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 requires the state board to approve a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020 and to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. 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 continuously appropriates 35% of the annual proceeds of the fund for transit, affordable housing, and sustainable communities programs and 25% of the annual proceeds of the fund for certain components of a specified high-speed rail project.

This bill would continuously appropriate $100,000,000 from the fund make moneys from the fund, upon appropriation, available to the Department of Forestry and Fire Protection for healthy forest programs that reduce greenhouse gas emissions caused by uncontrolled wildfires, as specified. The bill would continuously appropriate $100,000,000 from the fund specified; to the Department of Resources Recycling and Recovery for instate organic waste recycling projects that reduce greenhouse gas emissions, as specified. The bill would also continuously appropriate $100,000,000 from the fund specified; and to the Department of Resources Recycling and Recovery for instate recycling projects that reduce greenhouse gas emissions and help achieve the states policy goal that not less than 75% of solid waste generated be source reduced, recycled, or composted by the year 2020.

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 requires the state board to approve a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020 and to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. 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 continuously appropriates 35% of the annual proceeds of the fund for transit, affordable housing, and sustainable communities programs and 25% of the annual proceeds of the fund for certain components of a specified high-speed rail project.

This bill would continuously appropriate $100,000,000 from the fund to the Department of Forestry and Fire Protection for healthy forest programs that reduce greenhouse gas emissions caused by uncontrolled wildfires, as specified. The bill would continuously appropriate $100,000,000 from the fund to the Department of Resources Recycling and Recovery for instate organic waste recycling projects that reduce greenhouse gas emissions, as specified. The bill would also continuously appropriate $100,000,000 from the fund to the Department of Resources Recycling and Recovery for instate recycling projects that reduce greenhouse gas emissions and help achieve the states policy goal that not less than 75% of solid waste generated be source reduced, recycled, or composted by the year 2020.

Date of Hearing: May 17, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 1342

Author:(Flora) – As Amended Ver:April 27, 2017

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

SUMMARY:

This bill, upon appropriation by the Legislature, makes monies from the Greenhouse Gas Revenue Fund (GGRF) available to various programs. Specifically, this bill:

1. Authorizes CalFIRE to expend GGRF for healthy forest programs that reduce greenhouse (GHG) emissions caused by uncontrolled wildfires, including but not limited to vegetative management, forest overgrowth,
2. Authorizes CalFIRE to allocate the funding to local governments to carry out fire prevention activities and to provide incentives to private sector parties to reduce the risk and intensity of wildfires or improve the resiliency of lands prone to wildfires.
3. Authorizes CalRecycle to expend GGRF for in-state organic waste recycling projects that reduce GHG emissions, including, but not limited to, composting, energy production, food waste prevention, and recyclable materials manufacturing.
4. Authorizes CalRecyle to expend GGRF for in-state recycling projects that reduce GHG emissions and help achieve the state's policy goal that not less than 75% of solid waste be diverted from landfill disposal by 2020.

FISCAL EFFECT:

Cost pressures, likely in the hundreds of millions of dollars (GGRF) to funds the authorized programs at CalFire and CalRecycle. Administrative costs will be based on the size of the funded programs (GGRF).

COMMENTS:

1. Purpose. "According to the author, AB 1342 supports and builds upon existing goals and efforts to reduce emissions, allowing CAL FIRE and CalRecycle to take advantage of existing resources to appropriately fund projects for forest management and recycling or organic and nonorganic waste."
2. Background. The California Global Warming Solutions Act of 2006 (AB 32) requires the Air Resources Board (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.

1. Short lived climate pollutants (SLCPs). Carbon dioxide (CO₂) remains in the atmosphere for centuries, which makes it critical to reduce in order to limit long-term climate change. However, SLCPs, including methane, HFCs, and black carbon (soot), are relatively short-lived (anywhere from a few weeks to 15 years), but have much higher global warming potentials than CO₂.

Methane (CH4) is the principal component of natural gas and is produced biologically under anaerobic conditions in ruminants, landfills, and waste handling. Many emissions sources of methane are unregulated (e.g., methane from dairy production and fugitive methane emissions from landfills and natural gas distribution). Methane is about 80 times more powerful as a global warming pollutant than CO₂ on a 20-year time scale.

HFCs (also known as F-gases) are synthetic gases used in refrigeration, air conditioning, insulation foams, solvents, aerosol products, and fire protection. Currently, HFCs are a small fraction of the total climate forcing gases, but they are the fastest growing source of carbon pollution. HFCs, on average, have a global warming potential 1600 times that of CO2 on a 20-year time scale.

