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 act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation. Existing law requires the California Environmental Protection Agency to identify disadvantaged communities and requires the Department of Finance, in consultation with the state board and any other relevant state agency, to develop, as specified, a 3-year investment plan for the moneys deposited in the Greenhouse Gas Reduction Fund. Existing law requires the 3-year investment plan to allocate a minimum of 25% of the available moneys in the fund to projects that provide benefits to disadvantaged communities.

This bill would require the agency to establish a comprehensive technical assistance program, upon the appropriation of moneys from the fund, for eligible applicants, as specified, assisting eligible communities, as defined. The bill would require the agency to provide technical assistance to eligible communities based on a specified priority.

This bill also would require the department to include in the 3-year investment plan an allocation to the agency for that technical assistance program.

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 act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation. Existing law requires the California Environmental Protection Agency to identify disadvantaged communities and requires the Department of Finance, in consultation with the state board and any other relevant state agency, to develop, as specified, a 3-year investment plan for the moneys deposited in the Greenhouse Gas Reduction Fund. Existing law requires the 3-year investment plan to allocate a minimum of 25% of the available moneys in the fund to projects that provide benefits to disadvantaged communities.

This bill would require the agency to establish a comprehensive technical assistance program, upon the appropriation of moneys from the Greenhouse Gas Reduction Fund, fund, for eligible applicants, as specified, assisting eligible communities, as defined. The bill would require the agency to provide technical assistance to eligible communities based on a specified priority.

This bill also would require the department to include in the 3-year investment plan an allocation to the agency for that technical assistance program.

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 act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation. Existing law requires the California Environmental Protection Agency to identify disadvantaged communities and requires the Department of Finance, in consultation with the state board and any other relevant state agency, to develop, as specified, a 3-year investment plan for the moneys deposited in the Greenhouse Gas Reduction Fund. Existing law requires the 3-year investment plan to allocate a minimum of 25% of the available moneys in the fund to projects that provide benefits to disadvantaged communities.

This bill would also require the agency to establish a comprehensive technical assistance program, upon the appropriation of moneys from the Greenhouse Gas Reduction Fund, for eligible applicants, as specified, assisting eligible communities, as defined. The bill would require the agency to provide technical assistance to communities based on a specified priority.

This bill also would require the department to include in the 3-year investment plan an allocation to the agency for that technical assistance program.

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 act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation. Existing law requires the California Environmental Protection Agency to identify disadvantaged communities and requires the Department of Finance, in consultation with the state board and any other relevant state agency, to develop, as specified, a 3-year investment plan for the moneys deposited in the Greenhouse Gas Reduction Fund. Existing law requires the 3-year investment plan to allocate a minimum of 25% of the available moneys in the fund to projects that provide benefits to disadvantaged communities.

This bill would require the state board agency to prepare and post on its Internet Web site a specified report on the projects funded to benefit disadvantaged communities.

This bill would also require the state board agency to establish a comprehensive technical assistance program, upon the appropriation of moneys from the Greenhouse Gas Reduction Fund, for eligible applicants, as specified, assisting eligible communities, as defined.

This bill also would require the department to include in the 3-year investment plan an allocation to the state board agency for that technical assistance program.

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 act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation. Existing law requires the California Environmental Protection Agency to identify disadvantaged communities and requires the Department of Finance, in consultation with the state board and any other relevant state agency, to develop, as specified, a 3-year investment plan for the moneys deposited in the Greenhouse Gas Reduction Fund. Existing law requires the 3-year investment plan to allocate a minimum of 25% of the available moneys in the fund to projects that provide benefits to disadvantaged communities.

This bill would require the state board to prepare and post on its Internet Web site a specified report on the projects funded to benefit disadvantaged communities.

This bill would require the state board to establish a comprehensive technical assistance program, upon the appropriation of moneys from the Greenhouse Gas Reduction Fund, for eligible applicants, as specified, assisting eligible communities, as defined.

This bill also would require the department to include in the 3-year investment plan an allocation to the state board for that technical assistance program.

Date of Hearing: May 11, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1815

Author:(Alejo) – As Amended Ver:May 2, 2016

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

SUMMARY:

This bill requires the AB 32 investment plan to allocate technical assistance funds to the California Environmental Protection Agency (CalEPA) to assist disadvantaged and low-income communities in developing project funding proposals. Specifically, this bill:

1. Requires CalEPA, upon appropriation of Greenhouse Gas Reduction Funds (GGRF), to establish a comprehensive technical assistance program for applicants located in disadvantaged communities or communities with median incomes at or below 60% the statewide median or designated as very low income by the Department of Housing and Community Development (HCD), as specified.
2. Specifies that eligible applicants include regional agencies and nonprofit organizations coordinating with local governments.
3. Requires CalEPA to prioritize technical assistance for those communities based on specified criteria.
4. Requires technical assistance to promote programs that reduce GHG emissions and demonstrate a direct, meaningful benefit to the eligible communities.

