41780-41786

PUBLIC RESOURCES CODE
SECTION 41780-41786




41780.  (a) Each jurisdiction's source reduction and recycling
element shall include an implementation schedule that shows both of
the following:
   (1) For the initial element, the jurisdiction shall divert 25
percent of all solid waste by January 1, 1995, through source
reduction, recycling, and composting activities.
   (2) Except as provided in Sections 41783 and 41784, for the first
and each subsequent revision of the element, the jurisdiction shall
divert 50 percent of all solid waste on and after January 1, 2000,
through source reduction, recycling, and composting activities.
   (b) This section does not prohibit a jurisdiction from
implementing source reduction, recycling, and composting activities
designed to exceed the requirements of this division.



41780.05.  (a) After January 1, 2009, pursuant to the review
authorized by Section 41825, the board shall determine each
jurisdiction's compliance with Section 41780 for the years commencing
with January 1, 2007, by comparing each jurisdiction's change in its
per capita disposal rate in subsequent years with the equivalent per
capita disposal rate that would have been necessary for the
jurisdiction to meet the requirements of Section 41780 on January 1,
2007, as calculated pursuant to subdivisions (c) and (d).
   (b) (1) For purposes of paragraph (5) of subdivision (e) of
Section 41825, in making a determination whether a jurisdiction has
made a good faith effort to implement its source reduction and
recycling element or its household hazardous waste element, the board
shall consider, but is not limited to the consideration of, the
jurisdiction's per capita disposal rate and whether the jurisdiction
adequately implemented its diversion programs.
   (2) When determining whether a jurisdiction has made a good faith
effort pursuant to Section 41825 to implement its source reduction
and recycling element or its household hazardous waste element, the
board shall consider that an increase in the per capita disposal rate
is the result of the amount of the jurisdiction's disposal
increasing faster than the jurisdiction's growth. The board shall use
this increase in the per capita disposal rate that is in excess of
the equivalent per capita disposal rate as a factor in determining
whether the board is required, pursuant to Section 41825, to more
closely examine a jurisdiction's program implementation efforts. This
examination may indicate that a jurisdiction is required to expand
existing programs or implement new programs, in accordance with the
procedures specified in Article 4 (commencing with Section 41825) and
in Article 5 (commencing with Section 41850).
   (3) When reviewing the level of program implementation pursuant to
Sections 41825 and 41850, the board shall use, as a factor in
determining compliance with Section 41780, the amount determined
pursuant to subdivision (d) when comparing a jurisdiction's per
capita disposal rate in subsequent years.
   (c) (1) Except as otherwise provided in this subdivision, for
purposes of this section, "per capita disposal" or "per capita
disposal rate" means the total annual disposal, in pounds, from a
jurisdiction divided by the total population in a jurisdiction, as
reported by the Department of Finance, divided by 365 days.
   (2) (A) If a jurisdiction is predominated by commercial or
industrial activities and by solid waste generation from those
sources, the board may alternatively calculate per capita disposal to
reflect those differing conditions.
   (B) When making a calculation for a jurisdiction subject to this
paragraph, "per capita disposal" or "per capita disposal rate" means
the total annual disposal, in pounds, from a jurisdiction divided by
total industry employment in a jurisdiction, as reported by the
Employment Development Department, divided by 365 days.
   (C) The board shall calculate the per capita disposal rate for a
jurisdiction subject to this paragraph using the level of industry
employment in a jurisdiction instead of the level of population in a
jurisdiction.
   (3) If the board determines that the method for calculating the
per capita disposal rate for a jurisdiction provided by paragraph (1)
or (2) does not accurately reflect that jurisdiction's disposal
reduction, the board may use an alternative per capita factor, other
than population or industry employment, to calculate the per capita
disposal rate that more accurately reflects the jurisdiction's
efforts to divert solid waste.
   (d) The board shall calculate the equivalent per capita disposal
rate for each jurisdiction as follows:
   (1) Except as otherwise provided in this subdivision, the
equivalent per capita disposal rate for a jurisdiction shall be
determined using the method specified in this paragraph.
   (A) The calculated generation tonnage for each year from 2003 to
2006, inclusive, shall be multiplied by 0.5 to yield the 50 percent
equivalent disposal total for each year.
   (B) The 50 percent equivalent disposal total for each year shall
be multiplied by 2,000, divided by the population of the jurisdiction
in that year, and then divided by 365 to yield the 50 percent
equivalent per capita disposal for each year.
   (C) The four 50 percent equivalent per capita disposal amounts
from the years 2003 to 2006, inclusive, shall be averaged to yield
the equivalent per capita disposal rate.
   (2) If a jurisdiction is predominated by commercial or industrial
activities and by solid waste generation from those sources, the
board may alternatively calculate the equivalent per capita disposal
rate to reflect those conditions by using the level of industry
employment in a jurisdiction instead of the level of population in
that jurisdiction.
   (3) If the board determines that the method for calculating the
equivalent per capita disposal rate for a jurisdiction pursuant to
this subdivision does not accurately reflect a jurisdiction's per
capita disposal rate that would be equivalent to the amount required
to meet the 50 percent diversion requirements of Section 41780, the
board may use an alternative per capita factor, other than population
or industry employment, to calculate the equivalent per capita
disposal rate that more accurately reflects the jurisdiction's
diversion efforts.
   (4)  The board shall modify the percentage used in paragraph (1)
to maintain the diversion requirements approved by the board for a
rural jurisdiction pursuant to Section 41787 or for a reduction
granted pursuant to Section 41786.
   (5)  The board may modify the years included in making a
calculation pursuant to this subdivision for an individual
jurisdiction to eliminate years in which the calculated generation
amount is shown not to be representative or accurate, based upon a
generation study completed in one of the five years 2003 to 2007,
inclusive. In these cases, the board shall not allow the use of an
additional year other than 2003, 2004, 2005, 2006, or 2007.
   (6)  The board may modify the method of calculating the equivalent
per capita disposal rate for an individual jurisdiction to
accommodate the incorporation of a new city, the formation of a new
regional agency, or changes in membership of an existing regional
agency. These modifications shall ensure that a new entity has a new
equivalent per capita disposal rate and that the existing per capita
disposal rate of an existing entity is adjusted to take into account
the disposal amounts lost by the creation of the new entity.
   (7) The board shall not incorporate generation studies or new base
year calculations for a year commencing after 2006 into the
equivalent per capita disposal rate, unless a generation study that
included the year 2007 was commenced on or before June 30, 2008.
   (8) If the board determines that the equivalent per capita
disposal rate cannot accurately be determined for a jurisdiction, or
that the rate is no longer representative of a jurisdiction's waste
stream, the board shall evaluate trends in the jurisdiction's per
capita disposal to establish a revised equivalent per capita disposal
rate for that jurisdiction.


