BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: SB 760
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|Author: |Mendoza |
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|Version: |4/6/2015 |Hearing | 4/29/2015 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Rebecca Newhouse |
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SUBJECT: Disadvantaged Community Enhancement Act of 2015
ANALYSIS:
Existing law:
1. Under the California Global Warming Solutions Act of 2006
(also known as AB 32), requires the California Air Resources
Board (ARB) to determine the 1990 statewide greenhouse gas
(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. ARB is authorized to include the use of
market-based mechanisms to comply with these regulations.
(Health and Safety Code §38500 et seq.)
2. Establishes the Greenhouse Gas Reduction Fund (GGRF) in the
State Treasury, requires all moneys, except for fines and
penalties, collected pursuant to a market-based mechanism be
deposited in the fund and requires the Department of Finance,
in consultation with the state board and any other relevant
state agency, to develop, as specified, a three-year
investment plan for the moneys deposited in the GGRF.
(Government Code §16428.8)
3. Prohibits the state from approving allocations for a measure
or program using GGRF moneys except after determining that
the use of those moneys furthers the regulatory purposes of
AB 32, and requires moneys from the GGRF be used to
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facilitate the achievement of reductions of GHG emissions in
California. (HSC §39712)
4. Requires the Department of Finance, in the investment plan,
to allocate at least 25% of available moneys in the GGRF to
projects that provide benefits to disadvantaged communities,
and at least 10% to projects located within disadvantaged
communities. (HSC §39713 )
5. Continuously appropriates 60% of GGRF moneys to transit,
affordable housing and sustainable communities, including 20%
continuously appropriated to the Strategic Growth Council
(SGC) for the Affordable Housing and Sustainable Communities
Program. (HSC §39719)
6. Requires 50% of AHSC Program expenditures be for projects
benefitting
disadvantaged communities. (Public Resources Code §75214)
7. Establishes the SGC, consisting of the Director of State
Planning and Research, several agency secretaries, and one
member of the public, and tasks the Council with managing and
awarding grants and loans to support the planning and
development of sustainable communities (PRC §75120).
This bill:
1. Requires SGC to develop and implement a Disadvantaged
Community Enhancement Program.
2. Provides that this program shall award grants to
disadvantaged communities for "community enhancement
improvement projects" to reduce GHG emissions in, and provide
multiple environmental benefits to, disadvantaged
communities.
3. Provides that eligible projects shall include, but are not
limited to:
A. Land acquisitions in urban settings of blighted or
contaminated properties serving little sequestration
benefit for greenspace conversion.
B. Urban greening projects, including urban forestry and
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landscaping.
C. Park development and land protection for passive or
active recreation.
D. Hardscape conversions and repurposing of lands to serve
greenspace benefits.
E. Non-motorized trail and other active transportation
projects.
F. Heat island mitigation.
G. Planning of a sustainable community.
4. Requires SGC to award grants through a competitive process.
5. Requires SGC to consider all of the following factors in
prioritizing awards: poverty rate, unemployment rate,
childhood obesity rate and incidents of asthma, availability
of greenspace and venues for physical activity, lack of
non-motorized infrastructure supporting an active
transportation program, levels of air pollution, drinking
water quality, and groundwater quality (if applicable).
6. Requires SGC to also consider the environmental benefits
resulting from the project, including, but not limited to,
water quality improvement; groundwater storage, recharge, or
remediation; and storm water capture.
7. Requires SGC to prioritize eligible applicants and projects
located wholly within distressed watershed areas with
significant populations and heavy concentrations of
industrial facilities and trade corridor activity.
8. Requires an applicant to articulate how the grant would be
used to address the factors described above; explain what
other funding sources the applicant will leverage for the
project; and demonstrate how the project would help the state
meet its AB 32 goals.
9. Provides that funds awarded under this program shall not
supplant other sources of funding designed to benefit
disadvantaged communities.
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10.Requires ARB to determine a methodology to quantify the
carbon reduction benefits of applicant projects.
Background
1. The Strategic Growth Council.
The SGC was established in 2008 by SB 732 (Steinberg),
Chapter 729, Statutes of 2008. The Council is comprised of
eight members representing six state agencies, the Office of
Planning and Research and a public member appointed by the
Governor.