FISCAL EFFECT:

1. Unknown cost pressures, likely in the $100 million range (GGRF) to establish a comprehensive technical assistance program.
2. Increased annual costs of over $5.7 million for 37 positions and $200,000 in contracts if CalEPA designates the California Air Resources Board (ARB) as the implementing agency (GGRF and Cost of Implementation Fund).
3. Increased costs of approximately $900,000 for 6 positions and between $8 and $10 million for contracts if CalEPA implements the bill through contracts or partnerships with local administrators (GGRF and Cost of Implementation Fund).

COMMENTS:

1. Purpose. According to the author current law allows disadvantaged communities to apply for GHG funds, but does not provide the technical assistance necessary to complete a competitive application. This bill a comprehensive technical assistance program for communities identified as disadvantaged by CalEnviro Screen and well as other low-income households and communities.
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 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 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% are to 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.

An expenditure plan for the 40% was not included in the 2015-16 Budget Act, with the exception of $227 million appropriated to continue funding for specified existing programs. The remaining 2015-16 revenues, along with 2016-17 revenues, totaling $3.1 billion are available for appropriation this year.

1. Disadvantaged Communities. SB 535 (De León), Chapter 830, Statutes of 2012, requires no less than 10% of cap-and-trade revenues fund projects located within disadvantaged communities, and that 25% of available revenues fund projects that benefit those communities.

In October 2014, CalEPA released its list of disadvantaged communities for the purpose of SB 535. CalEPA relied on CalEnviroScreen to identify the areas disproportionately burdened by and vulnerable to multiple sources of pollution. CalEnviroScreen is a tool that assess all census tracts in California to identify the areas disproportionally affected and vulnerable to multiple sources of pollution.

Areas (census tracts) identified as disadvantaged for SB 535's purposes by CalEnviroScreen include: the majority of the San Joaquin Valley; much of Los Angeles and the Inland Empire; pockets of other communities near ports, freeways, and major industrial facilities such as refineries and power plants; and large swaths of the Coachella Valley, Imperial Valley and Mojave Desert.

1. Previous Legislation. Last year, AB 156 (Perea), required ARB to include technical assistance funds to assist disadvantaged and low-income communities in its AB 32 Greenhouse Gas Reduction Fund (GGRF) Investment Plan. This bill was held on suspense in the Senate Appropriations Committee.
2. Related Legislation. AB 2293 (Garcia) creates the Green Assistance Program and California Green Business program in CalEPA to assist nonprofits and business in applying for GGRF funds and to help certify businesses who voluntarily adopt environmentally preferable practices. This bill will be heard today in this Committee.

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

Date of Hearing: April 4, 2016

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Das Williams, Chair

ABPCA Bill Id:AB 1815 (

Author:Alejo) – As Amended Ver:March 28, 2016

SUBJECT: California Global Warming Solutions Act of 2006: disadvantaged communities

SUMMARY: Requires the Greenhouse Gas Reduction Fund (GGRF) Investment Plan to allocate technical assistance funds to the California Environmental Protection Agency (CalEPA) to assist disadvantaged and low-income communities in developing GHG reduction project funding proposals. Requires CalEPA to report on all projects funded by the GGRF, as specified.

EXISTING LAW:

1. Requires the Air Resources Board (ARB), pursuant to California Global Warming Solutions Act of 2006 [AB 32 (Nunez), Chapter 488, Statutes of 2006], to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. AB 32 authorizes ARB to permit the use of market-based compliance mechanisms to comply with GHG reduction regulations, once specified conditions are met.
   
2. Establishes the GGRF and requires all moneys, except for fines and penalties, collected by ARB from the auction or sale of allowances pursuant to a market-based compliance mechanism (i.e., the cap-and-trade program adopted by ARB under AB 32) to be deposited in the GGRF and available for appropriation by the Legislature.
   
