BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2722|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 2722
Author: Burke (D)
Amended: 8/19/16 in Senate
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 6/29/16
AYES: Wieckowski, Hill, Jackson, Leno, Pavley
NOES: Gaines, Bates
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 51-26, 6/2/16 - See last page for vote
SUBJECT: Transformative Climate Communities Program
SOURCE: California Environmental Justice Alliance
Greenlining Institute
DIGEST: This bill creates the Transformative Climate
Communities Program, administered by the Strategic Growth
Council (SGC), to fund the development and implementation of
neighborhood-level transformative climate community plans, that
include gas emissions reduction projects, which achieve local
economic, environmental and health benefits for disadvantaged
communities.
Senate Floor Amendments of 8/19/16 add tribal governments as an
eligible entity; specify plans provide benefits to disadvantaged
communities; require the California Environmental Protection
Agency to provide assistance in performing outreach; strike the
economic benefits definition; require that projects maximize
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Page 2
specified benefits; require SGC to fund technical assistance
providers to assist in application development and project
development and implementation; strike requirements surrounding
public workshops for guideline development; and require SGC to
consider economic displacement when adopting guidelines.
ANALYSIS:
Existing law:
1) Requires, under the California Global Warming Solutions Act
of 2006 (also known as AB 32), the California Air Resources
Board (ARB) to determine the 1990 statewide greenhouse gas
(GHG) emissions level and approve a statewide GHG emissions
limit that is equivalent to that level, to be achieved by
2020, and to adopt GHG emissions reductions measures by
regulation. ARB is authorized to include the use of
market-based mechanisms to comply with these regulations.
(Health and Safety Code §38500 et seq.)
2) Establishes the Greenhouse Gas Reduction Fund (GGRF) in the
State Treasury, requires all moneys, except for fines and
penalties, collected pursuant to a market-based mechanism be
deposited in the fund. (Government Code §16428.8)
3) Prohibits the state from approving allocations for a measure
or program using GGRF moneys except after determining that
the use of those moneys furthers the regulatory purposes of
AB 32, and requires moneys from the GGRF be used to
facilitate the achievement of reductions of GHG emissions in
California. (HSC §39712)
4) Appropriates, continuously, 60% of GGRF moneys to transit,
affordable housing and sustainable communities, including 20%
continuously appropriated to the SGC for the Affordable
Housing and Sustainable Communities Program. (HSC §39719)
This bill:
1) Establishes the Transformational Climate Communities Program
(Program) to fund the development and implementation of
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neighborhood-level transformative climate community plans
that include multiple, GHG emissions reduction projects that
provide local economic, environmental, and health benefits to
disadvantaged communities, as specified.
2) States the intent of the Legislature that private resources
can "more effectively be catalyzed to support innovative
community and climate transformation in disadvantaged
communities."
3) Requires the SGC to award competitive grants to eligible
entities, including, but not limited to, nonprofit
organizations, community-based organizations, faith-based
organizations, coalitions or associations of nonprofit
organizations, community development finance institutions,
community development corporations, local agencies, tribal
governments, and joint powers authorities.
4) Require eligible entities to demonstrate multistakeholder
partnerships with local agencies, community-based
organizations, labor groups, workforce investment boards, and
other stakeholders, as appropriate, and requires SGC to award
grants for projects that demonstrate community engagement in
all phases.
5) Authorizes SGC to award a grant over multiple years.
6) Specifies that, in order to be eligible for funding under the
program, a plan, and a project that implements a plan, must
demonstrate that it will achieve a reduction in GHG
emissions, and requires projects maximize climate, public
health, environmental, workforce, and economic benefits.
7) Requires the California Environmental Protection Agency to
provide assistance in performing outreach to disadvantaged
communities and assessing environmental justice benefits of
project awards.
8) Requires SGC to fund technical assistance providers to assist
in application development and project development and
implementation.
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9) Requires SGC to adopt guidelines and selection criteria, and
to conduct outreach to disadvantaged communities on the draft
guidelines, and consider comments from stakeholders when
adopting those guidelines.
