BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 156 (Perea) - California Global Warming Solutions Act of  
          2006: disadvantaged communities.
          
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          |Version: August 18, 2015        |Policy Vote: E.Q. 6 - 1         |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 24, 2015   |Consultant: Marie Liu           |
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          This bill meets the criteria for referral to the Suspense File. 


          Bill  
          Summary:  AB 156 would establish a technical assistance grant  
          program to help eligible applicants identify and develop  
          projects that are eligible to receive funding from the  
          Greenhouse Gas Reduction Fund (GGRF).


          Fiscal  
          Impact:  
           Unknown ongoing costs, likely in the mid-hundreds of thousands  
            to low millions, depending on the size of the grant program,  
            to the GGRF (special fund) for the ARB to administer the grant  
            program
           Cost pressures of at least $7 million to the GGRF (special  
            fund) for ARB or a third-party to provide technical  
            assistance.


          Background:  The California Global Warming Solutions Act of 2006 (referred  







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          to as AB 32, HSC §38500 et seq.) 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. All monies, except for fines and  
          penalties, collected pursuant to a market-based mechanism are  
          deposited in the Greenhouse Gas Reduction Fund (GGRF)  
          (Government Code §16428.8). 
          Existing law requires that the GGRF only be used to facilitate  
          the achievement of reductions of GHG emissions consistent with  
          AB 32 (HSC §39710 et seq.). To this end, the Department of  
          Finance, in consultation with the ARB and any other relevant  
          state agencies, is required to develop, as specified, a  
          three-year investment plan for the moneys deposited in the GGRF.  
          The investment plan must 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. Additionally, the ARB, in  
          consultation with CalEPA, is required 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.




          Proposed Law:  
            This bill would require the ARB, upon appropriation, to  
          establish a comprehensive technical assistance grant program for  
          eligible applicants assisting communities that the state board  
          determines require technical assistance in accessing programs  
          that allocate money from the GGRF. Priority would be given to  
          those communities demonstrating the greatest need for increased  
          capacity. Eligible applicants include regional agencies and  
          nonprofit organizations coordinating with local governments. 
          Grants could be used for the following activities: 
           Identifying appropriate grant programs, 
           Developing competitive project proposals,  
           Coordinating existing local programs that reduce GHG emissions  
            with new programs that receive GGRF funding,
           Conducting community outreach to residents of eligible  
            communities regarding consumer programs receiving funding from  








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            GGRF or reducing GHG emissions


          ARB would be required to coordinate with the California  
          Environmental Protection Agency (CalEPA) as well as agencies  
          that administer GGRF funds in the development of grant program  
          guidelines.


          This bill would require the investment plan to allocate money to  
          fund this technical assistance program.


          This bill would also require the ARB to prepare and post on its  
          website a report on projects funded to benefit disadvantaged  
          communities. The report is to include the following information  
          on the project: a general description, location of  
          implementation, estimated date of completion, award amount, and  
          the status of any monies not awarded in accordance with the  
          investment plan and the reasons for those funds not being  
          awarded.




          Related  
          Legislation:  SB 398 would create a technical assistance and  
          outreach program, administered by the secretary of the  
          California Environmental Protection Agency (CalEPA), for small  
          businesses and small nonprofits who are interested in applying  
          for grants from programs funded by the Greenhouse Gas Reduction  
          Fund (GGRF). SB 398 is awaiting hearing in the Assembly  
          Appropriations Committee. 
          AB 1179 (Rendon) would require the ARB to prepare and post on  
          its website a report on the GGRF funded projects, identical to  
          the requirement in this bill. Assembly Appropriations held AB  
          1179 was held under suspense and incorporated the language in AB  
          1179 into AB 156, also adding Assembly Member Rendon as a  
          principle co-author.




          Staff  








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          Comments:  To develop and provide a comprehensive technical  
          assistance program for disadvantaged communities for all GGRF  
          programs, ARB estimates that it would need 40 positions at $7.4  
          million plus 2 additional positions at $280,000 annually for the  
          first two years. This estimate assumes that ARB would be the  
          entity providing the technical assistance. This estimate  
          includes 20 positions to provide guidance and feedback to  
          communities in developing competitive projects to apply for  
          GGRF-funded grants and 10 positions to conduct outreach to local  
          governments, non-profits, and others on consumer programs aimed  
          at reducing GHG emissions. ARB notes that there are over 2,000  
          census tracks in the state that meet the definition of "eligible  
          community" in the bill. Each of these communities could receive  
          technical assistance for GGRF-funded programs run by 14  
          administering agencies with 40 sub-programs. Staff notes that  
          this bill aims to provide assistance in developing grant  
          proposals. This could require a significant amount of workload  
          per project. Depending on the depth of assistance given, the 20  
          positions estimated for this responsibility could be  
          conservative. 
          According to the author's staff, the intent of this bill is to  
          create a grant program that would allocate grants to  
          third-parties to provide the technical assistance instead of the  
          ARB providing the technical assistance itself. Staff notes that  
          both program designs could be allowed under the current language  
          of the bill.  Staff recommends  that the bill be amended to  
          clearly reflect the author's intent. If a third-party is  
          providing the assistance, the bill should also clarify whether  
          the third-party can receive a grant to provide technical  
          assistance to a single project or a single applicant.


          Staff believes the costs associated with the grant program are  
          approximately the same, regardless of who is providing the  
          technical assistance, just distributed differently. If the  
          assistance is to be conducted by a third-party, ARB will likely  
          need approximately 5% of the grant program's appropriation for  
          administration with the remaining amount being issued through  
          grants. 


          Staff notes that there is a very high probability that the grant  
          program would be oversubscribed. If the program is  
          oversubscribed, the ARB will be in a position of choosing which  








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          applicants receive funding, therefore giving those communities  
          an advantage over other eligible communities who don't receive  
          assistance. This early advantage could be especially significant  
          given that the assistance could include project development.  
          Providing an early advantage would be especially inappropriate  
          in programs administered by the ARB. Having a third-party  
          administer the technical assistance creates some distance  
          between the awarding agency and potential applicants, especially  
          if the third-party receives a grant to help with multiple  
          projects and applicants. However there still could be the  
          perception, if not the reality, that the technical assistance  
          program would be choosing early winners and losers for the  
          various GGRF-funded grant programs. Staff believes it is not  
          likely that enough funding could be provided to this grant  
          program to avoid oversubscription.




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