarticle 7 (commencing with Section 95480) of Article 4 of Subchapter 10 of Chapter 1 of Division 3 of Title 17 of the California Code of Regulations).
(8)Significant water quality benefits from advancements in manure management.
SEC. 2.SECTION 1.Section 412 is added to the Food and Agricultural Code, to read:412.Up to one hundred (a)Ten million dollars ($100,000,000) from the Greenhouse Gas Reduction Fund, created pursuant to Section 16428.8 of the Government Code, shall be available, upon appropriation by the Legislature, ($10,000,000) is hereby appropriated to the department to provide incentives loans for the implementation of dairy digesters and other dairy methane reduction projects and management practices.
(b)Loans issued by the department for the purposes specified in subdivision (a) shall be repaid within 10 years, and the payments shall be deposited into the General Fund.
The Legislature finds and declares all of the following:
(a)The State Air Resources Board has embarked on an ambitious strategy to reduce dairy methane emissions. These voluntary reductions cannot begin to be achieved unless the state provides a substantial and ongoing financial commitment to offset the costs of achieving these reductions.
(b)Dairy methane reduction projects are among the most cost-effective investments the state can make to reduce greenhouse gas emissions.
(c)Investments in dairy digesters and other methane reduction projects on dairies in the state will provide significant greenhouse gas and short-lived climate pollutant emissions reductions, as well as all of the following:
(1)Significant benefits to disadvantaged communities, as identified pursuant to Section 39711 of the Health and Safety Code, including criteria pollutant reductions, water quality improvements, and nuisance and odor control.
(2)Help in achieving a 50 percent reduction in petroleum use by replacing diesel with renewable natural gas.
(3)Furtherance of the California Sustainable Freight Action Plan.
(4)Substantial clean energy production, including renewable electricity, renewable natural gas, and renewable carbon-negative transportation fuel.
(5)Increased decarbonization of the states natural gas system.
(6)Job creation and economic development in high-unemployment rural communities.
(7)Significant greenhouse gas emissions offsets and credit production pursuant to the Low Carbon Fuel Standard regulation (Subarticle 7 (commencing with Section 95480) of Article 4 of Subchapter 10 of Chapter 1 of Division 3 of Title 17 of the California Code of Regulations).
(8)Significant water quality benefits from advancements in manure management.
SEC. 2.Section 412 is added to the Food and Agricultural Code, to read:412.Up to one hundred million dollars ($100,000,000) from the Greenhouse Gas Reduction Fund, created pursuant to Section 16428.8 of the Government Code, shall be available, upon appropriation by the Legislature, to the department to provide incentives for the implementation of dairy digesters and other dairy methane reduction projects and management practices.
SEC. 2.Section 39719 of the Health and Safety Code is amended to read:39719.(a)The Legislature shall appropriate the annual proceeds of the fund for the purpose of reducing greenhouse gas emissions in this state in accordance with the requirements of Section 39712.
(b)To carry out a portion of the requirements of subdivision (a), annual proceeds are continuously appropriated for the following:
(1)Beginning in the 201516 fiscal year, and notwithstanding Section 13340 of the Government Code, 35 percent of annual proceeds are continuously appropriated, without regard to fiscal year, for transit, affordable housing, and sustainable communities programs as follows:
(A)Ten percent of the annual proceeds of the fund is hereby continuously appropriated to the Transportation Agency for the Transit and Intercity Rail Capital Program created by Part 2 (commencing with Section 75220) of Division 44 of the Public Resources Code.
(B)Five percent of the annual proceeds of the fund is hereby continuously appropriated to the Low Carbon Transit Operations Program created by Part 3 (commencing with Section 75230) of Division 44 of the Public Resources Code. Moneys shall be allocated by the Controller, according to requirements of the program, and pursuant to the distribution formula in subdivision (b) or (c) of Section 99312 of, and Sections 99313 and 99314 of, the Public Utilities Code.
(C)Twenty percent of the annual proceeds of the fund is hereby continuously appropriated to the Strategic Growth Council for the Affordable Housing and Sustainable Communities Program created by Part 1 (commencing with Section 75200) of Division 44 of the Public Resources Code. Of the amount appropriated in this subparagraph, no less than 10 percent of the annual proceeds shall be expended for affordable housing, consistent with the provisions of that program.
