BILL ANALYSIS Ó
AB 26
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: AB 26
AUTHOR: Bonilla
AMENDED: May 28, 2013
FISCAL: Yes HEARING DATE: June 19, 2013
URGENCY: No CONSULTANT: Laura Feinstein
SUBJECT : CALIFORNIA GLOBAL WARMING SOLUTIONS ACT OF 2006:
GREENHOUSE GAS REDUCTION FUND
SUMMARY :
Existing law :
1)Under the California Global Warming Solutions Act of 2006,
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 to adopt GHG emissions
reductions measures by regulation. (Health and Safety Code
§38500 et seq.).
2)Establishes a Greenhouse Gas Reduction Fund (Fund) to receive
cap-and-trade auction proceeds and price containment reserve
sales, and to provide the framework for how the auction
proceeds will be administered. The State portion of the
proceeds from the auction of allowances under cap-and-trade is
deposited in the Fund to support programs that further the
purposes of the California Global Warming Solutions Act of
2006 (Government Code §§16428.8 and 16428.9).
3)Requires the Department of Finance, in consultation with the
ARB, to submit to the Legislature on or before January 10,
2013 a proposal that provides a detailed spending plan for the
expenditure of moneys in the Fund (GOV §16428.85).
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4)Requires that public works projects employ apprentices and
journeypersons and pay the prevailing local wage (Labor Code
§§1771 and 1777.5).
5)Under the Shelly-Maloney Apprentice Labor Standards Act of
1939, gives authority to the Chief of the Division of
Apprenticeship Standards to oversee the Division of
Apprenticeship Standards (DAS) with the goal of promoting the
welfare of apprentices and industry (LAB §3073).
6)Under the California Emergency Services Act, creates the
California Emergency Management Agency (Cal/EMA) to coordinate
the overall state agency response to major disasters in
support of local government (GOV §8550).
7)Under the California Labor Code, establishes the California
Occupational Safety and Health Administration Standards Board
(Cal/OSHA) to protect workers from health and safety hazards
on the job (LAB §140).
This bill
1) Defines the following terms:
a) "Apprenticeable occupation" as an occupation for which
DAS has approved an apprenticeship program.
b) "Registered apprentice" as an apprentice registered in
an apprenticeship program approved by DAS.
c) "Approved advanced safety training in performing work
processes to reduce greenhouse gas emissions" (GHG
Reduction Safety Training) as a curriculum approved by
DAS, in consultation with the California Emergency
Management Agency and the Division of Occupational Safety
and Health.
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d) "Skilled journeyperson" as a worker who has either
completed an apprenticeship or has the equivalent work
experience, is paid the prevailing local wage, and has
finished at least 20 hours of GHG Reduction Safety
Training.
2) Declares that construction, alteration, demolition,
installation, repair, and maintenance work paid for in whole
or in part from the Fund shall be considered a public work.
3) States that if moneys from the Fund are made available to the
owner or operators of a refinery to do work to reduce
greenhouse gas emissions, the work will not be performed by
the owner or operator's own employees, and the work falls
within an apprenticeable occupation, then the work will be
performed by either a registered apprentice or a skilled
journeyperson.
4) Requires the Chief of DAS to approve a curriculum in GHG
Reduction Safety Training by January 1, 2016. Further
stipulates that the Chief of DAS, in consultation with
Cal/EMA and Cal/OSHA, shall periodically review and revise
the curriculum to reflect current best practices.
COMMENTS :
1)Purpose of Bill . According to the author, many of the
projects that may be funded with revenues from the carbon
credit auction are likely to be construction related. Current
law does not specify that projects funded with Fund monies
must pay the prevailing wage. The author states that AB 26
upholds California's commitment to living wages by clarifying
that construction, alteration, demolition, installation,
repair, and maintenance work paid for with cap-and-trade
auction revenues is considered a public work.
In addition, the author believes that AB 26 ensures that
refineries will employ the most highly trained workers when
spending auction revenues, and ensures that the state supports
jobs that pay a living wage and support local economies. The
author also intends to ensure that all refinery greenhouse gas
reduction work which is paid for with Fund monies uses the
tradespeople who are best trained in safety. The author
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believes that it is important to utilize the best trained
persons to ensure the safety of all employees at refineries
and that our workers continue to undergo safety training as
technology develops.
2) The Greenhouse Gas Reduction Fund . The Greenhouse Gas
Reduction Fund contains revenue paid to purchase allowances
at cap-and-trade auctions and price containment reserve
sales. In 2012, the Legislature passed and Governor Brown
signed into law three related bills-AB 1532 (Pérez, Chapter
807), SB 535 (De León, Chapter 830), and SB 1018 (Budget and
Fiscal Review Committee, Chapter 39). The bills established
the Fund and provided the framework for how auction proceeds
will be administered. The primary goal of the Fund is to
reduce greenhouse gas emissions in the state and, where
feasible, maximize co-benefits to the state. Co-benefits as
defined in the Health and Safety Code §39710 et seq. include,
but are not limited to, energy efficiency, clean and
renewable energy generation, distributed renewable energy
generation, and energy transmission and storage at public
universities, state and local public buildings, and
industrial and manufacturing facilities.
According to the ARB, the Fund's balance following the first
three auctions was $236 million. Funding will be appropriated
to State agencies by the Legislature, consistent with the
three-year investment plan submitted by the Administration.
