BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1550|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 1550
Author: Gomez (D)
Amended: 8/23/16 in Senate
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-1, 6/29/16
AYES: Wieckowski, Hill, Jackson, Leno, Pavley
NOES: Gaines
NO VOTE RECORDED: Bates
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 54-23, 6/2/16 - See last page for vote
SUBJECT: Greenhouse gases: investment plan: disadvantaged
communities
SOURCE: Author
DIGEST: This bill requires a minimum of 25% of Greenhouse Gas
Reduction Fund (GGRF) moneys be spent on projects located within
and benefiting disadvantaged communities (DACs), and an
additional minimum of 10% of GGRF moneys be spent on projects
that benefit low-income households or are within, and benefit
low-income communities, as specified.
Senate Floor Amendments of 8/18/16 strike the specification that
the bill only becomes operative if $205 million from the GGRF is
appropriated through AB 1613 (Committee on Budget).
AB 1550
Page 2
ANALYSIS:
Existing law:
1)Requires, under the California Global Warming Solutions Act of
2006, the California Air Resources Board (ARB) to determine
the 1990 statewide greenhouse gas (GHG) emissions level, to
approve a statewide GHG emissions limit equivalent to that
level that will be achieved by 2020, and to adopt GHG
emissions reductions measures by regulation. ARB is
authorized to include the use of market-based mechanisms to
comply with the regulations. (Health and Safety Code (HSC)
§38500 et seq.)
2)Establishes GGRF and requires that moneys collected pursuant
to a market-based mechanism be deposited in the fund.
(Government Code §16428.8)
3)Requires that GGRF moneys be used to facilitate the
achievement of reductions of GHG emissions in the state
consistent with the Global Warming Solutions Act of 2006. (HSC
§39712)
4)Requires the GGRF investment plan allocate a minimum of 25% of
the funds to projects that benefit DACs and to allocate a
minimum of 10% of the funds to projects located within DACs.
(HSC §39713)
5)Requires the California Environmental Protection Agency
(CalEPA) to identify DACs for GGRF investment opportunities
and requires those communities be identified based on
geographic, socioeconomic, public health, and environmental
hazard criteria. (HSC §39711)
This bill:
AB 1550
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1)Revises the requirement that 25% of the GGRF be expended to
benefit DACs and 10% of GGRF be expended within DACs to
instead require that a minimum of 25% of the GGRF be allocated
for projects located within the boundaries of, and benefiting
individuals in, DACs.
2)Requires a minimum of 5% of GGRF revenues to be spent to
benefit low-income households or to projects located within
the boundaries of, and benefiting individuals in, low-income
communities anywhere in the state.
3)Requires a minimum of 5% of GGRF revenues to be spent to
benefit low-income households that are outside of, but within
a half mile of, DACs, or to projects located within the
boundaries of, and benefiting individuals in, low-income
communities that are outside of, but within a half mile of,
DACs.
4)Defines "low-income households" as households with incomes at
or below 80% of the statewide median income or with household
incomes at or below the threshold designated as low-income by
the Department of Housing and Community Development (HCD), as
specified.
5)Defines "low-income communities" as census tracts with median
household incomes at or below 80 percent of the statewide
median income or with median household incomes at or below the
threshold designated as low income by the HCD, as specified.
6)Requires funds benefitting DACs, funds benefitting low-income
households or low-income communities anywhere and the state,
and funds benefiting low-income households and low-income
communities within a half mile of DACs, to be counted
separately for the purposes of meeting the targets.
AB 1550
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7)Specifies that the bill will only become operative if AB 1613
(Committee on Budget) is enacted and becomes effective on or
before January 1, 2017.
Background
1)Cap-and-trade auction revenue. Since November 2012, ARB has
conducted 16 cap-and-trade auctions, generating over $4
billion in proceeds to the state.
State law requires auction revenues be used to facilitate the
achievement of GHG emissions reductions and outlines various
categories of allowable expenditures. Statute further
requires Department of Finance (DOF), with ARB and any other
relevant state agency, to develop a three-year investment plan
for the auction proceeds, which are deposited in the GGRF.
SB 535 (de León, Chapter 830, Statutes of 2012) requires DOF,
in the investment plan, to allocate at least 25% of available
moneys in the GGRF to projects that provide benefits to DACs,
and at least 10% to projects located within DACs.
Additionally, SB 862 (Committee on Budget and Fiscal Review,
Chapter 36, Statutes of 2014) requires ARB to develop
guidelines on maximizing benefits for DACs by agencies
administering GGRF funds, and guidance for administering
agencies on GHG emissions reduction reporting and
quantification methods.
