BILL ANALYSIS                                                                                                                                                                                                    Ó



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       Date of Hearing:  June 23, 2015


          ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT, AND THE ECONOMY


                                Eduardo Garcia, Chair


       SB  
       189 (Hueso) - As Amended June 1, 2015


       SENATE VOTE:  26-14


       SUBJECT:  Clean Energy and Low-Carbon Economic and Jobs Growth Blue  
       Ribbon Committee.


       SUMMARY:  Establishes the Clean Energy and Low-Carbon Economic and  
       Jobs Growth Blue Ribbon Committee (Clean Energy Committee) for the  
       purpose of advising state agencies on the most effective ways to  
       maximize California's economic benefits and jobs growth via actions  
       and investments in a cleaner, low-carbon economy.  Specifically, this  
       bill:  


       1)Finds and declares that:


          a)   Numerous analyses have shown that California is a world leader  
            in clean energy and greenhouse gas emission (GHG) reduction law  
            and policy which has led to major employment and economic benefit  
            to the state, as well as providing significant environmental and  
            public health benefits.  One report is cited as stating 430,000  
            jobs have been created as a result of California's advanced  
            energy policies and that California ranks first in the nation for  
            installed solar capacity, the number of solar jobs, the total  
            amount of advanced energy investments, and electric car sales.  







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          b)   The State Air Resources Board, the State Energy Resources  
            Conservation and Development Commission, and the Public Utilities  
            Commission have all created advisory committees to help them  
            better understand the implications of their clean energy and  
            climate policies and to ensure that the state's clean energy and  
            climate programs are optimized for maximum economic benefit and  
            job creation.



          c)   The purpose of this legislation is to create a single  
            independent blue ribbon committee to provide advice to these and  
            other agencies on the most effective ways to maximize  
            California's economic benefits and jobs growth via actions and  
            investments in a cleaner, low-carbon economy.



       1)Establishes the seven-member Clean Energy Committee under the  
         auspicious of California Environmental Protection Agency (CalEPA).   
         Five of the members are to be appointed by the Governor (subject to  
         confirmation by the Senate) and the Speaker of the Assembly and the  
         Senate Committee on Rules each appoint one member.


       2)Specifies that each Clean Energy Committee member serves a term of  
         four years.
       3)Prohibits committee members from receiving per diem or other  
         compensation for their service.  Members are, however, authorized to  
         receive reimbursement for actual expenses incurred in connection  
         with the performance of their duties.


       4)Requires that the Clean Energy Committee members have expertise in  
         economic, financial, and policy aspects of clean energy economic  
         growth, job creation, workforce standards, and employment  
         opportunities for disadvantaged workers.  At least two members of  







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         the committee are required to have experience working on economic  
         projects in disadvantaged communities.


       5)Requires the Clean Energy Committee to advise state agencies on the  
         most effective ways to expend clean energy and GHG-related funds and  
         to implement policies that maximize California's economic and  
         employment benefits.  In undertaking its duties, the bill requires  
         the Clean Energy Committee to do all the following:


          a)   Develop guidance for tracking and reporting jobs outcomes for  
            state clean energy and low-carbon investments and use this  
            information to evaluate jobs outcomes.



          b)   Develop guidance, in consultation with the Labor and Workforce  
            Development Agency, to measure the quantity and quality of jobs  
            created by state investments in clean energy and low-carbon  
            investments, as well as guidance to measure the geographic and  
            demographic distribution of jobs.



          c)   Advise state agencies on the most effective ways to require  
            responsible contractor standards, as applicable, and minimum  
            training and skill certifications for workers to ensure  
            high-quality work for state clean energy and low-carbon  
            investments, and the most effective ways to connect disadvantaged  
            communities and other target populations to good quality jobs and  
            career pathways created by those investments.



          d)   Advise state agencies, in consultation with the California  
            Workforce Investment Board (CWIB), on the most effective ways to  
            align state clean energy and low-carbon training funds with  
            existing state workforce development investments and strategies.








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       1)Requires the Clean Energy Committee to provide an annual update to  
         the Governor and the appropriate policy and fiscal committees of the  
         Legislature on its activities.


       2)Requires the State Energy Resources Conservation and Development  
         Commission, the Public Utilities Commission, the State Air Resources  
         Board, and any other state agency responsible for implementing clean  
         energy and low-carbon policies and programs to submit an annual  
         progress report to the Governor and the appropriate policy and  
         fiscal committees of the Legislature describing how it implemented  
         or responded to the advice, guidance, and any recommendations  
         provided by the Clean Energy Committee.
       3)Authorizes a state agency to include the reporting requirements of  
         this bill within any other annual report the state agency, as  
         specified.   