The Council is responsible for coordinating a variety of
state programs and activities related to sustainable
communities and the environment, such as the implementation
of SB 375 (Steinberg), Chapter 728, Statutes of 2008, which
incorporates sustainable community development into
transportation planning. SB 375 requires each of the state's
17 metropolitan planning organizations to prepare a
sustainable communities strategy as part of its regional
transportation plan, to help the region meet its GHG
emissions reduction target. The Sustainable Communities
Planning Grants and Incentives Program, authorized under Safe
Drinking Water, Water Quality and Supply, Flood Control,
River and Coastal Protection Bond Act of 2006 (Proposition
84) and administered by the SGC, assists local governments in
developing sustainable communities strategies in order to
meet the requirements of SB 375. At its June 3, 2014 meeting,
SGC approved the final $16 million in Round 3 Proposition 84
Sustainable Communities Planning Grants.
In addition, Proposition 84 also authorized the Legislature
to appropriate $70 million for urban greening projects and
plans that reduce energy consumption, conserve water, improve
air and water quality, and provide other community benefits.
SGC administers these funds for the Urban Greening Program.
In the last round of funding for the program approved by SGC
in June of last year, 40 urban greening grants were awarded,
totaling almost $24 million. Of those projects, all but five
were for disadvantaged communities.
2. Affordable Housing and Sustainable Communities Program.
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The Budget Act of 2014 appropriates $130 million from the
GGRF to develop and implement the Affordable Housing and
Sustainable Communities Program (AHSC). SB 862 (Committee on
Budget and Fiscal Review), Chapter 36, Statutes of 2014,
continuously appropriates 20% of GGRF annual proceeds to the
AHSC beginning in FY 2015-16. The Governor's proposed
2015-16 Budget appropriates $200 million for the AHSC.
The AHSC, administered by the Strategic Growth Council, is
tasked with reducing GHG emissions through projects that
implement land use, housing, transportation, and agricultural
land preservation practices to support infill and compact
development. Additionally, the statute specifies that
project objectives include reducing air pollution, improving
connectivity and accessibility to jobs, housing and services,
and increasing options for mobility, including implementation
of the Active Transportation Program.
Statute establishing the AHSC program establishes the goal of
50% of AHSC Program expenditures be directed to projects
benefitting disadvantaged communities.
Full applications are due in late April for the first round
of funding, with the SGC considering and approving awards for
selected applications in late June.
3. Use of Cap and Trade Auction Revenue.
ARB has conducted ten cap-and-trade auctions, generating
almost $1.6 billion in proceeds to the state.
Several bills in 2012, and one in 2014, provide legislative
direction for the expenditure of auction proceeds including
SB 535 (de León) Chapter 830, Statutes of 2012, AB 1532 (J.
Pérez) Chapter 807, Statutes of 2012, SB 1018 (Budget
Committee) Chapter 39, Statutes 2012, and SB 862 (Budget
Committee) Chapter 36, Statutes of 2014.
SB 535 (De León), Chapter 830, Statutes of 2012, requires
that 25% of auction revenue be used to benefit disadvantaged
communities and requires that 10% of auction revenue be
invested in disadvantaged communities.
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AB 1532 (J. Pérez), Chapter 807, Statutes of 2012, directs
the Department of Finance to develop and periodically update
a three-year investment plan that identifies feasible and
cost-effective GHG emission reduction investments to be
funded with cap-and-trade auction revenues. AB 1532 requires
that SB 1018 (Budget Committee), Chapter 39, Statutes of
2012, created the GGRF, into which all auction revenue is to
be deposited. The legislation requires that before
departments can spend moneys from the GGRF, they must prepare
a record specifying: (1) how the expenditures will be used,
(2) how the expenditures will further the purposes of AB 32
(Nuñez, Pavley), Chapter 488, Statutes of 2006, (3) how the
expenditures will achieve GHG emission reductions, (4) how
the department considered other non-GHG-related objectives,
and (5) how the department will document the results of the
expenditures.
SB 862 (Budget Committee) Chapter 36, Statutes of 2014,
requires the ARB to develop guidelines on maximizing benefits
for disadvantaged communities by agencies administering GGRF
funds, and guidance for administering agencies on GHG
emission reduction reporting and quantification methods.
4. Legal consideration of cap-and-trade auction revenues.
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.
In 2012, the California Chamber of Commerce filed a lawsuit
against the ARB claiming that cap-and-trade auction revenues
constitute illegal tax revenue. In November 2013, the
superior court ruling declined to hold the auction a tax,
concluding that it is more akin to a regulatory fee.
