BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: AB 1030
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|Author: |Ridley-Thomas |
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|Version: |5/5/2015 |Hearing | 7/1/2015 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Rebecca Newhouse |
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SUBJECT: California Global Warming Solutions Act of 2006:
Greenhouse Gas Reduction Fund.
ANALYSIS:
Existing law:
1) Requires, under the California Global Warming Solutions Act
of 2006 (also known as AB 32), the California Air Resources
Board (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. AB 32 authorizes ARB to adopt a regulation that
establishes a market-based mechanism with declining annual
aggregate emission limits for sources that emit GHGs. (Health
and Safety Code (HSC) §38500 et seq.)
2) Establishes the Greenhouse Gas Reduction Fund (GGRF) in the
State Treasury, requires 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 ARB 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 moneys from the GGRF be used to facilitate the
achievement of reductions of GHG emissions in this state
consistent with AB 32, and authorizes a range of GHG
reduction investments and establishes several additional
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policy objectives, including fostering job creation by
promoting in-state GHG emissions reduction projects carried
out by California workers and businesses. (HSC §39712)
4) Requires the GGRF investment plan to allocate, at a minimum,
25% of the funds to benefit disadvantaged communities, and to
allocate 10% of GGRF moneys within disadvantaged communities.
(HSC §39713)
This bill requires that, for projects funded by GGRF moneys and
that involve hiring, prioritization be given to projects that
include partnerships with training entities that have a proven
track record of placing disadvantaged workers in career-track
jobs.
Background
1) Cap and Trade auction revenue. ARB has conducted eleven
cap-and-trade auctions. The first 10 have generated almost
$1.6 billion in proceeds to the state.
Several bills in 2012 provided legislative direction for the
expenditure of auction proceeds including:
SB 535 (de León, Chapter 830, Statutes of 2012)
requires that 25% of auction revenue be used to benefit
disadvantaged communities and requires that 10% of
auction revenue be invested in disadvantaged
communities.
AB 1532 (J. Pérez, Chapter 807, Statutes of 2012)
directs the Department of Finance to develop and
periodically update a three-year investment plan that
identifies feasible and cost-effective GHG emission
reduction investments to be funded with cap-and-trade
auction revenues. AB 1532 outlines categories of
eligible GGRF investments, and establishes priorities
when investing GGRF moneys, including maximizing
economic, environmental, and public health benefits to
the state, foster job creation by promoting in-state GHG
emissions reductions, and directing investment toward
the most disadvantaged communities and households in the
state.
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SB 862 (Budget Committee, Chapter 36, Statutes of
2014) requires the ARB to develop guidelines on
maximizing benefits for disadvantaged communities by
agencies administering GGRF funds, and guidance for
administering agencies on GHG emission reduction
reporting and quantification methods.
Legal consideration of cap-and-trade auction revenues. The
2012-13 budget analysis of cap-and-trade auction revenue by
the Legislative Analyst's Office noted that, based on an
opinion from the Office of Legislative Counsel, the auction
revenues should be considered mitigation fee revenues, and
their use requires that a clear nexus exist between an
activity for which a mitigation fee is used and the adverse
effects related to the activity on which that fee is levied.
Therefore, according to the report, in order for their use to
be valid as mitigation fees, revenues from the cap-and-trade
auction must be used to mitigate GHG emissions or the harms
caused by GHG emissions.
In 2012, the California Chamber of Commerce and Morning Star
Packing Company filed a lawsuit against the ARB claiming that
cap-and-trade auction revenues constitute illegal tax
revenue. In November 2013, the superior court ruling declined
to hold the auction a tax, concluding that it is more akin to
a regulatory fee. The plaintiffs filed an appeal with the
3rd District Court of Appeal in Sacramento in February of
last year.
Budget allocations. The 2014-15 Budget allocates $832 million
in GGRF revenues to a variety of transportation, energy, and
resources programs aimed at reducing GHG emissions. Various
agencies are in the process of implementing this funding.
The budget agreement specifies how the state will allocate
most cap-and-trade auction revenues in 2015-16 and beyond.
For all future revenues, the legislation appropriates 25% for
the state's high-speed rail project, 20% for affordable
housing and sustainable communities grants, 10% to intercity
capital rail projects, and 5% for low-carbon transit
operations. The remaining 40% is available for annual
appropriation by the Legislature.
1) Maximizing benefits to disadvantaged communities. Pursuant
to requirements in SB 862 of last year, ARB staff released
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preliminary guidance in the fall of last year on approaches
that agencies can use to maximize the benefits of investments
to disadvantaged communities and how agencies can determine
whether their GGRF investments are located within, or provide
benefits to, disadvantaged communities, as required by SB
535.
The guidance establishes screening criteria to determine
whether a specific project qualifies toward the 25% target of
funds providing benefits to a disadvantaged community, or the
10% target of investments spent within a disadvantaged
community. The guidelines specify that benefits must be
"direct, meaningful, and assured."
The interim guidance also recommends that agencies expending
GGRF moneys maximize the percentage of those funds that are
allocated for projects that benefit disadvantaged
communities, preferably in a way that exceeds the minimum 10%
and 25% investment targets. The guidelines also suggest that
agencies give priority to those projects that maximize
benefits to disadvantaged communities when selecting projects
for a given investment by scoring criteria that favors
projects which provide multiple benefits or the most
significant benefits.
The guidance lists some common needs of disadvantaged
communities, as identified by community advocates, including
the need to create living wage jobs that increase family
income, provide access to health insurance, retirement
benefits and have long-term job retention. The guidance
suggests that administering agencies, to the maximum extent
possible, make investments that result in benefits that
either address an important need commonly identified by
disadvantaged community residents or address a key factor
that caused the area to be identified as a disadvantaged
community, and cite unemployment levels as one example.
Comments
1) Purpose of Bill. According to the author, "AB 1030 will
generate new workforce opportunities for disadvantaged
workers through the prioritization of projects that not only
accelerate emission reductions across the State but that have
inclusive training policies for workers facing barriers to
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employment."
2) Amendment. AB 1030 currently requires, where applicable and
to the extent feasible, that for projects funded through
cap-and-trade auction revenue that involve hiring, projects
that include partnerships with training entities that have a
proven track record of placing disadvantaged workers in
career-track jobs be prioritized. It is not clear what "a
proven track record" entails. Additionally, specifying
prioritization to partnerships with those training entities
that have "a proven track record" may unnecessarily narrow
the universe of investment-worthy projects to achieve the
goal of placing disadvantaged workers in career-track jobs
and GHG emissions reductions. Also, the term "disadvantaged
worker" is not defined.
Instead of specifying "partnerships with training entities
that have a proven track record" and using the term
"disadvantaged workers," an amendment is needed to broaden
and clarify the bill to specify that, for projects that
involve hiring, GGRF moneys prioritize projects that support
the training and hiring of workers from disadvantaged
communities for career-track jobs.
SOURCE: PolicyLink
SUPPORT:
California Black Health Network
California Rural Legal Assistance Foundation
Communities United for Restorative Youth Justice
Fathers & Families of San Joaquin
La Cooperativa Campesina de California
Latino Coalition for a Healthy California
Leadership Counsel for Justice and Accountability
National Employment Law Project
Peace4Kids
Physicians for Social Responsibility - Los Angeles
Strategic Concepts in Organizing and Policy Education
Urban Habitat
Valley Latino Environmental Advancement Project
OPPOSITION:
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None received
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