BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 32| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 32 Author: Pavley (D), et al. Amended: 8/19/16 Vote: 21 SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 4/29/15 AYES: Wieckowski, Hill, Jackson, Leno, Pavley NOES: Gaines, Bates SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15 AYES: Lara, Beall, Hill, Leyva, Mendoza NOES: Bates, Nielsen SENATE FLOOR: 24-15, 6/3/15 AYES: Allen, Beall, Block, De León, Glazer, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Pan, Pavley, Wieckowski, Wolk NOES: Anderson, Bates, Berryhill, Cannella, Fuller, Gaines, Galgiani, Huff, Moorlach, Morrell, Nguyen, Roth, Runner, Stone, Vidak NO VOTE RECORDED: Nielsen ASSEMBLY FLOOR: 30-35, 9/8/15 - See last page for vote (FAIL) ASSEMBLY FLOOR: 49-30, 8/23/16 - See last page for vote SUBJECT: California Global Warming Solutions Act of 2006: emissions limit SOURCE: Author DIGEST: This bill requires the Air Resources Board (ARB) to SB 32 Page 2 ensure that statewide greenhouse gas (GHG) emissions are reduced to at least 40% below the 1990 level by 2030. Assembly Amendments add intent language and strike the requirement that ARB approve a statewide GHG emissions target of 80% below the 1990 level, to be achieved by 2050. ANALYSIS: Existing law, under the California Global Warming Solutions Act of 2006 (also known as AB 32): 1) Requires ARB to determine the 1990 statewide 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. 2) Authorizes ARB to adopt a regulation that establishes a system of market-based declining annual aggregate emission limits for sources or categories of sources that emit GHGs, applicable from January 1, 2012, to December 31, 2020, inclusive. 3) Specifies that the statewide GHG emissions limit remains in effect unless otherwise amended or repealed. 4) Expresses Legislative intent that the statewide emissions limit continue in existence and be used to maintain and continue GHG emissions reductions beyond 2020. 5) Requires ARB to make recommendations to the Governor and the Legislature on how to continue GHG emissions reductions beyond 2020. This bill: 1)Makes findings and declarations regarding requirements and authority of ARB under AB 32; the need to continue to reduce GHG emissions to protect all areas of the state, especially the SB 32 Page 3 state's most disadvantaged communities; and that ARB shall achieve the state's more stringent GHG emission reductions in a manner that benefits the state's most disadvantaged communities and is transparent and accountable to the public and the Legislature. 2)Requires ARB to ensure that statewide GHG emissions are reduced to at least 40% below the 1990 statewide GHG emissions level no later than December 31, 2030, when adopting rules and regulations to achieve the maximum technologically feasible and cost-effective GHG emissions reductions authorized by AB 32. 3)Specifies that the bill shall become operative only if AB 197 (Garcia) is enacted and becomes effective on or before January 1, 2017. Background 1)The Global Warming Solutions Act of 2006. In 2006, the Global Warming Solutions Act of 2006, AB 32 (Núńez, Pavley, Chapter 488, Statutes of 2006), requires the ARB to determine the 1990 statewide GHG emissions level and approve a statewide GHG emissions limit that is equivalent to that level, to be achieved by 2020. AB 32 requires the ARB, among other things, to inventory GHG emissions in California; implement regulations that achieve the maximum technologically feasible and cost-effective reduction of GHG emissions and impose fees for administrative implementation costs; identify and adopt regulations for discrete early action measures; and prepare and approve a scoping plan to achieve the maximum technologically feasible and cost-effective reduction of GHG emissions by 2020, to be updated every five years. The statute also specifies that the ARB may include market-based compliance mechanisms in the AB 32 regulations, after considering the potential for direct, indirect, and cumulative emission impacts from these mechanisms. SB 32 Page 4 2)AB 32 Scoping Plan. Pursuant to AB 32, the ARB approved the first Scoping Plan in 2008. The Scoping Plan outlined a suite of measures aimed at achieving 1990-level emissions, a reduction of 80 million metric tons of CO2 (MMT CO2e). Average emission data in the Scoping Plan reveal that transportation accounts for almost 40% of statewide GHG emissions, and electricity and commercial and residential energy sector account for over 30% of statewide GHG emissions. The industrial sector, including refineries, oil and gas production, cement plants, and food processors, was shown to contribute 