Existing law establishes various plans and programs to preserve, protect, and rehabilitate lands adjacent to rivers in the state.

The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to adopt a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020.

This bill would require the Natural Resources Agency to establish a grant program for eligible applicants to develop projects on or adjacent to riparian corridors that assist the state in implementing that, among other things, furthers the regulatory purposes of the California Global Warming Solutions Act of 2006 and to prioritize funding for projects that provide consider the extent to which a project reduces emissions of greenhouse gases and provides the greatest level of specified cobenefits. The bill would create the CalRIVER Fund in the State Treasury, with moneys in the fund to be available upon appropriation to implement the grant program.

Existing law establishes various plans and programs to preserve, protect, and rehabilitate lands adjacent to rivers in the state.

The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to adopt a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020.

This bill would require the Natural Resources Agency to establish a grant program for eligible applicants to develop projects on or adjacent to riparian corridors that assist the state in implementing the California Global Warming Solutions Act of 2006 and that provide for to prioritize funding for projects that provide the greatest level of specified cobenefits. The bill would create the CalRIVER Fund in the State Treasury, with moneys in the fund to be available upon appropriation to implement the grant program.

Existing law provides various sources of funds for community parks. Existing law creates the Active Transportation Program in the Department of Transportation for the purpose of encouraging increased use of active modes of transportation, including biking and walking, and provides for funding of various types of projects, including recreational trails, trailheads, and park projects that facilitate trail linkages or connectivity to nonmotorized corridors.

This bill would create a program in the Department of Transportation to develop pathways between community parks, including local parks and state parks, and to connect those parks to public transportation systems, for the purpose of reducing greenhouse gas emissions. The bill would provide for moneys to be available to the department for the program from the Greenhouse Gas Reduction Fund. The bill would also state the intent of the Legislature to create a park access program to increase access to community parks.

Existing law provides various sources of funds for community parks.

This bill would state the intent of the Legislature to create a park access program to increase access to community parks.

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2015 - 2016 Regular

Bill No: AB 1205

SUBJECT: Hazardous waste: facilities permitting.

ANALYSIS:

Existing law:

1. Under the federal Resource Conservation and Recovery Act (RCRA) of 1976, governs the disposal of hazardous waste: 
2. Through regulation, sets standards for the treatment, storage, transport, tracking and disposal of hazardous waste in the United States.
3. Authorizes states to carry out many of the functions of the federal law through their own hazardous waste laws if such programs have been approved by the United States Environmental Protection Agency (US EPA).
4. Under the California Hazardous Waste Control Act (HWCA) of 1972:
   1. Establishes the Hazardous Waste Control program.
   2. Regulates the appropriate handling, processing and disposal of hazardous and extremely hazardous waste to protect the public, livestock and wildlife from hazards to health and safety.
   3. Implements federal tracking requirements for the handling and transportation of hazardous waste from the point of waste generation to the point of ultimate disposition.
   4. Establishes a system of fees to cover the costs of operating the hazardous waste management program.
   5. Authorizes the Department of Toxic Substances Control (DTSC) to enforce federal law and regulations under RCRA.
   6. Requires DTSC to grant and review permits and enforce HWCA requirements for hazardous waste treatment, storage and disposal facilities.
   7. Authorizes DTSC to issue an order under the hazardous waste control laws requiring that a violation be corrected and imposing a civil penalty to specified persons, including a person who has violated various provisions regulating hazardous waste or provisions concerning removal and remedial actions for hazardous substance releases. A person who is issued that order is required to pay for oversight of the removal or remedial action.
   8. Requires DTSC to hold a public meeting for specified purposes in or near the community in which a new hazardous waste facilities permit has been applied for. 
   9. Prohibits DTSC from issuing or renewing a permit to operate a hazardous waste facility unless the owner or operator of the facility establishes and maintains financial assurances.

This bill:

1. Requires DTSC, within 90 days of receiving a renewal application for a hazardous waste facilities permit, to hold a public meeting for specified purposes in or near the community in which the hazardous waste facility is located.
2. Requires DTSC review the financial assurances required to operate a hazardous waste facility at least once every 5 years. If the department’s review finds the financial assurances for a facility to be inadequate, the bill would require the department to notify the owner or operator of the facility and would require the owner or operator to update and adopt adequate financial assurances within 90 days.

Background

1. Exide Technologies, Vernon, California.  The Exide facility in Vernon, California was one of two secondary lead smelting facilities in California which recovered lead from recycled automotive batteries.  It has over 100 employees.  It recycles 23,000 to 41,000 batteries daily and has an average production of 100,000 to 120,000 tons of lead per year. 

The facility has been used for a variety of metal fabrication and metal recovery operations since 1922.  Previous owners have included Morris P. Kirk & Sons, Inc., NL Industries, Gould Inc., and GNB Inc.

The facility in Vernon has been operating with an interim hazardous waste facility permit since 1981. 

In recent years, the Exide facility has brought to light the failings of DTSC’s Permitting Program.  Over the 30 years that the facility operated with an interim permit, there were many violations of the permit as well as other regulatory standards, such as those by the South Coast Air Quality Management District, which caused environmental damage and risk to public health. 

In March, 2015 it was announced that an agreement was reached between the United States Department of Justice and Exide Technologies to permanently close the battery recycling facility in Vernon, CA, and in order to avoid criminal prosecution, Exide Technologies further agreed to a stipulation and order with DTSC to complete remediation activities as specified in the stipulation and order issued by DTSC. 

This example of a failed process calls into question whether the statutory authorizations, requirements and direction to DTSC is adequate to ensure that the program runs correctly and is appropriately protective of public health and the environment, especially in the vulnerable communities where there are permitted facilities.

Additionally, it called into question whether there are other facilities that may currently be similarly causing harm to the communities in which they are located.

The community crisis around Exide created significant concern about DTSC’s permitting statutory authorization and implementation. 

The DTSC Office of Permitting is authorized to issue hazardous waste facilities permits, and to impose conditions specifying the types of hazardous waste that may be accepted for transfer, storage, treatment, or disposal in California. Currently there are 117 permitted Operating Facilities, including 28 Post Closure Facilities (closed and going through final remediation) in the state, that provide for the treatment, storage, or disposal of substances regulated as hazardous waste under federal and state law. A total of 1.82 billion pounds of California toxic waste were disposed of in these facilities in 2012, with 62% treated to the point where it no longer met toxic standards, and 38% placed in landfills. From a staffing standpoint, currently there are 29 authorized positions allocated to the Office of Permitting, located in Sacramento, Berkeley, and Chatsworth.

There has been significant dissatisfaction with the performance of the Permitting Office, directed at the cost and length of time in completing the permit process and a perception that the Office does not deny or revoke permits as often as it should to address community concerns. The stakeholder interviews conducted as part of this study identified the following major concerns:

• The need to create clear and objective criteria for making denial/revocation decisions that are based on valid standards of performance and risk.
• A clear standard for violations that would lead to a denial or revocation.
• The need for the department to document and measure a “scorecard” of attributes that would be perceived as a “good result” for the permitting program.

DTSC entered into a contract with CPS HR Consulting on February 1, 2013, to conduct a Permitting Process Review and Analysis.

CPS HR was asked to review the existing permitting program and develop a recommended standardized process with clear decision criteria and corresponding standards of performance. CPS HR was also asked to document the changes in the permitting process over the past five years based primarily on the record obtained from past internal review, and to obtain perspectives of designated subject matter experts, including representatives from the environmentalist, environmental justice, and industry communities. This report provides findings in each defined area.

The study found that the overall average permitting process time, which was 5.0 years prior to FY2003, improved to a 3.2 year average for the period from FY2003 to FY2007, before again increasing to 4.3 years in the most recent time period (from FY2008 through part of FY2013). So while there was an improvement from the oldest period studied to the most recent, the current trend is again towards longer processing time.

The study notes several key findings regarding the recent increase in permit processing time which is attributed to at least two major factors:  

• There was a reduction in staffing in the office. Permitting staffing has been reduced significantly from 95.8 personnel years utilized in FY2007 to just 24.6 personnel years utilized in FY2009. The initial change was a response to the economic recession in 2009, and its required state budget reductions. However, less than 26.1 personnel years have been utilized in each year since that time.
• The study found that the second primary reason for permitting delays is poor management practices. Between December 2009 and June 2013, the Office of Permitting did not maintain consistent uniform management, supervisory structure or clear consistent organizational structure. This is demonstrated by the fact that program managers were either re‐assigned to other duties or vacant for a majority of the time period from July 2009 through July 2013, while program supervisor positions for all personnel in the unit were either not authorized or vacant for more than half of this period. In other words, there was a four‐year period in which direct supervision of personnel lapsed.

