BILL ANALYSIS Ó
SB 535
Page 1
( Without Reference to File )
SENATE THIRD READING
SB 535 (De León)
As Amended August 31, 2012
Majority vote
SENATE VOTE :23-15
NATURAL RESOURCES 6-3 APPROPRIATIONS 12-5
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|Ayes:|Chesbro, Brownley, |Ayes:|Gatto, Blumenfield, |
| |Dickinson, Huffman, | |Bradford, |
| |Monning, Skinner | |Charles Calderon, Campos, |
| | | |Davis, Fuentes, Hall, |
| | | |Hill, Cedillo, Mitchell, |
| | | |Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Knight, Grove, Halderman |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Requires the investment plan related to the Greenhouse
Gas (GHG) Reduction Fund (GHGR Fund) that is developed and
submitted to the Legislature pursuant to AB 1532 (John A. Pérez)
to allocate: 1) a minimum of 25% of the available moneys in the
fund to projects that provide benefits to identified
disadvantaged communities; and, 2) a minimum of 10% of the
available moneys in the fund to projects located within
identified disadvantaged communities. This bill is contingent
on the enactment of AB 1532. Specifically, this bill:
1)Requires the California Environmental Protection Agency
(CalEPA) to identify disadvantaged communities for investment
opportunities.
2)Requires disadvantaged communities to be identified based on
geographic, socioeconomic, public health, and environmental
hazard criteria, which may include either of the following:
a) Areas disproportionately affected by environmental
pollution and other hazards that can lead to negative
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public effects, exposure, or environmental degradation;
and,
b) Areas with concentrations of people that are of low
income, high unemployment, low levels of homeownership,
high rent burden, sensitive populations, or low levels of
educational attainment.
3)Requires the investment plan related to the GHGR Fund to
include all of the following allocations:
a) A minimum of 25% of the available moneys in the fund to
projects that provide benefits to identified disadvantaged
communities; and,
b) A minimum of 10% of the available moneys in the fund to
projects located within identified disadvantaged
communities. This minimum 10% allocation may be for
projects included, in whole or in part, in the set of
projects supported by the minimum 25% allocation described
above.
4)Requires any funding guidelines developed for administering
agencies to include guidelines for how the agencies should
maximize benefits for identified disadvantaged communities.
5)Includes reporting requirements, as specified.
6)Declares that nothing in the bill shall be construed as
resulting in any taxpayer paying a higher tax.
7)Prohibits the bill from becoming operative unless AB 1532
(John A. Pérez) is enacted.
EXISTING LAW , under the California Global Warming Solutions Act
of 2006 (AB 32 (Núñez and Pavley), Chapter 488, Statutes of
2006):
1)Requires the Air Resources Board (ARB), pursuant to AB 32, 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.
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2)Authorizes ARB to adopt fees to be paid by the sources of GHG
emissions regulated pursuant to AB 32. Fee revenues must be
deposited in the Air Pollution Control Fund and may be spent
for purposes of carrying out AB 32.
3)Authorizes ARB to permit the use of market-based compliance
mechanisms to comply with GHG reduction regulations, to be
adopted by 2011 and operative by 2012, once specified
conditions are met. Prior to adopting a market-based
compliance mechanism, to the extent feasible and in
furtherance of achieving the statewide GHG emissions limit,
ARB must:
a) Consider the potential for direct, indirect, and
cumulative emission impacts from these mechanisms,
including localized impacts in communities that are already
adversely impacted by air pollution.
b) Design any market-based compliance mechanism to prevent
any increase in the emissions of toxic air contaminants or
criteria air pollutants.
c) Maximize additional environmental and economic benefits
for California, as appropriate.
4)Requires ARB, to the extent feasible and in furtherance of
achieving the statewide GHG emissions limit, to:
a) Design market-based and certain other regulations,
including distribution of emissions allowances where
appropriate, in a manner that is equitable, seeks to
minimize costs and maximize the total benefits to
California, and encourages early action to reduce GHG
emissions.
b) Ensure that activities undertaken to comply with the
regulations do not disproportionately impact low-income
communities, and complement efforts to achieve and maintain
federal and state ambient air quality standards and to
reduce toxic air contaminant emissions.