20% of California's total GHG emissions. The 2008 Scoping Plan recommended that reducing GHG emissions from the wide variety of sources that make up the state's emissions profile could best be accomplished through a cap-and-trade program along with a mix of other strategies including a low carbon fuel standard (LCFS), light-duty vehicle GHG standards, expanding and strengthening existing energy efficiency programs, and building and appliance standards, a 33% Renewable Portfolio Standard (RPS), and regional transportation-related GHG targets. Pursuant to authority under AB 32, the ARB adopted a Low Carbon Fuel Standard in 2009, and a cap-and-trade program, approved on December 13, 2011. Scoping Plan update. The ARB approved an update to the Scoping Plan on May 22, 2014. The update describes policies, actions, and strategies in the energy, transportation, fuels, agriculture, waste, and natural lands sectors as a means to continue emissions reductions in each of these sectors. The update also asserts that California is on track to meet the near-term 2020 GHG limit and is well positioned to maintain and continue reductions beyond 2020 as required by AB 32. 3)Executive Orders. In 2005, Governor Schwarzenegger issued Executive Order S-3-05 and called for GHG emissions reductions to 1990 levels by 2020 and 80% below 1990 levels by 2050. On April 29, 2015, Governor Brown issued Executive Order B-30-15, which established an interim statewide GHG emission reduction target to reduce GHG emissions to 40% below 1990 levels by 2030, "in order to ensure California meets its target of reducing greenhouse gas emissions to 80 percent below 1990 SB 32 Page 5 levels by 2050." The EO also directed all state agencies with jurisdiction over sources of GHG emissions to implement measures, pursuant to statutory authority, to achieve reductions of GHG emissions to meet the 2030 and 2050 greenhouse gas emissions reductions targets. 4)2030 Concept Paper. On June 17, 2016, ARB released a "2030 Target Scoping Plan Update Concept Paper." The paper includes four potential high-level concepts for achieving a 40% GHG reduction below the 1990 GHG level by 2030. Concept 1 calls for enhancements to existing, successful programs and implementation of SB 350 (de Leon, Chapter 547, Statutes of 2015). It suggests investment of funds from the cap-and-trade program in areas that would further the goals of AB 32. Concept 2 extends the actions in Concept 1 to specifically address the industrial sector through industrial facility caps. It would have no cap-and-trade regulation post-2020 and no statewide limit on GHG emissions. Concept 3 focuses on transportation-oriented policy aimed at ambitious reductions in vehicle miles traveled and increased number of zero-emission and plug-in vehicles by 2030. It would not continue cap-and-trade regulation post-2020. Concept 4 includes the same complementary policies as Concept 1, but in lieu of a cap-and-trade program, suggests a carbon tax applied at a value predetermined by a method such as economic modeling or the use of United States Environmental Protection Agency social cost of carbon. According to the paper, it is not clear if the scenario outlined in Concept 4 would ultimately achieve the 2030 target because it would not include a statewide limit on GHG emissions, and it is unknown how the moneys generated by a carbon tax would be used. Comments Purpose of the bill. According to the author, "California has consistently set the pace in investing in a new, clean energy economy, and in communities battling climate change at the front lines. In the decade since the passage of AB 32 (Núńez-Pavley, 2006), the state has seen billions of dollars pour into investments in state-of-the-art technology, which has in turn created hundreds of thousands of jobs in the service of cleaning our air, making our energy sources more independent and reliable, and safeguarding our climate for our children. SB 32 Page 6 "Now, as the legislature considers this year's SB 32--and its companion bill, AB 197--the state has the opportunity to build a new coalition that ensures that we continue the historic progress we've made on climate, and to write the next chapter of our state's climate policy with three guiding principles at its core: equity, accountability, and transparency. SB 32 sets a 2030 climate pollution reduction target of 40% below 1990 levels. Doing so now provides critical certainty and predictability to businesses that need to know California will continue to support their work to clean our air and water. The bill also highlights the critical role that the legislature plays in developing state climate policy, and ensures that the policy