This study concludes that while many aspects of the work process required for a permit renewal are well-defined and well-known, most of the difficult or complex steps are not clear or well-defined. This is one of the most likely reasons for prolonged delays, and for future process improvement.

The study further stated that much of the “process” knowledge within the Office of Permitting is in the individual professional knowledge of the DTSC staff which is interpretive and not documented. More importantly, a re-review of the Permit Renewal Team effort of 2007‐2009 has not found any structural changes or permanent process changes that have been implemented that could cause significantly improved permit renewals in the future. According to CPS HR the “lessons learned” from the Renewal team effort appear to have been misconstrued, and the actions taken after the team experience were damaging to management and supervision in the unit.

According to the department, for several years, DTSC’s efforts to carry out this mission were compromised by deficiencies in technical and administrative processes and procedures, from a misaligned personnel system to insufficient coordination between programs. These systemic issues resulted in a structural budget deficit; $184.5 million in uncollected cleanup costs dating back 26 years; a growing backlog of applications to renew hazardous waste permits; and decreased stakeholder confidence and public trust in the department.

In early 2012, the department embarked on its “Fixing the Foundation” initiative, which includes more than 30 different activities intended to improve its operations and restore public trust in the department. Activities include increasing cost recovery from those responsible for hazardous waste contamination, reducing permitting backlogs, strengthening enforcement, and improving the financial sustainability of its operating funds. This effort includes multiple goals at every level of the organization, from staff engagement to permitting backlogs and cost recovery.

In 2014, DTSC released its Permitting Enhancement Work Plan as a comprehensive roadmap to guide efforts to improve DTSC’s ability to issue protective, timely and enforceable permits using more transparent standards and consistent procedures.

In the 2014-15 Budget Act, DTSC requested and was granted 8 limited-term positions and $1.2 million for reduction of backlogged permitting application review.

As part of the 2015-16 Budget Act, DTSC requested an additional $1.632 million and 16 limited-term positions for two years to address the permitting backlog.

1. Independent Review Panel (IRP). The IRP was created within DTSC by SB 83 (Committee on Budget and Fiscal Review, Chapter 24, Statutes of 2015). The IRP is comprised of three members tasked with reviewing and making recommendations regarding improvements to DTSC’s permitting, enforcement, public outreach, and fiscal management. The IRP will issue reports to the Governor and Legislature every 90 days detailing updates on DTSC’s performance and backlogs. The IRP reports will additionally include recommendations for improving DTSC programs.

The IRP has submitted 2 reports thus far with a series of observations, concerns and recommendations for improving DTSC’s permitting, cost recovery and site remediation programs. Much of the reports’ focus is on budgetary improvements that have been made or are being made. In addition the IRP makes several process improvement recommendations around DTSC’s permitting program with an emphasis on increasing public participation and accountability. 

Comments

1. Purpose of Bill. According to the author, years of systemic issues and programmatic deficiencies have affected DTSC’s ability to adequately protect public health and the environment, particularly in disadvantaged communities that suffer from multiple pollution burdens and vulnerabilities. Over the past few years, legislative oversight, community advocacy, and internal reform efforts have slowly begun to turn the ship around. Much work still remains to be done, however.

The author asserts that AB 1205 is another step in the right direction. AB 1205 requires DTSC to review financial assurances required to operate a hazardous waste facility at least once every five years. The author believes that this will ensure that facilities have the financial capacity to restore the public resources they degrade, pay for any necessary cleanup or closure, and protect the state and taxpayers from financial liability. The author states that his bill also requires early public engagement upon submittal of a permit renewal application so that communities have the opportunity to understand and participate in the decision-making process and learn about the facility’s enforcement history. Low-income communities and communities of color have historically lacked the resources, capacity and expertise to understand the complex permitting process as well as engage with regulators and industry. It is critical for the public to be aware of and involved in decisions that will impact their communities, and this engagement should occur well before a draft permit is prepared.

1. Or what? AB 1205 requires DTSC to review the financial assurances required to operate a hazardous waste facility at least once every 5 years. If DTSC’s review finds the financial assurances for a facility to be inadequate, the bill would require DTSC to notify the owner or operator of the facility and would require the owner or operator to update and adopt adequate financial assurances within 90 days. What happens after 90 days if the owner or operator doesn’t adopt adequate financial assurances? 

3)  A band aid on a hemorrhage? The author correctly points out that the Legislature, the Administration and stakeholders have all pointed to systemic issues and programmatic deficiencies that have impacted DTSC’s ability to fulfill its public health and environmental protection mandates. The Legislature has had nearly 20 hearings on the department’s deficiencies in the last 3 years between policy and budget committees in both houses. DTSC and the Governor have initiated audits, panels, reports, and their own initiatives to fix identified problems. The Legislature has passed several reform bills and significantly augmented DTSC’s budget and staff. 

It is not clear that a suite of bills that make small “steps in the right direction” at the 11^th hour of the Legislature’s policy deadlines at the end of a two-year session is the right direction at this point. This lacks the opportunity to do the thoughtful consideration necessary to review how these reforms impact all stakeholders and may actually hinder significant reform necessary to improve DTSC. 

It is clear however, that all review to date has pointed to systemic issues at DTSC. At the heart of the criticisms around DTSC’s failings is a lack of accountability. These bills, while they may tighten the statute, do not help solve the root problem of greater transparency and accountability.

Related/Prior Legislation

AB 1102 (Santiago, 2016) requires DTSC to inspect a permitted hazardous waste land disposal facility no less than once per month, inspect a permitted and operating hazardous waste facility no less than 4 times per calendar year, and inspect a permitted hazardous waste facility no less than 2 times per calendar year.  

AB 1400 (Santiago, 2016)  requires DTSC, as a condition for a new hazardous waste facilities permit or a renewal of a hazardous waste facilities permit, to require a facility operator to install monitoring devices or other equipment at the fence line of the facility to monitor for potential releases from the facility into the surrounding community, except as specified; requires DTSC to grant such a request from a member of the public for a technical assistance grant for the purpose of getting assistance relating to, and information about, a pending hazardous waste facilities permit if DTSC receives the request within one year of the submission of the applicable hazardous waste facilities permit application, and would authorize DTSC to, in its discretion, grant such a request received more than one year from the submission of the applicable permit application, requires the permit applicant to fund the grants; requires DTSC, upon receipt of an application for a new hazardous waste facilities permit or for a renewal of a hazardous waste facilities permit, to post on its Internet Web site that the application has been received, and to include with this information a description of the process for applying for a technical assistance grant. 

SB 83 (Committee on Budget and Fiscal Review, Chapter 24, Statutes of 2015) among other things, created the IRP to review and make recommendations for improving DTSC programs, as specified.

SB 673 (Lara, Chapter 611, Statutes of 2015) revises the DTSC’s permitting process and public participation requirements for hazardous waste facilities.

SB 712 (Lara, Chapter 833, Statutes of 2014) requires DTSC, on or before December 31, 2015, to issue a final permit decision on an application for a hazardous waste facilities permit that is submitted by a facility operating under a grant of interim status on or before January 1, 1986, by either issuing a final permit or a final denial of the application.

SB 812 (de León, 2014) would have required DTSC to adopt regulations by January 1, 2017, to specify conditions for new permits and the renewal of existing permits, as specified, and establishes deadlines for the submission and processing of facility applications, as specified. SB 812 was vetoed by Governor Brown.

SOURCE:           Author

SUPPORT:

Asian Pacific Environmental Network

Breast Cancer Fund

California Environmental Justice Alliance

California League of Conservation Voters

Center for Community Action and Environmental Justice

Center on Race, Poverty & The Environment

Clean Water Action/ Clean Water Fund

Communities for a Better Environment

Environmental Health Coalition

Environmental Working Group

Natural Resources Defense Council

OPPOSITION:

CalChamber

Waste Management

These lists are likely incomplete as the bill was gut and amended on 6/20/16, not giving stakeholders a sufficient opportunity to review.

