BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                              Senator Wieckowski, Chair
                                2015 - 2016  Regular 
           
          Bill No:           AB 156
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          |Author:    |Perea                                                |
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          |Version:   |7/1/2015               |Hearing      |7/15/2015       |
          |           |                       |Date:        |                |
          |-----------+-----------------------+-------------+----------------|
          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Laurie Harris                                        |
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          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  







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             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.









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          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  








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             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.  








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             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.  








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             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  








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             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."








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             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








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          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  









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           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 --