Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1717

Introduced by Assembly Member Hadley

January 27, 2016

An act to amend Section begin delete 44270.3 end delete begin insert 39719 end insert of the Health and Safety Code, relating to begin delete vehicular air pollution. end delete begin insert greenhouse gases, and making an appropriation therefor. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1717, as amended, Hadley. begin delete California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007. end delete begin insert Greenhouse Gas Reduction Fund. end insert

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The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation. Existing law continuously appropriates 60% of the annual proceeds of the fund for various purposes, including 10% for the Transit and Intercity Rail Capital Program administered by the Transportation Agency and 25% for certain components of the initial operating segment and Phase I Blended System of the high-speed rail project as described in the 2012 business plan adopted by the High-Speed Rail Authority.

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This bill would reappropriate the 25% share of the annual proceeds of the fund designated for the high-speed rail project to the Transportation Agency for the Transit and Intercity Rail Capital Program under specified conditions. The bill would make legislative findings and declarations.

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Existing law establishes the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007, which includes the Alternative and Renewable Fuel and Vehicle Technology Program and the Air Quality Improvement Program. Existing law defines specified terms for purposes of the act.

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This bill would make nonsubstantive changes to those definitions.

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Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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The Legislature finds and declares all of the
following:

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(a) According to the American Lung Association’s 2015 State
of the Air report, “Southern California remains home to some of
the most polluted air in the United States. Emissions from the
transportation sector are the leading source of pollution in the
region, bringing significant lung health burdens.”

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(b) Senate Bill No. 535 (Chapter 830, Statutes of 2012) requires
that 25 percent of funds generated by the state’s cap-and-trade
program must benefit disadvantaged communities. Disadvantaged
communities include “areas disproportionately affected by
environmental pollution” and “areas with concentrations of people
that are of low income, high unemployment, low levels of
homeownership, high rent burden, sensitive populations, or low
levels of educational attainment.”

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(c) More than 50 percent of the most disadvantaged census
tracts identified by the California Environmental Protection Agency
are located in southern California.

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(d) Less than 5 percent of disadvantaged census tracts are
located in the nine San Francisco Bay Area counties.

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(e) Senate Bill No. 862 (Chapter 36, Statutes of 2014)
continuously appropriates 25 percent of cap-and-trade funds for
the high-speed rail program. Prior to obtaining this funding, the
High-Speed Rail Authority committed in a June 14, 2014, letter to
Senator Fran Pavley “to accelerate reductions in greenhouse gas
emissions (GHG) and put new emphasis on improvements in urban
areas utilizing the funding that would be provided through the
ongoing commitment of cap and trade proceeds, as contained in
Senate Bill (SB) 862.... At the same time, with cap and trade funds
we would accelerate work on the segment from Burbank to
Palmdale, so that we would be building the initial operating
segment from two directions, north to south, and south to north.
The Burbank-Palmdale segment, which potentially could become
an operating segment on its own, would accelerate benefits to the
Los Angeles region.”

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(f) The High-Speed Rail Authority further committed to this
approach through adoption of Board Resolution #14-19 declaring
“The Authority Board concurs with the priority to move forward
with the approach outlined in the CEO’s letter to State Senator
Fran Pavley, including the prioritization of the Palmdale to
Burbank project section for expenditure of cap and trade proceeds
as they become available and in accordance with provisions of
the law.”

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(g) The Legislature approved cap-and-trade funds for
high-speed rail only for purposes consistent with this commitment.
SB 862 establishes that the first operating high-speed rail segment
must reach southern California, “as described in the 2012 business
plan.”

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(h) SB 862 specifies that any subsequent decision by the
High-Speed Rail Authority to deprioritize southern California and
direct construction funding for an alternative route would not be
eligible for funding.

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(i) SB 862 requires that any redirection of cap-and-trade
investments away from some of the state’s most disadvantaged
communities in southern California would require reauthorization
by the Legislature.

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(j) It is the intent of the Legislature to establish conditions for
use of any cap-and-trade funds voluntarily forfeited by the
High-Speed Rail Authority. Nothing in this act shall be interpreted
to alter or in any way affect the conditions of funding eligibility
established by SB 862.

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begin insert SEC. 2. end insert   

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begin insert Section 39719 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

39719.  

(a) The Legislature shall appropriate the annual
proceeds of the fund for the purpose of reducing greenhouse gas
emissions in this state in accordance with the requirements of
Section 39712.