ARGUMENTS IN SUPPORT:

Supporters state that the DTSC reform package (AB 1102, AB 1205 and AB 1400) will improve DTSC’s hazardous waste permit program by setting minimum inspection frequencies at hazardous waste facilities, increasing public’s ability to participate in the permitting process, ensuring adequate monitoring to avoid off-site migration of contaminants and requiring financial assurances to cover hazardous waste facilities clean-up costs.

ARGUMENTS IN OPPOSITION:

According to Waste Management “the objection pertains to the cumulative effect of these combined proposals, the costs of which must all be borne by applicants or operators.  In brief, the cumulative effect will be large, poorly-understood, and clearly discourage the operation of DTSC-licensed facilities in California.  Please note that legislation to eliminate the flat-fee option for permit applicants is part of the budget and trailer bills.  Additionally, legislation to create an Appeals Hearing Board is being actively considered.  Can we reasonably expect DTSC to implement the totality of these changes smoothly?  It is ill-advised to inundate DTSC with a myriad of lately developed proposals. 

These proposals should not be considered in isolation.  Important issues of public policy should be considered.  For example, approximately 85% of material deposited at Kettleman Hills is non-RCRA waste.  If transported to the border, non-RCRA waste is subjected to dramatically less demanding regulatory standards.   During Waste Management’s recent permit modification “ordeal”, waste previously deposited at Kettleman Hills went elsewhere (not in California).  No one has studied where this waste went and the manner in which it was handled, treated, etc.  Enactment of the three bills (and other matters) identified above could result in the export of more waste and related activity. 

No one questions the need to reform DTSC.  But the rapid adoption of multiple bills fails to prioritize reforms, frustrates integration, and may impede reform.  Further delay and frustration may result.”

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SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1205 (Gomez) - The California River Revitalization and Greenway Development Act of 2015.

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 1205 would create a grant program administered by the Natural Resources Agency (agency) for projects on or adjacent to riparian corridors that reduce greenhouse gas (GHG) emissions.

Fiscal Impact:

• Cost pressures at least in the tens of millions of dollars to the General Fund and the GHG Reduction Fund (GGRF, special) to fund the grant program.

• Unknown costs, likely in the hundreds of thousands to low millions of dollars to the General Fund and the GGRF (special) for the agency’s administrative costs in administering the grant program including the development of regulations.

• Potential costs of approximately $350,000 annually to the GGRF (special), to the ARB to evaluate the GHG reduction from each application, should the grant program receive funding from the GGRF. These costs may offset some of the agency’s administrative costs.

Background:

Existing law authorizes the Department of Water Resources to establish a program of flood damage reduction and urban creek restoration known as the Urban Streams Restoration Program (Water Code §7048). Since 1985, the program has provided more than 270 grants ranging from $1,000 to $1 million to communities throughout California for projects ranging from bank stabilization to the occasional acquisition of strategic floodplain properties or easements. The last funding cycle for the program was in 2014, where over $8 million was awarded to 13 project proposals.

Existing law establishes the California River Parkways Program (Public Resources Code (PRC) §§5750 et seq.) under the administration of the Secretary of the Natural Resources Agency (agency). It requires the agency to provide grants for river parkway projects that acquire land for river parkways or for the restoration, protection, and development of river parkways. The agency is currently soliciting for a one-time funding round of approximately $7.6 million for the acquisition, restoration, protection and development of river parkways. The funds for this cycle are the last of the Proposition 84 funding for the program. Eligible entities include public agencies and non-profits.

Additionally, the agency administers other grant programs, including the Urban Greening for Sustainable Communities (on behalf of the Strategic Growth Council) and the Environmental Enhancement and Mitigation Program that river restoration and related projects may be eligible for and have received funding from.

Further, various state bond acts and legislative appropriations have repeatedly provided moneys, through a variety of programs and mechanisms, for river and stream restoration. State-level organizations providing grants for these purposes include the Department of Fish and Wildlife; the Wildlife Conservation Board; various Conservancies, including the State Coastal Conservancy, the San Joaquin River Conservancy, the Santa Monica Mountains Conservancy, the Strategic Growth Council, and Department of Forestry and Fire, among others.

Proposition 1, which was passed by the voters in November 2014, which authorized $7.545 billion in general obligation bonds to fund ecosystem and watershed protection and restoration, water supply infrastructure projects, including surface and groundwater storage, and drinking water protection. More specifically, $.495 billion is designated for competitive grants for multibenefit ecosystem and watershed restoration projects.

The California Global Warming Solutions Act of 2006 (referred to as AB 32, HSC §38500 et seq.) requires the California Air Resources Board (ARB) to determine the 1990 statewide greenhouse gas (GHG) emissions level, to approve a statewide GHG emissions limit equivalent to that level that will be achieved by 2020, and to adopt GHG emissions reductions measures by regulation. ARB is authorized to include the use of market-based mechanisms to comply with the regulations. All monies, except for fines and penalties, collected pursuant to a market-based mechanism are deposited in the Greenhouse Gas Reduction Fund (GGRF) (Government Code §16428.8).Existing law requires that the GGRF only be used to facilitate the achievement of reductions of GHG emissions consistent with AB 32.

Proposed Law:

This bill would enact the California River Revitalization and Greenway Development Act, which would create a grant program administered by the agency for projects that reduce GHG emissions and are located on or adjacent to riparian corridors. Priority would be given to projects based on the extent to which the project provides the following co-benefits:

• Recreational access to and improve interaction with a river or riparian corridor, especially in urban corridors and park-stared communities.

• Improved transportation mobility

• Economic viability of the surrounding communities.

• Development of visitor-serving and interpretive facilities.

• Access and development of urban greening.

• Species protections and the protection of habitat strongholds.

• Improved resiliency to climate change.

• Improved water supply, flood protection, and water quality.

• Job training and workforce development.

• Improved stormwater retention.

Priority will also be given to projects that:

• Are consistent with a parkway, greenway, or urban greening plan.

• Leverage monies from Proposition 1.

• Provide recreational access and opportunities to major metropolitan areas of the state.

Projects funded by this program would be required to be consistent with the California Water Action Plan and the Safeguarding California Plan. If the project is for flood protection, it must also be consistent with the Cobey-Alquist Flood Plain Management Act and the Central Valley Flood Protection Act.

The agency would be required to consult with the ARB to consider the extent to which a project reduces GHG emissions.

The grant program would be funded by the CalRIVER fund, which is created by the bill, and may receive proceeds from bonds and special funds, including the GGRF.

Staff Comments:

By establishing a program to fund projects on or adjacent to riparian corridors, this bill would cause cost pressures to fund these projects. Based on the amount of state grants previously given to river restoration, river parkways, and related projects, staff assumes these costs pressures are at least in the tens of millions of dollars.

To administer the grant program, the agency will incur administrative costs. However, these costs are unknown as they are dependent on the size of the program. Generally speaking, administrative costs can be estimated at five percent of the grant program size. That is, for a $10 million dollar grant program, the agency will need approximately $500,000 in administrative costs. These administrative costs would include the workload necessary to develop regulations for the program.

This bill would require the agency to consult with the ARB to consider the extent to which a project reduces GHG emissions. This consultation will be particularly necessary should the grant program receive funding from the GGRF, as the GGRF must be used to further the purposes of AB 32. ARB notes that should this program be funded by the GGRF, it anticipates costs to create new GHG emission reduction methodologies for the proposed project types, to create new project reporting requirements, and to update the existing disadvantaged communities guidance to reflect the new projects. The ARB notes that these tasks may be more complicated than other projects because “[d]ue to the complexity of greenhouse gas sources and sinks in natural systems, the riparian projects identified in the bill may not provide significant net GHG emission reductions.” Thus, to ensure that GGRF funds are used appropriately, ARB anticipates needing a higher level of additional resources to develop GHG quantification methods. For a $10-$20 million dollar grant program, ARB would anticipate needing two positions at an annual cost of $350,000 to review projects for GHG reduction potential. Should funds be appropriated to ARB for these activities, it may result in a corresponding decrease in administrative costs for the agency.

Staff notes that this bill creates a special fund to fund the grant program. However, it is unclear why a special fund would be necessary.

