BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  May 18, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2722 (Burke) - As Amended April 20, 2016


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          The bill creates the Transformative Climate Communities Program  
          (Program), to be administered by the Strategic Growth Council  
          (SGC) and funded by AB 32 cap-and-trade revenues.  Specifically,  
          this bill:


          1)Allocates up to $250 million from of Greenhouse Gas Revenue  
            Funds (GGRF), upon appropriation by the Legislature, to SGC to  
            administer the program.  
          2)Requires SGC, in coordination with the Assistant Secretary for  
            Environmental Justice and Tribal Affairs at California  
            Environmental Protection Agency (CalEPA), to award competitive  








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            grants to eligible entities, including: 


             a)   Nonprofit organizations; 
             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. 





          1)Requires grants to be awarded for the development and  
            implementation of transformative climate community plans that  
            contribute to greenhouse gas (GHG) emission reductions and  
            demonstrate potential climate, economic, workforce, health,  
            and environmental benefits in disadvantaged communities, as  
            specified.  Grants may be awarded over multiple years. 



          2)Requires SGC and all funded entities to identify additional  
            public and private funds and coordinate a network of technical  
            assistance providers, as specified. 
          FISCAL EFFECT:









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          1)Cost pressures of up to $250 million (GGRF) to fund the  
            Program.


          2)Increased costs of $5 million for SGC to develop and implement  
            the program.  This figure is based on the Governor's proposed  
            budget which provides $100 million for an Administration  
            proposed Transformative Climate Communities Program (GGRF)


          3)Increased costs to the Air Resources Board (ARB) of less than  
            $150,000 (GGRF) if eligible projects fit within existing GGRF  
            project categories.  If eligible projects are outside current  
            existing GGRF project categories, ARB estimates increased  
            initial costs of approximately $670,000 for two years, and  
            ongoing annual costs of $520,000 (GGRF) to develop  
            quantification methodologies, disadvantaged community  
            criteria, reporting criteria, and expenditure records
          4)Minor, absorbable costs for CalEPA.


          COMMENTS:


          1)Purpose.  According to the author, this bill establishes a new  
            program to ensure California is making comprehensive,  
            cross-cutting, and transformative climate investments to  
            achieve multiple GHG, public health, and economic benefits in  
            our state's most vulnerable communities.  This bill will help  
            cities, local jurisdictions, and communities accelerate  
            sustainability plans to meet the state's climate change goals.  
             


          2)Background. The California Global Warming Solutions Act of  
            2006 (AB 32).  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  








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            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.  





            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. 





            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.  









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            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.  





            The 2016-17 proposed budget includes $100 million to create a  
            new Transformative Climate Communities Program, but did not  
            include much detail on the specifics of the program.  This  
            bill is intended to expand upon this proposal.



          3)Disadvantaged Communities and Environmental Justice.  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  








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            large swaths of the Coachella Valley, Imperial Valley and  
            Mojave Desert.

            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 GHG emitter and they are  
            disproportionately people of color.  

            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  
            environmental burdens; and, 4)Add additional indicators to  
            CalEnviroScreen to identify disadvantaged communities for the  
            purpose of GGRF expenditures.









          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081











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