(2)Beginning in the 201516 fiscal year, notwithstanding Section 13340 of the Government Code, 25 percent of the annual proceeds of the fund is hereby continuously appropriated to the High-Speed Rail Authority for the following components of the initial operating segment and Phase I Blended System as described in the 2012 business plan adopted pursuant to Section 185033 of the Public Utilities Code:
(A)Acquisition and construction costs of the project.
(B)Environmental review and design costs of the project.
(C)Other capital costs of the project.
(D)Repayment of any loans made to the authority to fund the project.
(3)Beginning in the 201617 fiscal year, notwithstanding Section 13340 of the Government Code, the sum of one hundred million dollars ($100,000,000) is hereby continuously appropriated, without regard to fiscal year, to the Department of Food and Agriculture to provide incentives for the implementation of dairy digesters and other dairy methane reduction projects and management practices.
(c)In determining the amount of annual proceeds of the fund for purposes of the calculation in subdivision (b), the funds subject to Section 39719.1 shall not be included.
The Legislature finds and declares all of the following:
(a)The State Air Resources Board has embarked on an ambitious strategy to reduce dairy methane emissions. These voluntary reductions cannot begin to be achieved unless the state provides a substantial and ongoing financial commitment to offset the costs of achieving these reductions.
(b)Dairy methane reduction projects are among the most cost-effective investments the state can make to reduce greenhouse gas emissions.
(c)Investments in dairy digesters and other methane reduction projects on dairies in the state will provide significant greenhouse gas and short-lived climate pollutant emissions reductions, as well as all of the following:
(1)Significant benefits to disadvantaged communities, as identified pursuant to Section 39711 of the Health and Safety Code, including criteria pollutant reductions, water quality improvements, and nuisance and odor control.
(2)Help in achieving a 50 percent reduction in petroleum use by replacing diesel with renewable natural gas.
(3)Furtherance of the California Sustainable Freight Action Plan.
(4)Substantial clean energy production, including renewable electricity, renewable natural gas, and renewable carbon-negative transportation fuel.
(5)Increased decarbonization of the states natural gas system.
(6)Job creation and economic development in high-unemployment rural communities.
(7)Significant greenhouse gas emissions offsets and credit production pursuant to the Low Carbon Fuel Standard regulation (Subarticle 7 (commencing with Section 95480) of Article 4 of Subchapter 10 of Chapter 1 of Division 3 of Title 17 of the California Code of Regulations).
(8)Significant water quality benefits from advancements in manure management.
SEC. 2.Section 39719 of the Health and Safety Code is amended to read:39719.(a)The Legislature shall appropriate the annual proceeds of the fund for the purpose of reducing greenhouse gas emissions in this state in accordance with the requirements of Section 39712.
(b)To carry out a portion of the requirements of subdivision (a), annual proceeds are continuously appropriated for the following:
(1)Beginning in the 201516 fiscal year, and notwithstanding Section 13340 of the Government Code, 35 percent of annual proceeds are continuously appropriated, without regard to fiscal years, year, for transit, affordable housing, and sustainable communities programs as following: follows:
(A)Ten percent of the annual proceeds of the fund is hereby continuously appropriated to the Transportation Agency for the Transit and Intercity Rail Capital Program created by Part 2 (commencing with Section 75220) of Division 44 of the Public Resources Code.
(B)Five percent of the annual proceeds of the fund is hereby continuously appropriated to the Low Carbon Transit Operations Program created by Part 3 (commencing with Section 75230) of Division 44 of the Public Resources Code. Funds Moneys shall be allocated by the Controller, according to requirements of the program, and pursuant to the distribution formula in subdivision (b) or (c) of Section 99312 of, and Sections 99313 and 99314 of, the Public Utilities Code.