Staff notes that there are multiple bills being considered by both houses of the Legislature that propose projects that would be eligible to receive GGRF funds. It is unclear how these bills will interact with each other. Staff notes that a discussion on the spending of GGRF is anticipated in August as part of a budget discussion.

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SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Fran Pavley, Chair

2015 - 2016 Regular

Bill No: AB 1205 Hearing Date: July 14, 2015

Subject: The California River Revitalization and Greenway Development Act of 2015.

BACKGROUND AND EXISTING LAW

California has over 46,000 miles of perennial (year round) streams located throughout the state. River parkways, including those in urban areas, are some of the most sensitive and ecologically important conservation areas in the state. They may provide crucial riparian habitat for multiple species – including endangered and threatened species – and also provide important open space for communities. Many communities, particularly urban communities, are “park poor.” These communities have insufficient open space areas nearby and lack ready access to public recreational opportunities afforded by proximity to trails, parks and open space.

Existing law authorizes the Department of Water Resources to establish a program of flood damage reduction and urban creek restoration known as the Urban Streams Restoration Program (Water Code §7048). Since 1985, the program has provided more than 270 grants ranging from $1,000 to $1 million to communities throughout California for projects ranging from bank stabilization to the occasional acquisition of strategic floodplain properties or easements. The last funding cycle for the program was in 2014, where over $8 million was awarded to 13 project proposals.

Existing law establishes the California River Parkways Program (Public Resources Code (PRC) §§5750 et seq.) under the administration of the Secretary of the Natural Resources Agency (agency). It requires the agency to provide grants for river parkway projects that acquire land for river parkways or for the restoration, protection, and development of river parkways. The agency is currently soliciting for a one-time funding round of approximately $7.6 million for the acquisition, restoration, protection and development of river parkways. The funds for this cycle are the last of the Proposition 84 funding for the program. Eligible entities include public agencies and non-profits.

Additionally, the agency administers other grant programs, including the Urban Greening for Sustainable Communities (on behalf of the Strategic Growth Council) and the Environmental Enhancement and Mitigation Program that river restoration and related projects may be eligible for and have received funding from.

Further, various state bond acts and legislative appropriations have repeatedly provided moneys, through a variety of programs and mechanisms, for river and stream restoration. State-level organizations providing grants for these purposes include the Department of Fish and Wildlife; the Wildlife Conservation Board; various Conservancies, including the State Coastal Conservancy, the San Joaquin River Conservancy, the Santa Monica Mountains Conservancy, the Strategic Growth Council, and CalFIRE, among others.

Most recently, in November 2014, voters approved the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Proposition1). Proposition 1 authorizes $7.545 billion in general obligation bonds to fund ecosystem and watershed protection and restoration, water supply infrastructure projects, including surface and groundwater storage, and drinking water protection. More specifically, $1.495 billion is designated for competitive grants for multibenefit ecosystem and watershed restoration projects.

Pursuant to the California Global Warming Solutions Act (AB 32), existing law requires the Air Resources Board (ARB) to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020 and to adopt rules and regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions (Health and Safety Code (HSC) §§38500 et seq.). As part of the implementation of AB 32 market-based compliance mechanisms, ARB adopted a cap-and-trade program that caps the allowable state wide emissions of GHGs and provides for the auctioning of emissions credits. Auction proceeds are deposited into the Greenhouse Gas Reduction Fund (GGRF) and available for appropriation by the Legislature.

Existing law establishes and authorizes expenditures from the GGRF for investments that reduce GHG emissions associated with water use and supply, land and natural resource conservation and management, forestry, sustainable agriculture and other purposes. Existing law requires the Department of Finance, as specified, to allocate at least 25% of available moneys in the GGRF to projects that provide benefits to disadvantaged communities and at least 10% to projects located within disadvantaged communities (HSC §39713).

Existing law also prohibits the state from approving allocations for a measure or program using GGRF monies except after determining that the use of those moneys furthers the regulatory purposes of AB 32 (HSC §39712).

The 2014 – 15 Budget Act allocated cap-and trade revenues for the 2014 -15 fiscal year and established a long-term plan for the allocation of cap-and-trade revenues beginning in fiscal year 2015 – 16. The Senate Environmental Quality Committee analysis of this bill includes a detailed review of the auction revenue expenditures and requirements. The 2015 -16 budget bill passed both houses on June 15, 2015, but excluded any appropriation of cap-and-trade auction revenue.

PROPOSED LAW

This bill would create a grant program called the California River Revitalization and Greenway Development Act of 2015 (CalRIVER) and require the agency to administer the program. Specifically this bill would:

1. Declare legislative intent to protect, restore and enhance a network of river systems and riparian corridors.

2. Require the agency to develop a grant program for eligible applicants to develop projects that assist with implementing AB 32 and to prioritize funding projects that provide the greatest level of the following cobenefits:

   1. Recreational access, as specified, especially in urban corridors and under-parked communities.

   2. Transportation mobility, especially pedestrian, bicycle, and public transit.

   3. Economic viability by promoting appropriate development, as specified.

   4. Development of visitor-serving and interpretative facilities

   5. Access and development of pocket parks, community gardens, demonstration gardens and other urban greening.

   6. Species protections and the protection of habitat strongholds, including improved wildlife corridors.

   7. Improved resiliency to climate change impacts.

   8. Improved water supply and quality.

   9. Job training and workforce development, as specified.

   10. Improved stormwater retention.

   11. Improvements along impaired water bodies.

3. Requires projects receiving grants to be consistent with AB 32, the California Water Action Plan, the Safeguarding California Plan and SB 535 (de León, c. 830, Statutes of 2012).

4. Requires the agency to prioritize awarding grants to projects that are consistent with a parkway, greenway or urban greening plan, leverage Proposition 1 funds, and provide recreational access to a major metropolitan area of the state.

5. Creates the CalRIVER fund, as specified, to receive bond proceeds and special funds, including, but not limited to, auction revenues from the GGRF.

6. Makes various supporting legislative findings, as specified.

ARGUMENTS IN SUPPORT

According to the author, “Given the vast potential for using our river systems to reduce and sequester greenhouse gas emissions, and no existing integrated, statewide grant program to deliver these benefits, this bill would establish CalRIVER.”

“The program would be especially useful in incentivizing projects that integrate stormwater, natural resource improvements, as well as reduction in vehicle miles traveled. Without CalRIVER, the state would continue to miss the opportunities to harness the climate values of our riparian corridors for greenhouse gas reductions, as well as the many other cobenefits associated with these projects.”

ARGUMENTS IN OPPOSITION

According to the California Taxpayers Association, “AB 1205 would make cap-and-trade funds available for use by the Natural Resources Agency in administrating the CalRIVER Fund to provide funding for park and recreational programs, and water supply and water quality programs. CalTax is opposed to the bill because it distorts the nature of a regulatory fee. […] Pending litigation will determine if the auction component of the cap-and-trade program constitutes an illegal tax. By directing funds beyond the clear regulatory purposes, AB 1205 opens up the cap-and-trade program to litigation risk.”

COMMENTS

CalRIVER is a targeted program. The legislative intent section of this bill makes clear that the intent of the CalRIVER program is GHG emissions reduction and carbon sequestration while at the same time achieving the multiple cobenefits possible through river restoration and related projects, as specified. This focus becomes slightly muddled later in the bill. Discussions with the author’s office indicate that the bill’s intent is to provide additional resources, but not replace, existing programs established for river restoration and related projects. The committee may wish to amend the bill to clarify this point. [Amendment 1]

Implementation of the program. The statutory language for many grant programs includes specific direction to the grantor to develop the program. The committee may wish to provide specific direction to the agency secretary to do so. [Amendment 2]

Litigation over auction revenue. In 2012, the California Chamber of Commerce filed a lawsuit against ARB claiming that cap-and-trade auction revenues constitute an illegal tax. The Superior Court ruling in late 2013 found that the auction is more akin to a regulatory fee than a tax. An appeal of that decision is pending. However, the committee may wish to require additional language to more explicitly tie the CalRIVER program into the statutory and regulatory framework developed to ensure that GGRF moneys further the regulatory purposes of AB 32 [Amendment 3]

Technical and clarifying changes. The committee may wish to make a series of minor technical and clarifying changes to the bill to help ensure the bill’s intent is realized. [Amendment 4]

Late “support if amended” letter. A late letter signed by several community-based organizations expressed qualified support for AB 1205, and requested several amendments. The letter expresses concerns about CalRIVER supplanting existing river and stream restoration programs, such as the Urban Streams Restoration Program, and requests the provision of base funding for existing river/stream programs, the removal of any prioritization for urban areas, assurance that all river grant programs have tools to meet auction revenue requirements, and the establishment of a program or process to help communities engage in the “often confusing state funding processes.”

