2002 Environmental Legislation Forecast - Doing More with Less

By Gary A. Lucks*

Copyright 2002 © All Rights Reserved

This article was originally published in the CALIFORNIA ENVIRONMENTAL LAW REPORTER (Matthew Bender). Permission to reprint is hereby granted by the publisher.

The last session's obsession with energy has been eclipsed by the latest legislative preoccupation: the looming $10 to $15 billion deficit that is likely to consume the legislature's attention this year. Absorbed by the election year cycle and the state's overflowing red ink, the 2002 legislative session is expected to be a lean year for legislative policy. As a result, the upcoming legislative session will probably see few programs cut from new cloth. Instead, there likely will be a focus on identifying impediments to effective implementation of existing environmental programs and identification of incentives to make such programs work better. The upshot will likely mean fewer bills being introduced and entertained that require appropriations. Consequently, the 2002 mantra will likely be "to do more with less."

The Budget Forecast

Fortunately, the nonpartisan Legislative Analyst's Office expects the current recession to be short-lived compared to the recession of the early 1990s, when program and staff layoffs occurred. As a result, the cuts are expected to be less deep and to spare state employees. In an unprecedented move, the Governor already trimmed $2.2 billion from the current 2002 fiscal year. Because most environmental programs are not mandated and are discretionary within the general fund, unlike education programs, environmental programs are expected to experience a disproportionate impact in the 2003 budget with either one-time cuts or delayed spending.

Despite the fact that this is an election year, the Governor has expressed an interest in addressing the General Fund shortfall by promoting a "polluter pays" approach for some environmental programs, such as increasing the costs of waste discharge report (WDR) fees to reflect the work load of the regional water quality control boards (RWQCB). Historically, state agencies have faced a "feast or famine" budget cycle where budgets for regulatory agencies hinge on the ever-changing health of the General Fund. However, the imposition of new fees, rather than a hike in existing fees, is not expected.

Energy Policy

A short 52 weeks ago, Enron was on top of its game, influencing energy markets in California. Since its dramatic fall, Enron's influence on California's energy markets may have disappeared, but concerns about a stable energy market have not. In a bold move to foster energy independence for the state, Senate Bill (SB) 532 (Sher) was introduced to increase the amount of renewable energy in California from 10 to 20 percent. Specifically, this legislation would support renewable sources of energy under the Renewable Energy Program (REP) by establishing a renewable energy portfolio standard (RPS) aimed at achieving a minimum renewable energy supply mix of 20 percent by 2010. Renewable energy would be defined to include wind, solar, biomass, and geothermal energy while excluding hydroelectric power. SB 532 would also extend funding for the Public Interest Energy Research (PIER) Program, which promotes renewable energy technologies and creates products designed to increase energy efficiency.

Other energy legislation may emerge to further address the supply side of the energy equation as well as to consolidate the permitting of electric transmission lines. We may also see legislation designed to reorganize those energy agencies with overlapping jurisdiction. Currently, SB 1524 (Sher) has been introduced to abolish the Electricity Oversight Board that currently oversees the Independent System Operator and the Power Exchange and transfer its authority to the California Public Utilities Commission (CPUC). Other legislation circulating throughout the Capitol would create a single agency that brings together the functions of the CPUC, the California Energy Commission, and the Electricity Oversight Board.

Air Quality

In a controversial move to regulate green house gases considered responsible for global warming, Assembly Bill (AB) 1058 (Pavley) would require the Air Resources Board (ARB) to develop regulations to achieve the "maximum feasible reduction" of carbon dioxide (CO2) emitted from automobiles and light duty trucks. This bill already passed the Assembly and is moving through the Senate. The bill's sponsor notes that California emits nearly 7 percent of the global C02 emissions.

Two bills consider regulating indoor air quality. AB 2332 (Keeley) would require the ARB, in consultation with the California Department of Health Services (DHS), to establish a program to prevent and control indoor air pollution. This bill would require the establishment of emission standards and controls for products contributing to indoor air pollution. Assembly member Keeley also introduced AB 2223, which would establish ambient air quality standards for new and remodeled schools. Other measures may address stationary source emissions of particulate matter of less than 2.5 microns in size as well as legislation designed to ensure that old, obsolete generators are either retrofitted or shut down.