3) Cap-and-Trade Auction Proceeds Investment Plan . AB 1532
required the Department of Finance, in consultation with ARB,
to submit to the Legislature a three-year investment plan for
the Fund. The investment plan recommended focusing on three
key sectors: sustainable communities and clean
transportation, energy efficiency and clean energy, and
natural resources and waste diversion.
Pursuant to the Administration's assessment that they had not
yet identified the highest priority activities for Fund
expenditures, the Legislature delayed making allocations from
the Fund in the 2013-14 budget. In the meantime, $500 million
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from the Fund will be lent to the General Fund.
4) Apprenticeship programs . Apprenticeship programs are
supervised by regional, industry-based organizations known as
a Joint Apprenticeship Committee (JAC), sometimes called a
Joint Apprenticeship and Training Committee (JATC) or
Unilateral Apprenticeship Committee (UAC). Apprentices
receive on-the-job training and attend related classes,
usually in the public schools. The role of the state,
through DAS, is consultative and developmental. The field
and technical staffs of DAS assist management, labor, JAC's
and UAC's by seeking to promote and develop additional
training programs and by serving as the registration and
certification agency for apprenticeship in California.
5) Journeypersons . Journeypersons are trained craftspersons who
have either completed an apprenticeship or have equivalent
work experience. Journeypersons commonly oversee and mentor
apprentices on the job. Public works projects employ
journeypersons and apprentices in ratios set by the relevant
apprenticeship standards.
6) Are petroleum refineries a high-priority investment for the
Greenhouse Gas Reduction Fund ? By codifying in statute that
the Fund may be used to pay for work at refineries, the
Legislature will be elevating refineries above other
potential recipients of Fund moneys. To date, the
Legislature has refrained from making any allocations from
the Fund as the state continues to work on identifying
priority investment, awaiting ARB's recommendation. This
bill would be the first to identify a specific industry as an
appropriate recipient of Fund moneys.
The bill could be construed as implying that the Legislature
considers refineries to be an important recipient of Fund
allocations before the investment plan and pursuant
regulations have identified them as a high priority
investment.
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7) Are refineries appropriate recipients for Fund allocations ?
Refineries are obligated under existing regulations to
minimize their GHG emissions, including ARB's flare
minimization regulations, and to pay fees for compliance
instruments under cap-and-trade. Using the Fund to pay for
GHG reduction activities at refineries would use public funds
to accomplish a goal that the facilities already have a
regulatory obligation and/or a cost incentive to carry out.
Given that the Legislature has not yet identified the
appropriate priorities for Fund allocation, the committee
should consider striking subdivision (c).
Alternatively, the committee could ask that the bill be
amended to replace the references to refineries with more
general references to industrial and manufacturing
facilities, consistent with legislative priorities already
identified in the Greenhouse Gas Reduction Fund Investment
Plan and Communities Revitalization Act (HSC §39712).
8) The bill should clarify that the Fund's priority is to
finance additional GHG emission reduction activities, and not
subsidize business-as-usual practices . The bill identifies
construction, alteration, demolition, installation, repair,
and maintenance work as activities that may be paid for from
the Fund. Maintenance work can be an important unmet need,
but without clarification it could be interpreted as implying
that the Fund can be used to pay for business-as-usual work.
An amendment is needed to state that the Fund can be used to pay
for construction, alteration, demolition, installation,
repair, and maintenance work insofar as those activities
reduce greenhouse gas emissions, pursuant to the Greenhouse
Gas Reduction Fund Investment Plan and Communities
Revitalization Act. The amendment should clarify that the
Fund should be used for additional activities beyond
"business as usual" operations (HSC §39712).
9) What is the funding source, design and purpose of the
"approved advanced safety training in performing work
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processes to reduce greenhouse gas emissions" (GHG Reduction
Safety Training) curriculum ? There are a number of points
related to the GHG Reduction Safety that need clarification.
a) Will curriculum approval, review and revision be paid
for from the Fund ? The author's intent is for
curriculum-related activities to be paid for from union
dues routinely paid into apprenticeship funds, not the
Greenhouse Gas Reduction Fund.
The bill should be amended to clarify that the Fund is not
the source of money for curriculum approval, review and
revision.
b) What topics will be covered in the curriculum that are
not already included in the green components of
apprenticeship programs ? The California Apprenticeship
Council requires all crafts to include "green" components
in their Minimum Industry Training Criteria.
Apprenticeships cover training in activities that reduce
GHG emissions including energy efficiency; recycling and
reuse of products; and use of technologies, materials and
methods that reduce harm to the environment. A GHG
Reduction Safety Training curriculum should provide
additional information beyond the topics already covered.
The author needs to clarify what additional topics are to
be included in the GHG Reduction Safety Training
curriculum that are not already covered in the green
components of the Minimum Industry Training Criteria.
10) Double Referral to Senate Labor and Industrial Relations
Committee . If this
measure is approved by this committee, the do pass
motion must include the
action to re-refer the bill to the Senate Labor and
Industrial Relations
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Committee.
SOURCE : State Building and Construction Trades Council of
California
SUPPORT : International Association of Heat and Frost
Insulators Local 5
California Teamsters Public Affairs Council
OPPOSITION : California Manufacturers & Technology Association
Communities for a Better Environment
Board of Directors of the Environmental
Priorities Network