As noted above, CalRIVER is a targeted program, and would be one of many state programs that provide funding for river and stream restoration. While many river and stream restoration efforts may have climate value, it is not clear that all efforts will be able to qualify for auction revenues. There is therefore benefit in having multiple programs established for river and stream restoration with funding, subject to Legislative appropriation, from a variety of sources. Further, many existing grant programs provide workshops and assistance to those seeking funding without a specific statutory requirement.

Rivers with plans. According to the author’s office, rivers throughout the state are in the process of or have completed restoration plans that could meet that priority criterium established in this bill. These include the San Joaquin, Eel, American, San Diego and Los Angeles Rivers. These plans contain rural reaches. There have also been considerable efforts undertaken in recent years to revitalize the Los Angeles River. Both the County (1996) and the City (2007) of Los Angeles have released revitalization plans, and the US Army Corps of Engineers recently approved the most extensive restoration alternative for its Ecosystem Restoration Feasibility Study for the Los Angeles River. Currently, the LA River’s “Greenway 2020” plan calls for public/private efforts to achieve a continuous 51 mile greenway along the Los Angeles River by 2020 to facilitate non-vehicular modes of transportation and recreational access, among other goals. There have also been several pocket parks added along the Los Angeles River in recent years.

Double-referral

This bill was heard earlier in the Senate Environmental Quality Committee. Elements of the bill under that Committee’s jurisdiction are provided here for context and completeness.

Recent related bills

AB 1251 (Gomez, 2015). This bill would establish the Greenway Development and Sustainment Act which, among other things, provides for greenway easements. (before the Senate Appropriations Committee)

AB 530 (Rendon, 2015). This bill would establish the Lower Los Angeles River Working Group to develop a revitalization plan for the Lower Los Angeles River. (before the Senate Natural Resources and Water Committee)

AB 735 (Gomez, 2013). This bill would have established the Greenway Initiative to promote the establishment of greenways along rivers statewide (held in the Assembly Appropriations Committee)

AB 1922 (Gomez, 2014). This bill is an earlier version of AB 1251 (Gomez, 2015) (held in the Senate Appropriations Committee)

SUGGESTED AMENDMENTS

AMENDMENT 1

On page 4, lines 9 & 10, delete “river parkway and urban creek programs and”

AMENDMENT 2

On page 4, insert after line 11:

“5849. The secretary shall develop regulations, criteria, or procedural guidelines for the implementation of this chapter.”

AMENDMENT 3

Delete page 2 lines 32 -33 and page 3 line 1-3 and replace with:

“to riparian corridors that furthers the regulatory purposes of the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) and meets the requirements of the Greenhouse Gas Reduction and Communities Revitalization Act (commencing with Section 39710) of the Health and Safety Code).

(b) In order to eligible for funding under the program, a project shall demonstrate that it will achieve a reduction in emissions of greenhouse gases. In selecting projects for funding, the Natural Resources Agency, in consultation with the California Air Resources Board, shall consider the extent to which a project reduces emissions of greenhouse gases.

(c) In evaluating grant applications for funding, the Natural Resources Agency shall, in addition to prioritizing projects pursuant to subdivision (b), consider the extent to which projects provide the greatest level of the”

AMENDMENT 4

On page 2, line 28, delete “and improve,” delete line 29 and replace with:

“increase active transportation, such as biking and walking and improve non-motorized mobility in the surrounding communities and decrease vehicle miles traveled.”

On page 3, line 5, add “to” between “access” and “and”

On page 3, line 5, delete “interactions,” and replace with “interaction with a river or riparian corridor,”

On page 3, line 7, insert “Improved” before “transportation”

On page 3, line 9 insert “of the surrounding community” after “viability”

On page 3, delete line 18 and replace with:

“(8) Improved water supply, flood protection and water quality, including the water quality of impaired water bodies through river restoration.”

On page 3, delete line 22.

On page 3, line 23, replace “(b)” with “(d)” and insert “also” after “shall”

On page 3, delete lines 25 – 27, inclusive.

On page 3, delete line 31.

On page 3, between lines 31 and 32 insert:

“(e) projects receiving funding pursuant to this chapter for flood protection shall be consistent, as applicable, with Chapter 4 (commencing with section 8400) of Part 2 of Division 5, Part 6 (commencing with section 9600) of Division 5, and Part 9 (commencing with Section 12980) of Part 6 of Division 6, of the Water Code.”

On page 3, line 32, replace “(c)” with “(f).”

On page 4, delete lines 1 – 2, inclusive, and replace with:

“(3) Provide recreational access and opportunities to major metropolitan areas of the state, including those that are relatively underserved by parks.”

SUPPORT

Audubon California

California League of Conservation Voters

California Trout

Los Angeles County Board of Supervisors

Los Angeles River Revitalization Corporation

Sierra Club California

OPPOSITION

California Taxpayers Association

-- END --

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2015 - 2016 Regular

Bill No: AB 1205

SUBJECT: The California River Revitalization and Greenway Development Act of 2015

ANALYSIS:

Existing law:

1. Under the California Global Warming Solutions Act of 2006 (AB 32), requires the California Air Resources Board (ARB) to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020 and to adopt rules and regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. (Health and Safety Code (HSC) §38500 et seq.)

2. Establishes the Greenhouse Gas Reduction Fund (GGRF) in the State Treasury, requires all moneys, except for fines and penalties, collected pursuant to a market-based mechanism be deposited in the fund and requires the Department of Finance, in consultation with ARB and any other relevant state agency, to develop, as specified, a three-year investment plan for the moneys deposited in the GGRF. (Government Code §16428.8)

3. Prohibits the state from approving allocations for a measure or program using GGRF moneys except after determining that the use of those moneys furthers the regulatory purposes of AB 32, and requires moneys from the GGRF be used to facilitate the achievement of reductions of GHG emissions in California. (HSC §39712)

4. Authorizes expenditures from the GGRF for investments that reduce GHG emissions associated with water use and supply, land and natural resource conservation and management, forestry, and sustainable agriculture. (HSC §39712)

5. Requires the Department of Finance, in the GGRF investment plan, to allocate at least 25% of available moneys in the GGRF to projects that provide benefits to disadvantaged communities, and at least 10% to projects located within disadvantaged communities. (HSC §39713 )

6. Under the California River Parkways Act of 2004, requires the California Natural Resources Agency (CNRA) to provide grants for river parkway projects that acquire land for river parkways or for the restoration, protection, and development of river parkways. (Public Resources Code §5750 et seq.)

7. Authorizes the Department of Water Resources to establish a program of flood damage reduction and urban creek restoration known as the Urban Streams Restoration Program. (Water Code Section §7048)

8. Creates the Active Transportation Program in the California Department of Transportation for the purpose of encouraging increased use of active modes of transportation, such as biking and walking. (Streets and Highways Code §2380)

This bill:

1. Makes various findings regarding the GHG emission reduction benefits and environmental cobenefits of river systems.

2. Declares it is the intent of the Legislature to protect, restore, and enhance a network of river systems and riparian corridors.

3. Requires CNRA to establish a grant program for eligible applicants to develop projects that assist with implementing AB 32 and requires CNRA to prioritize funding for projects that provide the greatest level of the following cobenefits:

1. Recreational access and improved human interactions, especially in urban corridors and park-starved communities.

2. Transportation mobility, especially pedestrian, bicycle, and public transit.

3. Economic viability by promoting appropriate development, especially in an urban setting.

4. Development of visitor-serving and interpretive facilities.

5. Access and development of pocket parks, community gardens, demonstration gardens, and other urban greening.

6. Species protections and the protection of habitat strongholds, including improved wildlife corridors.

7. Improved resiliency in the face of unavoidable impacts from climate change.

8. Improved water supply and water quality.

9. Job training and workforce development, especially projects that involve disadvantaged youth and veterans.

10. Improved stormwater retention.

11. Improvements along impaired water bodies.

4. Requires projects receiving grants to be consistent with AB 32, the California Water Action Plan, The Safeguarding California Plan, and requirements for GGRF investments in disadvantaged communities.