41780.1.  (a) Notwithstanding any other requirement of this part,
for the purposes of determining the amount of solid waste that a
regional agency is required to divert from disposal or transformation
through source reduction, recycling, and composting to meet the
diversion requirements of Section 41780, the regional agency shall
use the solid waste disposal projections in the source reduction and
recycling elements of the regional agency's member agencies. The
method prescribed in Section 41780.2 shall be used to determine the
maximum amount of disposal allowable to meet the diversion
requirements of Section 41780.
   (b) Notwithstanding any other requirement of this part, for the
purposes of determining the amount of solid waste that a city or
county is required to divert from disposal or transformation through
source reduction, recycling, and composting to meet the diversion
requirements of Section 41780, the city or county shall use the solid
waste disposal projections in the source reduction and recycling
elements of the city or county. The method prescribed in Section
41780.2 shall be used to determine the maximum amount of disposal
allowable to meet the diversion requirements of Section 41780.
   (c) To determine achievement of the diversion requirements of
Section 41780 in 1995 and in the year 2000, projections of disposal
amounts from the source reduction and recycling elements shall be
adjusted to reflect annual increases or decreases in population and
other factors affecting the waste stream, as determined by the board.
By January 1, 1994, the board shall study the factors which affect
the generation and disposal of solid waste and shall develop a
standard methodology and guidelines to be used by cities, counties,
and regional agencies in adjusting disposal projections as required
by this section.
   (d) The amount of additional diversion required to be achieved by
a regional agency to meet the diversion requirements of Section 41780
shall be equal to the sum of the diversion requirements of its
member agencies. To determine the maximum amount of disposal
allowable for the regional agency to meet the diversion requirements
of Section 41780, the maximum amount of disposal allowable for each
member agency shall be added together to yield the agency disposable
maximum.


