Existing law requires the State Air Resources Board to approve and begin implementing a comprehensive short-lived climate pollutant strategy to achieve a certain reduction in statewide emissions of methane, including a goal of a 75% reduction in the level of the statewide disposal of organic waste from the 2014 level by 2025. Existing law requires the Department of Resources Recycling and Recovery, in consultation with the state board, to adopt regulations to achieve these organic waste reduction goals, that provide for, among other things, the calculation by the department of recovered organic waste product procurement targets for each local jurisdiction, and that may include penalties to be imposed by the department for noncompliance.

This bill would require the department, for purposes of those regulations, to allow a local jurisdiction, until December 1, 2039, 2031, in procuring recovered organic waste products to meet the target procurement requirements, to use California-derived recovered organic waste that the local jurisdiction sends for processing at a facility or operation outside of the state that meets certain conditions, as provided.

Existing law requires, no later than January 1, 2018, requires the State Air Resources Board to approve and begin implementing a comprehensive short-lived climate pollutant strategy to achieve a certain reduction in statewide emissions of methane, including a goal of a 75% reduction in the level of the statewide disposal of organic waste from the 2014 level by 2025. Existing law requires the Department of Resources Recycling and Recovery, in consultation with the state board, to adopt regulations to achieve these organic waste reduction goals, that provide for, among other things, the calculation by the department of recovered organic waste product procurement targets for each local jurisdiction, and that may include penalties to be imposed by the department for noncompliance.

This bill would require the department, for purposes of those regulations, to allow a local jurisdiction, until December 1, 2039, in procuring recovered organic waste products to meet the target procurement requirements, to use California-derived recovered organic waste that the local jurisdiction sends for processing at a facility or operation outside of the state that meets certain conditions, as provided.

Existing law requires, no later than January 1, 2018, the State Air Resources Board to approve and begin implementing a comprehensive short-lived climate pollutant strategy to achieve a certain reduction in statewide emissions of methane, including a goal of a 75% reduction in the level of the statewide disposal of organic waste from the 2014 level by 2025. Existing law requires the Department of Resources Recycling and Recovery, in consultation with the state board, to adopt regulations to achieve these organic waste reduction goals, that provide for, among other things, the calculation by the department of recovered organic waste product procurement targets for each local jurisdiction, and that may include penalties to be imposed by the department for noncompliance.

This bill would require the departments regulations department, for purposes of those regulations, to allow a local jurisdiction, until December 1, 2039, in procuring recovered organic waste products to meet the target procurement requirements, to use California-derived recovered organic waste that the local jurisdiction sends for processing at a facility or operation outside of the state that meets certain conditions, as provided.

Existing law requires the State Air Resources Board, no later than January 1, 2018, to approve and begin implementing a comprehensive short-lived climate pollutant strategy to reduce statewide emissions of, among other pollutants, methane by 40% below 2013 levels by 2030. Existing law requires those methane emissions reduction goals to include specified targets for reducing organic waste in landfills. Existing law makes legislative findings and declarations relating to those organic waste disposal reduction targets, including, among others, that achieving organic waste disposal reduction targets requires significant investment to develop organics recycling capacity.

This bill would amend that legislative finding to instead state that achieving organic waste disposal reduction targets requires significant investment to develop the necessary organics recycling capacity.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 573 (Garcia) - Organic waste: meeting recovered organic waste product procurement targets

Bill Summary:

This bill would authorize local jurisdictions to procure California-derived organic waste products that are processed at out-of-state facilities in order to comply with the state’s recovered organic waste procurement requirements.

Fiscal Impact:

• The Department of Resources Recycling and Recovery (CalRecycle) estimates ongoing costs of about $1.2 million (Cost of Implementation Account [COIA]) for 8 positions to provide technical assistance to jurisdictions, review records, and inspect out of state facilities to ensure jurisdictions are using compliant material to count towards their procurement goals. In addition, CalRecycle estimates one-time costs of at least $150,000 (COIA) to re-open organic waste procurement regulations.
• The California Air Resources Board anticipates any costs would be minor and absorbable.

Background:

Organic material accounts for more than a third of California’s waste stream: food waste alone accounts for approximately 18% of landfilled material, and yard waste accounts for another seven percent of the total waste stream. Organic waste is not only a high volume problem in landfills--it also has an oversized impact on climate. According to CalRecycle, methane emissions from decomposing organic waste in landfills account for approximately 20% of the State’s total methane emissions. Methane is a climate “super pollutant” that is 84 times more potent than carbon dioxide over a 20-year timescale.

