BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 197| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 197 Author: Eduardo Garcia (D) Amended: 8/2/16 in Senate Vote: 21 PRIOR VOTES NOT RELEVANT SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 6/29/16 AYES: Wieckowski, Hill, Jackson, Leno, Pavley NOES: Gaines, Bates SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16 AYES: Lara, Beall, Hill, McGuire, Mendoza NOES: Bates, Nielsen SUBJECT: State Air Resources Board: greenhouse gases SOURCE: Asian Pacific Environmental Network California Environmental Justice Alliance DIGEST: This bill creates the Joint Legislative Committee on Climate Policies and requires the Air Resources Board (ARB) to consider adopting measures to achieve the statewide greenhouse gas (GHG) emissions limit based on specified priorities. The bill also requires ARB to rank all emission reduction measures adopted, as specified, and requires that two legislative members serve as ex-officio, nonvoting members of ARB. ANALYSIS: Existing law: AB 197 Page 2 1)Establishes 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)Requires, under the California Global Warming Solutions Act of 2006 (HSC §38500 et seq.), 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, 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. ARG is authorized 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 AB 197 Page 3 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 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 and authorizes voting members to serve additional terms. 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. AB 197 Page 4 Background 1)Air Resources Board. ARB 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. 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 six members must be board members from the following entities: South Coast Air Quality Management District (AQMD), Bay Area AQMD, San Joaquin Valley 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 six members to the extent practicable. AB 1288 (Atkins, Chapter 586, Statutes of 2015) added 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 (Núńez and Pavley, Chapter 488, Statutes of 2006) established a statewide GHG emissions limit by 2020. AB 32 defines 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 197 Page 5 AB 32 requires ARB, among other things, to inventory GHG 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; adopt discrete early action measures; prepare and approve a scoping plan; convene an Environmental Justice Advisory Committee; and 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. 3)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). 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; AB 197 Page 6 Expanding and strengthening existing energy efficiency programs, and building and appliance standards; Achieving a 33% Renewable Portfolio Standard; 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 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 LCFS in 2009, and a cap-and-trade program, approved on December 13, 2011. 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 Purpose of Bill. According to the author, "In order for AB 197 Page 7 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." Related/Prior Legislation SB 32 (Pavley, 2016) requires ARB to approve a statewide GHG emissions limit of 40% below the 1990 GHG emissions level to be achieved by 2030 and specifies the bill only becomes operative if AB 197 is enacted and becomes effective on or before January 1, 2017. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: One-time costs of $100,000 (various special funds) to the ARB for construction to enlarge the hearing room dais and to provide the equipment needed to accommodate two additional board members. $233,000 annually (Cost of Implementation Fund) to the ARB for staffing needs to support new board members and develop ranking criteria. AB 197 Page 8 SUPPORT: (Unable to verify at time of writing) Asian Pacific Environmental Network (co-source) California Environmental Justice Alliance (co-source) Clean Power Campaign The Nature Conservancy OPPOSITION: (Unable to verify at time of writing) California Manufacturers and Technology Association ASSEMBLY FLOOR: 55-21, 6/2/15 AYES: Achadjian, Alejo, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, AB 197 Page 9 Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez, Low, Maienschein, McCarty, Medina, Mullin, Nazarian, O'Donnell, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins NOES: Travis Allen, Bigelow, Brough, Chang, Beth Gaines, Gallagher, Grove, Harper, Jones, Kim, Lackey, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk NO VOTE RECORDED: Chávez, Dahle, Hadley, Linder Prepared by:Rebecca Newhouse / E.Q. / (916) 651-4108 8/16/16 8:51:47 **** END ****