BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                               Senator Wieckowski, Chair
                                 2015 - 2016  Regular 
           
          Bill No:            AB 197
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          |Author:    |Eduardo Garcia                                       |
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          |Version:   |6/8/2016               |Hearing      |6/29/2016       |
          |           |                       |Date:        |                |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Rebecca Newhouse                                     |
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          SUBJECT:  State Air Resources Board:  greenhouse gases.

            ANALYSIS:
          
          Existing law:  
          
          1) Establishes the California Air Resources Board (ARB) with 14  
             members, 12 of which are appointed by the Governor with consent  
             of the Senate, and two members appointed by the Senate Committee  
             on Rules and the Speaker of the Assembly, respectively.  Of the  
             12 members appointed by the Governor, six must have specified  
             qualifications and six must be board members from air districts,  
             and the two members of the Legislature are required to be  
             persons who work directly with pollution-burdened and vulnerable  
             communities. (Health and Safety Code §39510)

          2) Existing law, under the California Global Warming Solutions Act  
             of 2006 (HSC §38500 et seq.):

             a)    Requires ARB to determine the 1990 statewide greenhouse  
                gas (GHG) emissions level and approve a statewide GHG  
                emissions limit that is equivalent to that level, to be  
                achieved by 2020, and to adopt GHG emissions reductions  
                measures by regulation to achieve the maximum technologically  
                feasible and cost-effective reductions in GHG emissions in  
                furtherance of achieving the statewide GHG emissions limit.  

             b)    Requires ARB when adopting regulations, to the extent  
                feasible and in furtherance of achieving the statewide GHG  
                goal, to do the following:







          AB 197 (Eduardo Garcia)                                 Page 2 of ?
          
          

              i)       Ensure that activities undertaken to comply with the  
                   regulations do not disproportionately impact low-income  
                   communities.

              ii)      Ensure that activities pursuant to the regulations do  
                   not interfere with efforts to achieve and maintain federal  
                   and state ambient air quality standards and to reduce  
                   toxic air contaminant emissions, and consider  
                   cost-effectiveness of these regulations.

              iii)     Consider overall societal benefits, including  
                   reductions in other air pollutants, diversification of  
                   energy sources, and other benefits to the economy,  
                   environment, and public health.

              iv)       Consider cost-effectiveness of these regulations.

             c)    Authorizes ARB to include the use of market-based  
                mechanisms to comply with the regulations.  

          This bill:  

          1) Establishes the Joint Legislative Committee on Climate Change  
             Policies, consisting of three members of the Senate and three  
             members of the Assembly, to ascertain facts and make  
             recommendations to the Legislature concerning the state's  
             climate change programs and policies.

          2) Requires ARB to consider adopting measures to achieve the  
             statewide GHG emissions limit based on the following priority:

             a)    Measures that result in direct GHG emissions reductions  
                from large stationary sources, such as refineries, and the  
                transportation sector in the most technologically feasible  
                and cost effective manner possible that accounts for the  
                societal costs of GHG emissions.

             b)    Measures that result in direct reductions in GHG emissions  
                from sources other than large stationary sources and  
                transportation in the most technologically feasible and cost  
                effective manner possible that accounts for the societal  
                costs of GHG emissions.

          3) Requires ARB rank GHG emission reduction measures based on the  








          AB 197 (Eduardo Garcia)                                 Page 3 of ?
          
          
             reductions in GHG emissions, criteria pollutants, and toxic air  
             contaminants, and cost-effectiveness.

          4) Requires ARB to make all data related to the above ranking  
             available to the public and present on the rankings annually at  
             a regular ARB meeting.

          5) Establishes six-year terms for voting members of ARB.

          6) Specifies that a member of ARB whose appointment satisfies local  
             air district membership requirements for ARB's makeup, shall not  
             be a member of ARB effective immediately if they cease to hold  
             the qualifying membership of a local air district.

          7) Requires that two Legislative members serve as ex-officio,  
             nonvoting members of ARB, with one member appointed by the  
             Senate Committee on Rules, and the other member appointed by the  
             Speaker of the Assembly. 

          8) Provides that the provisions of this bill are only operative if  
             SB 32 (Pavley) is enacted and becomes law on or before January  
             1, 2017.