41780.2.  (a) Each city, county, or member agency of a regional
agency shall determine the amount of reduction in solid waste
disposal and the amount of additional diversion required from the
base-year amounts by using the methods set forth in this section.
   (b) The city, county, or member agency of a regional agency shall
multiply the total amount of base-year solid waste generation, as
adjusted using the methods described in subdivision (c) of Section
41780.1, by 0.75 to determine the maximum amount of total disposal
allowable in 1995 to meet the diversion requirements of Section
41780.
   (c) The city, county, or member agency of a regional agency shall
multiply the total amount of base-year solid waste generation, as
adjusted using the methods described in subdivision (c) of Section
41780.1, by 0.50 to determine the maximum amount of total disposal
allowable in the year 2000 to meet the diversion requirements of
Section 41780.
   (d) The city, county, or member agency of a regional agency shall
multiply the total amount of base-year solid waste generation, as
adjusted using the methods described in subdivision (c) of Section
41780.1, by 0.25 to determine the minimum amount of total diversion
needed in the year 1995 to meet the diversion requirements of Section
41780.
   (e) The city, county, or member agency of a regional agency shall
multiply the total amount of base-year solid waste generation, as
adjusted using the methods described in subdivision (c) of Section
41780.1, by 0.50 to determine the minimum amount of total diversion
needed in the year 2000 to meet the diversion requirements of Section
41780.
   (f) The city, county, or member agency of a regional agency shall
subtract the total amount of base-year existing diversion from the
minimum total diversion required as determined in subdivision (d) or
(e) to determine the amount of additional diversion needed to meet
the diversion requirements of Section 41780. This amount of
additional diversion shall be equal to the minimum amount of
additional reduction in disposal amounts which is needed to comply
with Section 41780.



41781.  (a) Except as provided in Sections 41781.1, and 41781.2, for
the purpose of determining the base rate of solid waste from which
diversion requirements shall be calculated, "solid waste" includes
only the following:
   (1) The amount of solid waste generated within a local agency's
jurisdiction, the types and quantities of which were disposed of at a
permitted disposal facility as of January 1, 1990. Nothing in this
section requires local agencies to perform waste characterization in
addition to the waste characterization requirements established under
Sections 41030, 41031, 41330, 41331, and 41332.
   (2) The amount of solid waste diverted from a disposal facility or
transformation facility through source reduction, recycling, or
composting.
   (b) For the purposes of this section, "solid waste" does not
include any solid waste which would not normally be disposed of at a
disposal facility.
   (c) For the purposes of this chapter, the amount of solid waste
from which the required reductions are measured shall be the amount
of solid waste existing on January 1, 1990, with future adjustments
for increases or decreases in the quantity of waste caused only by
changes in population or changes in the number or size of
governmental, industrial, or commercial operations in the
jurisdiction.



41781.1.  (a) Prior to determining that the diversion of sludge may
be counted toward the diversion requirements established under
Section 41780, but within 180 days of receiving such a request, the
board shall do both of the following:
   (1) Make a finding at a public hearing, based upon substantial
evidence, that the sludge has been adequately analyzed and will not
pose a threat to public health or the environment for the reuse which
is proposed.
   (A) Except as provided in subparagraph (B), prior to making the
finding required to be made pursuant to this paragraph, the board
shall consult with each of the following agencies, and obtain their
concurrence in the finding, to the extent of each agency's
jurisdiction over the sludge or its intended reuse:
   (i) The state water board and the regional water boards.
   (ii) The State Department of Health Services.
   (iii) The State Air Resources Board and air pollution control
districts and air quality management districts.
   (iv) The Department of Toxic Substances Control.
   (B) If, prior to the board making the finding required to be made
pursuant to this paragraph, an agency specified in subparagraph (A)
issues a permit, waste discharge requirements, or imposes other
conditions for the reuse of sludge, the agency shall have been deemed
to have concurred in that finding.
   (2) Establish, or ensure that one or more of the agencies
specified in subparagraph (A) of paragraph (1) establishes, ongoing
monitoring requirements which ensure that the proposed sludge reuse
does not pose a threat to health and safety or the environment.
   (b) It is not the intent of this section to require the board, or
the agencies listed in subparagraph (A) of paragraph (1) of
subdivision (a), to impose additional requirements or approval
procedures for sludge or sludge reuse applications, apart from the
requirements and approval procedures already imposed by state and
federal law. It is the intent of this section to require that the
board determine that each sludge diversion, for which diversion
credit is sought, meets all applicable requirements of state and
federal law, and thereby provides for maximum protection of the
public health and safety and the environment.