Hazardous Waste and Hazardous Materials

In the wake of the September 11 tragedy, we can expect a flood of anti-terrorism legislation designed to build on the existing cradle-to-grave tracking system that currently governs hazardous waste management. We could see, for the first time, expanded "upstream" tracking and management of the chain-of-custody for chemical materials as well as hazardous wastes. The chemical tracking program would likely be collaboratively managed by the California Department of Motor Vehicles, the California Environmental Protection Agency (Cal/EPA), and the California Department of Transportation (CalTrans). The more extreme end of the spectrum could involve imposition of electronic video surveillance of hazardous waste transfers. Currently, AB 2111 (Strickland) would authorize employers to obtain criminal background histories for applicants seeking employment transporting hazardous materials.

The proliferation of electronic wastes such as cathode ray tubes (CRTs) contained in computers and televisions and other electronic equipment (known as "e-wastes") filling our landfills has generated legislative interest in recycling these components. A single CRT contains approximately five to seven pounds of lead, along with smaller quantities of other heavy metals. One idea circulating in the halls of the Capitol building involves requiring an advance disposal fee of perhaps $1 to $3 for electronic equipment to cover the costs associated with separating these hazardous waste components prior to disposal. This approach resembles the used oil collection program and the AB 2020 Beverage Container Recycling program.

Solid Waste/Recycling/Procurement

After 16 years, AB 2020, the "Bottle Bill," will be reevaluated to revisit, among other things, how to calculate the processing fee. We can also expect a series of bills addressing landfill management, including the e-waste disposal issue discussed above, landfill siting, radioactive waste disposal in landfills, and landfill revenue issues addressing who pays for the use of landfills. Current law allows for the disposal of low-level radioactive waste in class III solid waste landfills. The San Onofre and Diablo Canyon power plants are seeking permanent disposal of high-level spent radioactive fuel because there is currently no central repository for high-level wastes due to the ongoing controversy over siting the Yucca Mountain facility in Nevada. Without long-term disposal, these plants could be effectively shut down, resulting in removal of up to 3,000 megawatts of power during a lean energy period.

Currently, there is no comprehensive system to evaluate the environmental impacts and life cycle effects of the $3 billion worth of products purchased by the state annually. AB 498 (Chan) was introduced to establish the position of environmentally preferable purchasing manager in the Department of General Services to promote procurement of environmentally preferable products.

Water Quality

With the recent passage of Proposition 40 (The California Clean Water, Clean Air, Safe Neighborhood Parks, and Coastal Protection Act of 2002), California voters agreed to a significant investment in a number of resource categories, including drinking water, flood control, water quality, and water supply. Despite the passage of Proposition 40, this session's water policy priorities will center on crafting additional water bonds. Senator Costa is championing a legislatively driven water bond that would, among other things, establish criteria on how to spend the Proposition 40 money as well as fund flood control projects and land acquisition. AB 954 (Kelley) represents a competing legislative bond proposal that would establish the California Water Supply Reliability and Protection Bond Fund. With several programs that rely on groundwater to solve California's water problems, such as the Cal-Fed Bay Delta Program and the Colorado River 4.4 Plan, AB 954 would provide bond funding to protect groundwater storage basins from contamination.

With the United States Environmental Protection Agency (EPA) threatening to back off on implementing the total maximum daily load (TMDL) allocations pursuant to Section 303(d) of the Clean Water Act, the California legislature is expected to hold the line with the water bonds funding this work.

A competing initiative-driven $3.44 billion water bond will appear on the November ballot if qualified in time. This bond proposal, currently in the signature-gathering phase, would make funds available for watershed protection, agriculture, coastal and cultural heritage land acquisitions, among other items. It is possible that the legislative bonds along with the initiative-led bond will ultimately be joined together. At this time, it is unclear how Cal-Fed considerations will be incorporated into the bonds as well as how pesticides and water storage will be addressed.

As the era of large federal and state block grants for individual local water agencies comes to an end, there is growing interest among individual water authorities and agencies to pool together their resources and advocate for their shared regional needs. Legislation will likely be introduced to establish a framework for individual water agencies located in the same hydrologic basins to formalize relationships through joint power authorities (JPAs). Funds could be used collectively for projects such as removing nonnative species to improve the shared watershed. In order to assuage the concerns of local elected officials, who fear loss of power, legislation will likely be aimed more toward incentives to promote local water agencies working together as opposed to being mandated to do so. For example, in establishing criteria for issuing water bond funds, JPAs might receive preference for bond moneys over individual groups.

Other legislation (SB 1822/Sher) would require DHS to establish a maximum contaminant level (MCL) drinking water standard for perchlorate, while other possible legislation could include a bill establishing an MCL for methyl tertiary butyl ether (MTBE) as well as assigning responsibility for MTBE cleanup to MTBE manufacturers.

Other expected legislation would implement a governance and accountability for the Cal-Fed Bay Delta program regarding water transfers.