BILL ANALYSIS Ó
AB 1550
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Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1550 (Gomez) - As Amended April 11, 2016
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|Policy |Natural Resources |Vote:|7 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires 25% of the AB 32 cap-and-trade revenues
(Greenhouse Gas Reduction Fund) to be spent on projects located
within and benefiting disadvantaged communities. This bill
requires an additional unspecified percentage of the Greenhouse
Gas Reduction Funds (GGRF) to be spent on projects that benefit
low-income households. Additionally, this bill:
1)Defines low-income households as households with incomes at or
below 80% of the statewide median income or with median
incomes at or below the threshold designated by the Department
of Housing and Community Development (HCD), as specified.
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2)Requires a fair share of GGRF to be targeted to households
with incomes at or below 200% of the federal poverty level, to
the extent feasible.
3)Requires funds benefitting disadvantaged communities and funds
benefitting low-income households to be counted separately for
the purposes of meeting the targets.
FISCAL EFFECT:
1)Increased GGRF expenditures in disadvantaged and low-income
communities. The Governor's budget proposes appropriating
$3.1 billion GGRF funds this year.
2)Increased annual ongoing costs of approximately $600,000
(GGRF) for the California Air Resources Board (ARB) to modify
existing guidelines and tracking systems, provide guidance to
state agencies, and conduct outreach.
COMMENTS:
1)Purpose. According to the author, the best greenhouse gas
reduction strategies are those that benefit low-income
households, whether they lie inside or outside
CalEnviroScreen-designated disadvantaged communities.
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.
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This bill ensures the state takes advantage of every
opportunity to lift poor and working Californians out of
poverty, while reducing greenhouse gas emissions.
2)Background. The California Global Warming Solutions Act of
2006 (AB 32) requires ARB to adopt a statewide GHG emissions
limit equivalent to 1990 levels by 2020 and adopt regulations,
including market-based compliance mechanisms, to achieve
maximum technologically feasible and cost-effective GHG
emission reductions.
As part of the implementation of AB 32 market-based compliance
measures, ARB adopted a cap-and-trade program that caps the
allowable statewide emissions and provides for the auctioning
of emission credits, the proceeds of which are quarterly
deposited into the GGRF available for appropriation by the
Legislature.
The 2014-15 Budget Act allocated cap-and-trade revenues for
the 2014-15 fiscal year and established a long-term plan for
the allocation of cap-and-trade revenues beginning in fiscal
year 2015-16.
The Budget continuously appropriates 35% of cap-and-trade
funds for investments in transit, affordable housing, and
sustainable communities. Twenty-five percent of the revenues
are continuously appropriated to continue the construction of
high-speed rail. The remaining 40% are to be appropriated
annually by the Legislature for investments in programs that
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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 remaining 2015-16 revenues, along with 2016-17
revenues, totaling $3.1 billion are available for
appropriation this year.
3)Disadvantaged and Low-income Communities. SB 535 (De León),
Chapter 830, Statutes of 2012, requires no less than 10% of
cap-and-trade revenues fund projects located within
disadvantaged communities (DACs), and that 25% of available
revenues fund projects that benefit those communities.
In October 2014, CalEPA released its list of disadvantaged
communities for the purpose of SB 535. CalEPA relied on
CalEnviroScreen to identify the areas disproportionately
burdened by and vulnerable to multiple sources of pollution.
CalEnviroScreen is a tool that assesses all census tracts in
California to identify the areas disproportionally affected
and vulnerable to multiple sources of pollution.
Areas (census tracts) identified as disadvantaged for SB 535's
purposes by CalEnviroScreen include: the majority of the San
Joaquin Valley; much of Los Angeles and the Inland Empire;
pockets of other communities near ports, freeways, and major
industrial facilities such as refineries and power plants; and
large swaths of the Coachella Valley, Imperial Valley and
Mojave Desert.
This bill modifies SB 535 by requiring the entire 25%
allocated to benefit DACs is used to fund projects located
within the communities.
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Additionally, this bill establishes a new allocation category
to target low-income households located outside DACs such as
rural communities in northern and southeastern California as
well as urban districts in places like the Bay Area and San
Diego regions.
This bill currently provides an unspecified percentage of
cap-and-trade revenues for projects that directly benefit
low-income households. In order to add fairness and balance,
Environmental Justice advocates and others propose specifying
25% for low-income households. Under this proposal, 50%
(rather than 75% under current law) of all funds would still
be available for communities and households other than
low-income and those not located in DACs. The author
continues to work with stakeholders and others to determine
the appropriate percentage for this category.
The author may also wish to clarify that the percentage of
funds allocated for low-income households may also be used to
benefit communities or populations comprised predominantly of
low-income residents.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
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