BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: AB 156 ----------------------------------------------------------------- |Author: |Perea | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |7/1/2015 |Hearing |7/15/2015 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Laurie Harris | | | | ----------------------------------------------------------------- SUBJECT: California Global Warming Solutions Act of 2006: disadvantaged communities. ANALYSIS: 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, to approve a statewide GHG emissions limit equivalent to that level that will be achieved by 2020, and to adopt GHG emissions reductions measures by regulation. ARB is authorized to include the use of market-based mechanisms to comply with the regulations. (Health and Safety Code (HSC) §38500 et seq.) 2) Establishes the Greenhouse Gas Reduction Fund (GGRF) as a special fund in the State Treasury; requires that all moneys, except for fines and penalties, collected pursuant to a market-based mechanism be deposited in the fund; and requires the Department of Finance, in consultation with the state board and any other relevant state agency, to develop, as specified, a three-year investment plan for the moneys deposited in the GGRF. (Government Code §16428.8) 3) Requires that GGRF moneys be used to facilitate the achievement of reductions of GHG emissions in the state consistent with the Global Warming Solutions Act of 2006. Appropriations of the GGRF funds in the annual budget are AB 156 (Perea) Page 2 of ? required to be consistent with the three-year investment plan. (HSC §39712) 4) Under the GGRF Investment Plan and Communities Revitalization Act ("Act"), requires the California Environmental Protection Agency (CalEPA) to identify disadvantaged communities for investment opportunities related to the Act. (HSC §39711) 5) Requires the GGRF investment plan to allocate a minimum of 25% of the funds to projects that benefit disadvantaged communities and to allocate 10% of the funds to projects located within disadvantaged communities. (HSC §39713) 6) Requires the ARB, in consultation with the California Environmental Protection Agency (CalEPA), to develop funding guidelines for administering agencies receiving allocations of GGRF funds that include a component for how agencies should maximize benefits to disadvantaged communities. (HSC §39715) 7) Requires that moneys in the GGRF be available, upon appropriation, to the ARB and administering agencies for administrative purposes in carrying out the Act. (HSC §39718) This bill: 1) Requires the ARB to prepare and post on its Internet Web site a report on projects funded to benefit disadvantaged communities, including for each project: a general description, location of implementation, estimated date of completion, and award amount, as well as the status of any moneys in the fund not awarded pursuant to the Section and why those moneys were not awarded. 2) Requires the investment plan, developed pursuant to Section 39716, to allocate GGRF moneys to the ARB to establish and implement a technical assistance program for eligible applicants assisting disadvantaged communities that ARB determines require assistance in accessing GGRF moneys. Eligible applicants include, but are not limited to, regional agencies and nonprofit organizations coordinating with local governments. AB 156 (Perea) Page 3 of ? 3) Redefines "disadvantaged communities" to mean census tracts identified as disadvantaged pursuant to Section 39711 or with median incomes at or below 80 percent of the statewide median household income. 4) Requires the ARB, in consultation with CalEPA and GGRF administering agencies, to develop guidelines to implement the program and to provide an opportunity for public comment prior to finalizing the guidelines. 5) Requires ARB to prioritize technical assistance to communities demonstrating the greatest need for increased capacity to access programs using GGRF moneys. 6) Requires that the established program provide assistance to eligible applicants with any of the following activities: a) Identifying state agencies with appropriate grant programs. b) Developing competitive project proposals. c) Coordinating existing local programs to reduce GHG emissions with new programs receiving moneys pursuant to the chapter. d) Conduct community outreach to residents of disadvantaged communities that the ARB determines require assistance on programs, as specified, on consumer programs receiving state or local moneys pursuant to the chapter or other programs that reduce GHGs. 7) Requires that technical assistance promote programs that reduce emission of GHGs and demonstrate a direct, meaningful benefit to disadvantaged communities and may have cobenefits as specified. Background 1) Cap-and-Trade Expenditure Plan in the Annual Budget & Administering Agencies. For the 2014-15 budget year, the Budget provides $832 million of cap-and-trade proceeds to reduce GHG emissions and meet SB AB 156 (Perea) Page 4 of ? 535 (de León, Chapter 830, Statutes of 2012) goals. Of the Budget, 60% is permanently allocated to high-speed rail, public transit, affordable housing, and sustainable communities, administered by four departments. Seven additional departments receive appropriations to administer programs for low carbon transportation, energy efficiency upgrades and energy efficiency for public buildings, agricultural and operational efficiency, wetlands and watershed restoration, fire prevention and urban forestry projects, and waste diversion. 