41781.2.  (a) (1) It is the intent of the Legislature in enacting
this section not to require cities, counties, and regional agencies
to revise source reduction and recycling elements prior to their
submittal to the board for review and approval, except as the
elements would otherwise be required to be revised by the board
pursuant to this part. Pursuant to Sections 41801.5 and 41811.5,
compliance with this section shall be determined by the board when
source reduction and recycling elements are submitted to the board
pursuant to Section 41791.5. However, any city or county may choose
to revise its source reduction and recycling element or any of its
components prior to board review of the source reduction and
recycling element for the purpose of complying with this section.
   (2) It is further the intent of the Legislature in enacting this
section to ensure that compliance with the diversion requirements of
Section 41780 shall be accurately determined based upon a correlation
between solid waste which was disposed of at permitted disposal
facilities and diversion claims which are subsequently made for that
solid waste.
   (b) For the purposes of this section, the following terms have the
following meaning:
   (1) "Action by a city, county, regional, or local governing body"
means franchise or contract conditions, rate or fee schedules, zoning
or land use decisions, disposal facility permit conditions, or
activities by a waste hauler, recycler, or disposal facility operator
acting on behalf of a city, county, regional agency, or local
governing body, or other action by the local governing body if the
local government action is specifically related to the claimed
diversion.
   (2) "Scrap metal" includes ferrous metals, nonferrous metals,
aluminum scrap, other metals, and auto bodies, but does not include
aluminum cans, steel cans, or bimetal cans.
   (3) "Inert solids" includes rock, concrete, brick, sand, soil,
fines, asphalt, and unsorted construction and demolition waste.
   (4) "Agricultural wastes" includes solid wastes of plant and
animal origin, which result from the production and processing of
farm or agricultural products, including manures, orchard and
vineyard prunings, and crop residues, which are removed from the site
of generation for solid waste management. Agriculture refers to SIC
Codes 011 to 0291, inclusive.
   (c) For purposes of determining the base amount of solid waste
from which the diversion requirements of this article shall be
calculated, "solid waste" does not include the diversion of
agricultural wastes; inert solids, including inert solids used for
structural fill; discarded, white-coated, major appliances; and scrap
metals; unless all of the following criteria are met:
   (1) The city, county, or regional agency demonstrates that the
material was diverted from a permitted disposal facility through an
action by the city, county, or regional agency which specifically
resulted in the diversion.
   (2) The city, county, or regional agency demonstrates that, prior
to January 1, 1990, the solid waste which is claimed to have been
diverted was disposed of at a permitted disposal facility in the
quantity being claimed as diversion. If historical disposal data is
not available, that demonstration may be based upon information
available to the city, county, or regional agency which substantiates
a reasonable estimate of disposal quantities which is as accurate as
is feasible in the absence of historical disposal data.
   (3) The city, county, or regional agency is implementing, and will
continue to implement, source reduction, recycling, and composting
programs, as described in its source reduction and recycling element.
   (d) If a city, county, or regional agency source reduction and
recycling element submitted pursuant to this chapter includes the
diversion of any of the wastes specified in subdivision (c) for years
preceding the year commencing January 1, 1990, that diversion shall
not apply to the diversion requirements of Section 41780, unless the
criteria in subdivision (c) are met.
   (e) If a city, county, or regional agency source reduction and
recycling element submitted pursuant to this chapter does not contain
information sufficient for the city, county, or regional agency to
demonstrate to the board whether the criteria in subdivision (c) have
been met, the city, county, or regional agency may provide
additional information following board review of the source reduction
and recycling element pursuant to Section 41791.5. In providing the
additional information, Sections 41801.5 and 41811.5 shall apply.
   (f) In demonstrating whether the requirements of paragraph (1) of
subdivision (c) have been met, the city, county, or regional agency
shall submit information to the board on local government programs
which are specifically related to the claimed diversion.
   (g) Notwithstanding any other provision of law, for purposes of
determining the base amount of solid waste from which the diversion
requirements of this article shall be calculated for a city, county,
or regional agency which includes biomass conversion in its source
reduction and recycling element pursuant to Section 41783.1, the base
amount shall include those materials disposed of in the base year at
biomass conversion facilities.



