BILL ANALYSIS Ó
AB 2722
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Date of Hearing: April 18, 2016
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 2722
(Burke) - As Amended April 12, 2016
SUBJECT: Transformative Climate Communities Program
SUMMARY: Establishes the Transformative Climate Communities
Program (Program) in the Strategic Growth Council (SGC) to fund
the development and implementation of neighborhood-level
transformative climate community plans (plans).
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 greenhouse gas
GHG emissions limit equivalent to 1990 levels by 2020 and
adopt regulations to achieve maximum technologically feasible
and cost-effective GHG emission reductions.
2)Authorizes ARB to permit the use of market-based compliance
mechanisms to comply with GHG reduction regulations, once
specified conditions are met.
3)Establishes the Greenhouse Gas Reduction Fund (GGRF) as the
repository for all moneys, except for fines and penalties,
collected by ARB from the auction or sale of allowances
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pursuant to a market-based compliance mechanism (i.e., the
cap-and-trade program adopted by ARB under AB 32).
4)Establishes the GGRF Investment Plan and Communities
Revitalization Act [AB 1532 (John A. Pérez), Chapter 807,
Statutes of 2012] to set procedures for the investment of GHG
allowance auction revenues. AB 1532 authorizes a range of GHG
reduction investments and establishes several additional
policy objectives.
5)Requires the GGRF Investment Plan to allocate: 1) a minimum
of 25% of the available moneys in the fund to projects that
provide benefits to identified disadvantaged communities; and,
2) a minimum of 10% of the available moneys in the fund to
projects located within identified disadvantaged communities
[SB 535 (de León), Chapter 830, Statutes of 2012].
THIS BILL:
1)Establishes the Program to fund the development and
implementation of neighborhood-level transformative climate
community plans that include multiple, coordinated GHG
emissions reduction projects that provide local economic,
environmental, and health benefits that are directly connected
to communities most impacted by pollution and vulnerable to
climate change. States the intent of the Legislature that
private resources can "more effectively be catalyzed to
support innovative community and climate transformation in
disadvantaged communities."
2)Requires SGC, in coordination with the Assistant Secretary for
Environmental Justice and Tribal Affairs at California
Environmental Protection Agency (CalEPA), to award competitive
grants to eligible entities, including:
a) Nonprofit organizations;
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b) Community-based organizations;
c) Faith-based organizations;
d) Coalitions or associations of nonprofit organizations;
e) Community development finance institutions;
f) Community development corporations; and,
g) Local agencies.
3)Directs SGC to award grants for plans that contribute to the
reduction of GHG emissions and demonstrate potential climate,
economic, workforce, health, and environmental benefits
located in disadvantaged communities that have a demonstrated
need for climate, economic, workforce, health, and
environmental benefits.
4)Requires SGC to award grants for both plan development and
plan implementation. Specifies that a plan or plan
development demonstrate, or engage in planning to achieve, an
integrated, innovative, cross-cutting project with multiple
benefitst provided directly in a disadvantaged community and
demonstrate community engagement and leadership in all phases.
5)Authorizes SGC to award a grant over multiple years.
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6)Requires SGC to weigh economic, environmental, and health
benefits equally with climate benefits. Defines "economic
benefits" as high-quality, well-paid employment opportunities
for residents, benefits for small businesses, and benefits for
minority-, LGBT-, woman-, or disabled veteran-owned small
businesses in the plan's region. Defines "LGBT" as lesbian,
gay, bisexual, or transgender.
7) Requires SGC to endeavor to identify additional public and
private sources of funding to sustain and expand the Program
and a network of technical assistance providers to assist in
plan development, implementation, and project financing.
8)Appropriates $250 million from the GGRF to fund the Program.
FISCAL EFFECT: Unknown
COMMENTS:
1)Existing GGRF funding and programs. The 2014-15 Budget Act
allocated GGRF revenues for the 2014-15 fiscal year and
established a long-term plan for the allocation of GGRF
revenues beginning in fiscal year 2015-16. Thirty-five
percent of GGRF is continuously appropriated for investments
in transit, affordable housing, and sustainable communities.
Twenty-five percent is continuously appropriated to continue
the construction of the high-speed rail project. The
remaining 40% is subject to annual appropriation 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
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continue funding for specified existing programs. The
remaining 2015-16 revenues, along with 2016-17 revenues, are
available for appropriation this year.
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.
