BILL NUMBER: SB 1572 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 31, 2012
AMENDED IN ASSEMBLY AUGUST 24, 2012
AMENDED IN ASSEMBLY AUGUST 22, 2012
AMENDED IN ASSEMBLY JUNE 25, 2012
AMENDED IN SENATE MAY 29, 2012
AMENDED IN SENATE MAY 1, 2012
INTRODUCED BY Senator Pavley
FEBRUARY 24, 2012
An act to add Sections 16428.81 , 16428.82, and 16428.83
and 16428.82 to the Government Code, relating to
greenhouse gases, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 1572, as amended, Pavley. California Global Warming Solutions
Act of 2006: AB 32 Investment Fund.
The California Global Warming Solutions Act of 2006 designates the
State Air Resources Board as the state agency charged with
monitoring and regulating sources of emissions of greenhouse gases.
The act 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, and 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 use of
market-based compliance mechanisms. The state board has adopted by
regulation a program pursuant to the act to cap greenhouse gas
emissions and provide for market-based compliance mechanisms,
including the auction of allowances (cap-and-trade program). 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 a state agency, prior to expending
any money appropriated to it by the Legislature from the fund, to
prepare a record consisting of a description of proposed expenditures
and of how they will further the regulatory purposes of the
California Global Warming Solutions Act of 2006, how they will
achieve specified greenhouse gas emissions reductions, how the agency
considered other objectives of that act, and how the agency will
document expenditure results.
This bill , with certain exceptions, would
appropriate a specified portion of moneys collected by the
state board and derived from the auction or sale of allowances in
the 2012-13 2012-13 fiscal year from the
Greenhouse Gas Reduction Fund to the state board. Under the bill, a
specified portion of the money appropriated to the state board would
be available to fund prescribed projects that meet certain goals
relating to greenhouse gas emissions reductions. This bill would
require any funds allocated to fund or finance eligible projects, as
specified, or awarded, as specified, to be committed by December 31,
2013. This bill would authorize
require the state board , the Strategic Growth Council,
and the Treasurer California Pollution
Control Financing Authority to adopt regulations, and
authorize those entities to adopt emergency regulations ,
for the purposes of funding eligible projects, as prescribed.
The bill would require the Treasurer
California Pollution Control Financing Authority and the
Strategic Growth Council to prepare and submit to the Legislature,
until January 1, 2017, annual reports on funded projects and
activities. The bill would require the state board to publish
information on projects on its Internet Web site.
This bill would create the Higher Education Greenhouse Gas
Emissions Reduction Account within the Greenhouse Gas Reduction Fund.
This bill would provide that any revenue collected by the state
board from the sale of an allowance to the University of California
or the California State University is required to be deposited into
this account. This bill would continuously
appropriate the moneys collected in the 2012-13 fiscal year and
deposited in this account , without regard to fiscal
years, to the state board and provide that the moneys
collected after the 2012-13 fiscal year in the account are available,
upon appropriation by the Legislature, for purposes that are
determined, based on the best available evidence, to reduce
greenhouse gas emissions, as specified, and would prescribe
additional criteria for the expenditure of moneys in the account.
This bill would require the state board to submit to the Legislature
a 5-year investment plan detailing the projects and activities to be
funded. This bill would require, no later than December 31, 2013, and
each December 31 thereafter, the University of California and the
California State University each to submit to the state
board and the Legislature a specified report.
This bill would create the Water Suppliers Greenhouse Gas
Emissions Reduction Account within the Greenhouse Gas Reduction Fund.
This bill would provide that any revenue collected by the state
board from the sale of an allowance to a water supplier, as defined,
is required to be deposited into this account. This bill would
continuously appropriate the moneys in this account, without regard
to fiscal years, to the state board for the purposes of reducing
greenhouse gas emissions associated with water suppliers, and would
prescribe additional criteria for the expenditure of moneys in the
account. This bill would require, no later than November 1, 2013, and
each November 1 thereafter, a water supplier that received funds
from the account to submit to the state board and the Legislature a
specified report.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares the following:
(a) In accordance with its discretionary authority to adopt
market-based compliance mechanisms pursuant to Part 5 (commencing
with Section 38570) of Division 25.5 of the Health and Safety Code,
the State Air Resources Board adopted on December 22, 2011, a final
regulation order establishing the cap-and-trade program, which took
effect on January 1, 2012.
(b) California's cap-and-trade program is authorized by the
California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code).