       4)Sunsets the provision of this bill on January 1, 2021.


       EXISTING LAW:   


       1)Enacts the California Global Warming Solutions Act, which requires  
         the California Air Resources Board (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 emission reduction measures by regulation, and sets  
         certain requirements in adopting the regulations.  



       2)Establishes the Green Collar Jobs Council (GCJC) within the CWIB,  
         for the purpose of consulting with other state agencies, among  
         others, on developing the funding, strategies, programs, policies,  
         partnerships, and opportunities necessary to address the growing  
         need for a highly skilled and well-trained workforce to meet the  







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         needs of California's emerging green economy.  To the extent private  
         funds are available, it is the intent of the Legislature that the  
         GCJC develop an annual award for outstanding achievement for  
         workforce training programs. The GCJC is comprised of the  
         appropriate representatives from the CWIB existing membership.
       3)Requires the ARB to convene an Environmental Justice Advisory  
         Committee (EJAC), to advise the ARB in developing the Scoping Plan,  
         and any other pertinent matter in implementing the Act.  Requires  
         that the EJAC be comprised of representatives from communities in  
         the State with the most significant exposure to air pollution,  
         including, but not limited to, communities with minority populations  
         or low-income populations.  





       4)Requires the ARB to appoint an Economic and Technology Advancement  
         Advisory Committee (ETAAC) to advise the ARB on activities that will  
         facilitate investment in and implementation of technological  
         research and development opportunities, including, but not limited  
         to, identifying new technologies, research, demonstration projects,  
         funding opportunities, developing state, national, and international  
         partnerships and technology transfer opportunities, and identifying  
         and assessing research and advanced technology investment and  
         incentive opportunities that will assist in the reduction of  
         greenhouse gas emissions.  Provides that the ETAAC may also advise  
         the ARB on state, regional, national, and international economic and  
         technological developments related to greenhouse gas emission  
         reductions.



       5)Eastablishes the State Agency GHG Reduction Report Card (Report  
         Card), which requires among other things, that on or before October  
         1 of each year, each state agency prepare and submit to the CalEPA  
         Secretary:










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          a)   A list of measures that have been adopted and implemented to  
            meet GHG emission reduction targets and a status report on actual  
            GHG emissions reduced as a result of these measures.



          b)   A list and timetable for adoption of any additional measures  
            needed to meet GHG emission reduction targets.



          c)   An estimate of the department's own greenhouse gas emissions,  
            as well as an explanation of any increase or decrease compared to  
            the previous year's emissions.



       6)Requires CalEPA to compile and organize the information submitted by  
         the state agencies into a format representative of a Report Card.   
         In addition, the Report Card is required to include a comparison of  
         the actions taken/proposed to be taken by individual state agencies  
         and their projected annual GHG emission reductions against the state  
         agency GHG emission reduction targets and statewide GHG emission  
         reduction limits.  



       7)Requires CalEPA to summit to the Legislature a comprehensive budget  
         display on or before January 10 of each year, that identifies  
         funding proposals and base funding in the proposed Governor's Budget  
         that are inteneded to help the state reach its greenhouse gas  
         emissions reduction targets as specified in the California Global  
         Warming Solutions Act of 2006, and a five-year work plan summary  
         that shows how staff and contracting resources will be allocated to  
         achieve specified climate solution deliverables.



       FISCAL EFFECT:  Unknown  








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       POLICY ISSUE FRAME:  


       In 2008, the GCJC was established under the auspiciousness of the CWIB  
       for the purposes of responding to the workforce and economic  
       development needs of California's transition to a lower carbon  
       economy.  The Legislature and Governor understood that addressing  
       rising GHG emissions would require the development of new and adaption  
       of existing technologies and processes, as well as the termination, or  
       at least the reduction, of some business activities within the state.   
       This, in turn, would require a differently skilled workforce and  
       potentially spur new business opportunities and job creation.

       Most recently, the GCJC has engaged on the deployment of Proposition  
       39 funds, supported a workforce plan for investor-owned utilities and  
       energy efficiency, and discussed workforce and credentialing standards  
       with the U.S. Department of Energy.  In the past, the GCJC adopted a  
       Green Workforce Master Plan and proposed job and workforce development  
       program elements for the state's carbon reduction investments.

       AB 189 proposes a more narrowly focused stakeholder advisory  
       committee, which would be tasked with specifically looking at  
       potential state expenditures and state policies that support economic  
       growth and job creation in the clean energy field.  The SB 189  
       stakeholder advisory committee will also have a unique set of  
       expertise from the GCJC, which should assist the committee in  
       developing recommendations that provide for a more inclusive workforce  
       development system, especially for historically underserved groups of  
       individuals and economic development efforts in disadvantaged  
       communities. 


