BILL ANALYSIS Ó
AB 574
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Date of Hearing: May 15, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 574 (Lowenthal) - As Amended: April 15, 2013
Policy Committee:
TransportationVote:12-4
Natural Resources 6-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill creates the Sustainable Communities Infrastructure
Program (Program) to fund sustainable communities strategies
(SCS) and equivalent greenhouse gas (GHG) reducing strategies
using AB 32 cap-and-trade auction revenues. Specifically this
bill:
1)Directs the appropriation of funds from the GHG Reduction Fund
for projects in the transportation sector that meet specified
requirements competitively awarded based on criteria
established by ARB.
2)Directs the California Transportation Commission (CTC), in
consultation with the ARB, to designate a regional granting
authority to administer, as prescribed, the Sustainable
Communities Infrastructure Program within each region.
Requires that the regional granting authority to be the same
agency responsible for preparing the regional transportation
plan.
3)Provides that money in the Sustainable Communities
Infrastructure Program should be allocated to regional
granting authorities on a per capita basis.
4)Specifies legislative intent that all cap-and-trade revenues
are to be appropriated consistent with AB 32, AB 1532 and
other related provisions of existing law.
5)Provides ARB's work to develop standards and guidelines and
the provision of grant money contingent on the Legislature
AB 574
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appropriating funds for these purposes.
FISCAL EFFECT
Significant cost pressures, potentially in the hundreds of
millions of dollars to fund the Program from Greenhouse Gas
Reduction (cap and trade) Fund revenues.
COMMENTS
1)Rationale. The transportation sector is responsible for
nearly 40% of the state's GHG emissions. This bill is
intended to create a new program to expend cap and trade
revenues to reduce state GHG emissions and create sustainable
communities by funding environmentally sound transportation
investments.
2)Background. SB 375 (Steinberg), Chapter 728, Statutes of
2008 requires the Air Resources Board to provide each region
that has a metropolitan planning organization (MPO) with a GHG
reduction target for the automobile and light truck sector for
by 2020 and 2035 respectively. The MPO is required to include
a sustainable communities strategy in its regional
transportation plan designed to achieve the GHG reduction
targets.
AB 32 (Núñez), Chapter 455, Statutes of 2006) requires
California to limit its emissions of GHGs so that, by 2020,
those emissions are equal to what they were in 1990.
The stated goal of the ARB in the AB 32 scoping plan, was to
achieve 20% of the necessary reductions from a cap-and-trade
market in which regulated emissions sources buy and sell
credits that give the holder the right to emit a quantity of
GHGs. Two actions have been held thus far.
The 2012-13 Budget Act authorized the Department of Finance
(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.
To date, proceeds from the initial two auctions have raised
approximately $139 million.
AB 1532 (J. Perez, 2012 ) created the Greenhouse Gas Reduction
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Fund Investment Plan and Communities Revitalization Act to set
procedures for the investment of regulatory fee revenues
derived from the auction of greenhouse gas (GHG) allowances
pursuant to the cap and trade program adopted by the Air
Resources Board (ARB) under the California Global Warming
Solutions Act of 2006.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081