Organic Waste and Methane Emission Reduction Goals (SB 1383 Regulations). In 2016, the Legislature passed SB 1383 (Lara, Chapter 395, Statutes of 2016), which established emission reduction targets for short-lived climate pollutants including hydrofluorocarbon gasses, anthropogenic black carbon, and methane. SB 1383 required CARB to approve and implement a comprehensive short-lived climate pollutant strategy that included a 2030 target of reducing methane emissions by 40% relative to 2014 levels. In order to achieve these reductions in methane emissions, SB 1383 set a goal of reducing landfill disposal of organic waste from 2014 levels 50% by 2020 and 75% by 2025; and to rescue at least 20% of currently disposed of surplus food for meals by 2025. CalRecycle was given the authority to adopt regulations that would achieve these organic waste reduction requirements.

Creating a strong market for organic materials is an important step in diverting that same organic waste from landfills. To develop markets for organic waste products, like mulch, compost, and digestat, CalRecycle has established organic waste procurement requirements for jurisdictions through SB 1383 regulations. The procurement targets are based on the average amount of organic waste generated by Californians annually, multiplied by the population of a jurisdiction.

To meet their SB 1383 goals, locals must ensure that the organic materials they procure meets all processing requirements laid out in regulations, including requirements that processing facilities measure and report data on their recovery rates to CalRecycle. As a result, CalRecycle currently only counts organic waste towards SB 1383 procurement targets if that organic material is processed at an in-state, not an out-of-state, facility.

Current trajectory falling short of state goals. California is behind on its organic waste reduction targets. While the state’s goal is to reduce organic material in landfills by 50 percent relative to 2014 levels in 2020, the total amount of organic materials actually increased by a million tons over that time period. According to a report by the Little Hoover Commission, California is unlikely to meet its 2025 goals, noting that: “Even if state estimates of increased processing capacity are met, California is likely to be short of the necessary capacity by approximately 8 million tons a year. For reasons of both cost and time, the state is highly unlikely to add sufficient capacity by 2025.” To date, more than a hundred local jurisdictions have sought an extension of the deadline for complying with the state’s requirement.

Proposed Law:

This bill would authorize local jurisdictions to procure California-derived organic waste products that are processed at out-of-state facilities in order to comply with the state’s recovered organic waste procurement requirements. Specifically, this bill would:

1. Authorize a local jurisdiction, until December 1, 2031, to send California-derived organic waste to an out-of-state facility for processing for purposes of reaching SB 1383 targets.
2. Require that the out-of-state operation or facility meet the following requirements:
   1. It has been in operation since January 1, 2022;
   2. It has been appropriately permitted in the jurisdiction in which it is located;
   3. It provides all information to the local jurisdiction needed to allow it to comply with the appropriate recordkeeping requirements; and
   4. It limits the processing capacity of that operation or facility to the capacity available as of January 1, 2022.
3. Exclude rural jurisdictions that have already been granted a waiver through CalRecycle from their SB 1383 organic waste collection requirements.
4. Specify that the amount of a local jurisdiction’s procurement requirement is limited to the amount of California-derived recovered organic waste that the local jurisdiction sent outside the state for processing.

Related Legislation:

AB 1985 (R. Rivas, Chapter 344, Statues of 2022) provides an exemption for rural jurisdictions and authorizes CalRecycle to create a delayed and ramping enforcement timeline for penalties for rural local jurisdictions to meet their organic waste procurement targets.

SB 613 (Laird, Chapter 508, Statutes of 2021) pushed back the timeline for penalties for local jurisdictions that have not complied with SB 1383 requirements until January 1, 2023.

Staff Comments:

CalRecycle estimates this bill would result in ongoing costs of about $1.2 million based on existing SB 1383 requirements to ensure only quality material is counting towards procurement in the state. CalRecycle notes that out-of-state inspection would likely be complicated, and could result in ongoing costs being higher than estimated. Actual costs would depend on how many out-of-state facilities ultimately end up processing organic waste under the provisions of this bill and how many times CalRecycle inspects each of them. The frequency for inspection could be as often as monthly, according to the department, meaning that CalRecycle would need to inspect each facility many times.

CalRecycle notes that this bill could result in a potential negative economic impact to the state as existing policy and regulations are designed to encourage the development of in-state organic infrastructure and markets. It is possible that allowing out-of-state material could undermine these policy goals.  

-- END –

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Allen, Chair

2023 - 2024 Regular

SUBJECT: Organic waste: meeting recovered organic waste product procurement targets

DIGEST: This bill authorizes local jurisdictions to comply with the state’s recovered organic waste procurement requirements by procuring California-derived organic waste products that are processed at out-of-state facilities.

