BILL ANALYSIS Ó
AB 1550
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Date of Hearing: April 4, 2016
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 1550
(Gomez) - As Amended March 28, 2016
SUBJECT: Greenhouse gases: investment plan: disadvantaged
communities
SUMMARY: Requires that 25% of the Greenhouse Gas Reduction Fund
(GGRF) be spent on projects located within disadvantaged
communities, and requires that an additional 25% be spent on
projects that benefit low-income households.
EXISTING LAW:
1)Requires the Air Resources Board (ARB), pursuant to California
Global Warming Solutions Act of 2006 [AB 32 (Nunez), Chapter
488, Statutes of 2006], to adopt a statewide greenhouse gas
(GHG) emissions limit equivalent to 1990 levels by 2020 and
adopt regulations to achieve maximum technologically feasible
and cost-effective GHG emission reductions. AB 32 authorizes
ARB to permit the use of market-based compliance mechanisms to
comply with GHG reduction regulations, once specified
conditions are met.
2)Establishes the GGRF and requires all moneys, except for fines
and penalties, collected by ARB from the auction or sale of
allowances pursuant to a market-based compliance mechanism
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(i.e., the cap-and-trade program adopted by ARB under AB 32)
to be deposited in the GGRF and available for appropriation by
the Legislature.
3)Establishes the GGRF Investment Plan and Communities
Revitalization Act to set procedures for the investment of GHG
allowance auction revenues. Authorizes a range of GHG
reduction investments and establishes several policy
objectives, including:
a) Maximize economic, environmental, and public health
benefits;
b) Foster job creation;
c) Complement efforts to improve air quality;
d) Direct investment toward the most disadvantaged
communities and households in the state;
e) Provide opportunities for businesses, public agencies,
nonprofits, and other community institutions to participate
in and benefit from statewide efforts to reduce GHG
emissions; and,
f) Lessen the impacts and effects of climate change on the
state's communities, economy, and environment.
4)Requires the investment plan to allocate (1) a minimum of 25%
of the available moneys in the GGRF to projects that provide
benefits to identified disadvantaged communities, and (2) a
minimum of 10% of the available moneys in the GGRF to projects
located within identified disadvantaged communities.
THIS BILL:
1)Revises the requirement that 25% of the GGRF be expended to
benefit disadvantaged communities to require that the funding
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be allocated for projects located within the boundaries of,
and benefiting individuals in, disadvantaged communities.
2)Requires that an additional 25% of the GGRF be allocated for
projects that benefit low-income households.
3)Defines "low-income household" as those with household incomes
at or below 80% of the statewide median income.
4)Requires that, to the extent feasible, a "fair share" of the
moneys allocated to benefit low-income households target
households with incomes at or below 200% of the federal
poverty level.
FISCAL EFFECT: Unknown
COMMENTS:
1)Existing GGRF funding and programs. The 2014-15 Budget Act
allocated GGRF revenues for the 2014-15 fiscal year and
established a long-term plan for the allocation of GGRF
revenues beginning in fiscal year 2015-16. Thirty-five
percent of GGRF is continuously appropriated for investments
in transit, affordable housing, and sustainable communities.
Twenty-five percent is continuously appropriated to continue
the construction of the high-speed rail project. The
remaining 40% is subject to annual appropriation by the
Legislature for investments in programs that include
low-carbon transportation, energy efficiency and renewable
energy, and natural resources and waste diversion. An
expenditure plan for the 40% was not included in the 2015-16
Budget Act, with the exception of $227 million appropriated to
continue funding for specified existing programs. The
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remaining 2015-16 revenues, along with 2016-17 revenues, are
available for appropriation this year.
The 2016 Annual Report of Cap and Trade Auction Proceeds
includes an analysis of funds spent within and benefiting
disadvantaged communities, excluding high speed rail spending.
According to the report, 39% of expenditures were for
projects located within disadvantaged communities and 51% of
the overall funding benefited disadvantaged communities.