is made transparently, and designed to help lift our most disadvantaged citizens up together with all Californians. "We know that the communities hardest hit by climate pollution--those that will suffer first and most frequently from the impacts of a heat wave, or a drought, or a flood, or poor air quality, or unavailable water--are disadvantaged communities, and disproportionately communities of color. That is why our climate package requires that our state's agencies ensure our programs are equitably designed, and that investments in climate pollution reduction provide the most benefits to those who need them most. "The good news is that the state and the private sector are largely already on track to accomplish so many of these goals. Governor Schwarzenegger signed Executive Order S-03-05, which set a long-term greenhouse gas emissions reduction target for California of 80 percent below 1990 levels by 2050; Governor Brown signed Executive Order B-30-15, which set a mid-term greenhouse gas emissions reduction target for California of 40% below 1990 levels by 2030; and the Legislature already codified a 40% below 1990 levels by 2030 target for the power sector in SB 350 last year. Businesses have risen to these calls with California's spirit of ingenuity, and have created a global model for clean energy technology, entrepreneurship, and policy innovation that countries around the world seek to replicate. SB 32 represents the next step of this critical policy, and to ensure that when the state drafts its climate policy, it does so with the interests of those who need our protection the most in mind." SB 32 Page 7 FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Assembly Appropriations Committee: Unknown annual costs, at least in the hundreds of millions of dollars, from various special funds for additional programs to achieve the new required emissions reductions. Minor, absorbable costs for the ARB to set the 2030 target (Cost of Implementation Account). SUPPORT: (Verified8/23/16) State Controller Betty Yee 350 Bay Area 350 Sacramento Access to Independence Advanced Energy Economy Agility Fuel Systems Agoura Hills Mayor Ilece Buckley American Academy of Pediatrics - California District IX American Cancer Society, California Division American College of Physicians, California Service Chapter American Farmland Trust American Heart Association American Lung Association in California American Stroke Association Annie's Inc. Applied LNG Technologies Apricus Inc. Asthma Coalition of Los Angeles County Atmos Energy Audubon Society of California Autodesk, Inc. Azul Bagito SB 32 Page 8 Bay Area Air Quality Management District Baz Allergy, Asthma & Sinus Center (San Joaquin Valley) Ben & Jerry's Benicia Mayor Elizabeth Patterson Big Sur Land Trust Biodico Sustainable Biorefineries Bioenergy Association of California Biosynthetic Technologies Blue Sky Biochar Bonnie J. Adario Lung Cancer Foundation Breathe California Building Doctors Business for Innovative Climate and Energy Policy C&C Development Co. Calabasas Mayor Lucy Martin California Bicycle Coalition California Biodiesel Alliance California Biomass Energy Alliance California Black Health Network California Catholic Conference, Inc. California Climate and Agriculture Network California Conference of Directors of Environmental Health California Contract Cities Association California Electric Transportation Coalition California Energy Efficiency Industry Council California Energy Storage Alliance California Equity Leaders Network California Green Business Network California Interfaith Power & Light California League of Conservation Voters California Municipal Utilities Association California Natural Gas Vehicle Coalition California Nurses Association California Pan-Ethnic Health Network California Public Health Association, North California Ski Industry Association California Solar Energy Industries Association California Solar Energy Industry Association California State Council of Laborers California Thoracic Society California Transit Association California Trout SB 32 Page 9 California Urban Forests Council California Wind Energy Association Californians Against Waste Calpine Corporation CalPIRG CALSTART Carbon Cycle Institute Cathedral City Mayor Pro Tem Greg Pettis Catholic Charities, Diocese of Stockton Center for Biological Diversity Center for Climate Change and Health Center for Climate Protection Center for Sustainable Suburban Development at University California, Riverside Central California Asthma Collaborative Ceres ChargePoint Chart Industries Circulate San Diego City and County of San Francisco City Heights Community Development Corporation City of Arcata City