ANALYSIS:

Existing law:

1. Requires the California Air Resources Board (CARB) to complete, approve, and implement a comprehensive strategy to reduce emissions of short-lived climate pollutants (SLCPs) in the state to achieve, among other things, a reduction in the statewide emissions of methane by 40%. (Health and Safety Code (HSC) §§39730 et seq.)
   1. Requires that methane emissions reduction goals include specified targets to reduce the landfill disposal of organic waste by 50% relative to its 2014 level by 2020, and achieve a 75% reduction relative to 2014 by 2025. (HSC §39730.6)
2. Requires the Department of Resources Recycling and Recovery (CalRecycle), in consultation with CARB, to adopt regulations to achieve those targets for reducing organic waste in landfills pursuant to SB 1383 (Lara, Chapter 395, Statutes of 2016). These regulations include:
   1. Requires local jurisdictions to impose requirements on generators and authorizes local jurisdictions to impose penalties for noncompliance with those requirements.
   2. Establishes different levels of requirements and phased timelines for local jurisdictions based on different categorizations for those local jurisdictions.
   3. Establishes process for local jurisdictions facing penalties for violations of these requirements to obtain relief by submitting a notice of intent to comply that includes an explanation of why they were unable to comply and a description of the proposed actions to come into compliance in a timely manner. (Public Resources Code (PRC) §42652.5)
3. Requires local jurisdictions, beginning January 1, 2022, to annually procure a quantity of recovered organic waste products that meet or exceed their annual recovered organic waste product procurement target.
   1. Requires CalRecycle to calculate the annual recovered organic waste product procurement target based on the per capita procurement target of 0.8 tons of organic waste per resident per year and the jurisdiction’s population.
   2. Authorizes jurisdictions to comply by either directly procuring recovered organic waste products for use or giveaway, or through a direct service provider contract. (Title 14 §18993.1 of the California Code of Regulations (CCR))
4. Defines “compostable materials” as any organic material that when accumulated will become active compost. (Title 14 § 17852 CCR)
5. Defines “jurisdiction” as a city, county, a city and county, or a special district that provides solid waste collection services. (Title 14 §18982 CCR)

This bill:

1. Authorizes a local jurisdiction, until December 1, 2039, to send California-derived organic waste to an out-of-state facility for processing for purposes of reaching SB 1383 targets.
2. Requires that the out-of-state operation or facility meet the following requirements:
   1. It has been in operation since January 1, 2022;
   2. It has been appropriately permitted in the jurisdiction in which it is located;
   3. It provides all information to the local jurisdiction needed to allow it to comply with the appropriate recordkeeping requirements; and
   4. It limits the processing capacity of that operation or facility to the capacity available as of January 1, 2022.
3. Excludes rural jurisdictions that have already been granted a waiver through CalRecycle from their SB 1383 organic waste collection requirements.
4. Specifies that the amount of a local jurisdiction’s procurement requirement is limited to the amount of California-derived recovered organic waste that the local jurisdiction sent outside the state for processing.

Background

1. Organic Waste and Short-Lived Climate Pollutants. Organic material accounts for more than a third of California’s waste stream: food waste alone accounts for approximately 18% of landfilled material, and yard waste accounts for another seven percent of the total waste stream. Organic waste is not only a high volume problem in landfills--it also has an oversized impact on climate. According to CalRecycle, methane emissions from decomposing organic waste in landfills account for approximately 20% of the State’s total methane emissions. Methane is a climate “super pollutant” that is 84 times more potent than carbon dioxide over a 20-year timescale.
2. Organic Waste and Methane Emission Reduction Goals (SB 1383 Regulations). In 2016, the Legislature passed SB 1383 (Lara, Chapter 395, Statutes of 2016), which established emission reduction targets for short-lived climate pollutants including hydrofluorocarbon gasses, anthropogenic black carbon, and methane. SB 1383 required CARB to approve and implement a comprehensive short-lived climate pollutant strategy that included a 2030 target of reducing methane emissions by 40% relative to 2014 levels. In order to achieve these reductions in methane emissions, SB 1383 set a goal of reducing landfill disposal of organic waste from 2014 levels 50% by 2020 and 75% by 2025; and to rescue at least 20% of currently disposed of surplus food for meals by 2025. CalRecycle was given the authority to adopt regulations that would achieve these organic waste reduction requirements.
3. Procurement and Processing. Creating a strong market for organic materials is an important step in diverting that same organic waste from landfills. To develop markets for organic waste products, like mulch, compost, and digestate, CalRecycle has established organic waste procurement requirements for jurisdictions through SB 1383 regulations. The procurement targets are based on the average amount of organic waste generated by Californians annually, multiplied by the population of a jurisdiction.

To be compliant with SB 1383 procurement requirements, facilities that process organic waste must follow certain protocols and meet certain reporting requirements. CalRecycle has developed detailed guidance on how processing facilities must calculate the amount of organic waste that is recovered vs. sent to disposal. This includes a set sampling procedure that processing facilities can follow. These processing operators are also required to maintain records and report to CalRecycle sampling results and daily outgoing weights of organic material sent for recovery and disposal.