2) Disadvantaged Communities. CalEnviroScreen was developed by OEHHA, at the request of CalEPA and pursuant to the GGRF Investment Plan and Communities Revitalization Act (SB 535, de León, Chapter 830, Statutes of 2012), to determine a list of disadvantaged communities in California that are the most vulnerable and pollution-burdened. The tool will be used to help direct those GGRF investments targeted for disadvantaged communities, as well as to guide CalEPA in administering its Environmental Justice Small Grants Program and prioritizing resources for cleanup and abatement projects and outreach efforts by the Agency. Using CalEnviroScreen, CalEPA determined a list of disadvantaged communities throughout California in October 2014. According to CalEPA, the current version incorporates 19 indicators, including those for exposures, environmental effects, sensitive populations, and socioeconomic factors. The areas within which the majority of disadvantaged communities were identified included the San Joaquin Valley, parts of Los Angeles and the Inland Empire, and large portions of the Coachella Valley and Mojave Desert, in addition to communities located near industrial areas and major roadways. 3) ARB Reporting. The ARB currently develops an annual report which includes the program-level status of funds appropriated from the GGRF targeted to disadvantaged communities and benefits that have been achieved by each state agency. However, the report does not include project-level information. AB 156 (Perea) Page 5 of ? The ARB has reportedly requested approval from the California Technology Agency (CTA) to develop and implement an information technology system that would track individual GGRF-funded projects implemented by state agencies and include a public interface for information such as that specified by this bill. Comments 1) Purpose of Bill. According to the author, "AB 156 would ensure that disadvantaged communities have the ability to apply competitively for Greenhouse Gas Reduction Fund money by establishing a technical assistance program at the ARB. This bill will increase access for disadvantaged communities to cap-and-trade revenue and assist them with technical assistance funding to navigate the pre-planning and application process. The application process can be overwhelming for communities most severely impacted by carbon emissions and without technical assistance these communities will not have the means to compete with others for grants." 2) Use of GGRF Moneys for Technical Assistance? By using GGRF moneys for technical assistance, some of the funds would likely assist project proposals that are not funded. Therefore, the moneys would not facilitate the reduction of GHG emissions, as required. However, ARB and administering agencies are allowed to use GGRF moneys for "administrative purposes," pursuant to Section 39718 of the Health and Safety Code for implementation of the GGRF Investment Plan and Communities Revitalization Act. Technical assistance and outreach could fall within this category of approved use for the moneys. Legislative Counsel provided a written opinion that "it is [their] opinion that the Legislature may lawfully appropriate moneys from the Greenhouse Gas Reduction Fund to pay for the technical assistance program proposed in Assembly Bill No. AB 156 (Perea) Page 6 of ? 156, as amended April 27, 2015." That version of the bill included technical assistance to eligible applicants assisting both disadvantaged communities and those with median incomes at or below 80% of the statewide median income and that the state board determines require technical assistance, as in the current version amended July 1, 2015. 3) Precedent for Technical Assistance for Disadvantaged Communities. AB 92 (Assembly Committee on Budget, Chapter 2, Statutes of 2015) established the Office of Sustainable Water Solutions within the State Water Resources Control Board. The Office is authorized to provide technical assistance to disadvantaged communities and small drinking water systems and wastewater systems, including grant application assistance, outreach and education in vulnerable communities, financial management support, and facilitation of discussions within and between communities. SB 732 (Steinberg, Chapter 729, Statutes of 2008), within the Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006, established implementation provisions, including a specification that, "State agencies that are authorized to award a loan or grant financed by this division shall provide technical assistance with regard to the preparation of an application for a loan or grant in a manner that, among other things, addresses the needs of economically disadvantaged communities." 4) Who Needs Assistance? In the Assembly Natural Resources Committee, an amendment was taken to expand the technical assistance program from eligible applicants assisting just disadvantaged communities as defined by the CalEnviroScreen tool to also encompass communities with median incomes at or below 80% of the median household income that ARB determines need assistance. It would stand to reason that ARB would determine the need for assistance not solely on income, but also on the GHG impact burdens as specified in the tool. Through CalEnviroScreen, CalEPA has identified the top 25% of the highest scoring census tracts to identify disadvantaged AB 156 (Perea) Page 7 of ? communities. If disadvantaged communities were broadened to include communities with median incomes at or below 80% of the statewide median income, the disadvantaged community classification would expand to encompass a larger percentage of the population. It follows that there would be less money available per eligible applicant for any funds budgeted for technical assistance. The basic questions surrounding these changes are: Which communities most need technical assistance in applying for moneys from the greenhouse gas reduction fund given the requirements of the fund's use, and how would those communities be prioritized? What capacity is available for meaningful technical assistance? 