BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1447
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          ASSEMBLY THIRD READING
          AB 1447 (Waldron and V. Manuel Pérez)
          As Amended  April 22, 2014
          Majority vote

           NATURAL RESOURCES   9-0         TRANSPORTATION      16-0        
           
           ----------------------------------------------------------------- 
          |Ayes:|Chesbro, Grove, Bigelow,  |Ayes:|Lowenthal, Linder,        |
          |     |Garcia, Muratsuchi,       |     |Achadjian, Ammiano,       |
          |     |Patterson,                |     |Bloom, Bonta, Buchanan,   |
          |     |Skinner, Stone, Williams  |     |Daly, Frazier, Gatto,     |
          |     |                          |     |Holden, Logue, Nazarian,  |
          |     |                          |     |Patterson, Quirk-Silva,   |
          |     |                          |     |Waldron                   |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           APPROPRIATIONS      17-0                                    

           Ayes:Gatto, Bigelow, Bocanegra, 
               Bradford, Ian Calderon, Campos, 
               Donnelly, Eggman, Gomez, 
               Holden, Jones, Linder, Pan, Quirk, 
               Ridley-Thomas, Wagner, Weber

           SUMMARY  :  Clarifies that eligible investments of moneys  
          appropriated from the Greenhouse Gas Reduction Fund (GHGRF) may  
          include traffic signal synchronization when the project is  
          designed and implemented to achieve cost-effective reductions in  
          greenhouse gas (GHG) emissions and includes specific reduction  
          targets and metrics to evaluate the project's effect.

           EXISTING LAW  :

          1)Requires the Air Resources Board (ARB), pursuant to California  
            Global Warming Solutions Act of 2006 [AB 32 (Núñez), Chapter  
            488, Statutes of 2006], 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.

          2)Authorizes ARB to permit the use of market-based compliance  
            mechanisms to comply with GHG reduction regulations, once  








                                                                  AB 1447
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            specified conditions are met.

          3)Establishes the GHGRF 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  
            (i.e., the cap-and-trade program adopted by ARB under AB 32)  
            to be deposited in the GHGRF and available for appropriation  
            by the Legislature.

          4)Establishes the GHGRF Investment Plan and Communities  
            Revitalization Act [AB 1532 (John A. Pérez), Chapter 807,  
            Statutes of 2012] to set procedures for the investment of GHG  
            allowance auction revenues.  AB 1532 authorizes a range of GHG  
            reduction investments and establishes several additional  
            policy objectives.

          5)Requires the investment plan 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 [SB 535  
            (De Leon), Chapter 830, Statutes of 2012].  

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, no direct fiscal impact.  Traffic signal  
          synchronization projects that reduce GHG emissions are eligible  
          for funding from the GHGRF.

           COMMENTS  :   

          The Highway Safety, Traffic Reduction, Air Quality, and Port  
          Security Bond Act of 2006, approved by the voters as Proposition  
          1B on November 7, 2006, provided $250 million to fund traffic  
          signal synchronization or other technology-based improvements to  
          improve safety, operations and the effective capacity of local  
          streets and roads.  SB 88 (Budget and Fiscal Review Committee),  
          Chapter 181, a 2007 budget trailer bill, allocated $150 million  
          to the City of Los Angeles.  The remaining $100 million was  
          allocated in much smaller amounts by the California  
          Transportation Commission to jurisdictions around the state.

          The 2012-13 Budget Act authorized Department of Finance (DOF) to  
          allocate at least $500 million from cap-and-trade revenue, and  
          make commensurate reductions to General Fund (GF) expenditure  








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          authority, to support the regulatory purposes of AB 32.  AB 1532  
          established a long-term spending strategy for moneys in the  
          GHGRF, including procedures for deposit and expenditure of  
          cap-and-trade auction revenues pursuant to an investment plan.   
          AB 1532 specifically authorizes funding for transportation  
          projects that reduce GHG emissions.

          While DOF and ARB developed a three-year investment plan for the  
          auction proceeds pursuant to AB 1532, the 2013-14 Budget Act  
          provided that the first $500 million in auction revenue be  
          loaned to the GF and did not appropriate any funds pursuant to  
          the investment plan.  For the 2014-15 Budget, the Governor has  
          proposed spending $850 million on a variety of programs,  
          including $250 million for High Speed Rail and approximately  
          $350 million for other transportation-related investments.   
          However, no funds have been proposed for traffic signal  
          synchronization.


           Analysis Prepared by  :    Lawrence Lingbloom / NAT. RES. / (916)  
          319-2092 


                                                                FN: 0003503