(C)Twenty percent of the annual proceeds of the fund is hereby continuously appropriated to the Strategic Growth Council for the Affordable Housing and Sustainable Communities Program created by Part 1 (commencing with Section 75200) of Division 44 of the Public Resources Code. Of the amount appropriated in this subparagraph, no less than 10 percent of the annual proceeds, proceeds shall be expended for affordable housing, consistent with the provisions of that program.
(2)Beginning in the 201516 fiscal year, notwithstanding Section 13340 of the Government Code, 25 percent of the annual proceeds of the fund is hereby continuously appropriated to the High-Speed Rail Authority for the following components of the initial operating segment and Phase I Blended System as described in the 2012 business plan adopted pursuant to Section 185033 of the Public Utilities Code:
(A)Acquisition and construction costs of the project.
(B)Environmental review and design costs of the project.
(C)Other capital costs of the project.
(D)Repayment of any loans made to the authority to fund the project.
(3)Beginning in the 201617 fiscal year, notwithstanding Section 13340 of the Government Code, the sum of one hundred million dollars ($100,000,000) is hereby continuously appropriated, without regard to fiscal year, to the Department of Food and Agriculture to provide incentives for the implementation of dairy digesters and other dairy methane reduction projects and management practices.
(c)In determining the amount of annual proceeds of the fund for purposes of the calculation in subdivision (b), the funds subject to Section 39719.1 shall not be included.
SECTION 1.Notwithstanding Section 13340 of the Government Code, the sum of one hundred million dollars ($100,000,000) annually is hereby continuously appropriated from the Greenhouse Gas Reduction Fund created pursuant to Section 16428.8 of the Government Code to the State Air Resources Board to make manure digester market development payments of up to $____ per kW of electricity produced from California-generated manure by California-based manure digesters.
Notwithstanding Section 13340 of the Government Code, the sum of one hundred million dollars ($100,000,000) annually is hereby continuously appropriated from the Greenhouse Gas Reduction Fund created pursuant to Section 16428.8 of the Government Code to the State Air Resources Board to make manure digester market development payments of up to $____ per kW of electricity produced from California-generated manure by California-based manure digesters.
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Date
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Status
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|---|---|
| May 11, 2016 | In committee: Set, first hearing. Referred to APPR. suspense file. |
| Jun 9, 2016 | Referred to Com. on B. & F.R. |
| Jun 6, 2016 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Jun 2, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0.) |
| Jun 2, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0. Page 5233.) |
| Jun 2, 2016 | Read third time. Passed. Ordered to the Senate. |
| May 31, 2016 | Read second time. Ordered to third reading. |
| May 27, 2016 | Read second time and amended. Ordered returned to second reading. |
| May 27, 2016 | From committee: Amend, and do pass as amended. (Ayes 20. Noes 0.) (May 27). |
| Feb 18, 2016 | Read first time. To print. |
| Apr 13, 2016 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 10. Noes 0.) (April 13). Re-referred to Com. on APPR. |
| Apr 12, 2016 | Re-referred to Com. on AGRI. |
| Apr 11, 2016 | Read second time and amended. |
| Apr 7, 2016 | From committee: Amend, and do pass as amended and re-refer to Com. on AGRI. (Ayes 8. Noes 1.) (April 4). |
| Mar 29, 2016 | Re-referred to Com. on NAT. RES. |
| Mar 28, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on NAT. RES. Read second time and amended. |
| Mar 3, 2016 | Referred to Coms. on NAT. RES. and AGRI. |
| Feb 19, 2016 | From printer. May be heard in committee March 20. |
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Date
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Description
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Location
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Votes
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|---|---|---|---|---|
| Jun 2, 2016 | AB 2223 GRAY Assembly Third Reading | Assembly Floor |
Passed |
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| May 27, 2016 | Do pass as amended. | Assembly Standing Committee on Appropriations |
Passed |
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| Apr 13, 2016 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Agriculture |