Budget allocations. SB 862, a Budget Trailer Bill,
established a long-term cap-and-trade expenditure plan by
continuously appropriating portions of the funds for
designated programs or purposes. The bill appropriates 25%
for the state's high-speed rail project, 20% for affordable
housing and sustainable communities grants, 10% to the Transit
and Intercity Rail Capital Program, and 5% for low-carbon
transit operations. The remaining 40% is available for annual
appropriation by the Legislature. The Governor's 2016-17
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proposed Budget appropriates over $3 billion to a variety of
programs and projects in the transportation, energy, natural
resources, and waste diversion sectors.
2)CalEnviroScreen and DACs. CalEnviroScreen was developed by the
Office of Environmental Health Hazard Assessment, at the
request of CalEPA and pursuant to the GGRF Investment Plan and
Communities Revitalization Act (SB 535), to determine a list
of DACs in California that are the most vulnerable and
pollution-burdened.
Using CalEnviroScreen, CalEPA determined a list of DACs
throughout California in October 2014. The current version
incorporates 19 indicators, including those for exposures,
environmental effects, sensitive populations, and
socioeconomic factors. Census tracts in the top 25th
percentile of cumulative CalEnviroScreen scores have been
designated DACs for the purposes of
SB 535.
The areas where the majority of DACs were identified included
the San Joaquin Valley, parts of Los Angeles and the Inland
Empire, and large portions of the Coachella Valley and Mojave
Desert, in addition to communities located near industrial
areas and major roadways.
3)ARB guidance on GGRF. In 2014, ARB published interim guidance
for meeting the requirements associated with GGRF
appropriations, as well as maximizing benefits to DACs, for
agencies appropriated GGRF moneys. This guidance was
finalized and released in late 2015.
In meeting the SB 535 requirement, the guidance states that
agencies should first assess whether projects will be located
within a DAC, as identified through CalEnviroScreen, and
whether the project will provide direct benefits to that
community, consistent with specific criteria in the guidance
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document for each program type. If investments meet this
requirement, then the guidance specifies that the projects and
administrative funds count towards both the 10% and 25%
requirements for GGRF investments within, and providing
benefits to, DACs.
If the project is not within the DAC, the guidance directs
agencies to evaluate whether the project provides direct,
meaningful, and assured benefits in accordance with specified
criteria for each project type. Projects within a half-mile
of a DAC and that provide increased service or access to those
communities, or projects that result in at least 25% of
project work hours performed by residents of DACs, may count
towards the SB 535 mandate requiring a minimum of 25% of GGRF
money benefit DACs.
4)GGRF benefits report. AB 1532 (Pérez, Chapter 807, Statutes
of 2012) requires DOF to submit an annual report to the
Legislature on the status and outcomes of projects funded from
the GGRF. The 2016 Annual Report describes states that for
implemented projects funded through GGRF, 51% of investments
provided benefits to DACs, with 39% of GGRF investments
directed within DACs.
Comments
Purpose of Bill. According to the author, "Low-income
communities and communities of color are and will continue to be
disproportionately impacted by the effects of our changing
climate. As we think about how to structure our state's climate
programs - as we discuss percentages and parameters - this is a
reality we cannot ignore and must strive to remedy. AB 1550
builds on the successes of our climate equity efforts to date by
ensuring a greater investment in California's environmentally
and socioeconomically disadvantaged populations. The bill
requires that at least 25% of cap-and-trade funds be spent on
projects located directly within disadvantaged communities, as
identified by the state's environmental health screening tool,
AB 1550
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to ensure that the level of investment in DACs equals their
share of the population.
"While CalEnviroScreen is a valuable tool for capturing
cumulative impacts in communities, it is widely recognized that
there are poor and working-class households that lie outside of
DACs - but that struggle to make ends meet and spend a large
portion of their incomes on necessitates - such as energy,
water, housing, and transportation. If we wish to foster a
shared, statewide commitment to tackling pressing environmental
issues, we must take advantage of opportunities to reduce
greenhouse gas emissions and build sustainable communities while
lifting poor and working Californians out of poverty. 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'."
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
Increased GGRF expenditures in DACs (from 10% direct
investment to 25%) and for low-income households and to
low-income communities (from zero to five percent).
Increased annual ongoing costs of up to $465,000 (GGRF) for
ARB to modify existing guidelines and tracking systems,
provide guidance to administering agencies, and conduct
outreach.
