The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act authorizes the state board to include the use of market-based compliance mechanisms in regulating these sources. Existing law requires all moneys, except for fines and penalties, collected by the state board from the auction or sale of allowances as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation by the Legislature. Existing law requires the moneys from the fund to be used to facilitate the achievement of reductions of greenhouse gas emissions consistent with the act and, where applicable and to the extent feasible, to maximize economic, environmental, and public health benefits to the state, among other goals.

This bill, beginning July 1, 2025, would require state agencies administering competitive grant programs that allocate moneys from the fund to give specified communities preferential points during grant application scoring for programs intended to improve air quality, to provide for a specified application timeline, and to allow applicants from the Counties of Imperial and San Diego to include daytime population numbers in grant applications.

This bill, for competitive grant programs that involve housing, urban forestry, urban greening, or planning and that allocate moneys from the fund after July 1, 2025, would require state agencies administering those moneys from the fund to develop at least 3 categories for applications based on the population and density of the communities in which the proposed project is to be located and to develop scoring criteria for each category.

This bill would additionally require the moneys in the fund to be used to facilitate the achievement of reductions of greenhouse gas emissions consistent with the act and, where applicable and to the extent feasible, to promote climate adaptation, accelerate the development of low-carbon technology and reduce vehicle miles traveled, and promote partnerships between jurisdictions and public agencies, Native American tribes in the state, nonprofits, and other community institutions, among other objectives.

This bill also would require the Department of Finance to include in an annual report to the Legislature specified information on the applications received for each grant program allocating moneys from the fund.

Date of Hearing: April 19, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 287

Author:(Garcia) – As Introduced Ver:January 24, 2023

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

SUMMARY:

This bill expands the list of Greenhouse Gas Reduction Fund (GGRF) co-benefits and revises the criteria for various GGRF grant programs.

Specifically, this bill, among other things:

1. Beginning July 1, 2025, requires state agencies administering competitive grant programs that allocate moneys from the GGRF to ensure that:
   1. Communities identified for community emissions reduction programs are given preferential points during grant application scoring for grant programs intended to improve air quality.
   2. There are at least three months between the first call for applications or proposals for projects and the due date.
   3. Applicants from the counties of Imperial and San Diego are allowed to include daytime population numbers in grant applications, as specified.
2. Beginning July 1, 2025, requires state agencies that administer competitive grant programs using GGRF for projects that involve housing, urban forestry, urban greening, or planning to develop at least three categories for applications based on the population and density of the communities in which the proposed projects are to be located, as well as scoring criteria for each category. Specifies that nothing in this bill should be interpreted as requiring an administering state agency to fund grant applications from all three of these categories.
3. States legislative intent that an administering state agency take into account the differences that exist between urban, suburban, and rural communities when reviewing applications for projects, as specified.
4. Adds specified benefits to the list of co-benefits to be priorities in GGRF expenditures.
5. Requires the annual report by Department of Finance on the status of projects funded by GGRF to also include the applications received for each grant program, as specified.

FISCAL EFFECT:

The Air Resources Board (ARB) estimates ongoing annual costs of approximately $2.5 million (GGRF) for 11 new positions and contracting funds to implement this bill.

Costs of an unknown amount to other state agencies that administer competitive grant programs that may be relevant to this bill. The Strategic Growth Council, which administers the GGRF-funded Affordable Housing and Sustainable Communities grant program, and the Department of Forestry and Fire Protection, which administers the GGRF-funded Urban Forestry program and wildfire prevention grants, do not anticipate any new costs as a result of this bill.

COMMENTS:

1) Purpose. According to the author:

Several years into the administration of the Greenhouse Gas Reduction Fund we are hearing of barriers that make it hard for applicants to access these important resources. AB 287 will direct administering agencies to refine their application processes to ensure communities can compete for resources and other important state priorities are met.

2) Greenhouse Gas Reduction Fund (GGRF). The state’s portion of auction proceeds from the cap-and-trade program – a key element of California’s strategy to reduce greenhouse gas (GHG) emissions – is deposited into the GGRF and used for a variety of climate investments. Five agencies receive approximately 65% of the proceeds from each quarterly auction through continuous appropriations. Additional legislation identifies other ongoing transfers and obligations from the fund, and the Legislature appropriates the remaining funds through the annual budget process. According to the California Climate Investments website, which tracks GGRF investments, as of August 2022, approximately $19.2 billion has been appropriated to state agencies implementing GHG emissions reduction programs.