Listed below are the major GGRF program areas, administering
agency, and funding to date:
a) Transportation and Sustainable Communities
i) High Speed Rail, High Speed Rail Authority
(Authority), $850 million
ii) Transit and Intercity Rail Capital Program,
Transportation Agency, $265 million
iii) Low Carbon Transit Operations Program, Department of
Transportation (Caltrans), $145 million
iv) Affordable Housing and Sustainable Communities
Program, Strategic Growth Council (SGC), $610 million
v) Low Carbon Transportation, ARB, $325 million
b) Clean Energy and Energy Efficiency
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i) Low-Income Weatherization Program, Community
Services and Development (CSD), $154 million
ii) Energy Efficiency in Public Buildings, California
Energy Commission (CEC), $20 million
iii) Climate Smart Agriculture, Department of Food and
Agriculture (CDFA), $75 million
iv) Water-Energy Efficiency, Department of Water
Resources (DWR), $70 million
c) Natural Resources and Waste Diversion
i) Wetlands and Watershed Restoration, Department of
Fish and Wildlife (DFW), $27 million
ii) Urban Forestry, Forest Health Restoration, and
Reforestation, Department of Forestry and Fire Protection
(CAL FIRE), $42 million
iii) Waste Diversion, Department of Resources Recycling
and Recovery (CalRecycle), $31 million
The Governor's 2016-17 Budget proposes just under $3.1 billion
in expenditures:
d) Continuous Appropriations
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i) High Speed Rail, Authority, $500 million
ii) Low Carbon Transit Operations, State Transit
Assistance, $100 million
iii) Transit and Intercity Rail Capital Program,
Transportation Agency, $200 million
iv) Affordable Housing and Sustainable Communities
Program, SGC, $400 million
e) Fifty Percent Reduction in Petroleum Use
i) Transit and Intercity Rail Capital Program,
Transportation Agency, $400 million
ii) Low Carbon Road Program, Caltrans, $100 million
iii) Low Carbon Transportation and Fuels, ARB, $500
million
iv) Biofuel Facility Investments, CEC, $25 million
f) Local Climate Action
i) Transformative Climate Communities, SGC, $100
million
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g) Short-Lived Climate Pollutants
i) Black Carbon Woodsmoke and Refrigerants, ARB, $60
million
ii) Waste Diversion, CalRecycle, $100 million
iii) Climate Smart Agriculture - Healthy Soils and Dairy
Digesters, CDFA, $55 million
h) Safeguarding California/Water Action Plan
i) Water and Energy Efficiency, CDFA and DWR, $30
million
ii) Drought Executive Order, CEC, $60 million
iii) Wetlands and Watershed Restoration/CalEcoRestore,
DFW, $60 million
i) Safeguarding California/Carbon Sequestration
i) Healthy Forests and Urban Forestry, CAL FIRE, $180
million
ii) Urban Greening, Natural Resources Agency, $20
million
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j) Energy Efficiency/Renewable Energy
i) Energy Efficiency for Public Buildings, Department
of General Services, $30 million
ii) California Lending for Energy and Environmental
Needs Center, I Bank, $20 million
iii) Energy Corps, Conservation Corps, $15 million
iv) Energy Efficiency Upgrades/Weatherization, CSD, $75
million
v) Renewable Energy and Energy Efficiency Projects,
University of California, California State University,
$60 million
2)Environmental justice. According to the Office of
Environmental Health Hazard Assessment (OEHHA), approximately
8 million Californians (21%) live in zip codes that are
considered "highly impacted" by environmental, public health,
and socioeconomic stressors. Nearly half of all Californians
live within six miles of a facility that is a significant
greenhouse gas emitter (46%), and they are disproportionately
people of color (62%). Throughout California, people of color
face a 50% higher risk of cancer from ambient concentrations
of air pollutants listed under the Clean Air Act. These
impacts are felt by all Californians. ARB estimates that air
pollution exposure accounts for 19,000 premature deaths,
280,000 cases of asthma, and 1.9 million lost work days every
year.
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In 2000, legislation [SB 89 (Escutia), Chapter 728] required
CalEPA to convene the Environmental Justice Working Group and
develop an agency-wide environmental justice strategy. In
2001, follow up legislation [SB 828 (Alarcon), Chapter 765]
established a
timeline for these requirements and required CalEPA to update
its report to the Legislature every three years. In October
of 2004, CalEPA released its Environmental Justice Action
Plan, but did not complete the required updates for a decade.
