BILL ANALYSIS Ó AB 2293 Page 1 Date of Hearing: May 18, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2293 (Cristina Garcia) - As Amended April 27, 2016 ----------------------------------------------------------------- |Policy |Natural Resources |Vote:|9 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill establishes the Green Assistance Program in CalEPA, and moves the Green Business Program from the Department of Toxic Substance Control (DTSC) to CalEPA and expands its provisions. This bill annually appropriates unspecified amounts AB 2293 Page 2 of funds, without regard to fiscal year, to both programs from the AB 32 Greenhouse Gas Reduction Fund (GGRF) or from funds available to the Affordable Housing and Sustainable Communities Program (GGRF). Specifically, this bill: 1)Creates the Green Assistance Program (GAP) to assist small businesses and nonprofits including the development of grant proposals to apply for Greenhouse Gas Revenue Funds (GGRF), complying with existing law, identifying state agency grant programs, and coordinating with existing local GHG reduction programs. 2)Eliminates the Green Business Program (GBP) at DTSC and recasts and expands the program at CalEPA. GBP is required to assist local governments in establishing green business certification programs, seeking and providing funding, coordinating with other programs, and collaborating with the GAP. Unlike the GBP program at DTSC, this program does not require compliance with applicable federal, state and local environmental laws as a condition of receiving certification. FISCAL EFFECT: 1)Unspecified annual appropriations (that do not require appropriation by the Legislature) likely in the hundred million dollar range, from GGRF or the Affordable Housing and Sustainable Communities Program funds (continuously appropriated GGRF). 2)Assuming CalEPA tasks the California Air Resources Board (ARB) with implementing the GAP, ARB estimates it would require 6 new positions and $873,000 to administer with an additional $8 to $10 million in contracts (GGRF and Cost of Implementation Account). AB 2293 Page 3 3)Unknown costs to implement GBP, likely similar to those identified for the GAP program (GGRF and other special funds.) It is unclear if CalEPA would administer this program or task it to a constituent department or agency. COMMENTS: 1)Purpose. According to the author, as cap and trade proceeds are make their way into our communities, it has become apparent there are barriers that prevent the funding from getting into many of places it is needed. This bill creates a Green Assistance Program to assist nonprofits and small businesses in accessing cap and trade funding. The already established Green Business Program is modified to green our small businesses and collaborate with the Green Assistance Program to provide technical assistance to small non-profits, which often lack capacity to effectively compete for grants. 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. AB 2293 Page 4 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. 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. 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 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 AB 2293 Page 5 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)GBP unfunded since 2012. In 2012, the GBP was defunded in a budget trailer bill that also made many of DTSC's mandates in the Pollution Prevention Program (where the GBP was housed) permissive. Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081