41781.3.  (a) The use of solid waste for beneficial reuse in the
construction and operation of a solid waste landfill, including use
of alternative daily cover, which reduces or eliminates the amount of
solid waste being disposed pursuant to Section 40124, shall
constitute diversion through recycling and shall not be considered
disposal for the purposes of this division.
   (b) Prior to December 31, 1997, pursuant to the board's authority
to adopt rules and regulations pursuant to Section 40502, the board
shall, by regulation, establish conditions for the use of alternative
daily cover that are consistent with this division. In adopting the
regulations, the board shall consider, but is not limited to, all of
the following criteria:
   (1) Those conditions established in past policies adopted by the
board affecting the use of alternative daily cover.
   (2) Those conditions necessary to provide for the continued
economic development, economic viability, and employment
opportunities provided by the composting industry in the state.
   (3) Those performance standards and limitations on maximum
functional thickness necessary to ensure protection of public health
and safety consistent with state minimum standards.
   (c) Until the adoption of additional regulations, the use of
alternative daily cover shall be governed by the conditions
established by the board in its existing regulations set forth in
paragraph (3) of subdivision (b) of, and paragraph (3) of subdivision
(c) of, Section 18813 of Title 14 of the California Code of
Regulations, as those sections read on the effective date of this
section, and by the conditions established in the board's policy
adopted on January 25, 1995.
   (d) In adopting rules and regulations pursuant to this section,
Section 40124, and this division, including, but not limited to, Part
2 (commencing with Section 40900), the board shall provide guidance
to local enforcement agencies on any conditions and restrictions on
the utilization of alternative daily cover so as to ensure proper
enforcement of those rules and regulations.



41782.  (a) The board may make adjustments to the amounts reported
pursuant to subdivisions (a) and (c) of Section 41821.5, if the city,
county, or regional agency demonstrates, and the board concurs,
based on substantial evidence in the record, that achievement of the
diversion requirements of Section 41780 is not feasible due to either
of the following circumstances:
   (1) A medical waste treatment facility, as defined in subdivision
(a) of Section 25025 of the Health and Safety Code, accepts untreated
medical waste, which was generated outside of the jurisdiction, for
purposes of treatment, and the medical waste, when treated, becomes
solid waste.
   (2) (A) A regional diversion facility within the jurisdiction
accepts material generated outside the jurisdiction and the
conversion or processing of that material results in the production
of residual solid waste that cannot feasibly be diverted. Any
adjustment provided pursuant to this paragraph shall apply only to
that portion of the residual solid waste produced as a consequence of
processing material that is not subject to the reporting
requirements of subdivisions (a) and (c) of Section 41821.5 and that
cannot feasibly be allocated to the originating jurisdiction.
   (B) For purposes of granting the reduction specified in
subparagraph (A) and for the purpose of calculating compliance with
the diversion requirements of Section 41780, "regional diversion
facility" means a facility which meets all of the following criteria:
   (1) The facility accepts material for recycling from both within
and without the jurisdiction of the city or county within which it is
located.
   (2) All material accepted by the facility has been
source-separated for the purpose of being processed prior to its
arrival at the facility.
   (3) The residual solid waste generated by the facility is a
byproduct of the recycling that takes place at the facility.
   (4) The facility is not a solid waste facility or solid waste
handling operation pursuant to Section 43020.
   (5) The facility contributes to regional efforts to divert solid
waste from disposal.
   (b) If the board makes an adjustment pursuant to subdivision (a),
the annual report required pursuant to Section 41821 by the
jurisdiction, within which a medical waste treatment facility or
regional diversion facility described in subdivision (a) is located,
shall include all of the following information:
   (1) The total amount of residual solid waste produced at the
facility.
   (2) The waste types and amounts in the residual solid waste that
cannot feasibly be diverted.
   (3) The factors that continue to prevent the waste types from
being feasibly diverted.
   (4) Any changes since the petition for adjustment was granted or
since the last annual report.
   (5) The additional efforts undertaken by the jurisdiction to
divert the waste produced at the facility.
   (c) Based upon the information submitted pursuant to subdivision
(b), if the board finds, as part of the biennial review pursuant to
Section 41825, that the residual solid waste that previously could
not be diverted can now be diverted, the board shall rescind the
adjustment commensurate with the amount of diversion of the residual
tonnages.
   (d) It is not the intent of the Legislature to exempt any solid
waste facility or handling operation from periodic tracking and the
reporting of disposal tonnages in accordance with the regulations
adopted by the board pursuant to subdivisions (a) and (c) of Section
41821.5, or from the permitting requirements pursuant to Section
43020.