(c) To mitigate the risk of market manipulation and windfall
profits and to ensure the market price of a greenhouse gas emissions
allowance is transparent and publicly discoverable, the State Air
Resources Board will auction a limited number of allowances to
qualifying market participants beginning on November 14, 2012, though
the majority of allowances will be freely
allocated at no cost to covered entities.
(d) Proceeds from the auction of allowances must be spent to
further purposes of the California Global Warming Solutions Act of
2006, including the reduction of statewide greenhouse gas emissions
to 1990 levels by 2020, and the maintenance of those levels beyond
2020.
(e) In order to further the purposes of the California Global
Warming Solutions Act of 2006, it is necessary and appropriate to
immediately allocate a portion of auction proceeds anticipated to be
generated in the 2012-13 fiscal year, excluding proceeds from
allowances consigned to auction by electrical distribution utilities,
to fund projects that reduce greenhouse gas emissions and that also
achieve the following purposes to the extent feasible:
(1) Maintain and create jobs for industries with covered entities
by reducing leakage risk through cost-effective investments in
greenhouse gas emissions reductions measures.
(2) Rapidly achieve greenhouse gas emissions reductions at a
reasonable cost.
(3) Ensure investments in emissions reductions benefit
disadvantaged communities to the maximum extent feasible.
(4) Provide near-term relief of budgetary pressure facing
universities, state, regional, and local government, and other public
agencies.
(5) Provide opportunities for small businesses, local governments,
nonprofit entities, state-certified local conservation corps, state
conservancies, and other community institutions to participate in and
benefit from statewide and regional efforts to reduce greenhouse gas
emissions.
(f) It is necessary and appropriate to prioritize near-term
investments from auction proceeds in emissions reductions at covered
entities that will generate most of the initial proceeds, in order to
ensure a low-cost transition to a clean-energy economy for the
benefit of their customers.
(g) A wider range of investments should be eligible longer term,
including increased investment in fuels-related emissions reductions
as the coverage of the cap-and-trade program expands,
transformational technology innovation, uncapped sectors such as
natural resources and sustainable agriculture where some of the most
cost-effective emissions reductions are possible, and other areas of
investment with broad public benefits that private markets may not
otherwise adequately fund.
SEC. 2. Section 16428.81 is added to the Government Code, to read:
16428.81. (a) For purposes of this section:
(1) "Covered entities" means an entity subject to
allowance surrender requirements a compliance
obligation in 2013 under any cap-and-trade program adopted by
the state board as of December 31, 2012, excluding electrical
corporations that receive all of their allowances for free
distribution utilities , and including, but not
limited to, food processors, manufacturers of glass, cement, and
other industrial products, oil and gas production facilities and
refineries, and thermal energy suppliers.
(2) "State board" means the State Air Resources Board.
(b) (1) Notwithstanding subdivision (c) of Section 16428.8,
80 percent of the moneys collected in the 2012-13 fiscal year
and deposited into the Greenhouse Gas Reduction Fund that are not
allocated or otherwise used by the Director of Finance to make
commensurate reductions to General Fund expenditure authority, as
authorized by Section 15.11 of the Budget Act of 2012, are hereby
appropriated from the Greenhouse Gas Reduction Fund to the state
board to be expended in accordance with this section. In accordance
with Section 16304 of the Government Code Section
16304 , funds not encumbered within three years shall
revert back to the Greenhouse Gas Reduction Fund.
(2) Funds expended pursuant to this section shall meet the
requirements of subdivision (a) of Section 16428.9 and shall benefit
disadvantaged communities to the maximum extent feasible. The
definition of a disadvantaged community shall be determined by the
California Environmental Protection Agency.
(c) The funds appropriated to the state board pursuant to
subdivision (b) shall be allocated as follows:
(1) Sixty Seventy-five
percent to the state board to fund eligible projects
at covered entities in a timely manner that would
maximize the use of private capital and innovative technology and
accommodate unique cost and project financing attributes of the
particular industry of a covered entity . The state board
may allocate any of these moneys to the Treasurer
California Pollution Control Financing Authority for use
in accordance with his or her its
authority under the California Pollution Control Financing Authority
Act to fund finance eligible projects
at covered entities , if the state board determines that
the allocation maximizes the use of private capital and
innovative technology and accommodates unique cost
and project cost, technology, financing ,
or other attributes of the particular covered entities'
industry eligible project applicants .
