BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 862|
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UNFINISHED BUSINESS
Bill No: SB 862
Author: Senate Budget and Fiscal Review Committee
Amended: 6/13/14
Vote: 21
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : Not available
SUBJECT : Budget Act of 2014: Cap-and-Trade Expenditure Plan
SOURCE : Author
DIGEST : This bill makes various changes to implement the
resources, environmental protection, energy, and agricultural
budget actions adopted as part the 2014-15-Budget package.
Assembly Amendments delete the Senate version of the bill, which
expressed legislative intent to enact statutory changes relating
to the Budget Act, and instead add the current language.
ANALYSIS : This bill makes the following statutory changes:
1. Long Term Cap-and-Trade Expenditure Plan . Establishes a
long-term plan for the expenditure of cap-and-trade revenues
consistent with all existing constitutional and statutory
requirements for use and allocation of cap-and-trade funds
beginning in 2015-16.
2. 35% of Funds for Transit, Affordable Housing, and
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Sustainable Communities . Provides a continuous appropriation
of 35% of the cap-and-trade funds for investments in transit,
affordable housing, and sustainable communities. Of this,
10% is for transit and inter-city rail capital programs
administered by the Department of Transportation (Caltrans)
and the California Transportation Commission (CTC); 5% is for
low carbon transit operations through the State Transit
Assistance formula; and 20% is for affordable housing and
sustainable communities, with half of this funding going to
affordable housing projects that demonstrate a reduction in
greenhouse gases.
3. 25% of Funds for High-Speed Rail . Provides a continuous
appropriation of 25% of the cap-and-trade funds to continue
the construction of high-speed rail, in addition to $400
million from the repayment of the cap-and-trade funds loaned
to the General Fund in 2013.
4. 40% of Funds for Low Carbon Transportation, Energy, Natural
Resources, and Other Programs . Provides unallocated funding
that will be appropriated annually in the budget or
legislation for investments in programs that include low
carbon transportation, energy efficiency and renewable
energy, and natural resources and waste diversion.
5.Identifies Cap-and-Trade Programs . These programs are:
Transit, Affordable Housing, and Sustainable Communities
Program
Transit and Intercity Rail Program
Low Carbon Transit Operations Program
High Speed Rail Program
Clean Vehicle Rebate Project
Energy Efficiency State Property Revolving Fund
Timberland Environmental Impact Report for Carbon
Sequestration and Fuel Reduction Program
Waste Diversion and Greenhouse Gas Reduction Financial
Assistance Program
1. Establishes Accountability and Reporting Provisions . These
include requiring each state agency to demonstrate to the
California Air Resources Board (ARB) how expenditures reduce
greenhouse gas emissions, requires the ARB to develop
guidelines for this purpose, articulates that cap-and-trade
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expenditures must have a clear nexus to the greenhouse gas
reduction goals, and stipulates that overall cap-and-trade
expenditures must comply with existing statutory requirements
that at least 25% of the funds are spent on disadvantaged
communities.
2. Creates the Transit, Affordable Housing and Sustainable
Communities Program. The Affordable Housing and Sustainable
Communities Program is a competitive grant program
administered by the Strategic Growth Council (SGC). The
goals of this program are to reduce air pollution, improve
conditions in disadvantaged communities, support public
health, improve connectivity and accessibility, increase
mobility to implement the Active Transportation Program,
increase transit ridership, preserve and develop affordable
housing, and protect agriculture lands to support infill
development. Eligible projects include intermodal affordable
housing projects, transit capital projects that support
transit ridership, active transportation programs, such as
bicycle and pedestrian programs, and transit-oriented
development projects. The SGC will develop program
guidelines, in consultation with the ARB using a public
process in coordination with metropolitan planning
organizations. Fifty percent of all funding in this program
will benefit disadvantaged communities.
3. Creates the Intercity Rail Capital Program . This grant
program is administered by the State Transportation Agency
and awarded by the CTC. Projects that may be eligible for
funding include rail capital projects including rail cars and
improving connectivity to existing and future rail systems,
intercity, commuter, and urban rail projects that increase
service levels, improve reliability, and decrease travel
time, rail and transit integration, and Bus Rapid Transit and
other bus transit investments. All expenditures must
demonstrate a reduction in greenhouse gas emissions, 25% must
benefit disadvantaged communities, and the CTC must consider
co-benefits when awarding funding.
4. Creates the Low Carbon Transit Operations Program . Provides
funding through the existing State Transit Assistance program
to reduce greenhouse gas emissions by supporting new or
expanded bus or rail services or expanded intermodal transit
facilities. Caltrans, in coordination with the ARB will
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develop guidelines for the use of these funds and each
transit agency must have a plan approved by Caltrans prior to
expenditure of funds. Fifty percent of funding spent on
programs benefit disadvantaged communities. This provision
only applies to local agencies that have identified
disadvantaged communities in their service area.
5. Creates the Energy Efficiency and Renewable Energy Program .
This program allows for the use of cap-and-trade funds for
weatherization activities in low-income communities.
Requires the Department of Community Services and Development
to develop guidelines for the program.
6. Makes Changes to the Energy Efficiency State Property
Revolving Fund. These changes allow for the use of
cap-and-trade funds for a revolving loan fund to finance
energy efficiency activities in state owned-buildings.
7. Creates the Timberland Environmental Impact Report for
Carbon Sequestration and Fuel Reduction Program . This
program, which allows for the use of cap-and-trade funds for
carbon sequestration and to resist wildfires through
agreements with landowners, will be administered by the
Department of Forestry and Fire Protection.
8. Creates the Waste Diversion and Greenhouse Gas Reduction
Financial Assistance Program . This is a revolving loan
program administered by CalRecycle to fund organic
composting, anaerobic digestion and recycling.
9. Renewable Energy Projects . Allows renewable energy projects
at the California Department of Corrections and
Rehabilitation to be included in net energy metering as an
eligible customer-generator.
10.Clean Vehicle Rebate Program . Appropriates $20 million in
greenhouse gas reduction revenue for the Clean Vehicle Rebate
Project to replace existing Vehicle Inspection and Repair
Account and Air Quality Improvement Fund revenues currently
dedicated for that purpose.
11.Strategic Growth Council Membership . Expands the membership
of the SGC to include two public members, one appointed by
the Assembly and one appointed by the Senate.
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12.Severability . Contains a severability clause.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
RM:nl 6/15/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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