BILL ANALYSIS Ó
SB 535
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2011-2012 Regular Session
BILL NO: SB 535
AUTHOR: De Leon
AMENDED: March 24, 2011
FISCAL: Yes HEARING DATE: May 2, 2011
URGENCY: No CONSULTANT: Peter Cowan
SUBJECT : COMMUNITIES HEALTHY AIR REVITALIZATION TRUST
SUMMARY :
Existing law , under the California Global Warming Solutions
Act of 2006 (CGWSA):
1) Requires the California Air Resources Board (ARB) to
determine the 1990 statewide greenhouse gas (GHG) emissions
level and approve a statewide GHG emissions limit that is
equivalent to that level, to be achieved by 2020, and sets
various requirements to meet this requirement. (Health and
Safety Code §38500 et seq.).
2) Requires ARB to prepare and approve a scoping plan by
January 1, 2009, for achieving the maximum technologically
feasible and cost-effective reductions in GHG emissions
from sources or categories of sources of GHGs by 2020. ARB
must evaluate the total potential costs and total potential
economic and noneconomic benefits of the plan for reducing
GHGs to the state's economy and public health, using the
best economic models, emission estimation techniques, and
other scientific methods. The plan must be updated at
least once every five years. (§38561).
3) Requires ARB to adopt GHG emission limits and emission
reduction measures by regulation on or before January 1,
2011, and meet certain requirements in adopting the
regulations. ARB may include the use of market-based
mechanisms to comply with these regulations. (§§38562,
38570).
4) Requires ARB to ensure that GHG emission reduction
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requirements and programs, to the extent feasible, direct
public and private investment toward the most disadvantaged
communities in the state and provide an opportunity for
certain entities to participate in and benefit from
statewide efforts to reduce GHG emissions (§38565). ARB
must convene an environmental justice advisory committee to
advise it in implementing the Act (§38591(a)), and a
Technology Advancement Advisory Committee to advise it on
activities to facilitate investment in technology matters
(§38591(d)).
5) Authorizes ARB to adopt a schedule of fees to be paid by
GHG emission sources regulated under CGWSA, to be deposited
into the Air Pollution Control Fund and available upon
appropriation by the Legislature for carrying out the
CGWSA. (§38597).
This bill :
1) Establishes criteria for "Most impacted and disadvantaged
communities" in relation to climate change impacts.
2) Establishes The California Communities Healthy Air
Revitalization Trust within the State Treasury (Cal CHART)
using not less than 10% of the revenue deposited in the Air
Pollution Control Fund pursuant to CGWSA, other than
revenue collected for administrative purposes.
3) Specifies that funds are used solely in the most impacted
and disadvantaged communities in California and specifies
that when provided to existing programs they supplement
rather than supplant those programs.
4) Specifies that the trust be used to fund programs or
projects that reduce GHG emissions or mitigate the direct
health impacts of climate change including green collar
employment or training.
5) Requires the Secretary of Environmental Protection in
consultation with the Climate Action Team to administer
moneys appropriated from the trust, establish criteria and
procedure, and before January 1, 2013, implement the
program.
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6) Requires that the Secretary produce and post on the
Environmental Protection Agency website a report describing
the implementation, the list of most impacted and
disadvantaged communities, the types of programs and
projects to be funded, the selection and oversight process
and the eligibility criteria.
7) Requires that the list of most impacted and disadvantaged
communities be updated every three years.
8) Requires that by July 1, 2012, and every three years
thereafter the Secretary of Environmental Protection in
consultation with the Climate Action Team develop, adopt,
and post on the EPA website plans describing the specific
types of projects and programs to be solicited for funding.
9) Authorizes up to 5% of the trust to be used for
administrating the requirements above.
10)Provides that this bill will not result in any taxpayer
paying higher tax within the meaning of Section 4 of
Article XIIIA of the California Constitution.
COMMENTS :
1) Purpose of Bill . According to the author "SB 535 ensures
that as California takes steps to address global warming,
we invest in the neighborhoods that continue to suffer from
higher levels of pollution and who are least able to
confront the expected impacts of the climate crisis. SB 535
outlines a process to identify disadvantaged communities
and allows for a periodic modification, when necessary. It
require that a minimum of ten percent of revenues deposited
in the Air Pollution Control Fund pursuant to AB 32, other
than administrative fees, to be allocated to projects that
reduce greenhouse gas emissions and environmental and
health benefits, and may include: energy efficiency
upgrades, deployment of pollution reduction technology and
investments in transit. Additionally, a portion of funds
could be used to help these communities tackle the climate
crisis, including anticipated heat waves and rising sea
levels."
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2) Opposition concerns . According to opponents "ŬARB] has
no authority to raise revenues other than for
administrative purposes. AB 32 grants ŬARB] authority to
raise revenues through a fee to cover the costs of
administering the program and for no other purpose."