of Berkeley City of Los Angeles City of Maywood City of Moorpark City of Oxnard City of Santa Monica City of Santa Rosa City of Sebastopol City of Simi Valley City of Thousand Oaks City of West Hollywood Clean Energy Clean Power Finance Clean Water Action CleanTech San Diego Cleveland National Forest Foundation Clif Bar, Inc Climate Action Campaign Climate Action Reserve Climate Parents SB 32 Page 10 Climate Ready Solutions LLC Climate Resolve Communications Workers of American, AFL-CIO District 9 Communitas Financial Planning Community Action to Fight Asthma Consumers Union Cosmodyne County of Los Angeles County of Marin County of Santa Barbara County of Sonoma County of Ventura Covanta Energy Corporation Cummins Westport Inc. Davis Mayor Dan Wolk Dignity Health Distance Learning Consulting Doctors for Climate Health Eagle Creek East Bay Municipal Utility District eBay Ecogate, Inc. El Proyecto del Barrio, Inc Endangered Habitats League Environment California Environmental Action Committee of West Marin Environmental Defense Fund Environmental Entrepreneurs (E2) Environmental Health Coalition Environmental Health Department, County of Los Angeles EtaGen FastTech Fiat Chrysler Automobiles Ford Motor Company Freightliner Fresno Mayor Ashley Swearengin Friends Committee on Legislation of California Friends of the River Gap, Inc. General Motors Company Gladstein Neandross & Associates Global Green USA SB 32 Page 11 Grand Boulevard Initiative Green Education Greenbelt Alliance Harvest Power Health Care Without Harm Health Officers Association of California Honda House Kombucha Housing California Humane Society International Humane Society of the United States Impco Automotive Jewish Family Services of Los Angeles KB Home Klean Kanteen Lancaster Mayor R. Rex Parris Land Trust of Santa Cruz County Landirenzo Large-Scale Solar Association Leadership Counsel for Justice and Accountability League of Women Voters of California League of Women Voters of Orange Coast Levi Strauss & Co Liberty Hill Foundation Long Beach Mayor Robert Garcia Los Angeles Alliance for a New Economy Los Angeles Business Council Los Angeles County Medical Association Los Angeles County Supervisor Hilda Solis Los Angeles County Supervisor Mark Ridley-Thomas Los Angeles County Supervisor Sheila Kuehl Los Angeles Mayor Eric Garcetti Lyft MAAC Marin Agricultural Land Trust Marin Clean Energy Mars Incorporated Medical Advocates for Healthy Air Member of Congress, Adam B. Schiff Member of Congress, Alan Lowenthal Member of Congress, Ted W. Lieu Mercury Press International SB 32 Page 12 Moms Clean Air Force Morgner Construction Motiv Mountains Recreation and Conservation Authority Move LA National Parks Conservation Association Natural Resources Defense Council Nature Conservancy NextGen Climate Oakland Mayor Libby Schaaf Pacific Forest Trust Pacific Gas and Electric Pacoima Beautiful Patagonia Works Patagonia, Inc. Peninsula Open Space Trust People Organizing to Demand Environmental and Economic Rights Physicians for Social Responsibility, Los Angeles Physicians for Social Responsibility--SF-Bay Area Chapter Planning and Conservation League Plug In America Power2Sustain Prevention Institute Progressive Asset Management, Inc. Progressive Baptist State Convention of California and the West Proterra Inc. Public Health Institute Puma Springs Vineyards Purple Wine & Spirits Quest Questar Fueling RC Cubed, Inc. Redlands Area Democratic Club Redlands Mayor Pro Tempore Jon Harrison ReFuel Regional Asthma Management and Prevention Republic Services, Inc. Sacramento Mayor Kevin Johnson Sacramento Municipal Utility District San Diego Housing Federation San Diego-Imperial Counties Labor Council San Francisco Asthma Task Force SB 32 Page 13 San Francisco Mayor Edwin Lee San Jose Mayor Sam Liccardo Santa Ana Mayor Miguel Pulido Santa Clara County Medical Society Santa Clara Valley Open Space Authority Santa Clarita Organization for Planning and the Environment Santa Monica Mountains Conservancy Save the Redwoods League Sempra Energy Sequoia Riverlands Trust Service Employees International Union Sidel Systems USA Sierra Business Council Sierra Club California Silicon Valley Leadership Group SmartWool Solano County Transit Solar Energy Industries Association Sonoma Agricultural Preservation and Open Space District Sonoma Clean Power Sonoma County Asthma Coalition Sonoma County Water Agency South Coast Air Quality Management District Southern California Edison Southern California Gas Company Southern California Public Power Authority Southwest Wetlands Interpretive Association Spectrum LNG Stop Waste Sustainable North Bay Symantec Tamalpais Nature Works The Added Edge The Hampstead