(b) To carry out a portion of the requirements of subdivision
(a), annual proceeds are continuously appropriated for the
following:

(1) Beginning in the 2015-16 fiscal year, and notwithstanding
Section 13340 of the Government Code, 35 percent of annual
proceeds are continuously appropriated, without regard to fiscal
years, for transit, affordable housing, and sustainable communities
programs as following:

(A) Ten percent of the annual proceeds of the fund is hereby
continuously appropriated to the Transportation Agency for the
Transit and Intercity Rail Capital Program created by Part 2
(commencing with Section 75220) of Division 44 of the Public
Resources Code.

(B) Five percent of the annual proceeds of the fund is hereby
continuously appropriated to the Low Carbon Transit Operations
Program created by Part 3 (commencing with Section 75230) of
Division 44 of the Public Resources Code. Funds shall be allocated
by the Controller, according to requirements of the program, and
pursuant to the distribution formula in subdivision (b) or (c) of
Section 99312 of, and Sections 99313 and 99314 of, the Public
Utilities Code.

(C) Twenty percent of the annual proceeds of the fund is hereby
continuously appropriated to the Strategic Growth Council for the
Affordable Housing and Sustainable Communities Program created
by Part 1 (commencing with Section 75200) of Division 44 of the
Public Resources Code. Of the amount appropriated in this
subparagraph, no less than 10 percent of the annual proceeds, shall
be expended for affordable housing, consistent with the provisions
of that program.

(2) Beginning in the 2015-16 fiscal year, notwithstanding
Section 13340 of the Government Code, 25 percent of the annual
proceeds of the fund is hereby continuously appropriated to the
High-Speed Rail Authority for the following components of the
initial operating segment and Phase I Blended System as described
in the 2012 business plan adopted pursuant to Section 185033 of
the Public Utilities Code:

(A) Acquisition and construction costs of the project.

(B) Environmental review and design costs of the project.

(C) Other capital costs of the project.

(D) Repayment of any loans made to the authority to fund the
project.

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(c) If the high-speed rail project becomes ineligible for funding
under paragraph (2) of subdivision (b) due to selection by the
High-Speed Rail Authority of an alternative initial operating
segment that is not as described in the authority’s 2012 business
plan, the proceeds in paragraph (2) of subdivision (b) shall instead
be continuously appropriated to the Transportation Agency for
the Transit and Intercity Rail Capital Program created by Part 2
(commencing with Section 75220) of Division 44 of the Public
Resources Code.

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(c)

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begin insert (d) end insert  In determining the amount of annual proceeds of the fund
for purposes of the calculation in subdivision (b), the funds subject
to Section 39719.1 shall not be included.

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SECTION 1.  

Section 44270.3 of the Health and Safety Code
is amended to read:

44270.3.  

For purposes of this chapter, the following terms have
the following meanings:

(a) “Benefit-cost score,” for the Alternative and Renewable Fuel
and Vehicle Technology Program created pursuant to Section
44272, means a project’s expected or potential greenhouse gas
emissions reduction per dollar awarded by the commission to the
project from the Alternative and Renewable Fuel and Vehicle
Technology Fund.

(b) “Commission” means the State Energy Resources
Conservation and Development Commission.

(c) “Full fuel-cycle assessment” or “life-cycle assessment”
means evaluating and comparing the full environmental and health
impacts of each step in the life cycle of a fuel, including, but not
limited to, all of the following:

(1) Feedstock production, extraction, cultivation, transport, and
storage, and the transportation and use of water and changes in
land use and land cover therein.

(2) Fuel production, manufacture, distribution, marketing,
transport, and storage, and the transportation and use of water
therein.

(3) Vehicle operation, including refueling, combustion,
conversion, permeation, and evaporation.

(d) “Vehicle technology” means any vehicle, boat, off-road
equipment, or locomotive, or component thereof, including its
engine, propulsion system, transmission, or construction materials.

(e) For purposes of the Air Quality Improvement Program
created pursuant to Section 44274, the following terms have the
following meanings:

(1) “Benefit-cost score” means the reasonably expected or
potential criteria pollutant emission reductions achieved per dollar
awarded by the state board for the project.

(2) “Project” means a category of investments identified for
potential funding by the state board, including, but not limited to,
competitive grants, revolving loans, loan guarantees, loans,
vouchers, rebates, and other appropriate funding measures for
specific vehicles, equipment, technologies, or initiatives authorized
by Section 44274.

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