Passed |
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| Apr 4, 2016 | Do pass as amended and be re-referred to the Committee on [Agriculture] | Assembly Standing Committee on Natural Resources |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
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Organization
|
Position
|
Date
|
|---|---|---|
| Agricultural Council Of California | ** Support | Jun 2, 2016 |
| Agricultural Energy Consumers Association | ** Support | Jun 2, 2016 |
| CalChamber | ** Against | Jun 2, 2016 |
| California Dairies | ** Support | Jun 2, 2016 |
| California Farm Bureau Federation | ** Support | Jun 2, 2016 |
| California Grain and Feed Association | ** Support | Jun 2, 2016 |
| CalTax | ** Against | Apr 4, 2016 |
| Dairy Farmers Of America | ** Support | Jun 2, 2016 |
| Dairy Institute | ** Support | Jun 2, 2016 |
| Jon Wick, Cofounder of Marin Carbon Project | * For If Amend | Apr 4, 2016 |
| Leadership Council for Justice and Accountability | * Against | Apr 4, 2016 |
| Milk Producers Council | ** Support | Jun 2, 2016 |
| NAT. RES. | ** Against | Apr 4, 2016 |
| Producer Dairy | ** Support | Jun 2, 2016 |
| Producer Handlers Association | ** Support | Jun 2, 2016 |
| Sierra Club California | ** Against | Apr 4, 2016 |
| Western United Dairymen | ** Support | Jun 2, 2016 |
ASSEMBLY THIRD READING
ATR Bill Id:AB 2223
Author:(Gray)
As Amended Ver:May 27, 2016
2/3 vote
Committee | Votes | Ayes | Noes |
Natural Resources | 8-1 | Williams, Jones, Cristina Garcia, Gomez, Hadley, Harper, McCarty, Wood | Mark Stone |
Agriculture | 10-0 | Dodd, Mathis, Eggman, Gallagher, Gray, Grove, Irwin, Jones-Sawyer, Quirk, Salas | |
Appropriations | 20-0 | Gonzalez, Bigelow, Bloom, Bonilla, Bonta, Calderon, Chang, Daly, Eggman, Gallagher, Eduardo Garcia, Roger Hernández, Holden, Jones, Obernolte, Quirk, Santiago, Wagner, Weber, Wood |
SUMMARY: Appropriates $10 million from the Greenhouse Gas Reduction Fund (GGRF) to the California Department of Food and Agriculture (CDFA) to fund loans for dairy digesters and other dairy methane reduction projects and management practices.
FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill appropriates a one-time expenditure of $10 million to CDFA to fund greenhouse gas (GHG) emissions reductions at dairies. Air Resources Board (ARB) costs are within existing resources.
COMMENTS: 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.
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.
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.
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.
Analysis Prepared by: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0003342
Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
ABPCA Bill Id:AB 2223
Author:(Gray) – As Amended Ver:April 11, 2016
Policy Committee: | Natural Resources | Vote: | 8 - 1 |
Agriculture | 10 - 0 |
Urgency: No State Mandated Local Program: No Reimbursable: 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:
- Cost pressures of up to $100 million (Greenhouse Gas Reduction Fund) for CDFA to provide methane reduction incentives.
- 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.
- California Air Resources Board (ARB) costs are within existing resources.
COMMENTS:
- 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.
- 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.
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.
- 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.
- 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 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.
Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081
Date of Hearing: April 13, 2016
ASSEMBLY COMMITTEE ON AGRICULTURE
Bill Dodd, Chair
ABPCA Bill Id:AB 2223 (
Author:Gray) – As Amended Ver:April 11, 2016
SUBJECT: Greenhouse Gas Reduction Fund: dairy digesters.
SUMMARY: Allows up to $100 million from the Greenhouse Gas Reduction Fund (GGRF) to the California Department of Food and Agriculture (CDFA) to fund incentives for dairy digesters and other dairy methane reduction projects and management practices, upon appropriation by the legislature.
EXISTING LAW:
- Requires the Air Resources Board (ARB) 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.
- Authorizes ARB to permit the use of market-based compliance mechanisms to comply with GHG reduction regulations, once specified conditions are met.
- Establishes GGRF and requires all moneys, except for fines and penalties, collected by ARB from the auction or sale of allowances pursuant to a market-based compliance mechanism (the cap-and-trade program) to be deposited in the GGRF and available for appropriation by the Legislature.