10)Specifies that the bill will only become operative if AB 1613
(Committee on Budget) is enacted and becomes effective on or
before January 1, 2017, and if AB 1613 appropriates funding
from the GGRF for the Program.
Background
1) Cap-and-trade auction revenue. Since November 2012, ARB has
conducted 15 cap-and-trade auctions, generating over $4
billion in proceeds to the state.
State law specifies that the auction revenues must be used to
facilitate the achievement of GHG emissions reductions and
outlines various categories of allowable expenditures.
Statute further requires the Department of Finance, in
consultation with ARB and any other relevant state agency, to
develop a three-year investment plan for the auction
proceeds, which are deposited in the GGRF.
SB 535 (de León, Chapter 830, Statutes of 2012) requires the
Department of Finance, in the investment plan, to allocate at
least 25% of available moneys in the GGRF to projects that
provide benefits to disadvantaged communities, and at least
10% to projects located within disadvantaged communities.
Additionally, SB 862 (Committee on Budget and Fiscal Review,
Chapter 36, Statutes of 2014) requires ARB to develop
guidelines on maximizing benefits for disadvantaged
communities by agencies administering GGRF funds, and
guidance for administering agencies on GHG emissions
reduction reporting and quantification methods.
Legal consideration of cap-and-trade auction revenues. The
2012-13 Budget analysis of cap-and-trade auction revenue by
the Legislative Analyst's Office noted that, based on an
opinion from the Office of Legislative Counsel, the auction
revenues should be considered mitigation fee revenues, and
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their use requires that a clear nexus exist between an
activity for which a mitigation fee is used and the adverse
effects related to the activity on which that fee is levied.
Therefore, in order for their use to be valid as mitigation
fees, revenues from the cap-and-trade auction must be used to
mitigate GHG emissions or the harms caused by GHG emissions.
In 2012, the California Chamber of Commerce filed a lawsuit
against the ARB claiming that cap-and-trade auction revenues
constitute illegal tax revenue. In November 2013, the
superior court ruling declined to hold the auction a tax,
concluding that it is more akin to a regulatory fee. The
plaintiffs filed an appeal with the 3rd District Court of
Appeal in early 2014, and that case is pending.
Budget allocations. SB 862 (Committee on Budget and Fiscal
Review, Chapter 36, Statutes of 2014), a budget trailer bill,
established a long-term cap-and-trade expenditure plan by
continuously appropriating portions of the funds for
designated programs or purposes. The legislation
appropriates 25% for the state's high-speed rail project, 20%
for affordable housing and sustainable communities grants,
10% to the Transit and Intercity Rail Capital Program, and 5%
for low-carbon transit operations. The remaining 40% is
available for annual appropriation by the Legislature.
The Governor's 2016-17 proposed budget appropriates over $3
billion to a variety of programs and projects in the
transportation, energy, natural resources, and waste
diversion sectors.
2) Governor's Transformative Climate Communities budget
proposal. The Governor's 2016-17 budget proposal requests
$100 million to establish the Program, administered by the
SGC, to support local climate action implementation in the
top five percent disadvantaged communities in California.
According to the proposal, "Funding would support projects
that integrate multiple, cross-cutting approaches to reduce
GHGs, and that the program combines climate investments
within a local area for catalytic impact-including
investments in energy, transportation, active transportation,
housing, urban, greening, land use, water and waste
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efficiency, and other areas-while also increasing job
training, economic, health and environmental benefits."
AB 1613 (Committee on Budget) includes various appropriations
from the GGRF, including $175 million to be used for
transformative climate communities and focused on
disadvantaged communities in the state, and $5 million for
outreach to disadvantaged communities. AB 1613 also
specifies that these funds for transformative climate
communities will only be appropriated if SB 32 (Pavley) is
enacted and becomes operative.
The Assembly budget plan for fiscal year 2016-17 includes a
$100 million appropriation from the GGRF for "local climate
programs."