       In the comment section of the analysis is additional information on  
       the California economy, unemployment, and economic opportunities  
       within cleantech and energy-related industries.  Suggestions for  
       technical amendments are provided under Comment 4.


       COMMENTS:  







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       1)Author's Purpose:  According to the author's statement, " As the  
         Legislature and the Governor articulate next steps for our clean  
         energy and climate policies, it is important to have a permanent and  
         formal committee that can advise agencies implementing such policies  
         on the best ways to maximize expenditure of public funds to ensure  
         the state achieves the greatest economic growth and job creation. SB  
         189 would establish a high-level expert Blue Ribbon Committee to  
         serve that role of advising state clean energy and climate actions  
         to ensure maximum job creation and economic benefits to California."
       2)The California Workforce:   California is home to over 38 million  
         people, providing the state with one of the most diverse populations  
         in the world, often comprising the single largest concentration of  
         nationals outside their native country.  In 2014, this diverse group  
         of business owners and workers produced $2.3 trillion in goods and  
         services; $174.1 billion of which were exported to over 220  
         countries around the world.   California's 2014 GDP ranks the state  
         economy as the eighth largest in the world.


       Many policy makers and economists describe California as having not a  
         single economy, but having a highly integrated network of a dozen or  
         so regional economies.  While biotech has a comparative advantage in  
         some regions, information technology drives growth in others.  This  
         econmic diversity is one of the reasons California was able to so  
         aggressively move out of the recession, ranking number two in the  
         nation by Business Insider for fastest growing economy in the nation  
         in August 2014 and as having the fourth best overall economy in  
         March 2015.   There are approximately 19 million people within the  
         California workforce.  Below is a chart of California employment by  
         industry sector.





         Another key economic driver in California is the agriculture sector,  
         which is includes a number of the industry sectors displayed above.   
         One estimate, by researchers at Butte Community College, is that  







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         California's agriculture value chain contributes nearly $300 billion  
         annually to the economy and accounts for nearly 2.5 million jobs  
         across 800 different job titles.  



       While many areas of the state have continued to experience economic  
         growth, other regions continue to lag in terms of jobs and business  
         activity.  Increasingly, the state is becoming economically divided.  
          As an example, in May 2015, the overall state unemployment rate was  
         6.2%.  The lowest unemployment rate was reported for San Mateo  
         (3.2%), followed by Marin (3.3%) and San Francisco (3.5%). In stark  
         contrast to the Bay Area's economic vitality is Imperial County,  
         which registered a 21.1% unemployment rate.  In fact, 21 of  
         California's 58 counties had rates below 6.0% and 34 counties had  
         unemployment rates above the 6.2% state rate.  A majority of the  
         counties experiencing the higher unemployment rates were in the  
         state's inland regions.  In addition to regional differences,  
         unemployment rates also differ by age, race, and ethnicity.  For May  
         2015 the highest unemployment was reported to be among 16 to 19 year  
         olds (22.3%), blacks (13.4%), and Hispanics (8%).  


       Given the significant financial and policy priority the state has  
         placed on GHG emission reductions, it is important that related  
         activities reflect the specific conditions and circumstances of all  
         regions and populations.  Transitioning to a lower carbon economy  
         has economic costs, as well as opportunities, which the state has  
         been slow to address.  Part of the ultimate goal for California's  
         less carbon intensive economy should be a more inclusive workforce  
         and business development platform.    


       AB 189 addresses the need for greater economic justice in policy  
         making by requiring at least two of the seven members of the Clean  
         Energy Committee have expertise in working on economic projects in  
         disadvantaged communities.  Further, the overall membership is  
         required to have experience in not just clean energy, but also job  
         creation, workforce standards, and employment opportunities for  
         disadvantaged workers.   







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       3)The Clean Energy Job Market:  California's clean energy and  
         technology economy encompasses a broad range of products and  
         services, touching upon multiple industry sectors.  This includes  
         clean technology such as alternative energy generation, wastewater  
         treatment, and the production of environmentally-friendly consumer  
         products.  Although some of these industries are very different,  
         they all use innovative technologies, products, and services that  
         have environmental benefits.


       Growth in the cleantech industry largely comes from the convergence of  
         two disparate factors.  One, recent advances in new technologies,  
         research methods, manufacturing, and communications that lower the  
         cost of environmentally sensitive technologies; and two, an  
         increasing number of consumers and businesses that are looking for  
         ways to reduce energy costs, increase clean water supply, and meet  
         new environmental regulatory requirements at the local, state, and  
         global levels.  Governments, in turn, have adopted new regulatory  
         frameworks that require greater use of recyclable materials,  
         increased the use of renewable energy, and lowered air pollution and  
         GHG emissions.


