BILL ANALYSIS
AB 1405
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Date of Hearing: May 13, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1405 (De Leon) - As Amended: April 28, 2009
Policy Committee: Natural
ResourcesVote:6-3
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill dedicates a portion of funds generated by AB 32 fees
disadvantaged communities for projects that mitigate or adapt to
climate change. Specifically, this bill:
1)Establishes the Community Benefits Fund (CBF) in the State
Treasury for deposit of an as-of-yet unspecified percentage of
fee revenue collected pursuant to AB 32.
2)Specify that funds in the CBF support competitive grants for
projects in the most impacted and disadvantaged communities,
as identified by ARB and other specified agencies, that reduce
greenhouse gases (GHGs) or help cope with climate change.
3)Requires ARB, the California Energy Commission (CEC), and the
Department of Public Health (DPH) to jointly develop
semiannual plans for the use of funds under this section.
FISCAL EFFECT
1)One-time costs to ARB of approximately $350,000 to develop a
methodology to identify the most impacted and disadvantaged
communities. (APCF)
2)Minor, absorbable costs to ARB, CEC and DPH to develop
semiannual plans.
3)Potential shift in funds, possibly in the hundreds of millions
of dollars annually, from the APFC to the CBF created by this
bill, to the extent ARB adopts an AB 32 fee that produces
revenue and depending on the percentage of revenue directed to
AB 1405
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the CBF in future iterations of this bill.
COMMENTS
1)Rationale. AB 32 requires ARB to ensure that GHG emission
reduction measures 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. The author contends this bill
provides direction to ensure that ARB meets these AB 32
requirements.
2)Background.
a) AB 32 Emissions Limit. AB 32 requires California to
limit its emissions of GHGs so that, by 2020, those
emissions are equal to what they were in 1990. To that end,
AB 32 requires ARB to quantify the state's 1990 GHG
emissions and to adopt, by January 1, 2009, a "scoping
plan" that describes the board's plan for achieving the
maximum technologically feasible and cost-effective
reductions of GHG emissions reductions by 2020.
In keeping with AB 32, ARB adopted its AB 32 scoping plan
in December of 2008. Consistent with AB 32, the scoping
plan includes both direct regulatory measures and
market-based compliance mechanisms, such as emissions taxes
and a "cap-and-trade" emissions allowance program.
b) AB 32 Provides Fee Authority to ARB. AB 32 authorizes,
but does not require, ARB to adopt fees to be paid by the
sources of GHG emissions. The statute directs that fee
revenues be deposited into the APFC.
Thus far, ARB has proposed to use its fee authority only to
fund state agencies' AB 32 implementation costs and to
repay currently outstanding AB 32 loans from other state
funds. The fee revenue necessary for these purposes is
estimated at $55 million per year. ARB is scheduled to
adopt the AB 32 fee in June 2009.
AB 1405
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ARB may generate additional revenue as a result of its use
of market-based mechanisms to limit GHG emissions. This
revenue, potentially in the hundreds of millions of
dollars, may result from the auction of cap-and-trade
emission allowances or from the imposition of an emissions
tax.
c) Air Pollution Control Fund. The money in the APCF is
available to ARB to carry out its air pollution control
duties. Revenues in the fund mainly result from penalties
paid by manufacturers or distributors of motor vehicles for
violations of regulations, cargo tank certification and
direct import vehicle certification fees, penalties for
violation of abatement orders and regulations, and various
fees imposed on non-vehicular sources of air emissions.
3)Related Legislation. AB 231 (Huffman), also before this
committee, creates a Climate Protection Trust Fund for the
deposit of fee revenue collected for the implementation of AB
32 and directs the use of those monies. AB 231 passed Natural
Resources on a vote of 6-3.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081