BILL ANALYSIS Ó
AB 2653
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ASSEMBLY THIRD READING
AB
2653 (Eduardo Garcia, et al.)
As Amended May 31, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Natural |9-0 |Williams, Jones, | |
|Resources | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Gomez, Hadley, | |
| | |Harper, McCarty, | |
| | | | |
| | | | |
| | |Mark Stone, Wood | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
AB 2653
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| | |Wagner, Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Requires the Department of Finance (DOF) to include in
its annual report to committees of the Legislature information
relating to the economic impacts of Greenhouse Gas Reduction
Fund (GGRF) expenditures. Specifically, this bill:
1)Requires DOF to include, at a minimum, the following:
a) The greenhouse gas (GHG) emissions reductions
attributable to each project;
b) Actions and outcomes from those actions taken to assist
residents of disadvantaged communities and other target
populations;
c) The geographic location, industry sector, and number of
employees of the business entities receiving moneys from
the GGRF;
d) The number of jobs created, including wage levels; and,
e) The amount of other public or private moneys leveraged
with investments from the GGRF.
2)Requires the Secretary for Environmental Protection to
identify the other target populations referenced in the bill.
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3)Defines "business entity" as any firm operating in the state
as a nonprofit, sole proprietorship, general partnership,
limited partnership, limited liability partnership, limited
liability company, or corporation.
EXISTING LAW:
1)Requires the Air Resources Board (ARB), pursuant to California
Global Warming Solutions Act of 2006 [AB 32 (Núñez), Chapter
488, Statutes of 2006], to adopt a statewide GHG emissions
limit equivalent to 1990 levels by 2020 and adopt regulations
to achieve maximum technologically feasible and cost-effective
GHG emission reductions. AB 32 authorizes ARB to permit the
use of market-based compliance mechanisms to comply with GHG
reduction regulations, once specified conditions are met.
2)Requires each state agency to annually prepare and submit to
the Secretary of the California Environmental Protection
Agency (CalEPA) a report that includes:
a) A list of those measures that have been adopted and
implemented by the state agency to meet GHG emission
reduction targets and a status report of the actual GHG
emissions reduced as a result of the measures;
b) A list a timetable for adoption of any additional
measures needed to meet GHG emissions reduction targets;
c) An estimate of the department's own GHG emissions and an
explanation of any increase or decrease compared to the
previous year's emissions.
3)Requires CalEPA, on or before January 1 of each year, to
compile and organize the information submitted by state
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agencies into a clear, standardized format and provide the
information on its website as a "state agency GHG emission
reduction report card" (report card).
4)Requires DOF to annually report to the appropriate committees
of the Legislature the status of projects funded by the GGRF
and their outcomes. Requires that the report include a
description of how the administering agencies have fulfilled
the funding requirements for disadvantaged communities.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill has the following state costs:
1)Unknown increased costs for all state agencies receiving GGRF,
potentially in the hundreds of thousands of dollars (GGRF).
There are approximately 47 state agency programs receiving
GGRF.
2)Unknown increased costs, potentially in the million dollar
range, for CalEPA to reconfigure its website to accommodate
the new data.
3)Increased ongoing costs for ARB, as the GGRF administrator, of
between $145,000 and $865,000 (GGRF) depending on how the
requirement is interpreted. The upper range assumes data will
be reported for each business entity receiving GGRF; the lower
range assumes reporting on aggregate business data.
COMMENTS: According to the author, as California continues its
important work to reduce GHG emissions, state agencies have
demonstrated great creativity in developing programs that
provide co-benefits that help businesses and communities choose
more sustainable actions. This bill is intended to ensure that
co-benefits are tracked as the state transforms to a lower
carbon economy.
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ARB and DOF are required to submit various reports to the
Legislature relating to the state's cap-and-trade program and
GGRF expenditures. The primary report is ARB's Scoping Plan,
which lays out ARB's plan to reduce greenhouse gas GHG emissions
to 1990 levels by 2020. The Scoping Plan was first adopted in
2008 and must be updated every five years. ARB is also tasked
with developing a short-lived climate pollution reduction
strategy. ARB also prepares an annual report of climate
investments using cap-and-trade funds. DOF is required to
develop a three-year investment plan for cap-and-trade funding.
DOF is required to annually report to the Legislature on the
status of projects funded by the GGRF and their outcomes. The
Act requires that, where applicable and to the extent feasible,
GGRF allocations be used for co-benefits, including: economic,
environmental, and public health benefits; job creation;
complement efforts to improve air quality; direct investments
toward disadvantaged communities; provide opportunities for
businesses, public agencies, nonprofits, and other community
institutions to participate in and benefit from GHG emissions
reductions efforts; and, lessen impacts of climate change on the
state's communities, economy, and environment. However, there
is no clear reporting mechanism to inform the Legislature and
the public about the economic and job benefits have resulted
from programs funded by the GGRF. This bill would require DOF
to include information about the economic benefits associated
with GGRF programs in its existing report to the Legislature.
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. 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
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quarterly deposited into the GGRF available for appropriation by
the Legislature.
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 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
$3.1billion, are available for appropriation this year.
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, and that 25% of available
revenues fund projects that benefit those communities. In
October 2014, CalEPA released its list of disadvantaged
communities for the purpose of SB 535. CalEPA relied on
CalEnviroScreen to identify the areas disproportionately
burdened by and vulnerable to multiple sources of pollution.
CalEnviroScreen is a tool that assesses all census tracts in
California to identify the areas disproportionally affected and
vulnerable to multiple sources of pollution. Areas (census
tracts) identified as disadvantaged for SB 535's purposes by
CalEnviroScreen include: the majority of the San Joaquin Valley;
much of Los Angeles and the Inland Empire; pockets of other
communities near ports, freeways, and major industrial
facilities such as refineries and power plants; and large swaths
of the Coachella Valley, Imperial Valley and Mojave Desert.
Analysis Prepared by:
Elizabeth MacMillan / NAT. RES. / (916) 319-2092
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