Listed below are the major GGRF program areas, administering
agency, and funding to date:
a) Transportation and Sustainable Communities
i) High Speed Rail, High Speed Rail Authority
(Authority), $750 million
ii) Transit and Intercity Rail Capital Program,
Transportation Agency, $225 million
iii) Low Carbon Transit Operations Program, Department of
Transportation (Caltrans), $125 million
iv) Affordable Housing and Sustainable Communities
Program, Strategic Growth Council (SGC), $530 million
v) Low Carbon Transportation, ARB, $325 million
b) Clean Energy and Energy Efficiency
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i) Low-Income Weatherization Program, Community
Services and Development (CSD), $154 million
ii) Energy Efficiency in Public Buildings, California
Energy Commission (CEC), $20 million
iii) Agricultural Energy and Operational Efficiency,
Department of Food and Agriculture (CDFA), $75 million
iv) Water-Energy Efficiency, Department of Water
Resources (DWR), $75 million
c) Natural Resources and Waste Diversion
i) Wetlands and Watershed Restoration, Department of
Fish and Wildlife (DFW), $27 million
ii) Urban Forestry, Forest Health Restoration, and
Reforestation, Department of Forestry and Fire Protection
(CalFIRE), $42 million
iii) Waste Diversion, Department of Resources Recycling
and Recovery (CalRecycle), $31 million
The Governor's 2016-17 Budget proposes just under $3.1 billion
in expenditures:
a) Continuous Appropriations
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i) High Speed Rail, Authority, $500 million
ii) Low Carbon Transit Operations, State Transit
Assistance, $100 million
iii) Transit and Intercity Rail Capital Program,
Transportation Agency, $200 million
iv) Affordable Housing and Sustainable Communities
Program, SGC, $400 million
b) Fifty Percent Reduction in Petroleum Use
i) Transit and Intercity Rail Capital Program,
Transportation Agency, $400 million
ii) Low Carbon Road Program, Caltrans, $100 million
iii) Low Carbon Transportation and Fuels, ARB, $500
million
iv) Biofuel Facility Investments, CEC, $25 million
c) Local Climate Action
i) Transformative Climate Communities, SGC, $100
million
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d) Short-Lived Climate Pollutants
i) Black Carbon Woodsmoke and Refrigerants, ARB, $60
million
ii) Waste Diversion, CalRecycle, $100 million
iii) Climate Smart Agriculture - Healthy Soils and Dairy
Digesters, CDFA, $55 million
e) Safeguarding California/Water Action Plan
i) Water and Energy Efficiency, CDFA and DWR, $30
million
ii) Drought Executive Order, CEC, $60 million
iii) Wetlands and Watershed Restoration/CalEcoRestore,
DFW, $60 million
f) Safeguarding California/Carbon Sequestration
i) Healthy Forests and Urban Forestry, CalFIRE, $180
million
ii) Urban Greening, Natural Resources Agency, $20
million
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g) Energy Efficiency/Renewable Energy
i) Energy Efficiency for Public Buildings, Department
of General Services, $30 million
ii) California Lending for Energy and Environmental
Needs Center, I Bank, $20 million
iii) Energy Corps, Conservation Corps, $15 million
iv) Energy Efficiency Upgrades/Weatherization,
Department of Community Services and Development, $75
million
v) Renewable Energy and Energy Efficiency Projects,
University of California, California State University,
$60 million
1)Author statement:
Numerous findings suggest that low-income communities and
communities of color are and will continue to be
disproportionately impacted by the effects of climate
change. Since CalEnviroScreen classifies a quarter of the
state's population as living in DACs, at least a quarter of
cap-and-trade funds should be invested directly within the
boundaries of DACs, which generally provides more
assistance than simply "benefiting" these communities.