CalRecycle also sets standards for the quality of the organic material leaving a processing facility, specifying that all material that a transfer/processing facility or operation sends to a recovery activity (like composting or anaerobic digestion) should be 80 percent “clean” or comprised of less than 20 percent of incompatible material by 2022. By 2024, those requirements are ratcheted up to a 90 percent clean or less than 10 percent of incompatible material.

1. Out of State Processing. To meet their SB 1383 goals, locals must ensure that the organic materials they procure meets all processing requirements laid out in regulations, including requirements that processing facilities measure and report data on their recovery rates to CalRecycle. As a result, CalRecycle currently only counts organic waste towards SB 1383 procurement targets if that organic material is processed at an in-state, not an out-of-state, facility.

Separate from the SB 1383 requirements, jurisdictions may choose to ship organic materials out of state for processing. The choice to use out-of-state processing facilities is a matter of cost and logistics. Local jurisdictions have an incentive to opt for the lowest cost option available. For more remote areas of the state that do not have their own processing facilities, facilities across state lines may be closer and less expensive than in-state options.

1. Missed Targets and Low Capacity. California is behind on its organic waste reduction targets. While the state’s goal is to reduce organic material in landfills by 50 percent relative to 2014 levels in 2020, the total amount of organic materials actually increased by a million tons over that time period. According to a report by the Little Hoover Commission, California is unlikely to meet its 2025 goals, noting that:

“Even if state estimates of increased processing capacity are met, California is likely to be short of the necessary capacity by approximately 8 million tons a year. For reasons of both cost and time, the state is highly unlikely to add sufficient capacity by 2025.”

To date, more than a hundred local jurisdictions have sought an extension of the deadline for complying with the state’s requirement.

Comments

1. Purpose of Bill. According to the author, “As jurisdictions ramp up their organic waste collection programs, many cities and counties have struggled to meet their procurement targets due to a limited amount of organic waste infrastructure across the state. In some cases, purchasing compost from within state borders and delivering it to a jurisdiction can require trucking compost hundreds of miles, unnecessarily increasing vehicle miles traveled and ratepayer costs. CalRecycle acknowledges that the state still needs approximately 50-100 new or expanded facilities for the successful implementation of SB 1383 and that it can take years to site and permit new facilities. While jurisdictions wait for in-state compost facilities to get sited and permitted, AB 573 will help local jurisdictions in meeting procurement requirements by allowing California-derived material processed at existing out-of state compost facilities to count towards procurement, which will both reduce vehicle miles traveled and potential financial impacts on ratepayers.”
2. Today’s Help, or Tomorrow’s Competition? The intent of AB 573 is to give local jurisdictions more options to meet SB 1383 procurement targets at a time when the in-state processing infrastructure is still being developed. This could be especially useful in rural areas of the state where processing options are fewer and further between, and where out-of-state options may be closer than in-state ones. However, allowing locals to send their organic waste out of state for processing introduces a risk that there will be no market pressure to develop in-state facilities. Providing breathing room for locals to meet procurement targets in the short term may undercut critical efforts to develop in-state organic waste processing infrastructure.

To address these concerns, the bill provides several guardrails, including specifying that local jurisdictions in California can only use out-of-state facilities that were operating before AB 573 was passed and that have not expanded their processing capacity. These measures discourage expansion of out-of-state processing facilities to accommodate more throughput of organic waste from California. As local jurisdictions procure more organic material in pursuit of reaching their SB 1383 targets, the amount of organic waste needing to be processed will increase. Since AB 573 adds some caps to the amount of waste that can be sent out of state for processing, based on the current capacity of those out-of-state facilities, the increase in organic waste material needing to be processed over time could support in-state markets (although the degree to which this could happen will depend on the current capacity of out of state facilities.)

Suggested Amendment. The committee and authors may wish to consider shortening the sunset allowing locals to count organic material that was processed out of state towards SB 1383 goals. The current sunset date is Dec 1, 2039—however, a seven-year sunset, until Dec 1, 2031, may provide sufficient time to allow in-state infrastructure to be developed.

1. Out of State, Out of Hand. Shipping organic waste out of California introduces an issue for enforcement. CalRecycle does not have the authority to enforce the processing standards it lays out in SB 1383 regulations for out-of-state facilities. While CalRecycle can and does regulate products that are manufactured out of state and then sold into the state, it cannot enforce specific processes at out-of-state facilities. SB 1383 regulations lay out specific requirements for how organic waste must be handled and reported at processing facilities. How will CalRecycle ensure that these criteria are being satisfied when the Department has no way of auditing out-of-state facilities to learn if entities are in compliance with SB 1383 regulations, and no way of penalizing those entities if they failed to comply?