Opponents contend that a regulatory fee must have a nexus
between fee payers, the fee amount and the revenue use,
this "standard is not met in SB 535 because the amount of
fee revenue is arbitrary (10% of the total amount raised),
the purposes in SB 535 are unrelated to harm caused by the
payers, and there is no demonstrated connection between the
proposed recipients and harm caused by the payers of the
revenues." Opponents further note "The cap and trade
market will not start until January 1, 2012. We do not know
how much revenue will be raised by ŬARB] nor how much
revenue will be needed to meet AB 32 emission reduction
goals and to mitigate unintended and harmful consequences
of the program."
3) Status of Cap and Trade . ARB on December 16, 2011, adopted
draft regulations for a proposed cap and trade market-based
compliance mechanism and is expected to produce a final
version of those regulations this fall.
On March 17, 2011, the California Superior Court found ARB
had not properly considered alternatives to cap and trade
and thus failed to comply with the California Environmental
Quality Act (CEQA) and enjoined the ARB from proceeding
with cap and trade until the court determines it has fully
complied with CEQA.
4) Federal and state environmental justice efforts .
Environmental justice refers to the fair treatment of
people of all races, cultures, and income with respect to
the development, implementation, and enforcement of
environmental laws, regulations, and policies. On February
11, 1994, President Clinton signed Executive Order 12898
regarding "federal actions to address environmental justice
in minority populations and low-income populations." The
executive order followed a 1992 Environmental Protection
Agency report indicating that "communities of color and
low-income populations experience higher than average
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exposures to selected air pollutants, hazardous waste
facilities, and other forms of environmental pollution."
President Clinton also directed each federal agency to
address effects of actions on these communities when
analysis is required under the National Environmental
Policy Act (NEPA).
SB 115 (Solis) Chapter 690, Statutes of 1999, enacted most
of the OPR and Cal-EPA responsibilities and SB 89 (Escutia)
Chapter 728, Statutes of 2000, enacted the working group,
advisory group, and implementation report requirements. SB
828 (Alarcon) Chapter 767, Statutes of 2001, revised SB 89
deadlines and renumbered the provisions. AB 1553 (Keeley)
Chapter 762, Statutes of 2001, required OPR environmental
justice general plan guidelines. AB 2312 (Chu) Chapter
994, Statutes of 2002, created the Environmental Justice
Small Grant Program.
Prior to SB 115 and SB 89, several legislators attempted to
address environmental justice issues in California,
including AB 937 (Roybal-Allard) of 1991 (vetoed), AB 3024
(Roybal-Allard) of 1992 (vetoed), and AB 2212 (Lee) of 1994
(refused passage on Senate Floor). These bills required
the submittal of "project site demographics" for a
"potentially high-impact development project" and
prohibited an application for such a facility from being
accepted as complete, deemed complete, or approved without
this information. SB 451 (Watson), SB 906 (Lee), SB 1113
(Solis), and SB 2237 (Escutia) addressed environmental
justice issues during the 1997-98 session. All were vetoed
except for SB 906 (Senator Watson canceled a hearing on the
bill).
5) Amendments needed . This bill anticipates revenue generated
by CGWSA, and further defines terms in CGWSA. For these
reasons SB 535 should be amended to add to Division 25.5 in
the Health and Safety Code rather than the Public Resources
Code. Likewise, ARB should administer the trust, adopt
reports, and adopt triennial plans describing project and
programs to be funded.
The committee may also wish to consider implementing the
programs when the ARB determines the fund passes a
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specified dollar threshold rather than by specified dates.
6) Related legislation . A similar bill AB 1405 (De Leon) was
vetoed by Governor Schwarzenegger in 2010 where the
governor noted in his veto message that funds have yet to
be realized by AB 32.
SB 31 (Pavley) of 2009-10 requires revenues generated from
certain purposes to be appropriated by the Legislature "in
furtherance of Ŭthe CGWSA] for purposes determined by the
Legislature." SB 31 was approved by the Environmental
Quality Committee April 20, 2009 (5-2), and failed on the
Senate Floor June 3, 2009 (16-19).
SB 143 (Rubio) allows ARB to, upon appropriation by the
Legislature, use revenues from any auction or other sale of
greenhouse gas allowances to incentivize private investment
in various state programs that reduce GHG emissions. SB 143
will be heard by the Senate Environmental Quality Committee
May 2, 2011.
SOURCE : Coalition for Clean Air, Ella Baker Center,
NAACP, California Environmental Justice
Alliance, National Resource Defense Council
SUPPORT : Asian Pacific Environmental Network, California
Environmental Justice Alliance, California
Rural Legal Assistance Foundation, Californian
Pan-Ethnic Health Network, Coalition for Clean
Air, Greenlining Institute, Latino Coalition
for a Healthy California, Natural Resource
Defense Council
OPPOSITION : California Chamber of Commerce, American
Council of Engineering Companies - California,
Building Owners and Managers Association,
California Building Industry Association,
California Business Properties Association,
California Farm Bureau Federation, California
Forestry Association, California League of Food
Processors, California Manufacturers &
Technology Association, California Metals
Coalition, California Retailers Association,
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Cal-Tax, Chemical Industry Council of
California, Consumer Specialty Products
Association, International Council of Shopping
Centers, NAOIP - Commercial Real Estate
Development Association, Western Growers,
Western States Petroleum Association, Western
Wood Preservers' Institute