Unknown cost to administering agencies to update tracking
systems, track GGRF expenditures in disadvantaged and
low-income communities, and report to ARB regarding
AB 1550
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expenditures in these communities.
SUPPORT: (Verified8/15/16)
Alameda County Board of Supervisors
Amigos de los Rios
Asian Pacific Environmental Network
Asian Pacific Policy and Planning Council
California Association of Local Conservation Corps
California Bicycle Coalition
California Black Health Network
California Center for Public Health Advocacy
California Environmental Justice Alliance
California Housing Partnership Corporation
California Interfaith Power & Light
California League of Conservation Voters
California ReLeaf
California Urban Forests Council
California Vanpool Authority
California Voices for Progress
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
Central Coast Energy Services
City Project
Coalition for Clean Air
Communities for a Better Environment
Community Action to Fight Asthma
Community Health for Asian Americans
Defenders of Wildlife
Energy Solidarity Cooperative
AB 1550
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Environment California
Environmental Defense Fund
Environmental Health Coalition
Fallbrook Land Conservancy
Filipino/American Coalition for Environmental Solidarity
Fresno Economic Opportunities Commission
Fresno Interdenominational Refugee Ministries
Friends Committee on Legislation of California
Grayson Neighborhood Council
Green Education, Inc.
Green for All
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
Natural Resources Defense Council
Pacific Asian Consortium in Employment
Pacoima Beautiful
People Organizing to Demand Environmental and Economic Rights
Physicians for Social Responsibility - Los Angeles
Placer Land Trust
Propel Fuels
Public Advocates
Regional Asthma Management and Prevention
Rising Sun Energy Center
Rural County Representatives of California
Sacramento Tree Foundation
Safe Routes to School National Partnership
Santa Clara Valley Open Space Authority
Save the Bay
SCOPE
Sierra Business Council
Sierra Climate Adaptation and Mitigation Partnership
Sierra Club California
Sierra Foothill Conservancy
AB 1550
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Solar-Oversight
Stone Soup Fresno
Strategic Actions for a Just Economy
Strategic Concepts in Organizing and Policy Education
The Nature Conservancy
TransForm
Tree Davis
Tree San Diego
Truckee Donner Land Trust
Trust for Public Land
TRUST South LA
Union of Concerned Scientists
Urban Releaf
Valley Clean Air Now
Watershed Conservation Authority
OPPOSITION: (Verified8/15/16)
Bay Area Air Quality Management District Legislative Committee
California Chamber of Commerce
California Taxpayers Association
Metropolitan Transportation Commission
ARGUMENTS IN SUPPORT: Supporters state that, since
CalEnviroScreen classifies a quarter of the state's population
as living in DACs, at least a quarter of GGRF proceeds should be
invested directly within the boundaries of DACs, which generally
provides more assistance than simply "benefiting" these
communities. They further note that low-income Californians
often lack adequate and affordable transportation and housing
choices, access to green spaces, and spend a significant
percentage of their budget on necessities including fuel and
energy, and for those reasons, AB 1550 directs additional
investments to low-income households, communities and
populations, as well.
ARGUMENTS IN OPPOSITION: The Metropolitan Transportation
Commission and the Bay Area Air Quality Management District
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Legislative Committee state that AB 1550 would expand the
state's reliance upon a flawed definition of DACs that excludes
many communities with poor socio-economic conditions. They also
argue that this bill has the effect of encouraging growth and
development in locations where residents have greater exposure
to environmental harm. California Chamber of Commerce and
California Taxpayers Association argue that ARB lacks the
authority to raise revenue through auction of allowances.
ASSEMBLY FLOOR: 54-23, 6/2/16
AYES: Achadjian, Alejo, Arambula, Atkins, Bloom, Bonilla,
Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau,
Chiu, Chu, Cooley, Cooper, Dababneh, Dodd, Eggman, Gallagher,
Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez,
Gonzalez, Gordon, Roger Hernández, Holden, Irwin,
Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low, Mathis,
McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk,
Ridley-Thomas, Rodriguez, Santiago, Mark Stone, Thurmond,
Weber, Williams, Wood, Rendon
NOES: Travis Allen, Baker, Bigelow, Chávez, Dahle, Beth Gaines,
Gray, Grove, Hadley, Harper, Jones, Kim, Maienschein, Mayes,
Melendez, Obernolte, Olsen, Patterson, Salas, Steinorth,
Wagner, Waldron, Wilk
NO VOTE RECORDED: Daly, Frazier, Ting
Prepared by:Rebecca Newhouse / E.Q. / (916) 651-4108
8/24/16 18:31:53
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