BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 398 (Leyva) - Green Assistance Program
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|Version: April 14, 2015 |Policy Vote: E.Q. 6 - 1 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 28, 2015 |Consultant: Marie Liu |
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SUSPENSE FILE. AS AMENDED.
Bill
Summary: SB 398 would create a technical assistance and
outreach program, administered by the secretary of the
California Environmental Protection Agency (CalEPA), for small
businesses and small nonprofits who are interested in applying
for grants from programs funded by the Greenhouse Gas Reduction
Fund (GGRF).
Fiscal Impact (as approved on May 28, 2015): Cost pressures in
the hundreds of thousands to low millions of dollars from the
General Fund or possibly the GGRF to the CalEPA for technical
assistance and outreach.
Background: Under the California Global Warming Solutions Act of 2006
(referred to as AB 32, HSC §38500 et seq.) requires the
California Air Resources Board (ARB) to determine the 1990
statewide greenhouse gas (GHG) emissions level, to approve a
statewide GHG emissions limit equivalent to that level that will
be achieved by 2020, and to adopt GHG emissions reductions
measures by regulation. ARB is authorized to include the use of
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market-based mechanisms to comply with the regulations. All
monies, except for fines and penalties, collected pursuant to a
market-based mechanism are deposited in the Greenhouse Gas
Reduction Fund (GGRF) (Government Code §16428.8).
Existing law requires that the GGRF only be used to facilitate
the achievement of reductions of GHG emissions consistent with
AB 32 (HSC §39710 et seq.). To this end, the Department of
Finance, in consultation with the ARB and any other relevant
state agencies, is required to develop, as specified, a
three-year investment plan for the moneys deposited in the GGRF.
The investment plan must allocate a minimum of 25% of the funds
to projects that benefit disadvantaged communities and to
allocate 10% of the funds to projects located within
disadvantaged communities. Additionally, the ARB, in
consultation with CalEPA, is required to develop funding
guidelines for administering agencies receiving allocations of
GGRF funds that include a component for how agencies should
maximize benefits to disadvantaged communities. Section 39718
allows the GGRF, upon appropriation, to be used by the ARB and
administering agencies for administrative purposes.
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 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.
Proposed Law:
This bill would require the secretary of CalEPA to administer
a technical assistance program, named the Green Assistance
Program, for small businesses, small nonprofits, and
disadvantaged communities to apply for project funding from the
GGRF. The secretary would be authorized to define what
constitutes a small business and a small nonprofit. The
technical assistance may include information on the available
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GGRF-funded programs as well as assistance in application
preparation and submission.
The secretary would also be required to coordinate outreach
activities to eligible program applicants.
This bill requires the program to be funded using existing
resources.
Related
Legislation: AB 156 (Perea) would require the GGRF Investment
plan to allocate technical assistance funds to the ARB for a
technical assistance program for eligible applicants assisting
disadvantaged communities and other communities as specified. AB
156 is currently on the Assembly Appropriations Suspense file.
Staff
Comments: The 2014-15 budget appropriated GGRF funds for a wide
range of purposes including affordable housing, sustainable
communities, low carbon transportation, energy efficiency
upgrades, wetlands and watershed restoration, and waste
diversion. These programs are managed by 11 departments, only
some of which are part of CalEPA.
This bill would require several categories of assistance- (1)
basic information on available programs, (2) referrals to
designated contact people administering the program), and (3)
assistance during the application preparation and submission
process. The first two categories, depending on the level of
interest by small business owners, small nonprofits, and
disadvantaged communities, will likely require only a small
increase in necessary positions at the agency, if at all.
However, the third type of assistance, presuming it involves
assisting the applicant in developing their application, could
require a significant number of new positions as assistance in
writing an application should not be done by the given program
staff of the administering agency to ensure impartiality in the
funding awards process. Also, additional staff would be
necessary because CalEPA inherently does not have detailed
knowledge about programs that are run by departments outside its
jurisdiction.
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While this bill will create substantial new workload for the
secretary, the bill requires that the secretary use existing
resources to create the Green Assistance Program. It is unclear
what funding that CalEPA could redirect for this purpose. Staff
notes that the secretary currently has 62 support positions
funded by various special funds, including the Cost of
Implementation Account (which funds the administration of AB 32)
and the General Fund, but not the GGRF. The Cost of
Implementation Account and the General Fund are likely the only
two existing funding sources that can legally be used to support
the activities required in this bill. Given that this bill may
require expenditures that exceed what the secretary currently
receives from either of these funds and that these existing
positions have other existing responsibilities, the costs for
this bill cannot be absorbed by the agency.
While the secretary does not currently receive an appropriation
from the GGRF fund, the GGRF may be considered as a future
funding source for the Green Assistance Program. However, staff
notes that it is questionable whether the use of GGRF monies to
implement this bill is appropriate. Existing law requires that
GGRF monies be used to facilitate GHG emissions (HSC §39712) or
for administrative purposes (HSC §39718(b)). The program
envisioned in this bill does not neatly fall into either of
these categories. In regards to GHG reductions, the purpose of
the program in this bill is to help certain entities apply for
GGRF monies. Technical assistance in itself does not result in
GHG emissions though GHG emissions may eventually be achieved if
the technical assistance results in a project being completed.
Is this nexus close enough to satisfy HSC §39712? In regards to
administrative costs, technical assistance is frequently
considered an administrative cost in many funding programs.
However, the technical assistance being offered in this bill is
unique in that it includes assistance in actually preparing
applications, not just providing general guidance. Arguably such
assistance is no longer an administrative activity.
Committee amendments (as adopted on May 28, 2015):
Amend to delete inclusion of assistance during the application
preparation and submission process as technical assistance.
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