5. GGRF moneys for Urban Forestry.
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The Department of Forestry and Fire Protection implements the
Urban & Community Forestry Program pursuant to the Urban
Forestry Act, and works to expand and improve the management
of trees and related vegetation in communities throughout
California.
According to the Department's website, "The mission of the
Urban Forestry Program is to lead the effort to advance the
development of sustainable urban and community forests in
California."
The 2014-15 budget appropriated $17 million for Sustainable
Forests and Urban forestry to the Department of Forestry and
Fire Protection from the GGRF. The 2015-16 budget proposal
appropriates $18 million for urban forestry, and the
Department of Finance is requiring all of these moneys go
toward disadvantaged communities.
The Department has established several urban forestry project
types, all of which require applicants to demonstrate GHG
emissions reductions. Some of these eligible projects include
planting of trees to optimize the multiple benefits of urban
forests in environmental justice communities; establishing a
new tree inventory, and urban forest mapping, and long-term
management plan; and projects to assist local entities to
purchase and improve unused, vacant urban neighborhood
properties in environmental justice communities to repurpose
it for a use consistent with the CA Urban Forestry Act and
with a positive GHG benefit.
The Program's Request for Proposal states that all grant
projects must track their GHG reductions and emissions. The
Department notes that they have worked with ARB, USDA Forest
Service, and other partners to develop a methodology and
tools to assist grantees with the GHG emission reporting
requirements.
6. Disadvantaged Communities.
State law requires the Department of Finance, in the
investment plan, to allocate at least 25% of available moneys
in the GGRF to projects that provide benefits to
disadvantaged communities, and at least 10% to projects
located within disadvantaged communities. This requirement is
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commonly referred to as the SB 535 requirement (SB 535, De
León, Chapter 830, Statutes of 2012).
To meet the SB 535 mandate, the California Environmental
Protection Agency (CalEPA) is developing options to identify
disadvantaged communities for investment based on a tool
called CalEnviroScreen. The Office of Environmental Health
Hazard Assessment (OEHHA) developed this tool under CalEPA's
guidance to assess census tracts across the state that are
disproportionately affected by multiple types of pollution
and areas with vulnerable populations. The latest version of
the tool, CalEnviroScreen version 2.0, is based on19
indicators for pollution burden and population
characteristic. The indicator scores were combined to
determine an overall CalEnviroScreen score. The higher the
score, the greater the impact. For the first round of GGRF
allocations, CalEPA has designated the top 25% of census
tracts in California as disadvantaged communities for the
purpose of investing cap-and-trade proceeds.
SB 862 (Committee on Budget and Fiscal Review, Chapter 36,
Statutes of 2014) requires ARB to develop guidelines on
maximizing benefits for disadvantaged communities by agencies
administering GGRF funds, and guidance for administering
agencies on GHG emissions reduction reporting and
quantification methods.
ARB staff released preliminary guidance in the fall of last
year on approaches that agencies can use to maximize the
benefits of investments to disadvantaged communities and how
agencies can determine whether their GGRF investments are
located within, or provide benefits to, disadvantaged
communities.
The guidance establishes screening criteria to determine
whether a specific project qualifies toward the 25% target of
funds providing benefits to a disadvantaged community, or the
10% target of investments spent within a disadvantaged
community. The guidelines specify that benefits must be
"direct, meaningful, and assured."
The interim guidance also recommends that agencies expending
GGRF moneys maximize the percentage of those funds that are
allocated for projects that benefit disadvantaged
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communities, preferably in a way that exceeds the minimum 10%
and 25% investment targets.
The guidelines also suggest that agencies give priority to
those projects that maximize benefits to disadvantaged
communities when selecting projects for a given investment by
scoring criteria that favors projects which provide multiple
benefits or the most significant benefits.
Comments
1. Purpose of Bill.
According to the author, "California's most distressed
communities face unique challenges in their efforts to
improve infrastructure and environmental sustainability. A
recent UCLA Luskin study, Envisioning a Greener LA 2014,
found that certain areas in close proximity to freeways,
goods movement corridors and industrial facilities suffer
from higher rates of asthma, heart disease and other harmful
health impacts, especially for children and the elderly. This
bill seeks to establish and implement a more targeted method
to the allocation of Greenhouse Gas Reduction Fund revenues
to California's most challenged communities and amplifies
previous expenditure plans in the area of 'natural resources
related' investment by providing funding for specified park
improvements and other transformative co-benefit type
projects that demonstrate GHG benefits."