3) Daytime Population Numbers. According to background information provided by the author’s office, approximately 150,000 people cross the US-Mexico Border into Imperial County or San Diego see every day. In a support letter for a substantially similar bill from a previous legislative session, the Imperial County Board of Supervisors noted:

Imperial County includes several disadvantaged communities and is one of the poorest counties in the state, suffering from unhealthy air pollution…however we have received very little GGRF funding over the years, because the methodology used to appropriate funding and grade the grant applications favors communities that are densely populated…This proposal seeks to improve access to programs funded by the GGRF by expanding the list of co-benefits, aligning application scoring with implementation of AB 617 (Chapter 136, Statutes of 2017), and reporting on applications. This bill further corrects an inequity specific to Imperial and San Diego Counties by allowing these border community applicants to county daytime population in their applications for funding.

4) Prior Legislation. AB 943 (E. Garcia), of 2021-2022 Legislative Session, was substantially similar to this bill. AB 943 was held in this committee.

AB 2812 (E. Garcia), of the 2019- 2020 Legislative Session, was substantially similar to this bill. AB 2812 was referred to but not heard in the Assembly Natural Resources Committee.

AB 352 (E. Garcia), of the 2019-2020 Legislative Session, was substantially similar to this bill, but was subsequently amended to address a different topic.

AB 1945 (E. Garcia), of the 2017-2018 Legislative Session, was substantially similar to this bill. AB 1945 was vetoed by Governor Brown, who stated:

This bill creates requirements that would apply to a broad range of climate change competitive grant programs, including criteria to prioritize certain communities and projects over others. The general goals of this bill have merit but would be better achieved through the budget process.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: March 13, 2023

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Luz Rivas, Chair

ABPCA Bill Id:AB 287 (

Author:Garcia) – As Introduced Ver:January 24, 2023

SUBJECT: California Global Warming Solutions Act of 2006: Greenhouse Gas Reduction Fund: competitive grant programs: funding objectives

SUMMARY: Adds specified co-benefits to be included in Greenhouse Gas Reduction Fund (GGRF) project quantification and revises the criteria for various GGRF grant programs.

EXISTING LAW:

1. Requires the Air Resources Board (ARB), pursuant to California Global Warming Solutions Act of 2006 [AB 32 (Núñez), 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. Requires ARB to approve a statewide GHG emissions limit equivalent to 85% below the 1990 level by 2045. (Health and Safety Code § 38500-38599.11)
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. (Health and Safety Code § 39710 et seq.)
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. (Health and Safety Code § 38500-38599.11)
4. Specifies that moneys appropriated from the GGRF for investments may include funding to reduce GHG emissions through:
   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. Strategic planning and development of sustainable infrastructure projects;
   4. Investments in programs implemented by local and regional agencies, local and regional collaboratives, and nonprofit organizations coordinating with local governments; and,
   5. Funding research, development, and deployment of innovative technologies, measures, and practices related to programs and projects funded pursuant to the Act.
5. Directs ARB and agencies administering GGRF funding to maximize the co-benefits associated with funded projects, including: (Health and Safety Code § 38500-38599.11)
   1. Maximizing economic, environmental, and public health benefits to the state;
   2. Fostering job creation by promoting in-state GHG emissions reduction projects carried out by California workers and businesses;
   3. Complementing efforts to improve air quality;
   4. Directing investment toward the most disadvantaged communities and households in the state;
   5. Providing opportunities for businesses, public agencies, Native American tribes in the state, nonprofits, and other community institutions to participate in and benefit from statewide efforts to reduce GHG emissions; and,
   6. Lessening the impacts and effects of climate change on the state’s communities, economy, and environment. (Health and Safety Code § 38500-38599.11)
6. Requires the Department of Finance (DOF) to submit an annual report and a triennial investment plan to the Legislature on the status of projects funded by GGRF moneys. (Health and Safety Code § 39716)
7. Requires ARB to prepare, in consultation with specified entities, a statewide strategy to reduce emissions of toxic air contaminants and criteria air pollutants in communities affected by a high cumulative exposure burden. Requires the strategy to include criteria for the development of community emission reduction programs. (Health and Safety Code § 44391.2)
   

