BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:   April 12, 2016


           ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS


                                  Luis Alejo, Chair


          AB 2292  
          (Gordon) - As Amended April 4, 2016


          SUBJECT:  California Communities Environmental Health Screening


          SUMMARY:  Requires additional factors to be considered in the  
          California Communities Environmental Health Screening  
          (CalEnviroScreen). Specifically, this bill:


             1)   Requires the California Environmental Protection Agency  
               (CalEPA), by July 1, 2017, to further update the  
               identification of disadvantaged communities (DAC) through  
               the CalEnviroScreen for investment opportunities, to  
               include factors that include areas of the state that are  
               disproportionately impacted by:


                  a.        High poverty rates; 


                  b.        High rent burden and severe rent burden where  
                    households pay more than 50% of their household income  
                    in gross rent; and, 









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                  c.        High cost of living. 


          EXISTING LAW:  


             1)   Requires CalEPA to develop a methodology that identifies  
               priority community areas for investment opportunities  
               related to the Greenhouse Gas Reduction Fund (GGRF).   
               Requires that these "priority community investment areas"  
               be identified and updated at least every two years based on  
               specified geographic, socioeconomic, and environmental  
               hazard criteria. To meet this requirement OEHHA has  
               developed CalEnviroScreen. (Health and Safety Code § 39711)


             2)   Requires the Office of Environmental Health Hazard  
               Assessment (OEHHA) to develop and maintain a system of  
               environmental indicators to provide policymakers and the  
               public with information to evaluate the effectiveness of  
               CalEPA's programs in improving environmental quality and  
               protecting public health throughout the state, including  
               environmental quality and public health in low-income  
               communities and communities of color, and to assist CalEPA  
               in making budget decisions that address the most  
               significant environmental concerns, among other objectives  
               for the system. (Public Resources Code (PRC) § 71080 (a))


             3)   Requires OEHHA to update its CalEnviroScreen 2.0 tool by  
               using any relevant environmental data relating to known  
               impacts of air pollution, water pollution, and toxic sites  
               on the environmental quality of the communities in the  
               California-Mexico border region. (PRC § 71090 (b)(1))


          FISCAL EFFECT:  Unknown. 









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          COMMENTS:  


          Need for the bill: According to the author, "SB 535 called for  
          the formation of a tool to use both environmental and economic  
          factors to identify disadvantaged communities for investment  
          opportunities. The current methodology of that tool,  
          CalEnviroScreen, does not include a number of metrics important  
          to capture poverty and economic disadvantage and subsequently  
          may not completely fulfill the mission of SB 535 to classify  
          California's most impacted and disadvantaged communities.  
          Currently, CalEnviroScreen only includes one metric out of 19 to  
          reflect poverty, and does not factor in other important economic  
          factors such as cost of living or rent burden. As we are  
          currently in the midst of a housing crisis, there are some  
          Californians paying more than half of their income on rent.  
          Ultimately, this results in a tool which does not capture some  
          of California's most chronically neglected and poverty-stricken  
          neighborhoods, and we believe that the inclusion of additional  
          factors that focus on economic disadvantage would make  
          CalEnviroScreen a tool to more effectively tackle issues of  
          environmental justice." 



          Senate Bill (SB) 535: Pursuant to the authorities provided in AB  
          32 (Nuñez, Chapter 488, Statutes of 2006), the California Air  
          Resources Board implemented the cap-and-trade program as one of  
          several strategies to reduce greenhouse gas emissions. Funds  
          received from the program are deposited into the GGRF and  
          appropriated by the Legislature. They must be used for programs  
          that further reduce emissions of greenhouse gases. 

          In 2012, the Legislature passed SB 535 (De Léon, Chapter 830,  
          Statutes of 2012), directing at least 25% of the funds from the  








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          GGRF to go to projects that provide a benefit to disadvantaged  
          communities (DACs), and requiring a minimum of 10% of the funds  
          to be directed to projects located within those communities. 

