BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 760 (Mendoza) - Distressed watershed: urban greening. ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: May 11, 2015 |Policy Vote: not relevant | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 18, 2015 |Consultant: Marie Liu | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 760 would require that a public agency that receives an appropriation of monies from Proposition 1 to enhance an urban creek or its tributaries, prioritize its spending as specified. Fiscal Impact: Unknown, but potential costs to the General Fund (bond monies) for a public agency that receives monies from §79735(a) to develop regulations to implement the priorities established in this bill. Background: Proposition 1, which was approved by the voters in November of 2014, included the authorization for $100 million for projects that protect and enhance an urban create and its tributaries (WAT §79735(a)). Proposition 1, similar to various previous bonds, defined a "disadvantaged community" as a community with an annual median household income that is less than 80% of the SB 760 (Mendoza) Page 1 of ? statewide annual median household income. (WAT §79505.5) Under the California Global Warming Act of 2006, the California Air Resources Board (ARB) is required to establish a statewide greenhouse gas (GHG) emissions limit such that by 2020 California reduces its GHG emissions to the level they were in 1990. The act authorizes the ARB to include the use of market-based mechanisms to comply with these regulations. Under that authority, the ARB established the Cap-and-Trade Program in which ARB establishes an overall limit - or "cap" - on GHG emissions from specified industries. As part of the Cap-and-Trade Program, ARB auctions off GHG emission allowances as mitigation fees. To date, ARB has completed 10 auctions, taking in a total of $1.6 billion in proceeds. Existing law requires that at least 25% of the revenues are to be available for projects that provide benefits to disadvantaged communities. For the purposes of this requirement, the secretary of the Environmental Protection Agency is required to identify disadvantaged communities based on geographic, socioeconomic, public health, and environmental hazard criteria (HSC §39711). The secretary has provided this identification through CalEnviroScreen. Proposed Law: This bill would require that a public agency, which receives funds from Proposition 1 to enhance an urban creek and its tributary, give priority to projects that are located directly in, or directly adjacent to, a disadvantaged community within a distressed watershed and provide greenspace or other venues for physical activities. This bill would define "disadvantaged communities" as a community that is considered disadvantaged under CalEnviroScreen and has significant population densities, significant concentrations of industrial facilities, and trade corridor activity. Staff Comments: The definition of "disadvantaged communities" in this bill is substantially different than the definition of SB 760 (Mendoza) Page 2 of ? "disadvantaged communities" used under Proposition 1. Staff notes that if the definition used under this bill identifies communities that would not also be considered disadvantaged under the Proposition 1 definition, this bill could conflict with a voter-passed measure. However, if this definition only identifies a subset of the "disadvantaged communities" as defined by Proposition 1, the language under this bill is permissible. Whether this is the situation is unclear. Staff notes that no public agency has received funds from Section 79730 so it is unclear what agency might be affected by this bill at this time. Furthermore, it is unclear whether a public agency that receives this category of Proposition 1 money would receive those monies in order for it to administer grants to other agencies or whether that public agency would receive the these bond funds for a specific project. In the case of the former, the public agency would potentially be required to develop guidelines for the distribution of grants for several purposes, including to provide additional specifics for the definition of disadvantaged communities. For example, the definition of disadvantaged communities under this bill is one that is identified on CalEnviroScreen, and has "significant population densities, significant concentrations of industrial facilities, and trade corridor activity. It is not clear what would constitute "significant" for the purposes of this definition. "Industrial facilities" and "trade corridor activity" may also need to be defined to ensure transparent spending of the bond funds. The guideline or regulatory process would also need to assure that the definition of disadvantaged communities does not include communities that would be identified under Proposition 1, as discussed above. Staff notes that grant program guidelines are frequently exempted from the Administrative Procedures Act, which would minimize but not eliminate regulatory costs. There is the possibility that the agency would need to develop regulations to interpret the bills requirements even outside of a grant program. Because it has not yet been determined how this section of Proposition 1 monies will be administered, or by which agency, it is unknown whether that public agency might have costs to develop regulations to implement the language in this bill. SB 760 (Mendoza) Page 3 of ? -- END --