Organic Waste Regulation Cost Impacts

The California Department of Resources Recycling and Recovery released a draft report of cost impacts to local agencies to implement Senate Bill 1383 and reduce organic waste in landfills. SB 1383, passed in 2016, directed CalRecycle to adopt regulations to reduce organic waste in landfills by 50 percent from its 2014 baseline level by 2020 and 75 percent by 2025. The report summarizes data collected from waste haulers, facility operators and local jurisdictions.

Local agencies can provide public comment on the draft report during the comment period that ends Feb. 14.

Under the proposed regulations, local agencies must provide organic waste collection to waste generators, unless CalRecycle grants a waiver or exemption. Depending on the jurisdiction, the cost to collect, process and market organic waste may be more expensive than disposing of it in the landfill, and could result in additional costs to customers. The report provides options and recommendations for local agencies to fund organic waste collection and recycling.

In order for local agencies to divert organic waste from the landfill, local agencies must identify facilities that can process the organic waste. According to CalRecycle, the current organic waste processing facilities are unable to accommodate the projected increase in processing necessary to comply with SB 1383’s regulations by 2025. CalRecycle estimates that as many as 100 new composting or anaerobic digestion facilities are needed.

While the proposed regulations would not take effect until Jan. 1, 2022, the delayed implementation is intended to provide local entities with time to adopt enforceable mechanisms (ordinances and/or franchise agreements, permits, or contracts with waste haulers) and rates to charge customers. CalRecycle can impose administrative penalties against local agencies that fail to comply with SB 1383 regulations. A local agency’s failure to adopt, by Jan. 1, 2022, any ordinance or enforceable mechanism for organic waste disposal reduction or include a provision in an agreement that requires a hauler to comply with CalRecycle regulations, among other things, is a major violation punishable by a penalty of $7,500 - $10,000 per violation, per day.

In addition, a local agency’s inability or failure to increase customer rates to pay for organics waste facilities and operations will not excuse it from the hefty penalties. Local agencies should begin planning now, as some of these tasks, such as identifying and securing capacity for organics processing, negotiating amendments to a franchise agreement, performing rate reviews and adopting rates, may take more than a year to complete. Local agencies should also determine whether a rate approval would be subject to Proposition 218 notice and hearing requirements.

The draft report also:

Compares options for rate structuring and collection service options that a local agency may wish to consider to incentivize customers to recycle their organic waste,
Includes infrastructure and organics collection case studies of various local agencies in their implementation of SB 1383, with key takeaways, successes and lessons learned, and
Includes the survey CalRecycle distributed to local jurisdictions, survey data, model waste enclosure guidelines, a sample waste assessment form local agencies can use to assess commercial customers’ compliance with organic recycling requirements, and education and outreach materials.

For more information about these regulations, please contact the authors of this Legal Alert listed at the right in the firm’s Municipal Law practice group, or your BB&K attorney.

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