BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 535
Author: De León (D), et al.
Amended: 8/31/12
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 5-1, 5/2/11
AYES: Simitian, Hancock, Kehoe, Lowenthal, Pavley
NOES: Blakeslee
NO VOTE RECORDED: Strickland
SENATE APPROPRIATIONS COMMITTEE : 6-3, 5/26/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Emmerson, Runner
SENATE FLOOR : 23-15, 6/2/11
AYES: Alquist, Calderon, Corbett, De León, DeSaulnier,
Evans, Hancock, Hernandez, Kehoe, Leno, Lieu, Liu,
Lowenthal, Padilla, Pavley, Price, Rubio, Simitian,
Steinberg, Vargas, Wolk, Wright, Yee
NOES: Anderson, Berryhill, Blakeslee, Cannella, Correa,
Dutton, Fuller, Gaines, Harman, Huff, La Malfa, Negrete
McLeod, Strickland, Walters, Wyland
NO VOTE RECORDED: Emmerson, Runner
ASSEMBLY FLOOR : Not available
SUBJECT : California Global Warming Solutions Act of
2006: Greenhouse Gas Reduction Fund
SOURCE : California Environmental Justice Alliance
Coalition for Clean Air
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Ella Baker Center
Greenlining Institute
NAACP
DIGEST : This bill requires the California Environmental
Protection Agency to identify disadvantaged communities for
investment opportunities, as specified. This bill requires
the Department of Finance (DOF), when developing a
specified three-year investment plan, to allocate 25% of
the available moneys in the Greenhouse Gas Reduction Fund
to projects that provide benefits to disadvantaged
communities, as specified, and to allocate a minimum of 10%
of the available moneys in the Greenhouse Gas Reduction
Fund to projects located within disadvantaged communities,
as specified. This bill requires the DOF, when developing
funding guidelines, to include guidelines for how
administering agencies should maximize benefits for
disadvantaged communities. This bill requires
administering agencies to report to the DOF, and the DOF to
include in a specified report to the Legislature, a
description of how administering agencies have fulfilled
specified requirements relating to projects providing
benefits to, or located in, disadvantaged communities.
This bill makes its provisions contingent on the enactment
of other legislation, as specified.
Assembly Amendments make substantive changes to the Senate
version keeping the intent the same.
ANALYSIS : The California Global Warming Solutions Act of
2006 (CGWSA) requires the State Air Resources Board (ARB)
to adopt regulations to require the reporting and
verification of emissions of greenhouse gases (GHG) and to
monitor and enforce compliance with the reporting and
verification program, and requires the state board to adopt
a statewide GHG emissions limit equivalent to the statewide
GHG 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 GHG emission
reductions. The Act authorizes the state board to include
the use of market-based compliance mechanisms. The Act
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authorizes the state board to adopt a schedule of fees to
be paid by the sources of GHG 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.
Comments
According to the author:
Currently, ARB is authorized to collect revenues from
regulated GHG emitters through a market-based mechanism.
The problem is that AB 32 did not provide a definition
for California's most impacted and disadvantaged
communities, nor direction on how the state will
mitigate adverse impacts from climate change in these
communities, nor direction on how the state will ensure
these communities can participate in and receive
investments from activities taken pursuant to Assembly
Bill 32 and not experience disproportionate impacts.
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 requires that
a minimum of ten percent of revenues?be allocated to
projects that reduce greenhouse gas emissions and
mitigate health impacts in disadvantaged communities.
The amount of allowance revenue is uncertain and depends
on the amount of allowances sold and allowance price.
The range of estimated funds available for purposes of
this bill (assuming the $5 million trigger is achieved)
is $500,000 to well over $1 billion. The bill
establishes general criteria for distribution of funds
and very broad criteria for project eligibility. The
distribution criteria (in the definition of "most
impacted and disadvantaged communities") targets areas
with a combination of high air pollution exposure and
poverty. Although there is room for interpretation how
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the criteria is applied, this is most likely to be urban
areas near ports, major industrial sources, freeways
and/or railyards, as well as densely-populated
communities in the Central Valley. Funds must go to
projects to reduce GHG emissions or mitigate direct
health impacts of climate change. Within the broad
boundaries of these criteria, the bill gives significant
discretion to ARB and the review panel to decide how to
spend the funds (subject at least to annual budgetary
review of the program by the Legislature).
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (As of 5/26/11 unknown with latest amendments)
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
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People Organized to Demand Environmental and Economic
Rights
Regional Asthma Management and Prevention
Sierra Club California
Southeast Asian Community Alliance
Trust for Public Land
Union of Concerned Scientists
OPPOSITION : (Verified As of 5/26/11 unknown with latest
amendments)
American Council of Engineering Companies
California Building Industry Association
California Building Owners and Managers Association
California Business Properties Association
California Chamber of Commerce
California Farm Bureau Federation
California Forestry Association
California League of Food Processors
California Manufacturers and Technology Association
California Metals Coalition
California Retailers Association
ARGUMENTS IN OPPOSITION : According to opponents "ÝARB]
has no authority to raise revenues other than for
administrative purposes. AB 32 grants ÝARB] 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 ÝARB] 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:nk 8/31/12 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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