BILL ANALYSIS                                                                                                                                                                                                    Ó

          |                                                                 |
          |                   Senator Fran Pavley, Chair                    |
          |                    2013-2014 Regular Session                    |
          |                                                                 |

          BILL NO: SB 511                    HEARING DATE: April 23, 2013
          AUTHOR: Lieu                       URGENCY: No
          VERSION: April 1, 2013             CONSULTANT: Katharine Moore
          DUAL REFERRAL: No                  FISCAL: Yes
          SUBJECT: Natural resources: climate change: grants.
          The California Natural Resources Agency's (agency's) mission is  
          to "restore, protect and manage the state's natural, historical  
          and cultural resources for current and future generations using  
          creative approaches and solutions based on science,  
          collaboration and respect for all the communities and interests  
          involved."  The secretary of the agency is a member of the  
          state's Climate Action Team as well as several directors of the  
          departments within the agency.  Additionally, the agency, in  
          coordination with other state agencies, leads efforts to update  
          the state's Climate Adaptation Strategy.

          The California Air Resources Board's (board's) mission is "to  
          promote and protect public health, welfare and ecological  
          resources through the effective and efficient reduction of air  
          pollutants while recognizing and considering the effects on the  
          economy of the state," and one of its major goals is to reduce  
          the state's emission of greenhouse gases.

          The California Global Warming Solutions Act of 2006 (act)(AB 32,  
          Pavley/Nunez, c. 488, Statutes of 2006) set the goal of reducing  
          the state's greenhouse gas emissions to 1990 levels by 2020.   
          The board was required to develop a scoping plan to describe how  
          the emissions targets will be achieved.  The 2013 update to the  
          scoping plan, currently under development, will evaluate how the  
          state's greenhouse gas reduction strategies align with other  
          state policy priorities including water and natural resources.   
          One of the methods used to achieve the greenhouse gas emissions  
          reductions is through the market-based mechanism where certain  
          greenhouse gas emissions allowances are auctioned off.  Revenues  
          from the auctions must be used to mitigate greenhouse gas  


          emissions or the adverse effects caused by them, and the  
          proceeds, with specified exceptions, collected by the board must  
          be deposited in the Greenhouse Gas Reduction Fund (fund).   
          Moneys in the fund are available for appropriation by the  

          AB 1532 (Pérez, c. 807, Statutes of 2012) requires that the fund  
          be used for specified purposes to further the act's regulatory  
          purposes including the reduction of greenhouse gas emissions to  
          the benefit of disadvantaged communities, providing  
          opportunities for public and private entities to benefit from  
          statewide efforts to reduce greenhouse gas emissions, and by  
          funding natural resources-related conservation efforts, among  
          other provisions.

          SB 535 (De León, c. 535, Statutes of 2012) sets minimum  
          requirements for funding for projects in disadvantaged  
          communities (10%) and projects that benefit disadvantaged  
          communities (25%) paid for through the fund, among other  

          PROPOSED LAW
          This bill would:
                 Require the agency in coordination with the board to  
               develop guidelines for awarding grants for natural  
               resources-related projects that enhance greenhouse gas  
               emissions avoidance and sequestration.
                 Specify the scope and goals of the guidelines including  
               appropriate natural resources-related applications,  
               providing incentives for model pilot projects, providing  
               funds for conservation projects in disadvantaged  
               communities, leveraging other funds to promote the climate  
               benefits of conservation projects, and promoting projects  
               that provide multiple benefits.
                 Require that existing grant programs, as specified, and  
               state conservancies be used to implement or administer this  
                 Exempt the development of the guidelines from the  
               Administrative Procedures Act.

          According to the author, this bill "seeks to address a major  
          issue facing the legislature this year - how to expend auction  
          revenue in an effective manner that results in significant  
          reductions of greenhouse gas emissions.  SB 511 address this  
          question in proposing that a portion of the auction revenue  
          proceeds be used to fund incentives that can transform typical  


          natural resource programs into high-impact climate change  
          projects that reduce [greenhouse gases].  By channeling some of  
          the auction revenue proceeds to existing programs, SB 511  
          proposes to minimize administrative costs while realizing a  
          higher 'bang for the buck' for natural resources projects."

          "More importantly, the programs that SB 511 proposes to support  
          with auction revenues will reduce carbon dioxide and help the  
          state achieve its goals set forth by AB 32.  Science is showing  
          us exactly how habitat and wetland restoration, forest  
          conservation, agricultural and conservation easements and urban  
          greening projects can aid in the effort to avoid, reduce or  
          sequester carbon."

          None received

           This bill is a work-in-progress  .  While the general intent of  
          the bill is evident, there are elements of the bill that remain  
          unresolved or worthy of clarification.  For example, statements  
          in support of the bill clearly express the bill's intent to  
          allocate a portion of auction revenues to support natural  
          resources-related greenhouse gas emissions reduction and  
          sequestration projects, yet the bill itself, unlike others, is  
          silent on the revenue source.  Further, there may well be  
          competing priorities or criteria between the existing programs  
          the bill seeks to promote that may need to be resolved (e.g.  
          multiple definitions of disadvantaged communities).  In view of  
          this, the committee may wish to take the following actions:
                 Direct staff to continue working with the author's  
               office on the bill, should it pass the committee today, and
                 Make a few clarifying minor technical changes to the  
               bill (Amendment 1).
          Additionally, the committee may wish to bring the bill back  
          before the committee should its contents change substantially in  
          the future.