(A) For purposes of this paragraph, an eligible
projects are those projects that are project
is a project that is determined by the state board to reduce
greenhouse gas emissions at covered entities that the state
board determines meet associated with the operations
of a covered entity as reported to the state board pursuant to the
mandatory greenhouse gas emissions reporting regulation, that
maximizes the use of private capital, is related to compliance with
and consistent with the goals of the California Global Warming
Solutions Act of 2006 (Division 25.5 (commencing with Section 38500)
of the Health and Safety Code) and is not required by any other law,
regulation, or court order, and satisfies one or more of the
following criteria: criteria, and any other
criteria that may be established by the state board:
(i) The project will reduce greenhouse gas emissions associated
with the operations of a covered entity under any cap-and-trade
program as reported to the state board pursuant to the mandatory
greenhouse gas emissions reporting regulation with a compliance
obligation commencing in the 2013 program year.
(ii) The covered entity's
(i) Reduces the compliance costs of a
covered entity whose projected greenhouse gas emissions in 2013
will exceed any free allocation of emission allowances in 2013 by at
least 10 percent.
(iii) The project is related to compliance with the California
Global Warming Solutions Act of 2006 (Division 2.5 (commencing with
Section 38500) of the Health and Safety Code) and is not required by
any other law, regulation, or court order.
(ii) Assists with the adoption of innovative greenhouse gas
emissions reduction technology.
(iii) Cost-effectively reduces greenhouse gas emissions through
efficiency or other measures.
(iv) The project applicant agrees
(B) Each eligible project shall be
subject to reporting and audit requirements.
(B)
( C) The value of the benefits that may be
received in a fiscal year pursuant to this paragraph for eligible
projects at a covered entity shall not exceed the actual costs
incurred by the covered entity from purchasing auctioned
allowances.
(C)
( D) Types of eligible projects may include,
but are not limited to, switching to the production or use of
low-carbon fuels, on-site onsite
efficiency measures, clean energy generation, increasing the use of
recycled content, energy storage, and waste heat recovery.
(D)
( E) The Treasurer
California Pollution Control Financing Authority and the state
board may consult with the Governor's Office of Business and Economic
Development for the purposes of administering this paragraph.
(E) In addition to any other authority the California Pollution
Control Financing Authority may have, the authority may provide a
rebate to the applicant in the amount of the sales and use tax paid
on the qualifying equipment within 30 days of receipt of a
determination by the state board that the requirements of
subparagraph (A) have been met and receipt of proof of purchase of
qualifying property associated with the eligible project.
(F) If the state board finds that moneys provided pursuant to this
paragraph were used for purposes other than those described in
subparagraph (A), the project applicant shall be required to repay
any moneys received with interest.
(G) The state board and the Treasurer may adopt emergency
regulations for the purposes of implementing this paragraph. The
adoption of emergency regulations shall be deemed necessary for the
immediate preservation of the public peace, health, safety, or
general welfare for the purposes of Section 11346.1.
(H)
(G) Total project cost associated with any eligible
project is eligible for funding.
(I)
(H) Any activities undertaken as part of any funded
eligible project shall complement and shall not interfere with
efforts to achieve and maintain federal and state ambient air quality
standards and reduce toxic air contaminant emissions.
(2) Ten Twenty-five percent to the
Strategic Growth Council to be awarded, on a competitive basis, to
metropolitan planning organizations or councils of governments, in
accordance with subparagraph (A), and to local climate innovation
projects, in accordance with subparagraph (B).
(A) Metropolitan planning organizations or , in regions
not within a metropolitan planning organization, the
council councils of governments, are eligible
for funding to develop and implement regional or local plans to
reduce greenhouse gas emissions through investments in transportation
infrastructure and operations and changes in land use.
(i) Project funding determinations shall be made at the regional
level in accordance with statewide criteria developed by the
Strategic Growth Council and the state board that prioritize
investments in projects that cost-effectively reduce greenhouse gas
emissions, integrate transportation infrastructure and land use
strategies, and achieve additional greenhouse gas emissions
reductions and community benefits through integration with local
energy, water, public health, or resource conservation strategies.
(ii) In regions with sustainable community strategies or an
alternative planning strategy for which the state board has accepted
a metropolitan planning organization's determination that the
sustainable communities strategy or the alternative planning strategy
would, if implemented, achieve the greenhouse gas emissions
reduction targets pursuant to subparagraph (H) of paragraph (2) of
subdivision (b) of Section 65080, projects shall implement the
adopted strategy within existing urbanized areas.