1. Committee amendments. Staff recommends the committee adopt the bolded amendments contained in comments 2 above.

Related/Prior Legislation

AB 1985 (R. Rivas, Chapter 344, Statues of 2022) provides an exemption for rural jurisdictions and authorizes CalRecycle to create a delayed and ramping enforcement timeline for penalties for rural local jurisdictions to meet their organic waste procurement targets.

SB 613 (Laird, Chapter 508, Statutes of 2021) pushed back the timeline for penalties for local jurisdictions that have not complied with SB 1383 requirements until January 1, 2023.

SOURCE:

CR&R Environmental Services

SUPPORT:

California Compost Coalition
City of Riverside
City of Tustin
County of Imperial
Cr&r, INC.
Republic Services - Western Region
Rural County Representatives of California (RCRC)
Truckee; Town of

OPPOSITION:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 573

Author:(Garcia)

As Amended Ver:May 18, 2023

Majority vote

SUMMARY

Allows local jurisdictions to comply with the state's recovered organic waste procurement requirements by procuring California-derived organic waste products processed at out-of-state facilities.

Major Provisions

1. Authorizes a local jurisdiction, until December 1, 2039, to procure California-derived organic waste that the local jurisdiction sends for processing to an operation or facility located outside the state that processes compostable materials to meet the state's organic waste product procurement requirements.
2. Requires that the out of state operation or facility meet the following requirements:
   1. It has been in operation since on or before January 1, 2022;
   2. It has been appropriately permitted in the jurisdiction in which it is located;
   3. It provides all information to the local jurisdiction needed to allow it to comply with the appropriate recordkeeping requirements, as specified; and,
   4. It is located within 125 miles of the jurisdiction from which the material originated.
3. Specifies that the amount of a local jurisdiction's procurement requirement is limited to the amount of California-derived recovered organic waste that the local jurisdiction sent outside the state for processing.

COMMENTS

An estimated 35 million tons of waste are disposed of in California's landfills annually. More than half of the materials landfilled are organics subject to SB 1383 (Lara), Chapter 395, Statutes of 2016, requirements. CalRecycle's 2021 waste characterization study, found that 34% of disposed waste is organic waste. SB 1383 requires the ARB to approve and implement a comprehensive Short Lived Climate Pollutant strategy to achieve, from 2013 levels, a 40% reduction in methane, a 40% reduction in hydrofluorocarbon gases, and a 50% reduction in anthropogenic black carbon, by 2030. In order to accomplish these goals, the bill specified that the methane emission reduction goals include targets to reduce the landfill disposal of organic waste 50% by 2020 and 75% by 2025 from the 2014 level.

In order to achieve these goals, California's waste management infrastructure is going to have to recycle much higher quantities of organic materials, involving significant investments in additional processing infrastructure. Organic waste is primarily recycled by composting the material, which generates compost that can be used in gardening and agriculture as a soil amendment and engineering purposes for things like slope stabilization. Anaerobic digestion is also widely used to recycle organic wastes. This technology uses bacteria to break down the material in the absence of oxygen and produces biogas, which can be used as fuel, and digestate, which can also be used as a soil amendment. Tree trimmings and prunings can also be mulched.

In order to ensure that there are adequate markets for the state's increasing quantities of products made from organic waste, like much, compost, and digestate, CalRecycle established procurement requirements for jurisdictions. The procurement targets are based on the average amount of organic waste generated by Californians annually multiplied by the population of a jurisdiction. Currently, the regulations require that the procurement targets be met by purchasing materials from in-state organic waste processors. While many jurisdictions are able to use in-state organic waste processing facilities, some ship materials out of state for processing. Many rural areas, for example, are closer to facilities across state lines than they are to California-based processors. Organic waste is heavy, and therefore expensive to transport, making it economically infeasible for these jurisdictions to ship to distant in-state facilities. Additionally, California does not yet have sufficient capacity to process all of the material generated in-state.

This bill would allow local jurisdictions, until 2039, to meet the state's organic waste procurement targets by purchasing recovered organic waste products from out-of-state facilities located within 125 miles. This bill limits this procurement allowance to California-derived products and to the amount of organic waste material that the jurisdictions sends out-of-state. These limitations ensure that procurement targets will not be met using material produced from organic waste generated in other states. Instead, it allows jurisdictions to essentially purchase finished organic waste products produced from material generated within the jurisdiction. The sunset on this bill is intended to allow time for the state's organic waste processing infrastructure to develop and encourage local jurisdictions to procure from in-state facilities when it becomes feasible to do so.