SB 535 (de León), Chapter 850, Statutes of 2012 requires the
Cap and Trade Proceeds Investment Plan to direct a minimum of
25% of the available moneys in the fund to projects that
provide benefits to identified disadvantaged communities; and,
a minimum of 10% of the available moneys in the fund to
projects located within identified disadvantaged communities.
SB 535 also required CalEPA to identify disadvantaged
communities (i.e., environmental justice communities). In
order to accurately identify environmental justice
communities, OEHHA, on behalf of CalEPA, created the
California Communities Environmental Health Screening Tool
(CalEnviroScreen). CalEnviroScreen is a screening methodology
that can be used to help identify California communities that
are disproportionately burdened by multiple sources of
pollution.
In February of 2014, CalEPA issued an Environmental Justice
Program Update, which included four main areas for future
actions: 1) increase efforts to eliminate discrimination on
the basis of race, national origin, ethnic group
identification, religion, age, sex, sexual orientation, color,
genetic information, or disability in any program or activity
conducted or funded by the state; 2) develop guidance to
promote a sound legal framework for CalEPA to advance
environmental justice goals and objectives; 3) lead an
agency-wide working group dedicated to increase compliance
with environmental laws in communities with relatively higher
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environmental burdens; and, 4) add additional indicators to
CalEnviroScreen.
3)Author's statement:
Assembly Bill 2722 establishes a much-needed, new program
to ensure that California is making comprehensive,
cross-cutting, and transformative climate investments that
achieve multiple GHG, public health, and economic benefits
in our state's most vulnerable communities. This program
will help cities, local jurisdictions, and communities
accelerate sustainability plans and help California meet
its ambitious climate change goals.
4)The benefit scale. This bill requires SGC to "weigh economic,
environmental, and health benefits equally with climate
benefits resulting from GHG emissions reductions." The
sponsors of this bill state that this is intended to ensure
that SGC directs funding to projects that have significant
co-benefits. However, it is unclear how SGC would be able to
develop a methodology that would determine and compare the
"weight" of the various benefits. Additionally, it seems
unlikely that any potential applicants would be able to
develop proposals that would meet this standard. Should this
bill move forward, the author may wish to work with
stakeholders and SGC to refine this provision to preserve the
focus on co-benefits while enabling SGC and potential
applicants to comply with the bill's requirements.
5)Suggested amendments:
a) This bill authorizes funding for plans and plan
implementation. As drafted, Section 75241 (b) (1) applies
to plan development, while (2) applies to plan development
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and implementation, which is duplicative and has the
potential to create confusion. The committee may wish to
amend the bill to combine these provisions and make related
technical and clarifying amendments.
b) This bill makes plan development eligible for grant
funding without requiring that the plan be implemented.
Plan development alone will not reduce GHG emissions.
Existing law prohibits the state from approving allocations
for a measure or program using moneys appropriated from the
GGRF unless there is a determination that the use of the
funding furthers the regulatory purposes of AB 32. In
order to ensure that SGC can allocate funds appropriately
and that grant funds result in GHG emissions reductions and
related co-benefits, the committee may wish to amend the
bill to authorize SGC to link grants for plan development
to the implementation of projects.
c) This bill appropriates $250 million from the GGRF for
the bill's purposes. In order to preserve the integrity of
the Budget process and ensure adequate legislative
oversight of GGRF expenditures, the committee may wish to
amend the bill to specify that an amount up to $250 million
is available, upon appropriation by the Legislature.
REGISTERED SUPPORT / OPPOSITION:
Support
Asian Pacific Environmental Network
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Audobon California
California Association of Local Conservation Corps
California Environmental Justice Alliance (co-sponsor)
California League of Conservation Voters
Center for Community Action and Environmental Justice
Center on Race, Poverty, and the Environment
Central Coast Alliance United for a Sustainable Economy
Communities for a Better Environment
Environmental Health Coalition
Fresno Economic Opportunities Commission
Greenlining Institute (co-sponsor)
Leadership Council for Justice and Accountability
Los Angeles Neighborhood Land Trust
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Pacoima Beautiful
People Organizing to Demand Environmental and Economic Rights
Physicians for Social Responsibility, Los Angeles
Strategic Concepts in Organizing and Policy Education
Valley Clean Air Now
Opposition
CalChamber
CalTax
Analysis Prepared by:Elizabeth MacMillan / NAT. RES. / (916)
319-2092
AB 2722
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