- Continuously appropriates:
- 10% of the GGRF for the Transit and Intercity Rail Capital Program;
- 5% for the Low Carbon Transit Operations Program;
- 20% for the Affordable Housing and Sustainable Communities Program; and,
- 25% for high speed rail.
- 10% of the GGRF for the Transit and Intercity Rail Capital Program;
- Establishes the GGRF Investment Plan and Communities Revitalization Act to set procedures for the investment of GHG allowance auction revenues. Authorizes a range of GHG reduction investments and establishes several policy objectives, including:
- Maximize economic, environmental, and public health benefits;
- Foster job creation;
- Complement efforts to improve air quality;
- Direct investment toward the most disadvantaged communities and households in the state;
- Provide opportunities for businesses, public agencies, nonprofits, and other community institutions to participate in and benefit from statewide efforts to reduce GHG emissions; and,
- Lessen the impacts and effects of climate change on the state's communities, economy, and environment.
- Maximize economic, environmental, and public health benefits;
- Requires the investment plan to allocate a minimum of 25% of the available moneys in the GGRF to projects that provide benefits to identified disadvantaged communities (IDC), and a minimum of 10% of the available moneys in the GGRF to projects located within an IDC.
FISCAL EFFECT: Unknown.
COMMENTS: The Global Warming Solutions Act of 2006 requires ARB determine the statewide 1990 GHG emission level and approve a statewide greenhouse gas emissions limit, equal to the 1990 level, to be achieved by 2020. ARB is responsible to prepare, adopt, and update California’s greenhouse gas inventory.
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. 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. Methane is responsible for about 20% of current climate change, and methane concentrations continue to increase globally. 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.
Biogas recovery systems are sometimes known as anaerobic digesters or "biodigesters" because they use a process called anaerobic digestion. During anaerobic digestion, bacteria break down waste in an oxygen-free environment. One of the natural products of anaerobic digestion is biogas, which typically contains between 60% to 70% methane, 30% to 40% carbon dioxide, and trace amounts of other gases. Applications of anaerobic digestion for biogas capture include wastewater treatment plants, dairies, and at organic waste processing facilities. Biogas can be used to produce electricity using engines or fuel cells, or it can be converted to transportation fuel or “biomethane,” which has the same properties as natural gas,
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. Currently, the California Department of Food and Agriculture (CDFA) has developed the Dairy Digester Research and Development (DDRD) Program. $11 million in competitive grant funding has been awarded to provide financial assistance for the installation of dairy digesters that result in reduced GHG emissions and other environmental benefits, 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.
According to the author, providing $100 million annually will incentivize the widespread adoption of dairy digesters and other dairy methane reduction projects. The ARB's strategy to improve manure management calls for putting digesters on more than several hundred dairies in the state and identifies a CDFA estimate of at least $100 million per year needed to support the development of necessary manure management infrastructure.
Dairy digesters would help California meet its organic diversion and bioenergy goals, because dairy manure can be mixed with other organic materials diverted from landfills or wastewater treatment plants. Furthermore, the majorities of dairies in California are located in the central valley in disadvantaged communities, which further builds on the goals that GGRF provide benefit to IDCs.
Opponents state ARB is conducted an extensive analysis of the dairy industry in order to present a strategy on how to reduce methane admissions from these sources. Without a complete report on all the potential methane controls within the dairy industry, opponents state AB 2223 is premature and inappropriate. Other opponents believed that ARB lack the legal authority to raise revenues though the auction of allowances and state given the legal uncertainties on the issue, expending GGRF funds is premature.
REGISTERED SUPPORT / OPPOSITION:
Support
Agricultural Council of California
Agricultural Energy Consumers Association
California Dairies, Inc.
California Farm Bureau Federation
California Grain and Feed Association
Dairy Farmers of America
Dairy Institute
Producer Dairy
Producer Handlers Association
Milk Producers Council
Western United Dairymen
Opposition
CalChamber
CalTax
Comite Civico Del Valle
Sierra Club California
Analysis Prepared by: Victor Francovich / AGRI. / (916) 319-2084
Date of Hearing: April 4, 2016
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
ABPCA Bill Id:AB 2223 (
Author:Gray) – As Amended Ver:March 28, 2016
SUBJECT: Greenhouse Gas Reduction Fund: manure digesters
SUMMARY: Continuously appropriates $100 million annually from the Greenhouse Gas Reduction Fund (GGRF) to the California Department of Food and Agriculture (CDFA) to fund incentives for dairy digesters and other dairy methane reduction projects and management practices.
EXISTING LAW:
- 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.
- Establishes the GGRF and requires all moneys, except for fines and penalties, collected by ARB from the auction or sale of allowances pursuant to a market-based compliance mechanism (i.e., the cap-and-trade program adopted by ARB under AB 32) to be deposited in the GGRF and available for appropriation by the Legislature.
- Continuously appropriates:
- 10% of the GGRF for the Transit and Intercity Rail Capital Program;
- 5% for the Low Carbon Transit Operations Program;
- 20% for the Affordable Housing and Sustainable Communities Program; and,
- 25% for high speed rail.
- 10% of the GGRF for the Transit and Intercity Rail Capital Program;
- Establishes the GGRF Investment Plan and Communities Revitalization Act to set procedures for the investment of GHG allowance auction revenues. Authorizes a range of GHG reduction investments and establishes several policy objectives, including:
- Maximize economic, environmental, and public health benefits;
- Foster job creation;
- Complement efforts to improve air quality;
- Direct investment toward the most disadvantaged communities and households in the state;
- Provide opportunities for businesses, public agencies, nonprofits, and other community institutions to participate in and benefit from statewide efforts to reduce GHG emissions; and,
- Lessen the impacts and effects of climate change on the state's communities, economy, and environment.
- Maximize economic, environmental, and public health benefits;
- Requires the investment plan to allocate (1) a minimum of 25% of the available moneys in the GGRF to projects that provide benefits to identified disadvantaged communities, and (2) a minimum of 10% of the available moneys in the GGRF to projects located within identified disadvantaged communities.
FISCAL EFFECT: Continuously appropriates $100 million from the GGRF to CDFA for dairy manure management.
COMMENTS:
- Existing GGRF funding and programs. The 2014-15 Budget Act allocated GGRF revenues for the 2014-15 fiscal year and established a long-term plan for the allocation of GGRF revenues beginning in fiscal year 2015-16. Thirty-five percent of GGRF is continuously appropriated for investments in transit, affordable housing, and sustainable communities. Twenty-five percent is continuously appropriated to continue the construction of the high-speed rail project. The remaining 40% is subject to annual appropriation 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, are available for appropriation this year.
The 2016 Annual Report of Cap and Trade Auction Proceeds includes an analysis of funds spent within and benefiting disadvantaged communities, excluding high speed rail spending. According to the report, 39% of expenditures were for projects located within disadvantaged communities and 51% of the overall funding benefited disadvantaged communities.
Listed below are the major GGRF program areas, administering agency, and funding to date:
- Transportation and Sustainable Communities
- High Speed Rail, High Speed Rail Authority (Authority), $750 million
- Transit and Intercity Rail Capital Program, Transportation Agency, $225 million
- Low Carbon Transit Operations Program, Department of Transportation (Caltrans), $125 million
- Affordable Housing and Sustainable Communities Program, Strategic Growth Council (SGC), $530 million
- Low Carbon Transportation, ARB, $325 million
- Clean Energy and Energy Efficiency
- Low-Income Weatherization Program, Community Services and Development (CSD), $154 million
- Energy Efficiency in Public Buildings, California Energy Commission (CEC), $20 million
- Agricultural Energy and Operational Efficiency, Department of Food and Agriculture (CDFA), $75 million
- Water-Energy Efficiency, Department of Water Resources (DWR), $75 million
- Natural Resources and Waste Diversion
- Wetlands and Watershed Restoration, Department of Fish and Wildlife (DFW), $27 million
- Urban Forestry, Forest Health Restoration, and Reforestation, Department of Forestry and Fire Protection (CalFIRE), $42 million
- Waste Diversion, Department of Resources Recycling and Recovery (CalRecycle), $31 million
- Transportation and Sustainable Communities
The Governor's 2016-17 Budget proposes just under $3.1 billion in expenditures:
- Continuous Appropriations
- High Speed Rail, Authority, $500 million
- Low Carbon Transit Operations, State Transit Assistance, $100 million