5)Requires ARB to ensure that the GHG emission reduction rules,
regulations, programs, mechanisms, and incentives under its
jurisdiction direct public and private investment toward the
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most disadvantaged communities in California and provide an
opportunity for small businesses, schools, affordable housing
associations, and other community institutions to participate
in and benefit from statewide efforts to reduce GHG emissions.
6)Creates the GHGR Fund 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
to be deposited in the GHGR Fund and available for
appropriation by the Legislature.
7)Requires the Department of Finance (DOF) to submit proposed
legislation, on or before January 10, 2013, that provides a
detailed spending plan for moneys in the GHGR Fund, unless the
Legislature passes a bill on or before August 31, 2012, that
establishes a long-term spending strategy for moneys in the
GHGR Fund. Requires any state agency, prior to expending any
moneys appropriated from the GHGR Fund, to prepare a specified
record.
8)Authorizes the DOF to allocate or otherwise use an amount of
at least $500 million from moneys deposited in the GHGR Fund,
and make commensurate reductions to General Fund expenditure
authority, to support the regulatory purposes of AB 32.
Requires ARB and DOF, at least 60 days prior to allocating any
funds, to submit a plan for the expenditure or use of the
funds to the chairpersons of the Senate and Assembly
Appropriations Committees and the Chairperson of the Joint
Legislative Budget Committee. Prohibits the use of funds for
the purpose of developing a high-speed rail system for at
least two years.
FISCAL EFFECT : Unknown
COMMENTS : According to ARB, a total reduction of 80 million
metric tons (MMT), or 16% compared to business as usual, is
necessary to reduce statewide GHG emissions to 1990 levels by
2020. ARB intends to achieve approximately 78% of the
reductions through identified "regulatory" measures. ARB
proposes to achieve the balance of reductions necessary to meet
the 2020 limit (approximately 18 MMT) through a cap-and-trade
program. The first auction of allowances in the cap-and-trade
program will take place on November 14, 2012, and the auctions
will be held quarterly thereafter.
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The 2012-13 Budget Act (AB 1464 (Budget Committee), Chapter 21,
Statutes of 2012) authorizes DOF to allocate at least $500
million from cap-and-trade revenue, and make commensurate
reductions to General Fund expenditure authority, to support the
regulatory purposes of AB 32. The Resources Budget Trailer Bill
(SB 1018 (Budget and Fiscal Review Committee), Chapter 39,
Statutes of 2012) creates the GHGR Fund for cap-and-trade
auction revenues and requires DOF to submit proposed
legislation, on or before January 10, 2013, that provides a
detailed spending plan for moneys in the GHGR Fund, unless the
Legislature passes a bill on or before August 31, 2012, that
establishes a long-term spending strategy for moneys in the GHGR
Fund.
AB 32 requires ARB to ensure that the GHG emission reduction
rules, regulations, programs, mechanisms, and incentives under
its jurisdiction direct public and private investment toward the
"most disadvantaged communities" in California and provide an
opportunity for small businesses, schools, affordable housing
associations, and other community institutions to participate in
and benefit from statewide efforts to reduce GHG emissions.
With regard to any market-based compliance mechanisms, including
cap-and-trade, ARB is required to "consider the potential for
direct, indirect, and cumulative emissions impacts from these
mechanisms, including localized impacts in communities that are
already adversely impacted by air pollution." In addition, in
adopting and implementing AB 32, ARB is required to "ensure that
activities undertaken to comply with the regulations do not
disproportionately impact low-income communities." With regard
to "co-pollutants," AB 32's GHG-reduction regulations must be
designed and implemented to "prevent any increase in the
emissions of toxic air contaminants or criteria air pollutants"
and "complement efforts to achieve and maintain federal and
state ambient air quality standards and to reduce toxic air
contaminant emissions."
According to the author and many of the supporters, "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."
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This bill is contingent on the enactment of AB 1532. AB 1532
requires GHGR Fund moneys to be used to facilitate the
achievement of feasible and cost-effective reductions of GHG
emissions.
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092
FN: 0005854