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Additionally, experience has shown that some of the best
greenhouse gas reduction strategies are those that benefit
low-income households, whether they lie inside or outside
CalEnviroScreen-designated DACs. Low-income Californians
often lack adequate transportation choices, spend a
significant percentage of their budgets on necessities like
energy, and are least able to relocate or afford
energy-saving appliances, vehicles, and household
improvements to adapt to our changing climate. It is
critical that the state continue making a concerted effort
to specifically target investments in DACs as well as take
advantage of every opportunity to lift poor and working
Californians out of poverty while reducing greenhouse gas
emissions. Therefore, AB 1550 ensures that low-income
households directly benefit from the state's cap-and-trade
program by requiring an additional 25 percent of climate
funds to benefit these households through programs such as
advanced clean vehicles, weatherization and energy
efficiency, transit passes, and household clean energy
generation.
A greater investment in California's environmentally and
socioeconomically disadvantaged populations has the
potential to yield significant climate, public health, and
cost benefits while helping bridge the 'green divide'.
2)Suggested amendments.
a) This bill would permanently allocate 25% of the GGRF for
projects that benefit low-income communities. This
provision has the potential to lessen the Legislature's
ability oversee and adjust GGRF spending during each budget
cycle. In order to ensure proper legislative oversight
over GGRF expenditures, the committee may wish to amend the
bill to make this percentage unspecified to allow the
author, stakeholders, and the fiscal committees to
determine the appropriate size of the set aside as the bill
moves forward.
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b) This bill defines "low-income" as households with
incomes at or below 80% of the statewide median income.
Unfortunately, a statewide definition inadvertently
excludes a large number of low-income Californians that
live in high cost of living areas. In order to ensure that
the threshold for low-income households accurately
identifies low-income households throughout the state, the
committee may wish to amend the bill to specify that the
threshold for low-income may also be determined by the
Department of Housing and Community Development's list of
state income limits, adopted pursuant to Health and Safety
Code section 50093.
REGISTERED SUPPORT / OPPOSITION:
Support
Amigos de los Rios
Asian Pacific Environmental Network
Asian Pacific Policy and Planning Council
California Association of Local Conservation Corps
California Bicycle Coalition
California Climate and Agriculture Network
California Environmental Justice Alliance
California Housing Partnership Corporation
California League of Conservation Voters
California ReLeaf
California Urban Forests Council
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California Vanpool Authority
Canopy
Catholic Charities
Catholic Charities, Diocese of Stockton
Center for Community Action and Environmental Justice
Center on Race, Poverty, and the Environment
Central California Asthma Collaborative
Central Coast Alliance United for a Sustainable Economy
Coalition for Clean Air
Communities for a Better Environment
Community Health for Asian Americans
Energy Solidarity Cooperative
Environmental Health Coalition
Fallbrook Land Conservancy
Filipino/American Coalition for Environmental Solidarity
Frenso Economic Opportunities Commission
Fresno Interdenominational Refugee Ministries
Friends Committee on Legislation of California
Grayson Neighborhood Council
Greenlining Institute
Greenspace-The Cambria Land Trust
GRID Alternatives
Growing Together
Huntington Beach Tree Society, Inc.
Liberty Hill Foundation
Little Tokyo Service Center
Los Angeles Conservation Corps
Los Angeles Neighborhood Land Trust
Move LA
National Parks Conservation Association
Pacific Asian Consortium in Employment
Pacoima Beautiful
People Organizing for Demand Environmental and Economic Rights
Physicians for Social Responsibility-Los Angeles
Public Advocates
Regional Asthma Management and Prevention
Rural County Representatives of California
Sacramento Tree Foundation
Safe Routes to School National Partnership
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Save the Bay
SCOPE
Sierra Club California
Solar-Oversight
Strategic Actions for a Just Economy
Strategic Concepts in Organizing and Policy Education
The Nature Conservancy
Tree Davis
Tree San Diego
Trust for Public Land
TRUST South LA
Union of Concerned Scientists
Urban Releaf
Valley Clean Air Now
Voices for Progress
Opposition
California Chamber of Commerce
CalTax
Analysis Prepared by:Elizabeth MacMillan / NAT. RES. / (916)
319-2092
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