BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 706 (Pavley) - Greenhouse Gas Reduction Fund: alternative
fuels
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|Version: April 6, 2015 |Policy Vote: E.Q. 7 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 11, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 706 would explicitly include funding to encourage
the in-state production of alternative fuels with low-carbon
intensity using sustainable feedstock as an eligible use of
Greenhouse Gas Reduction Fund (GGRF).
Fiscal
Impact: Cost pressures in the millions to tens of millions of
dollars to the Greenhouse Gas Reduction Fund (special) for
funding the in-state production of alternative fuels with low
carbon intensity.
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
SB 706 (Pavley) Page 1 of
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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 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.
Proposed Law:
This bill would require that funds to encourage the in-state
production of alternative fuels with low-carbon intensity using
sustainable feedstock be available from the GGRF.
Staff
Comments: Existing law generally allows the GGRF to be used for
investments that reduce GHGs in the state. Section 39712(c)
contains a non-exclusive list of eligible investments such as
goods and freight movement technology, advanced biofuels,
strategic planning and development of sustainable
infrastructure, and diversion of municipal solid waste from
disposal. This bill would add the promotion of in-state
production of low-carbon alternative fuels using sustainable
feedstock as an explicit eligible recipient of GGRF monies.
So long as production of low-carbon alternative fuels would
reduce GHG emissions in the state, that activity is already
eligible to receive funding from the GGRF under the existing
law. As such, this bill does not expand the universe for which
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the GGRF can be used. However, this bill also states that
funding "shall" be available for this purpose, creating cost
pressures.
Staff notes that this bill is drafted unclearly in that it is
adding a required investment, in-state production of low-carbon
alternative fuels, within a list of eligible, but not required
investments.
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