            Background
          
          1) Air Resources Board.  The Air Resources Board was created in  
             1967 through the Mulford-Carrell Act, which combined two  
             Department of Health bureaus, the Bureau of Air Sanitation and  
             the Motor Vehicle Pollution Control Board. 

             AB 1062 (Costa, Chapter 579, Statutes of 1993) added a public  
             member and a permanent member representing the San Joaquin  
             Valley Unified Air District, to increase the board's membership  
             from 9 to 11. 

             In 2012, AB 146 (Dickinson, Chapter 522, Statutes of 2012)  
             expanded the board membership from 11 to 12, adding a  
             requirement that one member represent an air district in the  
             Sacramento region. 

             Six of the board members must have certain qualifications  
             (e.g., automotive engineering; chemistry, meteorology, or  
             related field; surgeon or an authority on health effects).  The  
             other 6 members must be board members from the following  
             entities:  South Coast AQMD, Bay Area AQMD, San Joaquin Valley  








          AB 197 (Eduardo Garcia)                                 Page 4 of ?
          
          
             AQMD, San Diego APCD, one of six Sacramento region air  
             districts, and a board member from any other district.  These  
             board members must reflect the "qualitative requirements" of  
             the other 6 members to the extent practicable.  

             In 2015, AB 1288 (Atkins, Chapter 586, Statutes of 2015) adds  
             two additional members to the board, which increased the  
             membership from 12 to 14, appointed by the Senate Committee on  
             Rules and the Speaker of the Assembly, and requires those  
             members be persons who work directly with pollution-burdened and  
             vulnerable communities. 

             The Board members serve part-time, except the Chairperson, who  
             serves as a full-time member. 

          2) The Global Warming Solutions Act of 2006. In 2006, the Global  
             Warming Solutions Act of 2006, AB 32 (Núñez, Pavley, Chapter  
             488, Statutes of 2006) established a statewide GHG emissions  
             limit by 2020.  AB 32 defines greenhouse gasses (GHGs) as  
             carbon dioxide (CO2), methane, nitrous oxide,  
             hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride  
             and requires ARB to determine the 1990 statewide GHG emissions  
             level and approve a statewide GHG emissions limit that is  
             equivalent to that level, to be achieved by 2020. 

             AB 32 requires ARB, among other things, to:

                     Inventory greenhouse gas emissions in California.

                     Implement regulations that achieve the maximum  
                 technologically feasible and cost-effective reduction of  
                 GHG emissions and impose fees for administrative  
                 implementation costs.

                     Identify and adopt regulations for discrete early  
                 action measures.

                     Prepare and approve a scoping plan to achieve the  
                 maximum technologically feasible and cost-effective  
                 reduction of GHG emissions by 2020, to be updated every  
                 five years.

                     Convene an Environmental Justice Advisory Committee to  
                 advise ARB in the development of the scoping plan.









          AB 197 (Eduardo Garcia)                                 Page 5 of ?
          
          
                     Appoint an economic advisory committee to obtain  
                 recommendations for GHG reduction measures. 

             The statute also specifies that ARB may include market-based  
             compliance mechanisms in the AB 32 regulations after  
             considering the potential for direct, indirect, and cumulative  
             emission impacts from these mechanisms, including localized  
             impacts in communities that are already adversely impacted by  
             air pollution, and must design any market-based compliance  
             mechanisms to prevent any increase in the emissions of toxic  
             air contaminants or criteria air pollutants.  Additionally, AB  
             32 requires that market-based compliance mechanisms maximize  
             additional environmental and economic benefits for California,  
             as appropriate. 
            
          1) AB 32 Scoping Plan. Pursuant to AB 32, ARB approved the first  
             Scoping Plan in 2008.  The Scoping Plan outlined a suite of  
             measures aimed at achieving 1990-level emissions, a reduction of  
             80 million metric tons of CO2 (MMT CO2e).  Average emission data  
             in the Scoping Plan reveal that transportation accounts for  
             almost 40% of statewide GHG emissions, and electricity and  
             commercial and residential energy sector account for over 30% of  
             statewide GHG emissions.  The industrial sector, including  
             refineries, oil and gas production, cement plants, and food  
             processors, was shown to contribute 20% of California's total  
             GHG emissions. 