          SB 535 directed CalEPA to identify DACs based on geographic,  
          socioeconomic, public health, and environmental hazard criteria,  
          including:

             a)   Areas disproportionately affected by environmental  
               pollution and other hazards that can lead to negative  
               public health effects, exposure, or environmental  
               degradation; and, 

             b)   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.

          The intent of SB 535 was, specifically, to direct resources to  
          the state's most impacted and disadvantaged communities to  
          ensure activities taken pursuant to AB 32 will provide economic  
          and health benefits to these communities, and to ensure that  
          investments made per AB 32 will achieve additional emission  
          reductions and mitigate direct health impacts on California's  
          most impacted DACs.

          CalEnviroScreen: To comply with the requirements set forth in SB  
          535, OEHHA developed CalEnviroScreen (also known as CES 2.0),  
          which uses existing environmental, health, and socioeconomic  
          data to determine the extent to which communities across the  
          state are burdened by and vulnerable to pollution.  

          CalEnviroScreen uses the following metrics to identify the 25%  
          most disadvantaged census tracts:


          Pollution burden indicators: ozone, PM2.5 (particulate matter  
          <2.5 microns), diesel, drinking water, pesticides, toxic  
          releases, traffic, cleanups, groundwater, hazardous waste,  








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          impaired waters, and solid waste; and,





          Population characteristics: age, asthma, low birth weight, low  
          education, linguistic isolation, poverty, and unemployment.


          Concerns with the current CalEnviroScreen: According to the Bay  
          Area Air Quality Management District (BAAQMD), the current  
          version of the CalEnviroScreen is ill-suited for allocating GGRF  
          funds to DACs. Specifically, the BAAQMD believes the tool, with  
          its complex multivariate analysis of 19 variables, fails to  
          identify as disadvantaged hundreds of Bay Area census tracts  
          that are clearly very disadvantaged in the real world.  The  
          BAAQMD asserts that, "a single variable, even extreme poverty,  
          is heavily watered down by the existing CalEnviroScreen."





          As it relates to the San Francisco Bay Area region, a March 2015  
          research brief by the Silicon Valley Institute for Regional  
          Studies, Poverty in the San Francisco Bay Area, found that  
          federal poverty statistics may underestimate economic hardship  
          in the region. The report shows that using federal definitions  
          of the poverty line may not be appropriate in the San Francisco  
          Bay area because an inordinate percentage of income is spent on  
          severe rent and high cost of living, such that these factors  
          must be considered separately to income in California to truly  
          capture economic burden. 













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          Some stakeholders are concerned that DACs are being left out  
          under the current CalEnviroScreen. According to the BAAQMD and  
          the Metropolitan Transportation Commission (MTC), "CES2.0 only  
          identifies 85 Bay Area census tracts as disadvantaged- 4% of the  
          statewide total - even though we have 17% of the state's  
          households living in poverty, when adjusted for cost of  
          living?38% of the Bay Area's census tracts identified as DAC's  
          by CES2.0 have median household income above 80 percent of the  
          statewide median? [T]his same misalignment occurs across the  
          state; hundreds of low income communities are excluded, while  
          far more affluent ones are included."





          The MTC found that in Sacramento, only 28% of lower income  
          residents are included in CES2.0, while in San Diego only 13% of  
          lower income residents are included. In these two regions  
          combined, CES2.0 excludes 1.3 million lower income residents.   
          Even in Los Angeles County, the MTC states, where CES2.0  
          corresponds more closely with income, 27% of lower-income census  
          tracts are excluded - totaling 259 census tracts, home to over  
          955,000 residents. 





          Inclusion of poverty as a new indicator: AB 2292 proposes to  
          include "high poverty rates" as a new indicator in the CalEnviro  
          Screen. 





          The October 2014 CalEnviroScreen Version 2.0 Report stated that,  
          "[p]overty is an important social determinant of health.  