       Legislative findings in SB 189 state that numerous analyses have shown  
         that California is a world leader in clean energy and GHG reduction  
         law and policy, which has been a significant contributor to the  
         California job market, providing economic, as well as environmental  
         and public health benefits.


       The chart below, developed by Cleantech San Diego, illustrates the  
         wide range of industries engaged in the cleantech industry cluster.   
          


       









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          ------------------------------------------------------------------- 
         |            Chart 4:  Examples of Cleantech Industries             |
          ------------------------------------------------------------------- 
         |----------+--------------------------------------------------------|
         |Agricultur|Bio-based materials; farm efficiency technologies;      |
         |e         |micro-irrigation systems; bio-remediation; and          |
         |          |non-toxic cleaners and natural pesticides.              |
         |----------+--------------------------------------------------------|
         |Air &     |Air purification products and air filtration systems;   |
         |Environmen|energy efficient HVAC; universal gas detectors;         |
         |t         |multi-pollutant controls; and fuel additives to         |
         |          |increase efficiency and reduce toxic emissions.         |
         |----------+--------------------------------------------------------|
         |Materials |Biodegradable materials derived from seed proteins;     |
         |          |micro-fluidics technology for conducting biochemical    |
         |          |reactions; nano-materials; composite materials; thermal |
         |          |regulating fibers and fabrics; environmentally-friendly |
         |          |solvents; nano-technology components for electronics,   |
         |          |sensor applications and energy storage; electro-chromic |
         |          |glass; and thermoelectric materials.                    |
         |----------+--------------------------------------------------------|
         |Energy    |Energy Efficiency:  Energy management systems; systems  |
         |          |that improve output of power generating plants;         |
         |          |intelligent metering; solid state micro refrigeration;  |
         |          |control technology for HVAC systems; and automated      |
         |          |energy conservation networks.                           |
         |          |Energy Generation:  Distributed and renewable energy    |
         |          |and conversion, including wind, solar/photovoltaic      |
         |          |(PV), hydro/marine, biofuels, fuel cells, gasification  |
         |          |technologies for biomass, and flywheel power systems.   |
         |          |Energy Infrastructure:  Wireless networks to utilities  |
         |          |for advanced metering; power quality monitoring and     |
         |          |outage management; integrated electronic systems for    |
         |          |the management of distributed power; and demand         |
         |          |response and energy management software.                |
         |          |Energy Storage:  Batteries, e.g. thin film and          |
         |          |rechargeable; power quality regulation; flywheels; and  |
         |          |electro-textiles.                                       |
         |----------+--------------------------------------------------------|
         |Manufactur|Advanced packaging; natural chemistry; sensors; smart   |







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         |ing and   |construction materials; business process and data flow  |
         |Industrial|mapping tools; precision manufacturing instruments &    |
         |          |fault detectors; and chemical management services.      |
         |----------+--------------------------------------------------------|
         |Recycling |Recycling technologies; waste treatment; internet       |
         |& Waste   |marketplace for materials; hazardous waste remediation; |
         |          |and bio-mimetic technology for advance metals           |
         |          |separation and extraction.                              |
         |----------+--------------------------------------------------------|
         |Transporta|Hybrid vehicle technology; lighter materials for cars;  |
         |tion      |smart logistics software; car-sharing; and temperature  |
         |          |pressure sensors to improve transportation fuel         |
         |          |efficiency; telecommuting.                              |
         |----------+--------------------------------------------------------|
         |Water &   |Water recycling and ultra-filtration systems (e.g. UV   |
         |Wastewater|membrane & ion exchange systems); sensors and           |
         |          |automation systems; and water utility sub-metering      |
         |          |technology; desalination equipment.                     |
          ------------------------------------------------------------------- 
          ------------------------------------------------------------------- 
         |Source: Cleantech San                                              |
         |Diego                                                              |
          ------------------------------------------------------------------- 
                                                                       


         A December 2014 survey of 2,000 companies by the Advanced Energy  
         Economy Institute found that state advanced energy policies have  
         created over 430,000 jobs in 2014, which was an increase of 5% over  
         the prior year.  The survey also noted that significant comparative  
         advantage California has over other areas, as demonstrated by the  
         state having the most domestic installed solar capacity, solar jobs,  
         total advanced energy investment, and electric vehicle sales.   
         Another important finding was that 77% of the responding firms only  
         had customers in California and only 3% had customers outside the  
         U.S.  Given California's geographic location and already  
         demonstrated capability to successfully engage within global supply  
         chains, export opportunities could be substantial for California's  
         advanced energy industries.