1) What Type of Assistance is Appropriate? The bill currently tasks ARB with providing multiple types of technical assistance, some of which the board is already working to implement, such as assistance with program-specific requirements and eligibility criteria. An additional provision in the bill would task ARB with providing assistance to eligible applicants in developing competitive project proposals. ARB is the agency responsible, in consultation with the California Environmental Protection Agency (CalEPA), for developing funding guidelines for administering agencies receiving allocations of GGRF. As well, ARB is involved in the development of the investment plan. Thus, the committee may wish to consider whether it is appropriate to have ARB both overseeing GGRF moneys and guideline development and also helping selected groups to develop proposal for the moneys. 2) Clarifying Amendments. a) The current bill language redefines a disadvantaged community within a single chapter of code. This causes inconsistency and confusion. Therefore, an amendment is needed to define the communities receiving assistance in the bill language as "eligible communities" instead of "disadvantaged communities." AB 156 (Perea) Page 8 of ? b) The definition for disadvantaged communities also refers to communities with "median incomes" in comparison to statewide "median household incomes." This is inconsistent, and to clarify, an amendment is needed to remove the word "household" to state "communities with a median income at or below 80 percent of the statewide median income" as reflected in the amendments taken in the Assembly Natural Resources Committee. Related/Prior Legislation SB 398 (Leyva) would establish the Green Assistance Program (GAP) to be administered by the Secretary of CalEPA in concert with environmental justice programs to provide technical assistance and outreach to small businesses, small nonprofits, and disadvantaged communities in applying for GGRF moneys. SB 398 is currently referred to the Assembly Natural Resources Committee. AB 1179 (Rendon) would require ARB to prepare and post on its Internet Web site a report on the GGRF funded projects providing benefits to, or located within, disadvantaged communities. AB 1179 was held under suspense in the Assembly Committee on Appropriations, and the language of the bill has been incorporated into AB 156, also adding Assembly Member Rendon as a principle co-author, with agreement from both authors and Assembly Appropriations staff. SB 535 (De León, Chapter 830, Statutes of 2012) required CalEPA to identify disadvantaged communities for investment opportunities using the GGRF. OEHHA developed CalEnviroScreen pursuant to this requirement to determine the state's most pollution-burdened and vulnerable communities. SOURCE: Valley Clean Air Now (Valley CAN) & Leadership Counsel for Justice and Accountability SUPPORT: American Lung Association in California Breathe California California Bicycle Coalition California Coalition for Rural Housing California Climate and Agriculture Network AB 156 (Perea) Page 9 of ? California Environmental Justice Alliance California Equity Leaders Network California Institute for Rural Studies California League of Conservation Voters California ReLeaf California Vanpool Authority Catholic Charities, Diocese of Stockton Center for Sustainable Neighborhoods City of Firebaugh, City Manager Kenneth McDonald City of Fowler, City Manager David Elias City of Huron, Mayor Sylvia V. Chavez City of Kerman, City Manager Luis Patlan City of Kingsburg, Mayor Chet Reilly City of Mendota, City Manager Vince DiMaggio City of Parlier, City Manager Israel Lara, Jr. City of Reedley, Mayor Ray Soleno City of Sanger, Mayor Joshua Mitchell Clean Water Action Community Water Center Creswell Consulting Environmental Defense Fund Fresno Chamber of Commerce Fresno Council of Governments Housing California La Cooperativa Campesina Latino Coalition for a Healthy California Leading Age California Public Interest Law Project Regional Asthma Management & Prevention (RAMP) Rural Smart Growth Task Force Safe Routes to School National Partnership San Joaquin Valley Air Pollution Control District Self Help Enterprises Sierra Business Council Sierra Club California South Coast Air Quality Management District (SCAQMD) The Greenling Institute The Nature Conservancy Union of Concerned Scientists Valley Ag Water Coalition OPPOSITION: None received AB 156 (Perea) Page 10 of ? ARGUMENTS IN SUPPORT: A coalition of environmental and public health advocates state, "This bill will help bridge the gap for those who could most benefit from co-benefits associated with reduced greenhouse gas emissions but have difficulty applying for available funds. Too often, DACs [disadvantaged communities] do not have the staff capacity of resources to identify potential funding opportunities or assemble detailed and competitive grant applications. AB 156 has the potential to make DACs more competitive by helping them identify opportunities and navigate the application and research process to apply and receive these funds." -- END --