3. Continuously appropriates:
   
   1. 10% of the GGRF for the Transit and Intercity Rail Capital Program;
      
   2. 5% for the Low Carbon Transit Operations Program;
      
   3. 20% for the Affordable Housing and Sustainable Communities Program; and,
      
   4. 25% for high speed rail.
4. Establishes the GGRF Investment Plan and Communities Revitalization Act to set procedures for the investment of GHG allowance auction revenues. Authorizes a range of GHG reduction investments and establishes several policy objectives, including:
   
   1. Maximize economic, environmental, and public health benefits;
      
   2. Foster job creation;
      
   3. Complement efforts to improve air quality;
      
   4. Direct investment toward the most disadvantaged communities and households in the state;
      
   5. Provide opportunities for businesses, public agencies, nonprofits, and other community institutions to participate in and benefit from statewide efforts to reduce GHG emissions; and,
      
   6. Lessen the impacts and effects of climate change on the state's communities, economy, and environment.
5. Requires the investment plan to allocate (1) a minimum of 25% of the available moneys in the GGRF to projects that provide benefits to identified disadvantaged communities, and (2) a minimum of 10% of the available moneys in the GGRF to projects located within identified disadvantaged communities.

THIS BILL:

1. Requires ARB to allocate funding in the Investment Plan funding for a technical assistance program and requires CalEPA to implement the technical assistance program. Specifies that eligible applicants for technical assistance be located in disadvantaged communities or in communities with median incomes that are below 60% of the statewide median income and include regional agencies and nonprofit organizations coordinating with local governments.
2. Requires CalEPA to prioritize technical assistance for those communities based on:
   1. Communities having the greatest need for increased access to programs using moneys appropriated from the GGRF;
   2. Communities having a lower demonstrated general capacity to apply for grant funding;
   3. Communities that have not previously applied for and received grant funding; and,
   4. Communities that have previously received grant funding, ranked by the amount of grant funding per capita received.
3. Specifies that the technical assistance program include the following:
   1. Identifying state agencies with appropriate grant programs;
   2. Developing competitive project proposals;
   3. Coordinate existing local programs to reduce GHG emissions with new programs receiving money from the GGRF; and,
   4. Conducting community outreach to residents of eligible communities that CalEPA determines require technical assistance on consumer programs.
4. Specifies that technical assistance provided pursuant to the bill must promote programs that reduce GHG emissions and demonstrate a direct, meaningful benefit to the eligible communities.

FISCAL EFFECT: Unknown

COMMENTS:

1. Existing GGRF funding and programs. The 2014-15 Budget Act allocated GGRF revenues for the 2014-15 fiscal year and established a long-term plan for the allocation of GGRF revenues beginning in fiscal year 2015-16. Thirty-five percent of GGRF is continuously appropriated for investments in transit, affordable housing, and sustainable communities. Twenty-five percent is continuously appropriated to continue the construction of the high-speed rail project. The remaining 40% is subject to annual appropriation by the Legislature for investments in programs that include low-carbon transportation, energy efficiency and renewable energy, and natural resources and waste diversion. An expenditure plan for the 40% was not included in the 2015-16 Budget Act, with the exception of $227 million appropriated to continue funding for specified existing programs. The remaining 2015-16 revenues, along with 2016-17 revenues, are available for appropriation this year.
   
   The 2016 Annual Report of Cap and Trade Auction Proceeds includes an analysis of funds spent within and benefiting disadvantaged communities, excluding high speed rail spending. According to the report, 39% of expenditures were for projects located within disadvantaged communities and 51% of the overall funding benefited disadvantaged communities.

Listed below are the major GGRF program areas, administering agency, and funding to date:

• 1. Transportation and Sustainable Communities
     1. High Speed Rail, High Speed Rail Authority (Authority), $750 million
     2. Transit and Intercity Rail Capital Program, Transportation Agency, $225 million
     3. Low Carbon Transit Operations Program, Department of Transportation (Caltrans), $125 million
     4. Affordable Housing and Sustainable Communities Program, Strategic Growth Council (SGC), $530 million
     5. Low Carbon Transportation, ARB, $325 million
  2. Clean Energy and Energy Efficiency
     1. Low-Income Weatherization Program, Community Services and Development (CSD), $154 million
     2. Energy Efficiency in Public Buildings, California Energy Commission (CEC), $20 million
     3. Agricultural Energy and Operational Efficiency, Department of Food and Agriculture (CDFA), $75 million
     4. Water-Energy Efficiency, Department of Water Resources (DWR), $75 million
  3. Natural Resources and Waste Diversion
     1. Wetlands and Watershed Restoration, Department of Fish and Wildlife (DFW), $27 million
     2. Urban Forestry, Forest Health Restoration, and Reforestation, Department of Forestry and Fire Protection (CalFIRE), $42 million
     3. Waste Diversion, Department of Resources Recycling and Recovery (CalRecycle), $31 million