             The 2008 Scoping Plan recommended that reducing GHG emissions  
             from the wide variety of sources that make up the state's  
             emissions profile could best be accomplished through a  
             cap-and-trade program along with a mix of other strategies  
             including:

                     a low carbon fuel standard (LCFS); 
                     light-duty vehicle GHG standards;
                     expanding and strengthening existing energy efficiency  
                 programs, and building and appliance standards; 
                     achieving a 33% Renewable Portfolio Standard (RPS);
                     regional transportation-related GHG targets; and
                     creating targeted fees on water use and high global  
                 warming potential pollutants. 

             The basic design of the program, as recommended by the original  
             Scoping Plan, is that the combination of direct regulatory  
             measures and cap-and-trade is intended to achieve the emission  








          AB 197 (Eduardo Garcia)                                 Page 6 of ?
          
          
             reduction target by 2020.  Specifically, the Scoping Plan lays  
             out a strategy where the overall limit on GHG emissions from  
             most of the California economy is "capped" through a  
             cap-and-trade program, and direct regulations within both  
             capped and uncapped sectors would achieve additional emissions  
             reductions.

             Pursuant to authority under AB 32, ARB adopted a Low Carbon  
             Fuel Standard in 2009, and a cap-and-trade program, approved on  
             December 13, 2011.

             Of the 80 MMTCO2 of GHG emissions reductions required to reach  
             the 2020 AB 32 target, four programs are estimated by ARB to  
             result in the largest emissions reductions, including cap and  
             trade, LCFS, energy efficiency measures and the RPS.  Together,  
             they are projected to result in 70% of the total emissions  
             reductions necessary to meet the 2020 goal.  The measures that  
             make up the other 30% include the Advanced Clean Cars program,  
             which sets GHG emissions standards for passenger vehicles, the  
             Sustainable Communities and Climate Protection Act of 2008,  
             created by SB 375 (Steinberg, Chapter 728, Statutes of 2008),  
             which requires ARB to set regional targets for GHG emissions  
             reductions from passenger vehicle use, programs for the  
             reduction of high global warming potential gasses, and others.   
              

            Scoping Plan Update. ARB approved an update to the Scoping Plan  
            on May 22, 2014.  The update asserts that California is on track  
            to meet the near-term 2020 greenhouse gas limit and is well  
            positioned to maintain and continue reductions beyond 2020 as  
            required by AB 32.
            
          Comments
          
          1) Purpose of Bill.  According to the author, "In order for  
             California to remain an economic and environmental leader the  
             state will need to also be a leader on issues related to equity.  
             Placing the health and economic impacts of climate policy on  
             vulnerable populations second will stunt the state's prosperity.  
             A great degree of transparency and investment in California's  
             environmentally and socioeconomically disadvantaged populations  
             has the potential to yield significant climate, economic, public  
             health and quality of life benefits while knocking down barriers  
             to opportunity." 









          AB 197 (Eduardo Garcia)                                 Page 7 of ?
          
          
          2) Term limits. AB 197 limits the term of office for ARB's voting  
             members to six years.  As ARB's jurisdiction includes a number  
             of complex policy issues and growing challenges (e.g., climate  
             change and GHG emissions reductions), it may be prudent to allow  
             voting members serve for additional terms in order to retain  
             institutional knowledge on the Board. The committee may wish to  
             amend the bill to allow voting members serve more than one  
             six-year term.

          3) Contingent enactment. AB 197 (E. Garcia) contains contingent  
             enactment language with SB 32 (Pavley), currently in the  
             Assembly Natural Resources Committee, and will only become  
             operative if SB 32 (Pavley) is enacted. 

            Related/Prior Legislation

          SB 32 (Pavley) requires ARB to approve a statewide GHG emissions  
          limit of 40% below the 1990 GHG emissions level to be achieved by  
          2030.

            SOURCE:                    Asian Pacific Environmental Network
                         California Environmental Justice Alliance  

           SUPPORT:               

          None received  

           OPPOSITION:    

          None received   
                                            
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