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       4)Proposed Amendments:  Below is a list of technical amendments that  
         will assist in the implementation of the bill.


          a)   Clarify that an individual committee member is required to  
            have expertise in at least one of the specified areas, not all of  
            the specified areas.  
          b)   Set a date for the first meeting in order to establish a clear  
            timeline for appointments.


          c)   Clarify that vacancies will be filled in the same manner as  
            the initial appointments.  


          d)   Clarify which of the three appointing authorities has the  
            responsibility for appointing the individuals with experience in  
            working with disadvantaged communities.


          e)   Add a definition of agency.


          f)   Clarify that only those agencies that received advice from the  
            Clean Energy Committee are required to provide a progress report  
            to the Governor and Legislature.


       As the measure moves forward, the author may also want to consider  
         ways to more concretely differentiate the SB 189 advisory committee  
         from the work already being performed by the GCJC.


       5)Related Legislation:  This bill is part of the California State  
         Senate's Climate Bill Package.  Madame Speaker has also introduced a  
         major GHG reduction bill.  A selection of these bills are described  







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         below. 


          a)   AB 1288 (Atkins) ARB Regulation Sunset:  This bill eliminates  
            the December 31, 2020, limit on applicability of a market-based  
            mechanism to reduce greenhouse gas (GHG) emissions that may be  
            adopted by the Air Resources Board.  Status:  Pending in the  
            Senate Committee on Environmental Quality.
          b)   AB 1030 (Ridley-Thomas) would requires a state agency that  
            allocates moneys from the Greenhouse Gas Reduction Fund to  
            prioritize projects that include project labor agreements with  
            targeted hire goals, community workforce agreements that connect  
            local residents to jobs or training opportunities, or  
            partnerships with training entities that have a proven track  
            record of placing disadvantaged workers in career-track jobs.  
            Status:  Pending in the Assembly Natural Resources Committee.


          c)   SB 32 (Pavley) California Global Warming Solution Act of 2006:  
             Emission Limit:  This bill sets the overarching climate  
            pollution reduction target for 2050 that will provide California  
            businesses with regulatory certainty, improve public health, and  
            strengthen the economy.  Status:  Pending in Senate Natural  
            Resources.


          d)   SB 185 (De Léon) Divestment from Coal:  This bill prohibits  
            the California Public Employees' Retirement System (CalPERS) and  
            the California State Teachers' Retirement System (CalSTRS) boards  
            from making new or additional investments of public employee  
            retirement funds in thermal coal companies, as defined, and  
            requires each board to liquidate its existing investments in  
            thermal coal companies on or before July 1, 2017, provided that  
            the boards make a good faith determination that thermal coal  
            divestment is consistent with their fiduciary responsibility.   
            The boards must first constructively engage with the affected  
            companies to determine whether they are transitioning to clean  
            energy generation and must report to the Legislature and Governor  
            by January 1, 2018, on the boards' engagement and divestment  
            activities.  Status:  Set to be heard on June 23 in the Assembly  







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            Committee on Public Employees, Retirement and Social Security.


          e)   SB 350 (De Léon and Leno) Clean Energy and Pollution Reduction  
            Act of 2015:  This bill enacts the Clean Energy and Pollution  
            Reduction Act of 2015, which creates or expands three related  
            clean-energy goals to be achieved by 2030: (1) a 50 percent  
            reduction in petroleum used in motor vehicles; (2) a doubling of  
            the energy efficiency of existing buildings; and (3) generating  
            50 percent of total retail sales of electricity from renewable  
            resources.  Status:  Pending in the Assembly Utilities and  
            Commerce Committee.


       6)Double Referral:  The Assembly Rules Committee has referred this  
         measure the Assembly Committee on Jobs, Economic Development and the  
         Economy and to the Assembly Committee on Natural Resources (NR).   
         Should this measure pass the committee, it will be referred to NR  
         for further policy consideration.
       REGISTERED SUPPORT / OPPOSITION:



       Support


       Alliance for Solar Choice


       American Lung Association


       Audubon Society


       Azul


       Bloom Energy








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       California League of Conservation Voters


       California State Association of Electrical Workers


       Clean Transportation Technologies and Solutions


       Environment California


       Environmental Defense Fund


       Natural Resources Defense Council


       Sierra Club


       Solar City


       Solar Energy Industries Association


       Sun-Run


       Union of Concerned Scientists





       Opposition









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       None received





       Analysis Prepared by:Toni Symonds / J., E.D., & E. / (916)  
       319-2090