41783.  (a) For a jurisdiction's source reduction and recycling
element submitted to the board after January 1, 1995, and on or
before January 1, 2009, the 50 percent diversion requirement
specified in paragraph (2) of subdivision (a) of Section 41780 may
include not more than 10 percent through transformation, as defined
in Section 40201, if all of the following conditions are met:
   (1) The transformation project is in compliance with Sections
21151.1 and 44150 of this code and Section 42315 of the Health and
Safety Code.
   (2) The transformation project uses front-end methods or programs
to remove all recyclable materials from the waste stream prior to
transformation to the maximum extent feasible.
   (3) The ash or other residue generated from the transformation
project is routinely tested at least once quarterly, or on a more
frequent basis as determined by the agency responsible for regulating
the testing and disposal of the ash or residue, and, notwithstanding
Section 25143.5 of the Health and Safety Code, if hazardous wastes
are present, the ash or residue is sent to a class 1 hazardous waste
disposal facility.
   (4) The board holds a public hearing in the city, county, or
regional agency jurisdiction within which the transformation project
is proposed, and, after the public hearing, the board makes both of
the following findings, based upon substantial evidence on the
record:
   (A) The city, county, or regional agency is, and will continue to
be, effectively implementing all feasible source reduction,
recycling, and composting measures.
   (B) The transformation project will not adversely affect public
health and safety or the environment.
   (5) The transformation facility is permitted and operational on or
before January 1, 1995.
   (6) The city, county, or regional agency does not include biomass
conversion, as authorized pursuant to Section 41783, in its source
reduction and recycling element.
   (b) On and after January 1, 2009, for purposes of the review
authorized by Section 41825, with regard to a jurisdiction's
compliance with Section 41780 for each year commencing January 1,
2007, the board may reduce the per capita disposal rate for a
jurisdiction, as calculated pursuant to subdivision (d) of Section
41780.05, by no more than 10 percent of the average of the calculated
per capita generation tonnage amount, if the jurisdiction otherwise
meets the substantive requirements specified in paragraphs (1) to
(6), inclusive, of subdivision (a), for solid waste to be included as
diversion for purposes of that subdivision.



41783.1.  (a) For any city, county, or regional agency source
reduction and recycling element submitted to the board after January
1, 1995, the 50 percent diversion requirement specified in paragraph
(2) of subdivision (a) of Section 41780 may include not more than 10
percent through biomass conversion if all of the following conditions
are met:
   (1) The biomass conversion project exclusively processes biomass.
   (2) The biomass conversion project is in compliance with all
applicable air quality laws, rules, and regulations.
   (3) The ash or other residue from the biomass conversion project
is regularly tested to determine if it is hazardous waste and, if it
is determined to be hazardous waste, the ash or other residue is sent
to a class 1 hazardous waste disposal facility.
   (4) The board determines, at a public hearing, based upon
substantial evidence in the record, that the city, county, or
regional agency is, and will continue to be, effectively implementing
all feasible source reduction, recycling, and composting measures.
   (5) The city, county, or regional agency does not include
transformation, as authorized pursuant to Section 41783, in its
source reduction and recycling element.



41784.  If the board determines that a city or county source
reduction and recycling element submitted after January 1, 1995, will
not achieve the 50 percent requirement established under Section
41780, and the city or county chooses not to use a transformation
project to achieve the 50 percent requirement, the board shall not
require the city or county to achieve the 50 percent diversion
requirement through transformation, or impose any penalty on the city
or county to compel the city or county to achieve the 50 percent
requirement through transformation.



41786.  (a) Notwithstanding Section 41780, the board may reduce the
diversion requirements specified in Section 41780 for any city or
county which, on or before January 1, 1990, disposed of 75 percent or
more of its solid waste, collected by the jurisdiction or its
authorized agents or contractors, by transformation if either of the
following conditions exist:
   (1) The attainment of the 25 percent or 50 percent diversion
requirement specified in Section 41780 will result in substantial
impairment of the obligations of one or more contracts in existence
on January 1, 1990, for the city or county to furnish solid waste for
fuel. A substantial impairment of obligations includes, but is not
limited to, instances where a city has entered into a contract or
franchise for 20 or more years with a joint powers authority for the
operation of a transformation facility, and meeting the diversion
requirements of Section 41780 may increase the city's costs by 15
percent or more.
   (2) The attainment of the 25 percent or 50 percent diversion
requirement specified in Section 41780 will substantially interfere
with the repayment of debt incurred to finance or refinance the
transformation project, if the refinancing is done for the purpose of
reducing debt service and not for the expansion of the
transformation project.
   (b) If the board reduces the diversion requirements for a city or
county pursuant to subdivision (a), the board shall establish new
diversion requirements which require the maximum feasible amount of
source reduction, recycling, and composting but which will not result
in the conditions described in paragraphs (1) and (2) of subdivision
(a).