According to the Author

As jurisdictions ramp up their organic waste collection programs, many cities and counties have struggled to meet their procurement targets due to a limited amount of organic waste infrastructure across the state. In some cases, purchasing compost from within state borders and delivering it to a jurisdiction can require trucking compost hundreds of miles, unnecessarily increasing vehicle miles traveled and ratepayer costs. CalRecycle acknowledges that the state still needs approximately 50-100 new or expanded facilities for the successful implementation of SB 1383 and that it can take years to site and permit new facilities. While jurisdictions wait for in-state compost facilities to get sited and permitted, AB 573 will help local jurisdictions in meeting procurement requirements by allowing California-derived material processed at existing out-of-state compost facilities to count towards procurement, which will both reduce vehicle miles traveled and potential financial impacts on ratepayers.

Arguments in Support

A coalition of supporters state:

As jurisdictions ramp up their organic waste collection programs, many cities and counties have struggled to meet their procurement targets due to a limited amount of organic waste

infrastructure across the state. In some cases, purchasing compost from within state borders and delivering it to a jurisdiction can require trucking compost hundreds of miles, unnecessarily increasing vehicle miles traveled and ratepayer costs. CalRecycle acknowledges that the state still needs approximately 50-100 new or expanded facilities for the successful implementation of SB 1383 and that it can take several years – and even sometimes a decade – to site and permit new facilities. While jurisdictions wait for in-state compost facilities to get sited and permitted, AB 573 will help local jurisdictions in meeting their SB 1383 procurement targets by allowing jurisdictions near the state border to purchase California-derived compost processed at existing out-of-state facilities.

Arguments in Opposition

None on file

FISCAL COMMENTS

According to the Assembly Appropriations Committee on a prior version of this bill

1. CalRecycle estimated costs of approximately $1.2 million in fiscal year (FY) 2024-25 and ongoing to hire eight additional positions to provide technical assistance to jurisdictions, review records, and inspect out-of-state facilities to ensure jurisdictions are using compliant material to count towards their procurement goals (Cost of Implementation Account). CalRecycle noted out-of-state inspection could be complicated and costly, and this cost could increase exponentially depending on the number of facilities and frequency of inspections (potentially monthly). CalRecycle noted the need for inspections is based on existing SB 1383 (Lara), Chapter 395, Statutes of 2016, requirements to ensure only quality material counts toward procurement in the state. Amendments limit the bill to out-of-state facilities that are located within 125 miles of the jurisdiction from which the material originated, which should significantly lower CalRecycle's costs.
2. CalRecycle estimates additional one-time costs of at least $150,000 to re-open its SB 1383 procurement regulations to incorporate the changes proposed in this bill (Cost of Implementation Account).

VOTES

ASM NATURAL RESOURCES: 11-0-0

YES: Luz Rivas, Flora, Addis, Friedman, Hoover, Mathis, Muratsuchi, Pellerin, Ward, Wood, Zbur

ASM APPROPRIATIONS: 11-0-5

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Ortega

ABS, ABST OR NV: Megan Dahle, Dixon, Mathis, Robert Rivas, Sanchez

UPDATED

VERSION: May 18, 2023

CONSULTANT: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0000779

Date of Hearing: May 3, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 573

Author:(Garcia) – As Amended Ver:March 16, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill allows local jurisdictions to comply with the state’s recovered organic waste procurement requirements by procuring California-derived organic waste products processed at out-of-state facilities.

Specifically, this bill:

1. Allows a local jurisdiction, until December 1, 2039, in order to meet the state’s organic waste product procurement requirements, to procure California-derived recovered organic waste that the local jurisdiction sends for processing by an operation or facility located outside the state that processes compostable materials if the out-of-state operation or facility meet all the following requirements:
   1. It has been in operation since on or before January 1, 2022.
   2. It has been appropriately permitted in the jurisdiction in which it is located.
   3. It provides all information to the local jurisdiction needed to allow it to comply with specified recordkeeping requirements.
2. Specifies that the amount of a local jurisdiction’s procurement requirement that may be satisfied under 1) is limited to the amount of California-derived recovered organic waste that the local jurisdiction sent outside the state for processing pursuant to 1).

FISCAL EFFECT:

1) The Department of Resources Recycling and Recovery (CalRecycle) estimates costs of approximately $1.2 million in fiscal year (FY) 2024-25 and ongoing to hire eight additional positions to provide technical assistance to jurisdictions, review records, and inspect out-of-state facilities to ensure jurisdictions are using compliant material to count towards their procurement goals (Cost of Implementation Account). CalRecycle notes out-of-state inspection could be complicated and costly, and this cost could increase exponentially depending on the number of facilities and frequency of inspections (potentially monthly). The need for inspections is based on existing SB 1383 (Lara), Chapter 395, Statutes of 2016, requirements to ensure only quality material counts toward procurement in the state.

2) Additional one-time costs of at least $150,000 for CalRecycle to re-open its SB 1383 procurement regulations, which would require CalRecycle to go through the full Administrative Procedure Act process (Cost of Implementation Account).