THIS BILL:

1. Beginning July 1, 2025, requires state agencies administering competitive grant programs that allocate moneys from the GGRF to ensure that:
   1. Communities identified for community emissions reduction programs are given preferential points during grant application scoring for grant programs intended to improve air quality;
   2. There are at least three months between the first call for applications or proposals and the due date of the proposal; and,
   3. Applicants from the Counties of Imperial and San Diego are allowed to include daytime population numbers in grant applications, as specified.
2. Beginning July 1, 2025, requires state agencies that administer competitive grant programs using GGRF for projects that involve housing, urban forestry, urban greening, or planning to develop at least three categories for applications based on the population and density of the communities.
   1. Requires administering state agencies to develop scoring criteria for each category that takes into account the possible impacts a project will have on the population and density of the communities in which the project is located.
   2. Specifies that nothing in this provision should be interpreted to require an administering state agency to fund grant applications from all of the categories.
   3. States legislative intent that an administering state agency take into account the differences that exist between urban, suburban, and rural communities when reviewing applications for projects in order to ensure that all communities of the state have a reasonable chance of being awarded a grant.
3. Adds the following benefits to the list of co-benefits to be priorities in GGRF expenditures:
   1. Increase water supply resilience.
   2. Reduce or prevent increases in transportation, energy, or fuel costs, particularly in disadvantaged communities.
   3. Accelerate the development and implementation of low-carbon technology.
   4. Reduce vehicle miles traveled.
   5. Promote zoning and development activities that increase public access to essential services or amenities.
   6. Promote partnerships between multiple jurisdictions.
   7. Promote climate change adaptation capacity, including, but not limited to:
      1. Higher average temperatures;
      2. Decreased air and water quality;
      3. The spread of infection and vector-borne illnesses or other public health impacts;
      4. Extreme weather events;
      5. Sea level rise;
      6. Flooding;
      7. Heat waves;
      8. Wildfires; and,
      9. Drought.
   8. Improve community access to green space.
4. Requires the annual report by DOF on the status of projects funded by the GGRF to also include the applications received for each grant program, including:
   1. Locations of projects proposed;
   2. Amount of moneys requested for each project;
   3. Names of lead applicants;
   4. Whether the projects were funded in whole or in part by the GGRF.
5. Makes related technical and clarifying changes.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author’s statement:

Several years into the administration of the Greenhouse Gas Reduction Fund we are hearing of barriers that make it hard for applicants to access these important resources. AB 287 will direct administering agencies to refine their application processes to ensure communities can compete for resources and other important state priorities are met.

1. AB 32. The Global Warming Solutions Act (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 deposited into the GGRF to be available for appropriation by the Legislature.
   
   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% is 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.
2. Environmental justice. According to the Office of Environmental Health Hazard Assessment (OEHHA), more than 20% of Californians live in zip codes that are considered "highly impacted" by environmental, public health, and socioeconomic stressors. Nearly half of all Californians live within six miles of a facility that is a significant GHG emitter, and they are disproportionately people of color. Throughout California, people of color face a 50% higher risk of cancer from ambient concentrations of air pollutants listed under the Clean Air Act. These impacts are felt by all Californians. ARB estimates that air pollution exposure accounts for 19,000 premature deaths, 280,000 cases of asthma, and 1.9 million lost work days every year.

SB 535 (de León), Chapter 850, Statutes of 2012, requires the Cap and Trade Proceeds Investment Plan to direct a minimum of 25% of the available moneys in the fund to projects that provide benefits to identified disadvantaged communities; and, a minimum of 10% of the available moneys in the fund to projects located within identified disadvantaged communities. SB 535 also required the California Environmental Protection Agency (CalEPA) to identify disadvantaged communities (i.e., environmental justice communities). In order to accurately identify environmental justice communities, OEHHA, on behalf of CalEPA, created the California Communities Environmental Health Screening Tool (CalEnviroScreen). CalEnviroScreen is a screening methodology that can be used to help identify California communities that are disproportionately burdened by multiple sources of pollution.