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          Numerous studies have suggested that impoverished populations  
          are more likely than wealthier populations to experience adverse  
          health outcomes when exposed to environmental pollution." 





          It continues, "[b]ecause low socioeconomic status often goes  
          hand-in-hand with high unemployment, the rate of unemployment is  
          a factor commonly used in describing [DACs]. On an individual  
          level, unemployment is a source of stress, which is implicated  
          in poor health reported by residents of such communities. Lack  
          of employment and resulting low income often oblige people to  
          live in neighborhoods with higher levels of pollution and  
          environmental degradation." 





          Under the current version of CalEnviroScreen, data from the  
          American Community Survey (ACS), which is an ongoing survey of  
          the U.S. population conducted by the U.S. Census Bureau, are  
          used to assess poverty. The ACS releases results annually based  
          on a sub-sample of the population and includes more detailed  
          information on socioeconomic factors such as poverty. Multiple  
          years of data are pooled together to provide more reliable  
          estimates for geographic areas with small population sizes. The  
          most recent results available at the census tract scale are the  
          5-year estimates for 2008-2012.


           


          Consistent with that, the aforementioned research brief, Poverty  
          in the San Francisco Bay Area, found that, "the standard  
          definition of poverty is still a useful tool to determine the  








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          extent of severe economic hardship. And, since the federal  
          poverty statistics are reported regularly and at a fine  
          geographic level, they enable a highly detailed analysis over  
          time and within regions." 





          While CalEnviroScreen 2.0 currently includes poverty as an  
          indicator, according to the author, codifying poverty under this  
          bill clarifies that poverty shall be a standalone indicator, in  
          addition to the existing indicators and proposed indicators  
          under this bill. However, as the bill is written, just requiring  
          CalEnviroScreen to include areas of the state that are  
          disproportionately impacted by high poverty rates may not  
          accomplish the author's intent.  The author may wish to consider  
          including more detail on the inclusion of high poverty rates as  
          a factor to ensure his intent is realized.





          Inclusion of high rent burden as a new indicator: The intent of  
          AB 2292, as understood, is to make sure communities with high  
          poverty rates that are in high cost of living regions are  
          recognized by the CalEnviroScreen. Specifically, AB 2292  
          proposes including three new metrics, including high rent burden  
          and severe rent burden where households pay more than 50% of  
          their household income in gross rent. 





          Under state law, per SB 535, CalEPA is required to consider  
          concentrations of residents in areas that are low income, high  
          unemployment, low levels of homeownership, and high rent burden.








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          Currently, federal census data does not indicate rent burdens  
          higher than 50% of income, nor does it provide data at a  
          gradient, county level. However, OEHHA is currently evaluating  
          how to meet the intent of SB 535 with regards to inclusion of  
          high rent burden for its release of CalEnviroScreen version 3.0.  






          While mandating inclusion of "high rent burden and severe rent  
          burden where households pay more than 50% of their household  
          income in gross rent" may be consistent with the evaluations  
          OEHHA is currently working on, it may presume the ability to  
          include an accurate metric or reliable set of data before OEHHA  
          completes its own investigation and opens a public comment  
          period. The committee may wish to consider an amendment to  
          clarify that these factors shall be included where feasible. 





          Inclusion of high cost of living as a new indicator: As with the  
          author's intent for including poverty as a new indicator,  
          specifically including high cost of living as a definitive  
          indicator underscores the intent of SB 535 to adequately ensure  
          that socioeconomics are appropriately accounted for in the  
          CalEnviroScreen. 












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          As such, there are other state metrics used for evaluating  
          poverty, rent and cost of living that could inform the revisions  
          to the CalEnviroScreen envisioned by this bill. 





          For instance, similar to how the CalEnviroScreen is used to  
          determine DACs for GGRF investments, the California Department  
          of Housing and Community Development (Department) uses State  
          Income Limits (SIL) to determine applicant eligibility (based on  
          level of household income) and to calculate affordable housing  
          cost for applicable housing assistance programs. 


