BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 535|
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THIRD READING
Bill No: SB 535
Author: De León (D)
Amended: 5/31/11
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 5-1, 05/02/11
AYES: Simitian, Hancock, Kehoe, Lowenthal, Pavley
NOES: Blakeslee
NO VOTE RECORDED: Strickland
SENATE APPROPRIATIONS COMMITTEE : 6-3, 05/26/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Emmerson, Runner
SUBJECT : California Communities Healthy Air
Revitalization Trust
SOURCE : California Environmental Justice Alliance
Coalition for Clean Air
Ella Baker Center
Greenlining Institute
NAACP
National Resource Defense Council
DIGEST : This bill establishes the California Communities
Healthy Air Revitalization Trust in the State Treasury.
The moneys in the trust would be used, upon appropriation
by the Legislature, in the most impacted and disadvantaged
communities, as defined, to fund programs or projects that
reduce greenhouse gas emissions or mitigate direct health
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or environmental impacts of climate change through
competitive grants, loans, or other funding mechanisms.
The bill requires the Air Resources Board (ARB) to
administer moneys appropriated from the trust, establish
criteria and procedures, and meet other specified
requirements in connection with implementation.
ANALYSIS : The California Global Warming Solutions Act of
2006 (CGWSA) requires the State Air Resources Board to
adopt regulations to require the reporting and verification
of emissions of greenhouse gases and to monitor and enforce
compliance with the reporting and verification program, and
requires the state board to adopt a statewide greenhouse
gas emissions limit equivalent to the statewide greenhouse
gas emissions level in 1990 to be achieved by 2020. The
act requires the state board to adopt rules and regulations
in an open public process to achieve the maximum
technologically feasible and cost-effective greenhouse gas
emission reductions. The act authorizes the state board to
include the use of market-based compliance mechanisms. The
act authorizes the state board to adopt a schedule of fees
to be paid by the sources of greenhouse gas emissions
regulated pursuant to the act, and requires the revenues
collected pursuant to that fee to be deposited into the Air
Pollution Control Fund and be available, upon appropriation
by the Legislature, for purposes of carrying out the act.
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 of
which moneys in the trust are available upon
appropriation by the Legislature.
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
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or projects that reduce greenhouse gas emissions or
mitigate the direct health impacts of climate change
including green collar employment or training.
5. Specifies that five percent of the moneys allocated
to the trust may be used for purposed of administering
the bill.
6. Requires the ARB to administer moneys appropriated
from the trust, establish criteria and procedure, and
before January 1, 2013, implement the program. The
ARB is to begin implementation of the program within
90 days of finding that more than $5 million has been
deposited in the trust.
7. Requires ARB, following an open and public process,
to develop and adopt 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. The report is
to be made available to the public on the ARB Internet
Web site.
8. Specifies, upon implementation of the program, and
by every third January 1, the ARB is to develop and
adopt the list of the most impacted and disadvantaged
communities in California and triennial plans
describing the specific type of programs and projects
to be solicited for funding during the three year
period. The plans and lists are to be made public on
the ARB Internet Web site.
9. Requires ARB to only approve a program or project
for funding after determining, based on the available
evident, that the used of moneys for that program or
project is consistent with the requirements, for the
use of moneys derived from valid regulatory fees, as
established by the California Supreme Court in
Sinclair Paint Co. v. State Bd. of Equalization (1997)
15 Cal.4th 866 and reaffirmed in California Farm
Bureau Federation v. State Water Resources Control Bd .
(2011) 51 Cal.4th 421. This would not apply to the
use of penalty moneys, if those moneys are segregated
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from fee moneys.
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
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.
Related Legislation
AB 1405 (De Leon) which 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 143 (Rubio) requires the ARB, on or before July 1, 2012,
to adopt methodologies for determining the quantity of
greenhouse gas emissions reduced through specified
greenhouse gas emission reduction programs. Requires the
ARB to adopt regulations governing the creation of
greenhouse gas emission reduction offsets based on
investments in those programs for purposes of banking,
trading, and using the offsets to comply with the
market-based compliance mechanism adopted by the ARB.
Requires the ARB to credit persons who invest in those
programs with greenhouse gas emission offsets, based on a
cost-effectiveness calculation determined by the ARB, with
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specified exceptions. On Senate Third Reading File.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
The Senate Appropriations Committee indicates the total
expenditures under the bill are unknown and will depend on
future revenues generated from the cap and trade program.
Based on initial projections of cap and trade auction
revenues, total program expenditures are likely to be in
the tens of millions per year.
SUPPORT : (Verified 5/26/11)
California Environmental Justice Alliance (co-source)
Coalition for Clean Air (co-source)
Ella Baker Center (co-source)
Greenlining Institute (co-source)
NAACP (co-source)
National Resource Defense Council (co-source)
American Lung Association of California
Asian Neighborhood Design
Asian Pacific Environmental Network
Asian Pacific Islander Youth Promoting Advocacy and
Leadership
Breathe California
California Environmental Justice Alliance
California League of Conservation Voters
California Rural Legal Assistance Foundation
Californian Pan-Ethnic Health Network
Catholic Charities Diocese of Stockton
Center for Community Action and Environmental Justice
Center on Race, Poverty and the Environment
Coalition for Clean Air
Communities for a Better Environment
East Yard Communities for Environmental Justice
Environment California
Environmental Defense Fund
Environmental Health Coalition
Latino Coalition for a Healthy California
Los Angeles County Bicycle Coalition
National Parks Conservation Association
People Organized to Demand Environmental & Economic Rights
Regional Asthma Management and Prevention
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Sierra Club California
Southeast Asian Community Alliance
Trust for Public Land
Union of Concerned Scientists
OPPOSITION : (Verified 5/26/11)
American Council of Engineering Companies
California, Building Owners and Managers Association
California Building Industry Association
California Business Properties Association
California Chamber of Commerce
California Farm Bureau Federation
California Forestry Association
California League of Food Processors
California Manufacturers & Technology Association
California Metals Coalition
California Retailers Association
ARGUMENTS IN SUPPORT : 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."
ARGUMENTS IN OPPOSITION : 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,
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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."
DLW:nl 5/31/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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