5. Requires CNRA to prioritize funding for projects with the following characteristics:

1. Are consistent with a parkway, greenway, or urban greening plan.

2. Leverage moneys from the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Proposition 1).

3. Provide recreational access to a major metropolitan area of the state.

6. Creates the CalRIVER fund to receive appropriations from the Legislature from bond proceeds and special funds, including, but not limited to, GGRF.
   
   

Background

AB 1205 creates the CalRIVER program, with funding for the program authorized from the GGRF. Whereas the use of GGRF moneys is the jurisdiction of this committee, provisions relating specifically to the need for, and details of, the river revitalization program created in the bill, are within the jurisdiction of the Senate Natural Resources Committee, and are not considered in this analysis.

1. Cap-and-trade auction revenue. ARB has conducted 11 cap-and-trade auctions. The first 10 have generated almost $1.6 billion in proceeds to the state.

Several bills in 2012, and one in 2014, provided legislative direction for the expenditure of auction proceeds including:

SB 535 (de León, Chapter 830, Statutes of 2012) requires that 25% of auction revenue be used to benefit disadvantaged communities and requires that 10% of auction revenue be invested in disadvantaged communities.

• AB 1532 (J. Pérez, Chapter 807, Statutes of 2012) directs the Department of Finance to develop and periodically update a three-year investment plan that identifies feasible and cost-effective GHG emission reduction investments to be funded with cap-and-trade auction revenues. AB 1532 specifies that reduction of greenhouse gas emissions through water use and supply, land and natural resource conservation and management, forestry, and sustainable agriculture, are eligible investments of GGRF.

• SB 1018 (Budget and Fiscal Review Committee, Chapter 39, Statutes of 2012) created the GGRF, into which all auction revenue is to be deposited. The legislation requires that before departments can spend moneys from the GGRF, they must prepare a record specifying: (1) how the expenditures will be used, (2) how the expenditures will further the purposes of AB 32 (Nuñez and Pavley, Chapter 488, Statutes of 2006), (3) how the expenditures will achieve GHG emission reductions, (4) how the department considered other non-GHG-related objectives, and (5) how the department will document the results of the expenditures.

• SB 862 (Budget and Fiscal Review Committee, Chapter 36, Statutes of 2014) requires the ARB to develop guidelines on maximizing benefits for agencies administering GGRF funds and guidance for administering agencies on GHG emission reduction reporting and quantification methods.

Legal consideration of cap-and-trade auction revenues. The 2012-13 budget analysis of cap-and-trade auction revenue by the Legislative Analyst’s Office noted that, based on an opinion from the Office of Legislative Counsel, the auction revenues should be considered mitigation fee revenues, and their use requires that a clear nexus exist between an activity for which a mitigation fee is used and the adverse effects related to the activity on which that fee is levied. Therefore, in order for their use to be valid as mitigation fees, revenues from the cap-and-trade auction must be used to mitigate GHG emissions or the harms caused by GHG emissions.

In 2012, the California Chamber of Commerce filed a lawsuit against the ARB claiming that cap-and-trade auction revenues constitute illegal tax revenue. In November 2013, the superior court ruling declined to hold the auction a tax, concluding that it’s more akin to a regulatory fee. The plaintiffs filed an appeal with the 3^rd District Court of Appeal in Sacramento in February of last year.

AB 32 auction revenue investment plan. The first three-year investment plan for cap-and-trade auction proceeds, submitted by Department of Finance, in consultation with ARB and other state agencies in May of 2013, identified sustainable communities and clean transportation, energy efficiency and clean energy, and natural resources and waste diversion as the three sectors that provide the best opportunities, in that order, for achieving the legislative goals and supporting the purposes of AB 32. For natural resources investments, the plan recommends funding ecosystem management projects for their ability to sequester carbon, as well as their co-benefits to human health and the environment.

Budget allocations. The 2014-15 Budget allocates $832 million in GGRF revenues to a variety of transportation, energy, and resources programs aimed at reducing GHG emissions. Various agencies are in the process of implementing this funding. SB 862 (Budget and Fiscal Review Committee), the 2014 budget trailer bill, established a long-term cap-and-trade expenditure plan by continuously appropriating portions of the funds for designated programs or purposes. The legislation appropriates 25% for the state’s high-speed rail project, 20% for affordable housing and sustainable communities grants, 10% to the Transit and Intercity Rail Capital Program, and 5% for low-carbon transit operations. The remaining 40% is available for annual appropriation by the Legislature.

Of that 40%, the Governor’s 2015-16 budget proposal appropriates $40 million towards wetland and watershed restoration to be administered by the Department of Fish and Wildlife.

The 2015-16 Budget bill passed both houses on June 15 of this year, but excluded any appropriation of cap-and-trade auction revenue.

2. River and Stream Restoration. California has two grant programs in statute that restore rivers and streams: 1) the Urban Streams Restoration Program and 2) the California River Parkways Program. Both programs are primarily funded through the Safe Drinking Water, Water Quality and Supply, Food Control, River and Coastal Protection Bond Act of 2006 (Proposition 84).

The California River Parkways Program was created pursuant to the California Rivers Parkways Act of 2004. The Natural Resources Agency is currently soliciting for a one-time funding round of approximately $7.6 million dollars for the acquisition, restoration, protection and development of river parkways, with a cap for an individual project at $500 thousand. This funding cycle will award the last of Proposition 84 moneys for the program. Projects are required to meet at least two of the following objectives: 1) providing compatible recreation opportunities, 2) protecting or restoring riverine or riparian habitat, 3) providing flood management benefits, 4) conversion of developed riverfront land to river parkways, and 5) providing facilities to support river conservation. Over 60 projects have been funded through the program.

Through the Urban Streams Restoration Program, the Department of Water Resources provides grants to local communities for projects to reduce flooding and erosion and associated property damage, restore, enhance or protect the natural ecological values of streams, and promote community involvement, education and stewardship. Since 1985, the program has provided more than 270 grants ranging from $1,000 to $1 million to communities throughout California. The projects have included stream cleanups, bank stabilization projects, revegetation efforts, recontouring of channels to improve floodplain function and occasional acquisition of strategic floodplain properties or easements. The last funding cycle for the program was in 2014, where over $8 million was awarded to 13 project proposals.

Proposition 1. The Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Proposition 1) authorizes $7.545 billion in general obligation bonds to fund ecosystems and watershed protection and restoration, water supply infrastructure projects, including surface and groundwater storage, and drinking water protection. Specifically, $1.495 billion is designated for competitive grants for multibenefit ecosystem and watershed restoration projects.

Comments

1. Purpose of Bill. According to the author, “Given the vast potential for using our river systems to reduce and sequester greenhouse gas emissions, and no existing integrated, statewide grant program to deliver these benefits, this bill would establish CalRIVER. The program would be especially useful in incentivizing projects that integrate stormwater, natural resource improvements, as well as reductions in vehicle miles traveled. Without CalRIVER, the state would continue to miss opportunities to harness the climate values of our riparian corridors for greenhouse gas reductions, as well as the many other co-benefits associated with these projects.”

2. GHG emission reduction priorities. As noted in the background, the GGRF investment identified sustainable communities and clean transportation, energy efficiency and clean energy, and natural resources and waste diversion as the three sectors that provide the best opportunities, in that order, for achieving the legislative goals and supporting the purposes of AB 32. The natural resources sector (in addition to waste diversion) is third on the priority list.

The investment plan, in reference to the natural resources and waste diversion sectors, states, “while this combined category represents less than ten percent of GHG emissions, there is potential for achieving greater reductions and realizing significant co-benefits to human health and the environment.”

So while natural resources is recommended for funding from GGRF, it is recommended for a smaller appropriation of GGRF moneys than other sectors, since, although significant opportunities for cobenefits exist, the GHG emissions reduction potential of projects in the natural resources sector is significantly lower than for clean transportation and energy investments.

The 2014-15 Budget appropriated $25 million to the Department of Fish and Wildlife for wetlands and watershed restoration. The Governor’s 2015-16 budget proposal increases this appropriation to $40 million.