          The Department is required under current law to update the SIL  
          for the low, very-low, and extremely-low income categories when  
          the U.S. Department of Housing and Urban Development (HUD)  
          updates its Section 8 program income limits. The Department has  
          developed a metric for incorporating, by county, median income,  
          cost of living, and housing costs into determining Section 8  
          housing, and updates this metric (SIL) every year. 


          Information like this could inform the inclusion of the new  
          indicators required under AB 2292.  


          Recent changes: The CalEnviroScreen was updated pursuant to AB  
          1059 (E. Garcia, Chapter 584, Statutes of 2015) in October 2014  
          to include additional data along the US-Mexico border. 





          In addition, the scoring for many of the previously existing  








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          indicators was also adjusted. For example, unemployment has been  
          associated with poor health outcomes and psychosocial stress in  
          communities. An indicator using the 5-year estimate of the  
          unemployment rate (2008-2012) was included as a Socioeconomic  
          Factor in CalEnviroScreen 2.0.





          OEHHA plans to release another updated version of  
          CalEnviroScreen (version 3.0) sometime this year.



          GGRF Budget: The 2015-2016 Budget allocated a total of $1.4  
          billion from the GGRF, and the Governor's proposed FY 2016-2017  
          Budget includes $1 billion in GGRF expenditures. The remaining  
          2015-2016 revenues, along with 2016-2017 revenues, are available  
          for appropriation this year. Including ongoing accruing  
          revenues, there is currently more than $3 billion in  
          cap-and-trade revenues in the GGRF for investments. That could  
          result in around $750 million in investments in projects that  
          benefit disadvantaged communities as identified by  
          CalEnviroScreen. Ensuring the CalEnviroScreen accurately  
          implements the intent of SB 535 is important to many communities  
          hoping to reap the investment benefits. 


          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.  


          Modifications to the CalEnviroScreen could result in communities  
          not previously identified as a DAC being eligible for GGRF  








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          investments, while other communities that were previously  
          identified as eligible could be found to be ineligible. 


          Technical amendment: In order to ensure the proposed factors are  
          based on the best available data, the Committee may wish to  
          amend the bill as follows:  

            On page 3, line 14, the bill should be amended as follows:   
            (b) No later than July 1, 2017, the California Environmental  
            Protection Agency shall update the identification of  
            disadvantaged communities for investment opportunities related  
            to this chapter, as established pursuant to subdivision (a),  
            to include factors,  based on best available data,  that  
            include, but need not be limited to, areas of the state that  
            are disproportionately impacted by any of the following: 



          Related legislation:

             1)   AB 1550 (Gomez) would require that 25% of the GGRF be  
               spent on projects located within DACs, and requires that an  
               additional 25% be spent on projects that benefit low-income  
               households.  This bill was heard in the Assembly Natural  
               Resources Committee on April 4, where it was approved on a  
               7 - 0 vote.  



             2)   AB 1815 (Alejo) would require the GGRF Investment Plan  
               to allocate technical assistance funds to CalEPA to assist  
               DACs and low-income communities in developing greenhouse  
               gas reduction project funding proposals. This bill was  
               heard in the Assembly Natural Resources Committee on April  
               4, where it was approved on a 7 - 2 vote.  











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             3)   AB 1968 (Steinorth) would require that 10% of the  
               funding continuously appropriated to the Affordable Housing  
               and Sustainable Communities Program to be allocated to  
               certain cities and counties. It has been referred to the  
               Assembly Housing & Community Development Committee. 
          REGISTERED SUPPORT / OPPOSITION:




          Support


          Bay Area Air Quality Management District


          Sierra Club California 




          Opposition


          None on file. 




          Analysis Prepared by:Paige Brokaw / E.S. & T.M. / (916) 319-3965

















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