Comments
1) Purpose of Bill. According to the author, "Assembly Bill
2722 establishes the Transformative Climate Communities
Program administered by the Strategic Growth Council to
ensure that California is making investments that reduce
greenhouse gases and also demonstrate co-benefits for the
economy, workforce, and the health of California's most
vulnerable communities. AB 2722 creates a one stop shop for
cities, counties, and community-based organizations to fund
multiple projects that reduce greenhouse gas emissions. Our
state has been a strong leader in the fight against climate
change and reducing pollution, and AB 2722 is a step to
ensure that we leave no community behind."
2) What types of investments will be supported through the
program? AB 2722 does not prescribe the types of projects
that are eligible for funding, or provide categorical
guidance for plans and projects that may be funded under the
Program. Instead, the bill specifies that the Program will
fund "neighborhood-level transformative" plans that include
"multiple, coordinated greenhouse gas emissions reduction
projects." The bill also requires that plans and projects
awarded grants by SGC demonstrate an "integrated, innovative,
crosscutting" approach and "provide multiple benefits to the
community and demonstrate community engagement and leadership
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in all phases."
The Governor's proposal includes investments in energy,
transportation, active transportation, housing, urban,
greening, land use, water and waste efficiency, and other
areas, as possible projects that could be funded through the
Program.
The sponsors of the bill have provided examples of the types
of projects that might be funded through the Program. These
include community-led planning in National City to develop a
land use plan to build a vibrant, healthy community with
affordable housing, equitable transit, safe pedestrian
walkways, and increased clean energy. Other examples from
the sponsors include an urban greening project in the San
Fernando Valley to increase green infrastructure and active
transportation, and an affordable housing development in
South Los Angeles that includes community gardens, open
space, and a community room and commercial space that serves
the local community.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
Unknown ongoing costs, between the high hundreds of
thousands to low millions (GGRF) for the SGC to develop,
administer, and oversee the financial assistance programs.
Approximately $715,000 annually in years one and two for
ARB, and approximately $550,000 ongoing (GGRF).
Unknown, potentially significant, costs (GGRF) to CalEPA
for consultation.
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SUPPORT: (Verified8/22/16)
California Environmental Justice Alliance (co-source)
Greenling Institute (co-source)
Audubon California
California Association of Local Conservation Corps
California Equity Leaders Network
California League of Conservation Voters
California Pan Ethnic Health Network
Coalition for Clean Air
Fresno Economic Opportunities Commission
Health Officers Association of California
Los Angeles Neighborhood Land Trust
Lutheran Office of Public Policy - California
National Audubon Society
PAN North America
Sierra Club California
TransForm
Union of Concerned Scientists
Valley Clean Air Now
OPPOSITION: (Verified8/22/16)
None received
ARGUMENTS IN SUPPORT: Supporters state that the Program will
foster an integrative collaborative approach to comprehensively
address the burdens of disproportionately impacted communities
that have suffered from decades of environmental pollution and
neglect. They also state that the Program moves out of the
project-specific silos that has characterized most GGRF spending
thus far and instead, the bill promotes multi-stakeholder
collaborations and leverages a range of funding sources,
including private sector, to achieve large-scale impact in a
holistic manner.
ASSEMBLY FLOOR: 51-26, 6/2/16
AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown,
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Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper,
Dababneh, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo
Garcia, Gatto, Gipson, Gomez, Gonzalez, Gray, Roger Hernández,
Holden, Irwin, Jones-Sawyer, Levine, Linder, Lopez, Low,
McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk,
Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,
Thurmond, Ting, Weber, Williams, Wood, Rendon
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,
Chávez, Dahle, Beth Gaines, Gallagher, Grove, Harper, Jones,
Kim, Lackey, Maienschein, Mathis, Mayes, Melendez, Obernolte,
Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk
NO VOTE RECORDED: Daly, Gordon, Hadley
Prepared by:Rebecca Newhouse / E.Q. / (916) 651-4108
8/23/16 16:37:28
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