3. Other sources of funding available. AB 1205 creates the CalRIVER fund and authorizes the transfer of bond fund moneys, and special funds, including, but not limited to, river parkway and urban creek programs, and the GGRF. As noted in the background, the California River Parkways Program and the Urban Streams Restoration Program have completed, or are in the process of completing, their last funding cycles. However, the newly enacted Proposition 1 assigns over $1.45 billion toward the protection of rivers, lakes, streams, coastal waters and watersheds. Proposition 1 calls out the protection and restoration of rural and urban watersheds to improve storage capacity, stormwater resource management and greenhouse gas reduction, the restoration of river parkways, the implementation of watershed adaptation project to reduce climate impacts, the restoration of ecosystems, the reduction of pollution, and other goals, as purposes of the $1.45 billion of Proposition 1 funding. Additionally, $100 million is designated for project to protect and enhance urban creeks. Proposition 1 also requires $20 million go toward a competitive program to fund multibenefit watershed and urban rivers enhancement projects. Many of the goals specified in Proposition 1 are also prioritized as cobenefits in AB 1205. It is likely that a significant portion of the river restoration activities to date have had some level of GHG reduction of sequestration benefit due to restoration of riparian habitats and opportunities for active transport in urban settings, however, AB 1205 differs from other river restoration efforts, in that the stated goal of the CalRIVER program is the reduction or sequestration of GHGs.

Although projects to protect, restore, and enhance river systems and riparian corridors are critically important, authorizing GGRF moneys for this program, when money is already available for similar efforts, potentially takes away funding for other measures to reduce GHGs that do not have multiple other sources of funding.

Is it appropriate to authorize GGRF funds for this program, when other dedicated funding streams are available for river restoration and protection?

4. GHG emissions. AB 1205 requires CNRA to establish a grant program and authorizes the use of GGRF moneys for the program, which are funds that are required to be used to achieve GHG emission reductions. And although the bill specifies project prioritization based on a list of cobenefits, there is no requirement in the bill for the prioritization of projects based on GHG emission reductions or GHG sequestration potential.

5. Implementing AB 32? AB 1205 specifies that the CalRIVER program assist the development of projects that assist the state in implementing AB 32. This language is unclear, as the implementation of AB 32 entails various actions such as mandatory GHG emissions reporting, regulations that achieve the maximum technologically feasible and cost-effective reduction of GHG emissions, imposition of fees for administrative implementation costs, as well as the preparation of a scoping plan. It may be more appropriate to require the program to, instead, further the regulatory purposes of AB 32, as required by any use of GGRF moneys, and meet the requirements of the Greenhouse Gas Reduction Fund Investment Plan and Communities Revitalization Act.

6. Vague language. SB 1205 requires the prioritization of certain projects based on a list of cobenefits, including “recreational access and improved human interactions,” “economic viability by promoting appropriate development,” and “improvements along impaired water bodies.” It is not clear what is meant by, or what projects would qualify as having, improved human interactions, appropriate development, or “improvements” along impaired water bodies.

7. Piece by piece. GGRF investments must facilitate the achievement of GHG emissions reductions. However, after that requirement is fulfilled, there are number of other policy goals that should be considered, including benefits to environmental quality, resource protection, public health and the economy, as well as benefits to disadvantaged communities. And although the fund is growing, it is still a limited source of revenue. In order to create an optimized investment strategy from GGRF moneys, proposals should not be considered in isolation, but be assessed in aggregate to determine what suite of measures best meets the requirements of the fund, uses resources most efficiently, and maximizes policy objectives.

As budget discussions on a cap-and-trade investment strategy have been pushed to later this session, an opportunity exists to have a comprehensive discussion on the universe of GGRF proposals currently in the Legislature, during budget negotiations this summer. If the Legislature feels that the CalRIVER program established through AB 1205 is an appropriate expenditure of GGRF moneys, then this measure should also be considered through the budget process for cap-and-trade expenditures, along with all other measures proposing to expend, or authorize for expenditure, GGRF moneys.

SOURCE:

Author

SUPPORT:

Audubon California

California Trout

LA River Revitalization Corporation

Los Angeles County Board of Supervisors

OPPOSITION:

CalTax

ARGUMENTS IN SUPPORT:

California Trout states that while AB 1205 will

focus on providing support to rivers and the lands adjacent to them, its benefits

will be much broader and far-reaching. They note that investing in river systems is

a valuable effort that allows for multiple economic, social, and environmental

benefits. The Los Angeles Board of Supervisors states that AB 1205 would

provide an important funding mechanism for projects that are on or adjacent to

riparian corridors that integrate stormwater, and natural resource improvements,

and would also help to reduce vehicle miles travelled.

ARGUMENTS IN OPPOSITION:

CalTax is opposed to the bill because they

state it distorts the nature of a regulatory fee and that a true regulatory fee must

comply with the principles of having a nexus to the payer, not being imposed for

the purpose of generating revenue, and that they must be reasonable. CalTax also

states that pending litigation will determine if the auction component of the cap-

and-trade program constitutes an illegal tax, and by directing funds beyond the clear regulatory purposes, AB 1205 opens up the cap-and-trade program to litigation risk.

DOUBLE REFERRAL:

If this measure is approved by the Senate Environmental Quality Committee, the do pass motion must include the action to re-refer the bill to the Senate Natural Resources and Water Committee.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1205

Author:(Gomez)

As Amended Ver:May 5, 2015

Majority vote

SUMMARY: Creates the grant program called the California River Revitalization and Greenway Development Act of 2015 (CalRIVER), and requires the Natural Resources Agency (NRA) to administer the program. Specifically, this bill:

1. Requires NRA to establish a grant program for eligible applicants to develop projects that assist with implementing AB 32 (Núñez), Chapter 488, Statutes of 2006 and to prioritize funding projects that provide the greatest level of the following co-benefits:

1. Recreational access and improved human interactions, especially in urban corridors and park-starved communities.

2. Transportation mobility, especially pedestrian, bicycle, and public transit.

3. Economic viability by promoting appropriate development, especially in an urban setting.

4. Development of visitor-serving and interpretive facilities.

5. Access and development of pocket parks, community gardens, demonstration gardens, and other urban greening.

6. Species protections and the protection of habitat strongholds, including improved wildlife corridors.

7. Improved resiliency in the face of unavoidable impacts from climate change.

8. Improved water supply and water quality.

9. Job training and workforce development, especially projects that involve disadvantaged youth and veterans.

10. Improved stormwater retention.

11. Improvements along impaired water bodies.

4. Requires projects receiving grants to be consistent with AB 32, the California Water Action Plan, The Safeguarding California Plan, and SB 535 (DeLeón), Chapter 830, Statutes of 2012.

5. Requires NRA to also prioritize awarding grants to projects with the following characteristics:

   1. Are consistent with a parkway, greenway, or urban greening plan.

   2. Leverage moneys from the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Proposition 1).

   3. Provide recreational access to a major metropolitan area of the state.

6. Creates the CalRIVER fund to receive appropriations from the Legislature from bond proceeds and special funds, including but not limited to, GGRF.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Cost pressures, potentially in tens of millions annually (GGRF and other special funds) to fund CALRIVER.

2. Increased costs for the Air Resources Board of approximately $175,000 per year to quantify and report on river projects to track GHG reductions.

3. Absorbable administrative costs for NRA.

COMMENTS: California has 46,166 miles of perennial (year round) streams, which are in most parts of the state. Currently, California has two grant programs that restore rivers, the Urban Streams Restoration Program and the California River Parkways Program. Both programs fund river restoration through grants to communities throughout California. Various urban rivers in California already have river plans to promote restoration, and the co-benefits outlined in this bill including the San Joaquin River, Elk River, American River, San Diego River, and Los Angeles (LA) River. Urban river parkways in California are some of the most unique, sensitive, and ecologically important conservation areas in the state. Not only do they provide crucial riparian habitat for endangered and threatened species, but they also provide important open space areas for communities. Many of these communities near urban rivers are considered "park poor," meaning they have insufficient open space areas and lack access to free, public opportunities for recreation and nature based activities.

The LA River is a great example of communities coming together to work towards a healthier river, which means a healthier community. Organizations such as the LA River Revitalization Corporation are working to restore and improve 51 miles of the LA River into a "greenway" by 2020, which would be a continuous stretch of parks, bike paths, and open spaces for recreation. CalRIVER will create a consolidated grant program that will assist communities in restoring their river while reducing GHG emissions.

