CA AB3163

Amends Public Utilities Code Section 650 to redefine "biomethane" as methane produced from organic waste feedstock rather than biogas, provided it meets standards for pipeline injection.

Establishes two pathways for biomethane production: anaerobic decomposition of organic material (including codigestion) or noncombustion thermal conversion of specified materials.

Specifies eligible materials for noncombustion thermal conversion including agricultural crop residues, yard waste, wood products, nonrecyclable paper, livestock waste, and municipal sewage sludge.

Maintains Public Utilities Commission authority to adopt biomethane procurement targets for gas corporations, with violations remaining subject to existing criminal penalties under the Public Utilities Act.

States no state reimbursement is required for local agencies or school districts since any costs result from creating or modifying criminal penalties, consistent with California Constitutional requirements.