Companies The North Face TransForm TreePeople Trillium CNG Trust for Public Land U.S. Green Building Council California Union of Concerned Scientists United States Senator Barbara Boxer SB 32 Page 14 United States Senator Dianne Feinstein UPS VNG Voices for Progress Wakeland Housing & Development Corporation Waste Management, Inc. Waterplanet Alliance WaterSmart Software Westport Innovations OPPOSITION: (Verified8/23/16) African American Farmers of California Agricultural Council of California American Alliance Authority and Compliance American Alliance Drug Testing American Forest and Paper Association American Wood Council Apartment Association of Greater Los Angeles Apartment Association of Orange County Apartment Association, California Southern Cities Associated Builders and Contractors of California Brea Chamber of Commerce Building Owners and Managers Association California Agricultural Aircraft Association California Apartment Association California Association of Nurseries and Garden Centers California Association of Realtors California Building Industry Association California Business Properties Association California Business Roundtable California Cattlemen's Association California Chamber of Commerce California Concrete Pumpers Alliance California Construction Trucking Association California Cotton Ginners Association California Cotton Growers Association California Dairies, Inc. California Dairy Campaign California Farm Bureau Association SB 32 Page 15 California Farm Bureau Federation California Fresh Fruit Association California Independent Oil Marketers Association California Independent Petroleum Association California League of Food Processors California Manufacturers and Technology Association California Political Consulting Group California Small Business Association California Taxpayers Association California Trucking Association Californians for Affordable and Reliable Energy Camarillo Chamber of Commerce Chambers of Commerce Alliance of Ventura & Santa Barbara Counties Coalition of American Latino Truckers East Bay Rental Housing Association Family Business Association Fullerton Chamber of Commerce Greater Bakersfield Chamber of Commerce Greater Fresno Area Chamber of Commerce Greater Riverside Chamber of Commerce Heavy-Haul Conference Inland Empire Economic Partnership International Council of Shopping Centers Irvine Chamber of Commerce Kern County Board of Supervisors Los Angeles County Business Federation Milk Producers Council NAIOP of California, the Commercial Real Estate Development Association National Federation of Independent Business National Hmong American Farmers Nisei Farmers League North Orange County Chamber North Valley Property Owners Association Orange County Business Council Oxnard Chamber of Commerce Rancho Cordova Chamber of Commerce Redondo Beach Chamber of Commerce & Visitors Bureau San Jose Silicon Valley Chamber of Commerce Santa Barbara Rental Property Association Santa Maria Valley Chamber of Commerce and Visitors Convention SB 32 Page 16 Bureau Simi Valley Chamber of Commerce South Bay Association of Chambers of Commerce Southwest California Legislative Council Torrance Chamber of Commerce Valley Industry and Commerce Association Ventura County Economic Development Association Western Agricultural Processors Association Western Growers Association Western Plant Health Association Western States Petroleum Association Western Trucking Alliance Western United Dairymen ASSEMBLY FLOOR: 30-35, 9/8/15 (FAIL) AYES: Bloom, Bonilla, Bonta, Chau, Chiu, Chu, Dababneh, Eggman, Cristina Garcia, Gatto, Gomez, Gonzalez, Holden, Jones-Sawyer, Levine, Lopez, McCarty, Mullin, Nazarian, Quirk, Rendon, Ridley-Thomas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang, Cooley, Dahle, Daly, Frazier, Beth Gaines, Gallagher, Gray, Grove, Hadley, Harper, Jones, Kim, Lackey, Linder, Low, Maienschein, Mathis, Mayes, Medina, Melendez, Obernolte, Olsen, Patterson, Perea, Salas, Steinorth, Wagner, Waldron, Wilk NO VOTE RECORDED: Alejo, Brown, Burke, Calderon, Campos, Chávez, Cooper, Dodd, Eduardo Garcia, Gipson, Gordon, Roger Hernández, Irwin, O'Donnell, Rodriguez ASSEMBLY FLOOR: 49-30, 8/23/16 AYES: Alejo, Arambula, Atkins, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dodd, Eggman, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon NOES: Achadjian, Travis Allen, Bigelow, Brough, Chang, Chávez, SB 32 Page 17 Dahle, Frazier, Beth Gaines, Gallagher, Gray, Grove, Hadley, Harper, Jones, Kim, Lackey, Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson, Salas, Steinorth, Wagner, Waldron, Wilk NO VOTE RECORDED: Daly Prepared by:Rebecca Newhouse / E.Q. / (916) 651-4108 8/24/16 10:20:34 **** END ****