Black carbon, a component of soot, also known as PM 2.5, comes from diesel engines and incomplete burning of carbon sources. In addition to being a powerful global warming pollutant, black carbon is associated with numerous negative health impacts and is designated a potential human carcinogen. Black carbon is not listed under AB 32 as a GHG subject to AB 32 regulations. However, due to known health and air quality impacts, ARB has several programs to reduce particulate matter emissions from heavy-duty vehicles. Black carbon has a global warming potential 3,200 times that of CO₂ on a 20-year time scale.

CalRecycle has been engaged with ARB in developing ARB's Strategy to reduce methane emissions from landfills. It is also is tasked with diverting at least 75% of solid waste generated statewide by 2020. Organic materials make up one-third of the waste stream and food continues to be the greatest single item disposed, comprising over 15% of materials landfilled.

According to ARB, wildfire is the largest source of black carbon emissions in California, accounting for over 50% of total black carbon emissions in a typical year. Wildfires are difficult to prevent, and there is uncertainty in estimating emissions. Prescribed fires are also a source of black carbon, but in practice can reduce overall black carbon emissions by preventing catastrophic wildfires.

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

Date of Hearing: April 24, 2017

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Cristina Garcia, Chair

ABPCA Bill Id:AB 1342 (

Author:Flora) – As Introduced Ver:February 17, 2017

SUBJECT: Greenhouse Gas Reduction Fund: appropriations

SUMMARY: Continuously appropriates $100 million from the Greenhouse Gas Reduction Fund (GGRF) to the Department of Forestry and Fire Protection (CAL FIRE) and continuously appropriates $200 million from the GGRF to the Department of Resources Recycling and Recovery (CalRecycle) for greenhouse gas (GHG) emissions reduction projects.

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 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. Establishes the GGRF Investment Plan and Communities Revitalization Act (Act) to set procedures for the investment of GHG allowance auction revenues. Authorizes a range of GHG reduction investments and establishes several policy objectives:
   
   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.
4. Specifies that moneys appropriated from the GGRF through investments may include funding to reduce GHG emissions as follows:
   
   1. Energy efficiency, clean and renewable energy generation, distributed renewable energy generation, transmission and storage, and other related actions;
      
   2. The development of state-of-the-art systems to move goods and freight, advanced technology vehicles and vehicle infrastructure, advanced biofuels, and low-carbon and efficient public transportation;
      
   3. Water use and water supply, land and natural resource conservation and management, forestry, and sustainable agriculture projects;
      
   4. Strategic planning and development of sustainable infrastructure projects;
      
   5. In-state diversion of municipal solid waste from disposal through waste reduction, diversion, and reuse;
      
   6. Investments in programs implemented by local and regional agencies, local and regional collaboratives, and nonprofit organizations coordinating with local governments; and,
      
   7. Funding research, development, and deployment of innovative technologies, measures, and practices related to programs and projects funded pursuant to the Act.
      
5. Requires the investment plan to allocate:
   
   1. A minimum of 25% of the available moneys in the GGRF to projects located within, and that provide benefits to individuals living in, disadvantaged communities;
      
   2. A minimum of 5% of the available moneys in the GGRF to projects that benefit low-income households or to projects located within, and benefiting individuals living in, low-income communities; and,
      
   3. A minimum of 5% of the available moneys in the GGRF to projects that benefit low-income households that are outside of, but within ½ mile of, disadvantaged communities, or to projects located within the boundaries of, and benefiting individuals living in, low-income communities that are outside of, but within ½ mile of, disadvantaged communities.
      
6. Requires ARB to implement the comprehensive short-lived climate pollutant (SLCP) strategy to achieve, from 2013 levels, a 40% reduction in methane, a 40% reduction in hydrofluorocarbon gases (HFCs), and a 50% reduction in black carbon by 2030.
   
7. Allows CAL FIRE to enter into agreements and make grants and take other actions to develop Program Timberland Environmental Impact Reports for carbon sequestration and fuel reduction programs to encourage forest resource improvements and otherwise facilitate good timberland management through a program of financial and technical assistance.
   
8. Authorizes funds in Timber Regulation and Forest Restoration Fund to be spent for fuel treatment grants and grants to local agencies responsible for fire protection, qualified nonprofits, recognized tribes, local and state governments, and resources conservation districts undertaken on a state responsibility area or on wildlands that pose a threat to a state responsibility area. Grants are required to reduce the costs of wildland fire suppression, reduce GHG emissions, promote adaptation of forested landscapes to changing climate, improve forest health, and protect homes and communities.
   