Analysis Prepared by: Michael Jarred / NAT. RES. / (916) 319-2092 FN: 0000773

Date of Hearing: May 20, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 1205

Author:(Gomez) – As Amended Ver:May 5, 2015

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

SUMMARY:

This bill establishes the California River Revitalization and Greenway Development Act (CALRIVER) at the Natural Resources Agency.

FISCAL EFFECT:

1. Cost pressures, potentially in tens of millions annually (Greenhouse Gas Reduction Funds and other special funds) to fund CALRIVER.

2. Increased costs for the Air Resources Board (ARB) of approximately $175,000 per year to quantify and report on river projects to track GHG reductions.

3. Absorbable administrative costs for the Natural Resources Agency.

COMMENTS:

1. Rationale. Using our river systems to reduce and sequester greenhouse gas emissions produces numerous environmental, recreational, and health benefits. However, there is no existing integrated, statewide grant program to deliver these benefits.

This bill recognizes the vast potential and establishes the CalRIVER program.

The program is especially useful in incentivizing projects that integrate stormwater, natural resource improvements, as well as reductions in vehicle miles travelled.

Without this bill, the state will continue to miss the opportunities to harness the climate values of our riparian corridors for greenhouse gas reductions, as well as the many other co-benefits associated with these projects.

2. Background. The California Global Warming Solutions Act of 2006 (AB 32) requires ARB to adopt a statewide GHG emissions limit equivalent to 1990 levels by 2020 and adopt regulations, including market-based compliance mechanisms, to achieve maximum technologically feasible and cost-effective GHG emission reductions.
   
   
   

As part of the implementation of AB 32 market-based compliance measures, ARB adopted a cap-and-trade program that caps the allowable statewide emissions and provides for the auctioning of emission credits, the proceeds of which are quarterly deposited into the GGRF available for appropriation by the Legislature.

The 2014-15 Budget Act allocates cap-and-trade revenues for the 2014-15 fiscal year and establishes a long-term plan for the allocation of cap-and-trade revenues beginning in fiscal year 2015-16.

The Budget continuously appropriates 35% of cap-and-trade funds for investments in transit, affordable housing, and sustainable communities. Twenty-five percent of the revenues are continuously appropriated to continue the construction of high-speed rail. The remaining 40% will be appropriated annually by the Legislature for investments in programs that include low-carbon transportation, energy efficiency and renewable energy, and natural resources and waste diversion.

3. Governor's May Revision. The Governor's May Revision revises revenue estimates for both 2014-15 and 2015-16. The May Revision projects $1.7 Billion additional GGRF over the next two years. Of this amount, $700 million is additional 2014-15 revenue and $1 billion is attributed to 2015-16.

Pursuant to the Budget agreement, $600,000 of the additional $1 billion is subject to the continuous appropriation.

The Governor proposes spending the remaining $1.1 Billion, with $654 million in new spending and $500 million held in reserve.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: April 27, 2015

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Das Williams, Chair

ABPCA Bill Id:AB 1205

Author:(Gomez) – As Amended Ver:April 8, 2015

SUBJECT: The California River Revitalization and Greenway Development Act of 2015

SUMMARY: Creates the grant program called the California River Revitalization and Greenway Development Act of 2015 (CalRIVER), and requires the Natural Resources Agency (NRA) to administer the program.

EXISTING LAW:

1. Authorizes the Department of Water Resources to establish a program of flood damage reduction and urban creek restoration known as the Urban Streams Restoration Program.

2. Establishes the California River Parkways Program in the office of the Secretary of NRA.

3. Requires NRA to provide grants for river parkway projects that acquire land for river parkways or for the restoration, protection, and development of river parkways.

4. Requires, pursuant to the California Global Warming Solutions Act (AB 32), the Air Resources Board to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020 and to adopt rules and regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions.

5. Authorizes expenditures from the Greenhouse Gas Reduction Fund (GGRF) for investments that reduce GHG emissions associated with water use and supply, land and natural resource conservation and management, forestry, and sustainable agriculture.

6. Authorizes expenditures from GGRF for investments that reduce GHG emissions through strategic planning and development of sustainable infrastructure projects, including, but not limited to, transportation and housing.

7. Establishes the Active Transportation Program in the Department of Transportation for the purpose of encouraging increased use of active modes of transportation, such as biking and walking.

8. Requires California Transportation Commission to adopt guidelines for the Active Transportation Program and requires those guidelines to include recreational trails and trailheads, park projects that facilitate trail linkages or connectivity to nonmotorized corridors, and conversion of abandoned railroad corridors to trails as eligible for funding from the program.

THIS BILL:

1. Makes various finds regarding the GHG emission reduction benefits and environmental cobenefits of river systems.

2. Declares it is the intent of the Legislature to protect, restore, and enhance a network of river systems and riparian corridors.

3. Requires NRA to establish a grant program for eligible applicants to develop projects that assist with implementing AB 32 and that provide the following cobenefits:

   1. Recreational access and improved human interactions, especially in urban corridors and park-starved communities.

   2. Transportation mobility, especially pedestrian, bicycle, and public transit.

   3. Economic viability by promoting appropriate development, especially in an urban setting.

   4. Development of visitor-serving and interpretive facilities.

   5. Access and development of pocket parks, community gardens, demonstration gardens, and other urban greening.

   6. Species protections and the protection of habitat strongholds, including improved wildlife corridors.

   7. Improved resiliency in the face of unavoidable impacts from climate change.

   8. Improved water supply and water quality.

   9. Job training and workforce development, especially projects that involve disadvantaged youth and veterans.

   10. Improved stormwater retention.

   11. Improvements along impaired water bodies.

4. Requires projects receiving grants to be consistent with AB 32, the California Water Action Plan, The Safeguarding California Plan, and SB 535 (deLeon), Chapter 830, Statutes of 2012.

5. Requires NRA to prioritize awarding grants to projects with the following characteristics:

   1. Are consistent with a parkway, greenway, or urban greening plan.

   2. Leverage moneys from the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Proposition 1).

   3. Provide recreational access to a major metropolitan area of the state.

6. Creates the CalRIVER fund to receive appropriations from the Legislature from bond proceeds and special funds, including but not limited to, GGRF.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author’s statement:

Given the vast potential for using our river systems to reduce and sequester greenhouse gas emissions, and no existing integrated, statewide grant program to deliver these benefits, this bill would establish CalRIVER.

The program would be especially useful in incentivizing projects that integrate stormwater, natural resource improvements, as well as reductions in vehicle miles travelled. Without CALRIVER, the state would continue to miss the opportunities to harness the climate values of our riparian corridors for greenhouse gas reductions, as well as the many other cobenefits associated with these projects.

2. River restoration. California has 46,166 miles of perennial (year round) streams, which are in most parts of the state. Currently, California has two grant programs that restore rivers, the Urban Streams Restoration Program and the California River Parkways Program. Both programs fund river restoration through grants to communities throughout California. Various urban rivers in California already have river plans to promote restoration, and the cobenefits outlined in this bill including the San Joaquin River, Elk River, American River, San Diego River, and Los Angeles River. Urban river parkways in California are some of the most unique, sensitive, and ecologically important conservation areas in the state. Not only do they provide crucial riparian habitat for endangered and threatened species, but they also provide important open space areas for communities. Many of these communities near urban rivers are considered “park poor,” meaning they have insufficient open space areas and lack access to free, public opportunities for recreation and nature based activities.

The Los Angeles River is a great example of communities coming together to work towards a healthier river, which means a healthier community. Organizations such as the LA River Revitalization Corporation are working to restore and improve 51 miles of the LA River into a “greenway” by 2020, which would be a continuous stretch of parks, bike paths, and open spaces for recreation. CalRIVER will create a consolidated grant program that will assist communities in restoring their river while reducing GHG emissions.

3. Suggested amendment. The author and committee may wish to consider an amendment with the following language:

5847. (a) The Natural Resources Agency shall establish a grant program for eligible applicants to develop projects on or adjacent to riparian corridors that assist the state in implementing the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) and that provide for the following shall prioritize funding for projects pursuant to this chapter that provide the greatest level of the following cobenefits:

REGISTERED SUPPORT / OPPOSITION:

Support

LA River Revitalization Corporation

Opposition

CalTax

Analysis Prepared by: Michael Jarred / NAT. RES. / (916) 319-2092