(iii) In regions that do not have strategies that meet the
requirements of clause (ii), projects shall meet criteria developed
by the Strategic Growth Council, in collaboration with the state
board, to ensure that projects provide measurable and verifiable
greenhouse gas emissions reductions.
(iv) Funds allocated by the Strategic Growth Council pursuant
to this subparagraph may be used for any of the following:
(I) Integrated land use and transportation infrastructure
development, design, construction, or planning, including, but not
limited to, complete street retrofits, street scape improvements,
multiuse traits, electric vehicle charging infrastructure, natural
gas refueling infrastructure, and transit infrastructure implemented
with complementary land use changes, including passenger or commuter
rail, transit-oriented affordable housing, and other infrastructure
that provides access to a diverse mix of housing types, jobs,
schools, and recreational, commercial, retail, and other services of
the neighborhood level, as well as other integrated infrastructure
and land use strategies that demonstrate greenhouse gas emission
reductions.
(II) Transportation efficiency measures that provide greenhouse
gas emissions reduction benefits, including, but not limited to,
expansion and greenhouse gas reduction of transit services, road and
bridge maintenance with safety retrofits, roadway operations, and
demand management strategies.
(III) Performance measurement systems to evaluate greenhouse gas
emissions reductions from integrated projects and program
administrative costs.
(v) Within each region, projects shall be selected based on the
net greenhouse gas emissions reductions per dollar invested.
(B) A city, county, or city and county, state conservancy,
regional climate authority, special district, air district, joint
powers authority, regional collaborative, nonprofits coordinating and
communicating with local governments, or state-certified local
conservation corps is eligible for funding to develop, plan, design,
implement, or construct approved local climate innovation projects
that do demonstrate all of the
following:
(i) Result The project will result
in replicable models.
(ii) Quantifiably reduce Quantifiable
greenhouse gas emissions reductions from
projects, including, but not limited to, clean energy generation,
energy efficiency, urban and community greening, stormwater
reductions, urban river restoration, water efficiency, agricultural
and open- space protection, and natural community
conservation plan development and implementation .
(iii) Have The project will have
clear, accurate, transparent reporting procedures in place ,
including, but not limited to, clean energy generation, energy
efficiency, urban and community greening, stormwater reductions,
urban river restoration, water efficiency, agricultural and open
space protection, and natural community conservation plan development
and implementation .
(d) (1) To ensure that funds are expended efficiently and
transparently, all of the following shall occur:
(A) The Treasurer California Pollution
Control Financing Authority , for the purposes of any
allocation made pursuant to paragraph (1) of subdivision (c), and the
Strategic Growth Council, for the purposes of paragraph (2) of
subdivision (c), shall prepare and submit to the Legislature an
annual report that includes, but is not limited to, a detailed list
of projects and activities for which funds were expended or
obligated. For each project or activity, the detailed list shall
include at least the following information:
(i) The name of the project or activity.
(ii) A description of the project or activity.
(iii) An evaluation of the completion status.
(B) The state board shall publish on its Internet Web site
information on projects funded pursuant to this section, including
the status, costs, benefits, location, and other information relating
to a project in a manner that is easily accessible and
comprehensible to the public, in order to understand
to ensure that the public understands the
effects the funded projects are having on California's environment
and economy.
(2) Any recipient of funds pursuant to this section shall provide
the state agency from which the recipient received the funds any
information necessary for that state agency to comply with the
requirements of paragraph (1).
(3) (A) The report to be submitted pursuant to subparagraph (A) of
paragraph (1) shall be submitted in compliance with Section 9795.
(B) The requirement for submitting a report imposed pursuant to
subparagraph (A) of paragraph (1) is inoperative on January 1, 2017,
pursuant to Section 10231.5.
(e) (1) The state board, the California Pollution Control
Financing Authority, and the Strategic Growth Council shall adopt
regulations, and may adopt emergency regulations, for the purposes of
implementing this section. The adoption of emergency regulations
shall be deemed necessary for the immediate preservation of the
public peace, health, safety, or general welfare for the purposes of
Section 11346.1.
(2) Any funds allocated to fund or finance eligible projects,
pursuant to paragraph (1) of subdivision (c), or awarded, pursuant to
paragraph (2) of subdivision (c), shall be committed to specific
projects by December 31, 2013.
(e)
(f) In addition to subdivision (c) of Section 16428.9,
the provisions of this section are severable. If any provision of
this section or its application is held invalid, that invalidity
shall not affect other provisions or applications that can be given
effect without the invalid provision or application.