THIS BILL:

1. Beginning in the 2017-18 fiscal year, continuously appropriates $100 million annually from the GGRF to CalFIRE for healthy forest programs that reduce GHG emissions caused by uncontrolled wildfires, as specified.
2. Authorizes CalFIRE to allocate the funding to local governments to carry out fire prevention activities and to provide incentives to private sector parties to reduce the risk and intensity of wildfires or improve the resiliency of lands prone to wildfires.
3. Beginning in the 2017-18 fiscal year, continuously appropriates $100 million annually from the GGRF to CalRecycle for in-state organic waste recycling projects that reduce GHG emissions, including, but not limited to, composting, energy production, food waste prevention, and recyclable materials manufacturing.
4. Beginning in the 2017-18 fiscal year, continuously appropriates $100 million annually from the GGRF to CalRecycle for in-state recycling projects that reduce GHG emissions and help achieve the state's policy goal that not less than 75% of solid waste be diverted from landfill disposal by 2020.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author's statement:

AB 1342 supports and builds upon existing goals and efforts to reduce [GHG] emissions, allowing CAL FIRE and CalRecycle to take advantage of existing resources to appropriately fund projects for forest management and recycling or organic and nonorganic waste.

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.
   
   The 2017 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, 34% of expenditures were for projects located within disadvantaged communities and 50% of the overall funding benefited disadvantaged communities.

Listed below are the major GGRF program areas and funding to date, totaling $3.385 billion:

• 1. Sustainable Communities and Clean Transportation:
     1. High Speed Rail Authority, High Speed Rail Project, $800 million
     2. State Transit Assistance, Low-Carbon Transit Operations, $135 million
     3. Transportation Agency, Transit and Intercity Rail Capital Program, $381 million
     4. Strategic Growth Council, Affordable Housing and Sustainable Communities Program, $570 million
     5. Department of Transportation, Active Transportation, $10 million
     6. Strategic Growth Council, Transformative Climate Communities Program and Technical Assistance, $142 million
     7. Air Resources Board, Low Carbon Transportation, $695 million
  2. Short-Lived Climate Pollutants:
     1. Air Resources Board, Black Carbon Woodsmoke, $5 million
     2. Department of Resources Recycling and Recovery, Waste Diversion, $71 million
     3. Department of Food and Agriculture, Dairy Digesters and Alternative Fuels, $65 million
     4. Department of Food and Agriculture, Healthy Soils, $8 million
  3. Carbon Sequestration:
     1. Department of Forestry and Fire Protection, Healthy Forests, $49 million
     2. Department of Forestry and Fire Protection, Urban and Community Forestry, $33 million
     3. Department of Fish and Wildlife, Wetlands and Watershed Restoration, $30 million
     4. Natural Resources Agency, Urban Greening, $80 million
  4. Energy Efficiency/Renewable Energy:
     1. Department of Community Services and Development, Energy Efficiency Upgrades/Weatherization, $174 million
     2. Department of Water Resources, Water Use Efficiency, $70 million
     3. Department of Food and Agriculture, State Water Efficiency and Enhancement Program, $68 million

The Governor's 2017-18 Budget proposes $2.155 billion in expenditures:

• 1. Continuous Appropriations:
     1. High Speed Rail, Authority, $375 million
     2. Low Carbon Transit Operations, State Transit Assistance, $75 million
     3. Transit and Intercity Rail Capital Program, Transportation Agency, $150 million
     4. Affordable Housing and Sustainable Communities Program, Strategic Growth Council, $300 million
  2. Transportation Package, $500 million:
     1. Transportation Agency, Transit and Intercity Rail Capital Program
     2. Department of Transportation, Active Transportation
  3. Fifty Percent Reduction in Petroleum Use:
     1. Air Resources Board, Low Carbon Transportation, $363 million
  4. Transformational Climate Communities:
     1. Strategic Growth Council, Transformative Climate Communities and Technical Assistance and Outreach, $142 million
  5. Short-Lived Climate Pollutants, $95 million:
     1. Air Resources Board, Black Carbon Woodsmoke
     2. Department of Resources Recycling and Recovery, Waste Diversion
     3. Department of Food and Agriculture, Dairy Digesters
  6. Carbon Sequestration, $127.5 million:
     1. Department of Forestry and Fire Protection, Healthy Forests and Urban Greening
     2. Department of Food and Agriculture, Climate Smart Agriculture and Healthy Soils
     3. Natural Resources Agency, Urban Greening
  7. Energy Efficiency/Renewable Energy, $27.5 million:
     1. Department of Community Services and Development, Energy Efficiency Upgrades/Weatherization
     2. Department of Food and Agriculture, State Water Efficiency and Enhancement Program