           Public participation in the development of grant criteria and  
          guidelines  .  In some instances, the development of grant  
          criteria and guidelines have specifically been exempted from the  
          rulemaking provisions of the Administrative Procedures Act (see,  
          for example, Health and Safety Code §44287) as they are here.   
          However, public participation in some form of the development of  
          grant criteria and guidelines is not unusual (see the prior  
          example and the program development associated with the  
          Integrated Regional Water Management Plan program (Water Code  


          §10541)).  The committee may wish to provide for public  
          participation in the development of these guidelines (Amendment  

           Specified programs and Conservancies  .  The existing competitive  
          grant programs specified in the bill in forestry, open space,  
          sustainable agriculture and watershed enhancements are the  
          California River Parkways Act of 2004, the Rangeland, Grazing  
          Land and Grassland Protection Act, the California Urban Forestry  
          Act of 1978 and those run by the California Coastal Conservancy,  
          the San Gabriel and Lower Los Angeles Rivers and Mountains  
          Conservancy, and the Santa Monica Mountains Conservancy.   
          Additionally, the San Diego River Conservancy, the Sierra Nevada  
          Conservancy, the Coachella Valley Mountains Conservancy, the  
          Baldwin Hills Conservancy, the San Joaquin River Conservancy,  
          and the Sacramento - San Joaquin Delta Conservancy may all  
          participate.  Of the state conservancies, only the California  
          Tahoe Conservancy (Government Code §66905 et seq.) is omitted.

           Existing programs  .  Proposition 84, passed by California voters  
          in 2006, includes guidance on climate change and funding for  
          related activities. Numerous conservancies and the agency itself  
          fund grant programs that, in part, focus on the natural  
          resources-related greenhouse gas reduction and sequestration  
          activities specified in this bill through Proposition 84 or  
          other funding sources.  These include, for example, the Urban  
          Greening Program for Sustainable Communities, the Strategic  
          Growth Council's Sustainable Communities planning grants and  
          incentives, the California Energy Commission's Alternative and  
          Renewable Fuel and Vehicle Technology Program, and the Coastal  
          Conservancy's climate change grants.  Both the agency and the  
          board coordinate and collaborate across jurisdictions with other  
          state entities on grant and other state programs (for example,  
          the agency and Caltrans on the Environmental Enhancement and  
          Mitigation Program).

           Related 2013 policy legislation
           SB 497 (Walters, 2013) would freely allocate any greenhouse gas  
          emissions allowances to and waive any related fees due from  
          colleges or universities. (before Senate Environmental Quality  

          SB 798 (De León/Pavley, 2013) would create the California Green  
          Investment Bank which would be able to receive appropriation  
          from the fund. (before Senate Governance and Finance Committee)

          AB 26 (Bonilla, 2013) would prohibit the Controller from using  


          moneys in the fund for cash flow loans to the General Fund.  
          (before Assembly Natural Resources Committee)

          AB 574 (Lowenthal, 2013) would require the board, in  
          consultation with the California Transportation Commission and  
          the Strategic Growth Council, to establish standards for the use  
          of moneys allocated from the fund for sustainable communities  
          projects, as specified, develop criteria for a regional grant  
          program and designate the regional granting authority. (before  
          Assembly Transportation Committee)

          AB 1073 (Eggman, 2013) would enact the Greenhouse Gas Reduction  
          through Recycling, Composting, and Recycled Content  
          Manufacturing Investment Program and require the Department of  
          Resources Recycling and Recovery to implement the program which  
          could include payments or grants for capital equipment. (before  
          Assembly Natural Resources Committee)

          AB 1375 (Chau, 2013) would create the Clean Technology  
          Investment Account within the fund and require the Legislature  
          to annually appropriate money from the fund into the Clean  
          Technology Investment Account. (before Assembly Natural  
          Resources Committee)


               AMENDMENT 1  
               Delete page 2, lines 14 - 21, inclusive and replace with:

               "(1) promote climate benefits from reducing greenhouse gas  
               emissions associated with transportation emissions and from  
               reducing or sequestering greenhouse gas emissions  
               associated with improvements in energy conservation or  
               efficiency, promoting development of sustainable  
               communities, improving the siting of  
               environmentally-sensitive distributed energy generation,  
               improving regional water supply from regional water  
               filtration and watershed enhancements, improving forest  
               management, or increasing the urban forestry canopy."

               On page 2, line 22, replace "incentivize" with "provide  
          incentives for"

               On page 2, line 26 replace "climate value" with "benefits  
          to the climate" 



               On page 2, revise line 28 to read "that provide important  
          benefits to the climate." 

               AMENDMENT 2 
               On page 3, between lines 19 and 20, insert:

               "(e) The development and adoption of the guidelines adopted  
               pursuant to this part shall provide for public  



          Amigos de los Rios
          Audubon California
          Benicia Tree Foundation
          Bolsa Chica Land Trust
          California ReLeaf
          California Urban Forests Council
          Defenders of Wildlife
          Environmental Defense Fund
          Goleta Valley Beautiful
          Huntington Beach Tree Society
          International Society of Arboriculture, Western Chapter
          Keep Eureka Beautiful
          Land Trust of Santa Cruz County
          Los Angeles Conservation Corps
          Marin Agricultural Land Trust
          Marin ReLeaf
          North East Trees
          Oakland Landscape Committee 
          Our City Forest
          Pacific Forest Trust
          Peninsula Open Space Trust
          Richmond Trees
          Roseville Urban Forest Foundation
          Sacramento Tree Foundation
          Sonoma County Board of Supervisors
          Sonoma County Agricultural Preservation and Open Space District
          Tahoe Fund
          The Big Sur Land Trust
          The Trust for Public Land
          Tree Davis
          Tree Foundation of Kern
          Tree Fresno
          Tree Musketeers
          Tree Partners Foundation
          Urban Releaf
          Urban Tree Foundation
          Woodland Tree Foundation

          None Received