BILL ANALYSIS
AB 1405
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Date of Hearing: April 20, 2009
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Nancy Skinner, Chair
AB 1405 (De Leon) - As Amended: April 14, 2009
SUBJECT : California Global Warming Solutions Act of 2006:
Community Benefits Fund
SUMMARY : Directs an unspecified percentage of revenues
generated pursuant to AB 32 to a Community Benefits Fund (Fund)
to be awarded by an appointed panel as grants to benefit
disadvantaged communities.
EXISTING LAW , AB 32:
1)Requires the Air Resources Board (ARB) to adopt a statewide
greenhouse gas (GHG) emissions limit equivalent to 1990 levels
by 2020 and adopt regulations to achieve maximum
technologically feasible and cost-effective GHG emission
reductions.
2)Authorizes ARB to adopt fees to be paid by the sources of GHG
emissions regulated pursuant to AB 32. Fee revenues must be
deposited in the Air Pollution Control Fund and may be spent
for purposes of carrying out AB 32.
3)Requires ARB to ensure that the GHG emission reduction rules,
regulations, programs, mechanisms, and incentives under its
jurisdiction direct public and private investment toward the
most disadvantaged communities in California and provide an
opportunity for small businesses, schools, affordable housing
associations, and other community institutions to participate
in and benefit from statewide efforts to reduce GHG emissions.
THIS BILL :
1)Provides that an unspecified percentage of the total revenues
generated by AB 32 be deposited in the Fund, which the bill
creates.
2)Requires moneys in the Fund be used, upon appropriation, for
the Community Benefits Program (Program).
3)Creates the Fund Review Panel (Panel) to implement the Program
AB 1405
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by awarding competitive grants for projects in the most
impacted and disadvantaged communities in California to
accelerate GHG emission reductions and mitigate direct health
impacts of climate change. Grants may be awarded to projects
that do any of the following:
a) Reduce greenhouse gas emissions, while achieving
co-benefits such as reductions in other air pollutants and
energy efficiency.
b) Minimize health impacts caused by global warming.
c) Assist small businesses to reduce their greenhouse gas
emissions.
d) Install or replace equipment that reduces greenhouse gas
emissions.
e) Improvements to mass transit that reduce greenhouse gas
emissions, including, but not limited to, subsidies to
commuters.
f) Clean distributed electricity generation systems that
reduce greenhouse gas emissions.
g) Energy efficiency upgrades for schools, senior centers,
or low-income housing that reduce greenhouse gas emissions.
h) Emergency preparedness for extreme weather events caused
by global warming.
4)Specifies the Panel is composed of nine members, three each
appointed by the Governor, the Assembly Speaker, and the
Senate Rules Committee. Each member must have "demonstrated
integrity in protecting community interests in the area of
environmental protection for at least 10 years" or education,
expertise, and 10 years of working experience in one of
several specified fields.
5)Requires ARB to recommend a methodology to the Panel to
identify the most impacted and disadvantaged communities.
6)Requires ARB, the Energy Commission, and the Department of
Public Health to jointly develop semiannual plans for use of
Program funds, and present them to the Panel for approval.
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7)Requires the Panel to ensure that all projects approved for
funding have local community support.
8)Provides the Panel may only approve a project if it determines
that the use of moneys would not be inconsistent with Article
XIII A of the California Constitution (tax limitations,
including requirement that tax increases must be approved by
2/3 vote of the Legislature).
FISCAL EFFECT : Unknown
COMMENTS :
1)Background. AB 32 authorizes ARB to adopt via regulation "a
schedule of fees to be paid by the sources of greenhouse gas
emissions" and deposit revenues into the Air Pollution Control
Fund. AB 32 also authorizes, but does not require, the use of
market-based mechanisms to achieve GHG emission reductions,
provided specified conditions are met.
Thus far, ARB has proposed only to use its fee authority for
the limited purpose of funding its own and other state
agencies' AB 32 implementation costs, and to repay loans of
other state funds that previously have been approved by the
Legislature for these purposes. The fee revenue necessary for
these purposes is estimated at $55 million per year. The
proposed administrative fee is scheduled for adoption by ARB
in June 2009. It's possible that a more expansive fee on GHG
emitters, the auction of GHG emission allowances, or another
market mechanism will produce significantly higher revenues
over the course of AB 32 implementation.
AB 32 also requires ARB to ensure that the GHG emission
reduction rules, regulations, programs, mechanisms, and
incentives under its jurisdiction direct public and private
investment toward the most disadvantaged communities in
California and provide an opportunity for small businesses,
schools, affordable housing associations, and other community
institutions to participate in and benefit from statewide
efforts to reduce GHG emissions. ARB has yet to propose how
it will meet this requirement.
2)Is it necessary to create a new entity to govern these funds?
The composition of the nine-member Panel created by this bill
seems somewhat duplicative of the Environmental Justice
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Advisory Committee (EJAC) appointed by ARB pursuant to AB 32.
The purpose of the EJAC is to advise ARB regarding
implementation of AB 32. The key structural difference is
that the Panel would be appointed by the Governor (three
members) and the Legislature (six members) and would be
completely independent of ARB. The author and committee may
wish to consider whether independence from ARB is beneficial
in this case, or whether it would be more efficient to use the
existing EJAC to develop criteria and guide the expenditure of
the Fund.
3)Fill in the blanks? While this bill provides details about
the uses of the Fund and composition of the Panel, it leaves
blanks for the percentage of AB 32 revenues that must be
directed to the Fund and the date by which the Panel members
must be appointed. The author and the committee may wish to
consider filling in these blanks so the scope and timeline of
the Program will be clear.
4)Related legislation. AB 231 (Huffman), also pending in this
Committee, creates a Climate Protection Trust Fund, with
related provisions. AB 1405 and AB 231 amend the same section
and direct the expenditure of the same AB 32 revenues in
incompatible ways. The author and the committee may wish to
consider adopting amendments to move the provisions of this
bill to a new section, rather than amending the same existing
section as AB 231, and related technical amendments to resolve
the conflict with AB 231.
REGISTERED SUPPORT / OPPOSITION :
Support
American Lung Association
Breathe California
California Business Properties Association
Catholic Charities, Diocese of Stockton
California State Conference of the NAACP
Central Valley Air Quality Coalition
Coalition for Clean Air
COFEM
Community Resources Project, Inc.
Environmental Defense Fund
Planning and Conservation League
Sierra Club California
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The Greenling Institute
Union of Concerned Scientists
Opposition
Amcor PET Packaging N.A.
California Chamber of Commerce
California Forestry Association
California Independent Petroleum Association
California Manufacturers & Technology Association
Cal-Tax
Del Monte Foods
Stop Hidden Taxes Coalition
Western States Petroleum Association
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092