The Governor's 2016-17 Budget proposes just under $3.1 billion in expenditures:

• 1. Continuous Appropriations
     1. High Speed Rail, Authority, $500 million
     2. Low Carbon Transit Operations, State Transit Assistance, $100 million
     3. Transit and Intercity Rail Capital Program, Transportation Agency, $200 million
     4. Affordable Housing and Sustainable Communities Program, SGC, $400 million
  2. Fifty Percent Reduction in Petroleum Use
     1. Transit and Intercity Rail Capital Program, Transportation Agency, $400 million
     2. Low Carbon Road Program, Caltrans, $100 million
     3. Low Carbon Transportation and Fuels, ARB, $500 million
     4. Biofuel Facility Investments, CEC, $25 million
  3. Local Climate Action
     1. Transformative Climate Communities, SGC, $100 million
  4. Short-Lived Climate Pollutants
     1. Black Carbon Woodsmoke and Refrigerants, ARB, $60 million
     2. Waste Diversion, CalRecycle, $100 million
     3. Climate Smart Agriculture – Healthy Soils and Dairy Digesters, CDFA, $55 million
  5. Safeguarding California/Water Action Plan
     1. Water and Energy Efficiency, CDFA and DWR, $30 million
     2. Drought Executive Order, CEC, $60 million
     3. Wetlands and Watershed Restoration/CalEcoRestore, DFW, $60 million
  6. Safeguarding California/Carbon Sequestration
     1. Healthy Forests and Urban Forestry, CalFIRE, $180 million
     2. Urban Greening, Natural Resources Agency, $20 million
  7. Energy Efficiency/Renewable Energy
     1. Energy Efficiency for Public Buildings, Department of General Services, $30 million
     2. California Lending for Energy and Environmental Needs Center, I Bank, $20 million
     3. Energy Corps, Conservation Corps, $15 million
     4. Energy Efficiency Upgrades/Weatherization, Department of Community Services and Development, $75 million
     5. Renewable Energy and Energy Efficiency Projects, University of California, California State University, $60 million

1. Author's statement:

Disadvantaged communities cannot compete with more advantaged communities when applying for GHG funds, and thus, may not get the funds they require to improve their communities. Current law allows for disadvantaged communities to apply for GHG funds, but does not provide them with technical assistance to complete a competitive application due to a lack of managerial and financial resources. At this time, there is no administrative avenue, or funds that are available to allow disadvantaged communities to gain technical assistance to solve this problem.

1. Disadvantaged communities. In October 2014, CalEPA released its list of disadvantaged communities based on the California Communities Environmental Health Screening Tool (CalEnviroScreen), a tool that assesses all census tracts in California to identify the areas disproportionately burdened by and vulnerable to multiple sources of pollution. Each of the programs administering funds from the GGRF have separate guidelines and grant proposal request documents on their respective websites. Eligibility criteria and application processes vary, as do recommendations about working with the administering agency to develop proposals or applications. For disadvantaged communities and low-income cities lacking experience in this area, assistance such as that proposed by this bill may help them successfully apply for and utilize available funding.
2. Is technical assistance an allowable use of GGRF funds? It seems that the expenditure of GGRF for technical assistance will not directly reduce GHG emissions. In some cases, it may facilitate projects that reduce GHG emissions. In other cases, there may be no measureable result. Existing law prohibits the state from approving allocations for a measure or program using moneys appropriated from the GGRF except after determining, based on the available evidence, that the use of those moneys furthers the regulatory purposes of AB 32 and is consistent with law; however, current law does allow ARB and other agencies to use GGRF funds for "administrative purposes."
3. Suggested amendment. This bill defines "low-income" as communities with a median income at or below 60% of the statewide median income. Unfortunately, a statewide definition inadvertently excludes a large number of low-income Californians that live in high cost of living areas. In order to ensure that the threshold for low-income households accurately identifies low-income households throughout the state, the committee may wish to amend the bill to specify that the threshold for low-income can also be determined by the Department of Housing and Community Development's list of state income limits, adopted pursuant to Health and Safety Code section 50093.

REGISTERED SUPPORT / OPPOSITION:

Support

California Bicycle Coalition
California Climate and Agriculture Network
Catholic Charities Diocese of Stockton

Community Water Center

Faith in Community

Leadership Counsel for Justice and Accountability

PolicyLink
Rural Community Assistance Corporation

Trust for Public Land

Valley Clean Air Now

Opposition

None on file

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. / (916) 319-2092