2. Why is a New Program Needed?
SB 760 specifies a number of project categories that would be
eligible under the new program. It appears that most of
these project categories are already included in other
programs.
For example:
This bill would fund "planning of a sustainable
community," but SGC already administers sustainable
communities programs.
This bill would also provide funds to
non-motorized trail and other active transportation
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projects, but the state Department of Transportation
already administers an Active Transportation Program.
This bill specifies urban greening projects
including urban forestry and landscaping and park
development and land protection, but the SGC already
implements an urban greening program that administered
$23 million of Proposition 84 funds in June 2014,
primarily to disadvantaged communities.
Additionally CALFIRE was just awarded $17 million from
the GGRF in 2014-15 and may receive $18 million in
2015-16, for urban forestry projects in disadvantaged
communities.
Why is another new program needed when many of the eligible
projects specified by this bill are already being funded
through existing programs and targeting disadvantaged
communities?
1. Disadvantaged Communities.
This bill aims to target funds to disadvantaged communities.
As noted above, SB 535 (De León) established the requirement
in 2012 that 25% of GGRF moneys go toward projects that
provide benefits to disadvantaged communities, and allocates
a minimum of 10% of GGRF moneys to projects located within
disadvantaged communities. Existing law has also established
a process for identifying these communities through a
comprehensive screening tool designed by OEHHA based on 19
indicators for pollution burden and population
characteristics.
The program proposed by this bill specifies grants be awarded
to disadvantaged communities, as defined through the SB 535
process, but then requires that SGC prioritize awards to
those disadvantaged communities based on poverty rate,
unemployment rate, childhood obesity rate and incidents of
asthma, availability of greenspace and venues for physical
activity, lack of nonmotorized infrastructure supporting
active transportation, levels of air pollution, drinking
water quality and other factors. Additionally, the bill
requires priority for funding be given to projects located
wholly within distressed watershed areas with significant
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populations and heavy concentration of industrial facilities
and trade corridor activity.
The SB 535 process of identifying these communities has gone
through a comprehensive, scientific and public process.
SB 760 layers a subjective determination of which communities
are the most disadvantaged on the SB 535 process and adds
criteria for GGRF moneys that do not have a direct nexus with
GHG emission reductions. How will SGC prioritize one
disadvantaged community over another where one has a higher
incidence of asthma, and the other a higher poverty rate, or
where one has higher levels of air pollution and another one
has worse drinking water quality? How are "distressed
watershed areas with significant populations and heavy
concentration of industrial facilities and trade corridor
activity" defined?
This bill sets up a confusing, and potentially conflicting
process with SB 535 for determining which communities are
considered disadvantaged in order to be eligible for funding
from the GGRF. Additionally, some of these criteria do not
have a clear nexus to GHG emission reductions.
2. Contaminated Property.
SB 760 specifies that land acquisitions in urban settings of
blighted or contaminated properties serving little
sequestration benefit for greenspace conversion are eligible
community enhancement improvements.
Does the bill intend, and would the program use, GGRF moneys
for the remediation of contamination after the purchase of
the contaminated property in order to be able to utilize the
property for greenspace conversion? Any remediation to clean
up contaminated properties would undoubtedly increase GHG
emissions, due to the energy intensive nature of certain
technologies used for remediation.
Are GGRF moneys an appropriate source of revenue for
purchasing contaminated properties?
Related/Prior Legislation
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AB 156 (Perea), pending hearing in the Assembly Natural
Resources Committee, requires ARB to establish a comprehensive
technical assistance program, and a three-year investment plan,
to assist disadvantaged community applicants.
AB 1336 (Salas), currently on the Assembly floor, requires a
minimum of 40% of cap-and-trade funds to be allocated to
projects that provide benefits to disadvantaged communities.
SOURCE: Watershed Conservation Authority
SUPPORT:
Safe Routes to School National Partnership
Sierra Club California
OPPOSITION:
None on file
DOUBLE REFERRAL:
This measure was heard in the Senate Transportation and Housing
Committee on April 14, 2015, and passed out of committee with a
vote of 10-1.
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