BILL ANALYSIS Ó AB 1555 Page 1 Date of Hearing: May 11, 2016 ASSEMBLY COMMITTEE ON BUDGET Philip Ting, Chair AB 1555 (Gomez) - As Amended March 28, 2016 SUBJECT: Greenhouse Gas Reduction Fund SUMMARY: Appropriates $800 million Greenhouse Gas Reduction Funds for various programs in 2016. Specifically, this bill: 1) Appropriates $300 million to the Air Resources Board for the following programs: a. $290 million for low carbon transportation and infrastructure programs; and b. $10 million for active transit and transit passes. 1) Appropriates $240 million for clean energy communities including the following programs: a. $100 million to the Department of Community Services and Development and the California Conservation Corp for weatherization and low-income solar rooftop programs, with an unspecified earmark of funding for rooftop solar; b. $100 million to the California State Energy Resources Conservation and Development Commission and the Department of Water Resources for equipment and other replacement programs, including turf and toilet replacement; AB 1555 Page 2 c. $10 million to the Department of Water Resources for energy efficient ground water pump replacement grant programs; d. $20 million to provide incentive programs for waste diversion, biogas development, and compost programs, including grants to agriculture and urban waste organic diversion facilities; of this amount: i. $5 million would be appropriated to the Department of Food and Agriculture, and ii. $15 million would be appropriated to the Department of Resources Recycling and Recovery; and e. $10 million to the Department of Food and Agriculture for on-farm energy and water efficiency programs. 2) Appropriates $100 million to the Department of Fish and Wildlife for wetland development, rehabilitation, and enhancement. 3) Appropriates $85 million to the California Coastal Conservancy for wetland and watershed restoration, and carbon sequestration. 4) Appropriates $15 million to the Natural Resources Agency for riparian and revegetation programs. 5) Appropriates $25 million to the Natural Resources Agency for local-climate-beneficial projects for urban greening, urban canopies, urban brownfield conversion, and other related projects. 6) Appropriates $10 million to the Natural Resources Agency for agricultural and rangeland carbon sequestration programs 7) Appropriates $25 million to the Department of Forestry and Fire Protection for urban forestry. AB 1555 Page 3 8) Expresses Legislative Intent to use $150 million of additional Greenhouse Gas Reduction funds to fund future legislative priorities. FISCAL EFFECT: This bill would appropriate $800 million of the available balance of the Greenhouse Gas Reduction Fund for various programs. While this fund does have sufficient balance to allow this appropriation, the Governor's 2016-17 budget proposal also seeks to use the same funds for programs in the budget year. COMMENTS: This bill would appropriate $800 million, approximately half of the current Greenhouse Gas Reduction Fund balance in 2016. While the Greenhouse Gas Reduction fund currently has a $1.6 billion balance, the underlying revenue for the fund is likely to decline as the number of pollution allowances available for sale declines in future years and 60 percent of all new Greenhouse Gas Reduction funds are continuously appropriated for programs. Therefore, this fund balance would be unlikely to grow in future years and these one-time funds would only be available for one-time purposes. The Governor's proposed 2016-17 Budget includes a spending plan that has a great deal of overlap with appropriations contained in this bill. The Governor's $3.1 billion plan contains additional programmatic elements beyond what are proposed by this bill. However, this bill includes funding for active transportation and transit passes, which are not included in the Governor's proposal. It is unlikely this bill could be enrolled before the 2016-17 budget was in place, so the funding assumed in this bill may already be appropriated through the budget process. AB 1555 Page 4 REGISTERED SUPPORT / OPPOSITION: Support None on File. Opposition CalTax California Chamber of Commerce Analysis Prepared by:Christian Griffith / BUDGET / (916) 319-2099