BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
DEVELOPMENT
Senator Jim Beall, Chair
2015 - 2016 First Extraordinary
Bill No: SBX1 6 Hearing Date: 9/1/2015
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|Author: |Runner |
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|Version: |7/13/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Erin Riches |
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SUBJECT: Greenhouse Gas Reduction Fund: transportation
expenditures
DIGEST: This bill prohibits expenditure of Greenhouse Gas
Reduction Fund (GGRF) monies on the high-speed rail project and
appropriates the majority of GGRF monies to the California
Transportation Commission (CTC) for allocation to high-priority
transportation projects, as specified.
ANALYSIS:
Existing law:
1)AB 32, Núñez, Chapter 488, Statutes of 2006 requires the state
Air Resources Board (ARB) to develop a plan to reduce
emissions to 1990 levels by 2020. It also requires ARB to
ensure that programs to reduce greenhouse gas (GHG) emissions
are targeted, to the extent feasible, to the most
disadvantaged communities in the state. AB 32 authorizes ARB
to deposit any fees paid by GHG emission sources into the
GGRF.
2)AB 1532, Pérez, Chapter 807, Statutes of 2012 specifies that
GGRF revenues must be used to facilitate the achievement of
GHG emissions reductions.
The 2014-15 budget agreement allocated $832 million in GGRF
revenues to a variety of GHG emission reduction programs.
SBX1 6 (Runner) Page 2 of ?
Beginning in 2015-16, the budget agreement appropriates 25% of
GGRF revenues to the state's high-speed rail project, 20% to
affordable housing and sustainable communities grants, 10% to
intercity capital rail projects, and 5% to low-carbon transit
projects. The remaining 40% of GGRF revenues are available for
annual appropriation by the Legislature.
The 2013-14 budget agreement provided for a loan of GGRF monies
to the General Fund. The 2014-15 budget agreement provided that
$400 million in GGRF loan repayments shall be directed to the
high-speed rail project beginning in 2015-16. To date, no
appropriations have been made to repay the loan.
This bill:
1)Deletes the continuous appropriation of 25% of GGRF monies to
high-speed rail.
2)Continuously appropriates 65% of GGRF monies to the CTC for
allocation to "high-priority transportation projects," as
determined by the CTC.
3)Requires the CTC to allocate 40% of these monies to state
highway projects; 40% to local street and road projects,
divided equally between cities and counties; and 20% to public
transit projects.
4)Prohibits any GGRF monies from being used for the high-speed
rail project.
5)Deletes the requirement for the $400 million GGRF loan
repayment to be directed to high-speed rail.
COMMENTS:
1)Purpose. The author asserts that the state's continuous
appropriation of GGRF monies to high-speed rail will not
accomplish AB 32's goals; on the contrary, the most optimistic
estimate of when the first phase of the high-speed rail
project may be operational is 2022, two years after the AB 32
target date. The author also states that according to the
Legislative Analyst's Office report, The 2012-13 Budget:
Funding Requests for High-Speed Rail, this project would
initially increase GHG emissions for numerous years. This
bill seeks to redirect GGRF revenues to projects that will
SBX1 6 (Runner) Page 3 of ?
actually reduce GHG emissions and help enable the state to
meet its AB 32 emission reduction target by 2020.
2)A bullet in the bullet train budget. In 2008, California
voters approved Proposition 1A, the Safe, Reliable High-Speed
Passenger Train Bond Act for the 21st Century (Prop. 1A),
which authorized $9 billion in general obligation bonds for
the high-speed rail project. In 2009, the federal government
augmented the Prop. 1A bond funding with roughly $3.3 billion
in funding from the American Recovery and Reinvestment Act and
other federal funding programs. The High-Speed Rail Authority
(HSRA) committed to match these federal funds with
approximately $2.3 billion in state funding. Of the $8.8
billion appropriated thus far for high-speed rail, HSRA spent
$950 million through 2013-14 and an estimated $917 million in
2014-15. For 2015-16, HSRA plans to spend $3.0 billion: $1.4
billion in Prop. 1A bond funds, $1.2 billion in federal funds,
and $500 million in GGRF revenues. By removing GGRF monies
from the mix, this bill creates a large hole in high-speed
rail funding; it is unclear what other funds could fill that
hole.
3)Piece by piece. GGRF investments must facilitate the
achievement of GHG emissions reductions. However, after that
requirement is fulfilled, there are a number of other policy
goals that should be considered, including benefits to
environmental quality, resource protection, public health, and
the economy, as well as benefits to disadvantaged communities.
And although the GGRF is growing, it is still a limited
source of revenue. In order to create an optimized strategy
from GGRF monies, proposals should not be considered in
isolation, but be assessed in aggregate to determine what
suite of measures best meets the requirements of the GGRF,
uses resources most efficiently, and maximizes policy
objectives. As budget discussions on a cap-and-trade
investment strategy have been pushed later and later this
session, an opportunity exists to have a comprehensive
discussion on the universe of GGRF proposals currently in the
Legislature. The committee may wish to consider whether the
subject of this bill is more appropriate to the budget
discussion than the transportation special session.
Related Legislation:
SBX1 2 (Huff) - would require GGRF monies generated from
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transportation fuels to be spent on transportation
infrastructure, excluding high-speed rail. SBX1 1 is also being
heard by this committee today.
SBX1 3 (Vidak) - would have redirected Prop. 1A bond proceeds to
state highways and freeways, and local streets and roads, upon
voter approval. SBX1 3 failed passage in this committee on
August 19, 2015.
SBX1 8 (Hill) - would increase the percentage of GGRF funds from
10% to 20% for the Transit and Intercity Rail Capital Program
and from 5% to 10% for the Low Carbon Transit Operations
Program. SBX1 8 is also being heard by this committee today.
ABX1 7 (Nazarian) - is identical to SBX1 8 (Hill). ABX1 7 is
pending committee assignment in the Assembly.
FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Thursday, August 27, 2015.)
SUPPORT:
None received
OPPOSITION:
None received
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