COMMENTS:

1) Purpose. According to the author:

As jurisdictions ramp up their organic waste collection programs, many cities and counties have struggled to meet their procurement targets due to a limited amount of organic waste infrastructure across the state. In some cases, purchasing compost from within state borders and delivering it to a jurisdiction can require trucking compost hundreds of miles, unnecessarily increasing vehicle miles traveled and ratepayer costs. CalRecycle acknowledges that the state still needs approximately 50-100 new or expanded facilities for the successful implementation of SB 1383 and that it can take years to site and permit new facilities. While jurisdictions wait for in-state compost facilities to get sited and permitted, AB 573 will help local jurisdictions in meeting procurement requirements by allowing California-derived material processed at existing out-of-state compost facilities to count towards procurement, which will both reduce vehicle miles traveled and potential financial impacts on ratepayers.

2) Background. According to the CalRecycle, about 40 million tons of waste were disposed of in California's landfills in 2021. Organics like food scraps, yard trimmings, paper, and cardboard make up half of what is dumped in landfills. SB 1383, among other things, set methane emissions reduction targets in an effort to reduce emissions of short-lived climate pollutants. The targets must reduce organic waste disposal 50% by 2020 and 75% by 2025 from the 2014 level.

To achieve these goals, California’s waste management infrastructure will need to recycle much higher quantities of organic materials, involving significant investments in additional processing infrastructure. According to CalRecycle, the state needs approximately 50 to 100 new or expanded facilities to annually recycle the additional 20 million to 25 million tons of organic waste that will be collected from residents and commercial businesses with the successful implementation of SB 1383. To ensure there are adequate markets for the state’s increasing quantities of products made from organic waste, SB 1383 requires a local jurisdiction to annually procure a certain quantity of recovered organic waste products to meet its annual procurement target assigned to it by CalRecycle. The procurement targets are based on the average amount of organic waste generated by Californians annually multiplied by the population of a jurisdiction. CalRecycle’s regulations require jurisdictions to meet the procurement targets by purchasing materials from in-state organic waste processors. While many jurisdictions are able to use in-state organic waste processing facilities, some ship materials out-of-state for processing. Many rural areas, for example, are closer to facilities across state lines than they are to California-based processors. Organic waste is heavy, and therefore expensive to transport, making it economically infeasible for these jurisdictions to ship to distant in-state facilities. Additionally, California does not yet have sufficient capacity to process all the material generated in-state.

This bill allows a local jurisdiction, until 2039, to meet its organic waste procurement targets by purchasing recovered organic waste products from out-of-state facilities. This bill limits this procurement allowance to California-derived products and to the amount of organic waste material the jurisdictions sends out-of-state. These limitations ensure jurisdictions meet procurement targets not by using material produced from organic waste generated in other states but, instead, by purchasing finished organic waste products produced from material generated within the jurisdiction. The sunset date on this bill allows time for the state’s organic waste processing infrastructure to develop and encourage local jurisdictions to procure from in-state facilities when it becomes feasible to do so. On the other hand, state policy and regulations are designed to encourage the development of in-state organic infrastructure and markets, and this bill could potentially undermine those policy goals.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: April 10, 2023

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Luz Rivas, Chair

ABPCA Bill Id:AB 573 (

Author:Garcia) – As Amended Ver:March 16, 2023

SUBJECT: Organic waste: meeting recovered organic waste product procurement targets

SUMMARY: Allows local jurisdictions to comply with the state’s recovered organic waste procurement requirements by procuring California-derived organic waste products processed at out-of-state facilities.

EXISTING LAW:

1. Requires the Air Resources Board (ARB), pursuant to California Global Warming Solutions Act of 2006 [AB 32 (Núñez), 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. Requires ARB to approve a statewide GHG emissions limit equivalent to 85% below the 1990 level by 2045. (Health and Safety Code (HSC) 38500-38599.11)
2. Requires ARB to develop a comprehensive strategy to reduce the emissions of short-lived climate pollutants (SLCP) to achieve a 40% reduction in methane emissions, 40% reduction in hydrofluorocarbon gases, and 50% reduction in anthropogenic black carbon below 2013 levels by 2030. (HSC 39730-39730.5)
3. Requires the state to reduce the disposal of organic waste by 40% from the 2014 level by 2020 and 75% by 2025 to help achieve the state’s methane reduction goal. (HSC 39730.6)
4. Requires, beginning January 1, 2022, local jurisdictions to annually procure a quantity of recovered organic waste products that meet or exceed its current annual recovered organic waste product procurement target. Requires CalRecycle to calculate the annual recovered organic waste product procurement target based on the per capita procurement target of 0.8 tons of organic waste per resident per year and the jurisdiction’s population. Authorizes jurisdictions to comply by either directly procuring recovered organic waste products for use or giveaway, or through a direct service provider contract. (Title 14 18993.1 of the California Code of Regulations (CCR))
5. Defines “compostable materials” as any organic material that when accumulated will become active compost. (Title 14 17852 CCR)
6. Defines “jurisdiction” as a city, county, a city and county, or a special district that provides solid waste collection services. (Title 14 18982 CCR)