- Transit and Intercity Rail Capital Program, Transportation Agency, $200 million
- Affordable Housing and Sustainable Communities Program, SGC, $400 million
- Fifty Percent Reduction in Petroleum Use
- Transit and Intercity Rail Capital Program, Transportation Agency, $400 million
- Low Carbon Road Program, Caltrans, $100 million
- Low Carbon Transportation and Fuels, ARB, $500 million
- Biofuel Facility Investments, CEC, $25 million
- Local Climate Action
- Transformative Climate Communities, SGC, $100 million
- Short-Lived Climate Pollutants
- Black Carbon Woodsmoke and Refrigerants, ARB, $60 million
- Waste Diversion, CalRecycle, $100 million
- Climate Smart Agriculture – Healthy Soils and Dairy Digesters, CDFA, $55 million
- Safeguarding California/Water Action Plan
- Water and Energy Efficiency, CDFA and DWR, $30 million
- Drought Executive Order, CEC, $60 million
- Wetlands and Watershed Restoration/CalEcoRestore, DFW, $60 million
- Safeguarding California/Carbon Sequestration
- Healthy Forests and Urban Forestry, CalFIRE, $180 million
- Urban Greening, Natural Resources Agency, $20 million
- Energy Efficiency/Renewable Energy
- Energy Efficiency for Public Buildings, Department of General Services, $30 million
- California Lending for Energy and Environmental Needs Center, I Bank, $20 million
- Energy Corps, Conservation Corps, $15 million
- Energy Efficiency Upgrades/Weatherization, Department of Community Services and Development, $75 million
- Renewable Energy and Energy Efficiency Projects, University of California, California State University, $60 million
- Continuous Appropriations
- Short-lived climate pollutants. 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. 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. Methane is responsible for about 20% of current climate change, and methane concentrations continue to increase globally. There is increasing concern that continued warming will cause massive releases of methane from thawing arctic permafrost and dissolve frozen methane deposits on the sea floor. ARB's Draft Short-Lived Climate Pollutant Reduction Strategy identifies dairies as the source of 35% of the state's methane emissions. The Strategy identifies a number of technologies and processes that have the potential to greatly reduce dairy methane emissions.
- Author's statement:
- AB 2223 provides $100 million annually [to] incentivize the widespread adoption of dairy digesters and other dairy methane reduction projects. The ARB's strategy to improve manure management calls for putting digesters on more than several hundred dairies in the state and identifies a CDFA estimate of at least $100 million per year needed to support the development of necessary manure management infrastructure.
In addition, dairy digesters would help California meet its organic diversion and bioenergy goals, because dairy manure can be mixed with other organic materials diverted from landfills or wastewater treatment plants.
- AB 2223 provides $100 million annually [to] incentivize the widespread adoption of dairy digesters and other dairy methane reduction projects. The ARB's strategy to improve manure management calls for putting digesters on more than several hundred dairies in the state and identifies a CDFA estimate of at least $100 million per year needed to support the development of necessary manure management infrastructure.
- Suggested amendment. This bill continuously appropriates $100 million from the GGRF. Continuous appropriations diminish the Legislature's ability oversee and adjust a program during each budget cycle. In order to ensure proper legislative oversight over GGRF expenditures, the committee may wish to amend the bill to remove the continuous appropriation and clarify that up to $100 million is available, upon appropriation, for purposes of the bill.
- Double referral. This bill has also been referred to the Assembly Agriculture Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
Agricultural Council of California
Agricultural Energy Consumers Association
California Dairies, Inc.
California Farm Bureau Federation
California Grain and Feed Association
Dairy Farmers of America
Dairy Institute
Milk Producers Council
Western United Dairymen
Opposition
CalChamber
CalTax
Sierra Club California
Analysis Prepared by: Elizabeth MacMillan / NAT. RES. / (916) 319-2092
Discussed in Hearing
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Bill Author
Bill Co-Author(s):