In February of 2014, CalEPA issued an Environmental Justice Program Update, which included four main areas for future actions: 1) increase efforts to eliminate discrimination on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, genetic information, or disability in any program or activity conducted or funded by the state; 2) develop guidance to promote a sound legal framework for CalEPA to advance environmental justice goals and objectives; 3) lead an agency-wide working group dedicated to increase compliance with environmental laws in communities with relatively higher environmental burdens; and, 4) add additional indicators to CalEnviroScreen.

1. Co-benefits in GGRF projects. Proceeds from the state's cap-and-trade program are used to fund a variety of projects across state agencies that reduce GHGs through California Climate Investments (CCIs). As the oversight agency for distribution of GGRF funds, ARB is directed by statute to provide guidance to administering agencies on quantifying co-benefits associated with CCI investments. For example, efforts to control diesel emissions simultaneously reduce carbon dioxide and particulate matter, which can reduce rates of asthma and respiratory disease. These positive public health outcomes are co- benefits associated with this GHG intervention, and are slated to be tracked as part of the CCI reporting process.

California Climate Investments support the state's climate change goals and provide many additional benefits to individuals, households, businesses, and communities. These "co-benefits" include social, economic, and environmental benefits. ARB provides guidance on quantification methods and reporting to administering agencies. ARB contracted with the University of California, Berkeley (UC Berkeley) to help research and develop methods for evaluating project co-benefits. Guidance on using the co-benefit assessment methodologies is contained in ARB's Funding Guidelines.

The co-benefits listed below were prioritized based on administering agency input and broad applicability to CCI programs. UC Berkeley first reviewed the scientific data to determine if methods could be developed and summarized the findings in literature reviews. Next, UC Berkeley and ARB developed co-benefit assessment methodologies where feasible. ARB solicited public comment on draft versions in Spring 2018 prior to posting final Co-benefit Assessment Methodologies. ARB may review and update assessment methodologies periodically based on: new or evolving project types; new legislation; available resources; new scientific developments or tools, or modifications in the analytical tools or approaches upon which the methodologies were based; or input from administering agencies or the public. ARB has established quantification methodologies and a calculator tool to assist administering agencies with estimating GHG emissions reductions and co-benefits for GGRF projects and benefit criteria tables for determining benefits for priority populations.

1. California-Mexico Border. Air pollution along the California-Mexico border poses significant threats to adjacent communities in California. OEHHA is participating in pilot projects with community groups to monitor air quality in the border region, and has found that pollution levels in border adjacent cities are substantially higher than in cities farther from the border. ARB estimates that Imperial County would be able to meet the national standard for 2.5 micrometer particulate matter if pollution from Mexico was not crossing the border. An estimated 196,120 people commute daily from Mexico to San Diego and Imperial Counties and back again, and in July of 2015, an estimated 1.1 million passenger cars, 29,000 trucks, and 230 buses crossed through the two ports of entry in Calexico. Border crossings often involve considerable time, sometimes hours, waiting to pass through customs, which leads to idling vehicles that exacerbate pollution. Communities in these areas are not authorized to account for daytime population in applications for CCI programs, so exposure to pollutants is likely higher in these areas than current estimates account for.
2. Application lead time. To apply for GGRF funding, the administering state agency issues a request for proposals with a specified due date, and the time between announcement and due date varies between programs. For example, the Natural Resources Agency Urban Greening program has solicited applications in January with a due date of April 16, the Department of Food and Agriculture Healthy Soils Program has solicited applications on March 6 with a due date of April 16, and the Department of Community Service and Development Low-Income Weatherization Program has solicited applications on March 27 with a due date of April 27. Short turn-around times for grant applications have the potential to limit the applicant pool and favor groups that have existing capacity to apply for grants. The three-month minimum time between the initial grant solicitation and due date for competitive GGRF programs across agencies could help less sophisticated applicants engage in the process.
3. Previous legislation.
   1. AB 943 (E. Garcia) of 2022 was substantially similar to this bill. This bill was held in the Assembly Appropriations Committee.
   2. AB 2812 (E. Garcia) of 2020 was substantially similar to this bill; it was not heard in the Assembly Natural Resources Committee.
   3. AB 352 (E. Garcia) of 2019 was substantially similar to this bill, but was subsequently amended to establish the Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2020. This bill was held in the Senate Environmental Quality Committee.
   4. AB 1945 (E. Garcia) of 2018 was substantially similar to this bill; it was vetoed by Governor Brown.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

None on file

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