1. Cap and trade auction revenues. The GGRF is funded by cap and trade auction revenues. While some auctions generated significant funds, more recent auctions have generated less revenue. Fiscal year 2015-16 peaked at over $1.8 billion; however, the three auctions raised just over $380 million in proceeds. The February 2017 auction generated just $8.1 million. The next auction will take place on May 16^th.
2. Short lived climate pollutants. Carbon dioxide (CO₂) remains in the atmosphere for centuries, which makes it critical to reduce in order to limit long-term climate change. However, SLCPs, including methane, HFCs, and black carbon (soot), are relatively short-lived (anywhere from a few weeks to 15 years), but have much higher global warming potentials than CO₂. New research suggests that aggressively reducing these SLCPs in the short-term, compared to only cutting CO₂ emissions, can do more to slow sea level rise and other climate change impacts in the near-term.
   
   Methane (CH4) is the principal component of natural gas and is produced biologically under anaerobic conditions in ruminants, landfills, and waste handling. Atmospheric methane concentrations have been increasing as a result of human activities related to agriculture, fossil fuel extraction and distribution, and waste generation and processing. Many emissions sources of methane are unregulated (e.g., methane from dairy production and fugitive methane emissions from landfills and natural gas distribution). Methane is about 80 times more powerful as a global warming pollutant than CO₂ on a 20-year time scale.
   
   HFCs (also known as F-gases) are synthetic gases used in refrigeration, air conditioning, insulation foams, solvents, aerosol products, and fire protection. They are primarily produced for use as substitutes for ozone-depleting substances which are being phased out globally. Currently, HFCs are a small fraction of the total climate forcing gases, but they are the fastest growing source of carbon pollution. HFCs, on average, have a global warming potential 1600 times that of CO2 on a 20-year time scale.
   
   Black carbon, a component of soot, also known as PM 2.5, comes from diesel engines and incomplete burning of carbon sources. In addition to being a powerful global warming pollutant, black carbon is associated with numerous negative health impacts and is designated a potential human carcinogen. Black carbon is not listed under AB 32 as a GHG subject to AB 32 regulations. However, due to known health and air quality impacts, ARB has several programs to reduce particulate matter emissions from heavy-duty vehicles. Black carbon has a global warming potential 3200 times that of CO₂ on a 20-year time scale.
   
   CalRecycle has been engaged with ARB in developing ARB's Strategy to reduce methane emissions from landfills. It is also is tasked with diverting at least 75% of solid waste generated statewide by 2020. Organic materials make up one-third of the waste stream and food continues to be the greatest single item disposed, comprising over 15% of materials landfilled. According to CalRecycle, significant gains in organic waste diversion are necessary to meet these goals. Recycling technologies for organic waste include composting, anaerobic digestion, and other types of processing that generate renewable fuels, energy, soil amendments, and mulch. Recycling provides significant GHG reductions over landfilling. Recycling reduces GHGs by avoiding the emissions that would be generated by the material’s decomposition in a landfill, as well as by displacing fossil fuels used in the manufacture of virgin materials.
   
   According to ARB, wildfire is the largest source of black carbon emissions in California, accounting for over 50% of total black carbon emissions in a typical year. Wildfires are difficult to prevent, and there is uncertainty in estimating emissions. Prescribed fires are also a source of black carbon, but in practice can reduce overall black carbon emissions by preventing catastrophic wildfires.
   
   This bill provides funding to reduce methane emissions generated by solid waste and black carbon emissions associated with wildfires.
3. Suggested amendments. Given the inconsistent nature of cap and trade revenues and in order to ensure that the Legislature maintains proper oversight of funds allocated, the committee may wish to amend the bill to authorize up to $100 million annually, upon appropriation by the Legislature, for each of the programs identified in the bill. The committee may also wish to amend the bill to specify that the funding allocated to CAL FIRE fund programs that are consistent with Public Resources Code section 4799.05, which provides guidance to CAL FIRE for GGRF expenditures.

REGISTERED SUPPORT / OPPOSITION:

Support

Calforests

California Biomass Energy Alliance

California Compost Coalition

Californians Against Waste

Community Alliance with Family Farmers

Rural County Representatives of California

Opposition

California Chamber of Commerce
CalTax

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /