BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2653 (Eduardo Garcia) - Greenhouse Gas Reduction Fund:
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|Version: June 15, 2016 |Policy Vote: E.Q. 6 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 8, 2016 |Consultant: Narisha Bonakdar |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 2653 requires the annual report submitted by the
Department of Finance (DOF) on projects funded through the
Greenhouse Gas Reduction Fund (GGRF) to include specified
additional information related to jobs and business.
Fiscal
Impact:
Year one staff costs of approximately $780,000 (GGRF) to ARB,
and ongoing staff costs of approximately $620,000 (GGRF).
Approximately $200,000 (GGRF) annually for information
technology and other contracts.
Unknown, potentially significant costs to the DOF and the
administering agencies to track, compile, and provide
requested information.
Background:
AB 2653 (Eduardo Garcia) Page 1 of
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Greenhouse Gas Reduction Fund. 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 quarterly deposited
into the GGRF available for appropriation by the Legislature.
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 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.
ARB co-benefits assessment. ARB is currently in the process of
executing a $750,000 contract (including fiscal years 2016-17
and 2017-18) with UC Berkeley to assess co-benefits on a broad
scale (social, economic, and environmental). Guidance on
quantification or data collection on employment/jobs creation is
included as one of many co-benefits the assessment will review.
ARB will implement the recommendations.
Proposed Law:
AB 2653 (Eduardo Garcia) Page 2 of
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This bill:
1) Requires the annual report submitted by DOF on projects
funded through GGRF to include the following information:
a) GHG reductions attributable to each project.
b) The environmental and public health benefits
attributable to the project.
c) Actions and outcomes from actions taken to assist
residents of disadvantaged communities, and other target
populations, as specified, with the business, employment,
and training opportunities offered through activities
funded through the GGRF.
d) Geographic locations, industry sector, and number of
employees of the business entities, as defined, receiving
GGRF moneys.
e) The number of jobs created, including wage levels
reported in ranges, as specified, by the business entities
receiving GGRF moneys.
f) The amount of other public and private moneys leveraged
with GGRF moneys.
2) Requires that state agencies expending GGRF moneys condition
the acceptance of those moneys on the recipient providing
information necessary to meet the above reporting
requirements.
3) Requires that data received in order to meet the above
reporting requirements is available to the public.
4) Requires the Secretary of the California Environmental
Protection Agency (CalEPA) to post a link to the report on
specified Internet websites.
5) Specifies that target populations means communities and
groups of individuals that experience high levels of
unemployment or poverty, and authorizes the California
Workforce Development Board and the Governor's Office of
Business and Economic Development identify those populations.
Staff Comments:
Purpose of Bill. According to the author, "Since the enactment
of the California Global Warming Solutions Act of 2006,
AB 2653 (Eduardo Garcia) Page 3 of
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California has been committed to taking actions to reduce its
own greenhouse gas emissions and serve as a catalyst for others
to undertake their own emission reduction actions.
"One of the primary financing methods being used by the state,
are the proceeds from the cap-and-trade auction revenues. The
use of these funds is guided by the three-year Climate Change
Investment Plan, which is designed to identify: near-term and
long-term GHG emission reduction goals by sector; gaps in
current state strategies; and, priority programmatic investments
of moneys in the Greenhouse Gas Reduction Fund. Annually, the
Department of Finance reports on programs funded with Greenhouse
Gas Reduction Fund moneys.
"While the Investment Plan and annual updates include relevant
information, California needs to establish routine, quantified,
consistent, and public reporting of the actions and outcomes of
the expenditures of these funds. Having access to this level of
data can assist the legislature in making good decisions related
to new funding, modifications to existing activities in order to
fill gaps, review goals and objectives, and to ensure that all
areas of the state and type/size of business are making this
important economic transition to a lower carbon economy."
ARB fiscal. According to ARB, ARB will be consolidating and
analyzing data collected for the business entities subject to AB
2653 across the 45+ GGRF programs (including data quality
checks), mapping and publishing the data, and reporting on
employment/jobs outcomes and how they are related to benefits to
disadvantaged communities. The positions requested in ARB's
fiscal are meant to capture the additional workload. In
addition, the positions would be tasked with expanding the
existing tracking and reporting requirements, and modifying the
tracking system to integrate the new employment/jobs data with
existing project tracking data.
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