SEC. 3. Section 16248.82 is added to the Government Code, to read:
16248.82. (a) For purposes of this section, "state board" shall
mean the State Air Resources Board.
(b) The Higher Education Greenhouse Gas Emissions Reduction
Account is hereby created within the Greenhouse Gas Reduction Fund.
Notwithstanding Section 16428.8, any moneys that may be collected by
the state board from the sale of an allowance to the University of
California or the California State University as part of any
market-based compliance mechanism that may be adopted by the state
board shall be deposited into this account.
(c) Notwithstanding Section 13340, the The
moneys collected in the 2012-13 fiscal year
and deposited in the Higher Education Greenhouse Gas Emissions
Reduction Account are continuously hereby
appropriated , without regard to fiscal years,
to the state board and the moneys collected after the
2012-13 fiscal year in the account are available, upon appropriation
by the Legislature, to be expended as follows:
(1) The requirements of subdivision (a) of Section 16428.9 shall
be met prior to expending any funds.
(2) Funds may be expended only for purposes that are determined,
based on the best available evidence, to reduce greenhouse gas
emissions associated with public segments of the state's
postsecondary education system that are covered entities for purposes
of any cap-and-trade program. These projects and activities may
include, but are not limited to, the following:
(A) Projects or activities that reduce electricity and natural gas
consumption at facilities controlled by the University of California
or the California State University, including energy efficiency,
distributed generation, waste heat recovery, and energy storage.
(B) Procurement of energy sources that reduce natural gas usage at
university facilities.
(C) Procurement of carbon-neutral electricity that displaces
conventional electricity generation at university facilities.
(3) Funds may be expended for administrative costs to directly
support any of the activities funded by this section. Administrative
costs shall not exceed 2.7 percent of the total moneys deposited in
the Higher Education Greenhouse Gas Emissions Reduction Account each
fiscal year.
(4) Expenditure of funds shall be contingent upon an additional
investment by the University of California or the California State
University in greenhouse gas abatement projects and activities, equal
in value to 20 percent of the funds it receives pursuant to this
section, either direct or in kind.
(d) The state board shall submit to the Legislature a five-year
investment plan detailing the projects and activities to be funded
with an anticipated allocation.
(e) (1) No later than December 31, 2013, and each December 31
thereafter, the University of California and the California State
University shall each submit to the state board and to the
Legislature a report describing the respective
disposition of funds received pursuant to this section by each
in that calendar year and the planned expenditures for funding
that may be received pursuant to this section in the coming calendar
year.
(2) (A) The requirement for submitting a report imposed pursuant
to paragraph (1) is inoperative on December 31, 2017, pursuant to
Section 10231.5.
(B) A report to be submitted pursuant to paragraph (1) shall be
submitted in accordance with Section 9795.
SEC. 4. Section 16428.83 is added to the
Government Code, to read:
16428.83. (a) For the purposes of this section, the following
terms have the following meanings:
(1) "State board" means the State Air Resources Board.
(2) "Water supplier" means any publicly owned supplier or
contractor for water, including, but not limited to, the Metropolitan
Water District of Southern California and, for purposes of managing
the State Water Project, the Department of Water Resources, that
distributes or sells water for ultimate resale to customers and that
is a regulated entity pursuant to Section 38570 of the Health and
Safety Code.
(b) The Water Suppliers Greenhouse Gas Emissions Reduction Account
is hereby created within the Greenhouse Gas Reduction Fund.
Notwithstanding Section 16428.8, any revenue that may be collected by
the state board from the sale of an allowance to a water supplier as
part of any market-based compliance mechanism that may be adopted by
the state board shall be deposited into this account.
(c) Notwithstanding Section 13340 of the Government Code, the
moneys in the Water Suppliers Greenhouse Gas Emissions Reduction
Account are continuously appropriated, without regard to fiscal
years, to the state board, to be expended as follows:
(1) The requirements of subdivision (a) of Section 16428.9 shall
be met prior to the expenditure of any funds.
(2) Funds may be expended only for the purpose of reducing
greenhouse gas emissions associated with water suppliers.
(3) Expenditure of funds shall be contingent upon an additional
investment by a water supplier that receives funds pursuant to this
section in greenhouse gas abatement projects and activities, equal in
value to 25 percent of the funds it receives, either direct or in
kind.
(d) No later than November 1, 2013, and each November 1
thereafter, each water supplier that has received funds pursuant to
this section shall submit to the state board and the Legislature a
report describing the disposition of funds received during that
calendar year and the status of projects funded by this section.