THIS BILL:

1. Authorizes a local jurisdiction, until December 1, 2039, to procure California-derived organic waste that the local jurisdiction sends for processing to an operation or facility located outside the state that processes compostable materials to meet the state’s organic waste product procurement requirements.
2. Requires that the out of state operation or facility meet the following requirements:
   1. It has been in operation since on or before January 1, 2022;
   2. It has been appropriately permitted in the jurisdiction in which it is located; and,
   3. It provides all information to the local jurisdiction needed to allow it to comply with the appropriate recordkeeping requirements, as specified.
3. Specifies that the amount of a local jurisdiction’s procurement requirement is limited to the amount of California-derived recovered organic waste that the local jurisdiction sent outside the state for processing.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author’s statement:

As jurisdictions ramp up their organic waste collection programs, many cities and counties have struggled to meet their procurement targets due to a limited amount of organic waste infrastructure across the state. In some cases, purchasing compost from within state borders and delivering it to a jurisdiction can require trucking compost hundreds of miles, unnecessarily increasing vehicle miles traveled and ratepayer costs. CalRecycle acknowledges that the state still needs approximately 50-100 new or expanded facilities for the successful implementation of SB 1383 and that it can take years to site and permit new facilities. While jurisdictions wait for in-state compost facilities to get sited and permitted, AB 573 will help local jurisdictions in meeting procurement requirements by allowing California-derived material processed at existing out-of-state compost facilities to count towards procurement, which will both reduce vehicle miles traveled and potential financial impacts on ratepayers.

1. Organic waste recycling. An estimated 35 million tons of waste are disposed of in California's landfills annually. More than half of the materials landfilled are organics subject to SB 1383 (Lara, Chapter 395, Statutes of 2016) requirements. CalRecycle’s 2021 waste characterization study, found that 34% of disposed waste is organic waste. SB 1383 requires the ARB to approve and implement a comprehensive SLCP strategy to achieve, from 2013 levels, a 40% reduction in methane, a 40% reduction in hydrofluorocarbon gases, and a 50% reduction in anthropogenic black carbon, by 2030. In order to accomplish these goals, the bill specified that the methane emission reduction goals include targets to reduce the landfill disposal of organic waste 50% by 2020 and 75% by 2025 from the 2014 level.
   
   In order to achieve these goals, California’s waste management infrastructure is going to have to recycle much higher quantities of organic materials, involving significant investments in additional processing infrastructure. Organic waste is primarily recycled by composting the material, which generates compost that can be used in gardening and agriculture as a soil amendment and engineering purposes for things like slope stabilization. Anaerobic digestion is also widely used to recycle organic wastes. This technology uses bacteria to break down the material in the absence of oxygen and produces biogas, which can be used as fuel, and digestate, which can also be used as a soil amendment. Tree trimmings and prunings can also be mulched.
   
   In order to ensure that there are adequate markets for the state’s increasing quantities of products made from organic waste, like much, compost, and digestate, CalRecycle established procurement requirements for jurisdictions. The procurement targets are based on the average amount of organic waste generated by Californians annually multiplied by the population of a jurisdiction. Currently, the regulations require that the procurement targets be met by purchasing materials from in-state organic waste processors. While many jurisdictions are able to use in-state organic waste processing facilities, some ship materials out of state for processing. Many rural areas, for example, are closer to facilities across state lines than they are to California-based processors. Organic waste is heavy, and therefore expensive to transport, making it economically infeasible for these jurisdictions to ship to distant in-state facilities. Additionally, California does not yet have sufficient capacity to process all of the material generated in-state.
   
2. This bill. AB 573 would allow local jurisdictions, until 2039, to meet the state’s organic waste procurement targets by purchasing recovered organic waste products from out-of-state facilities. This bill limits this procurement allowance to California-derived products and to the amount of organic waste material that the jurisdictions sends out-of-state. These limitations ensure that procurement targets will not be met using material produced from organic waste generated in other states. Instead, it simply allows jurisdictions to essentially purchase finished organic waste products produced from material generated within the jurisdiction. The sunset on this bill is intended to allow time for the state’s organic waste processing infrastructure to develop and encourage local jurisdictions to procure from in-state facilities when it becomes feasible to do so.
   

REGISTERED SUPPORT / OPPOSITION:

Support

California Compost Coalition

Californians Against Waste

City of Blythe

County of Imperial

CR&R, INC (sponsor)

League of California Cities

Republic Services - Western Region

Rural County Representatives of California

Town of Paradise

Town of Truckee

Waste Management

Opposition

None on file

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /