BILL ANALYSIS
AB 1405
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: AB 1405
AUTHOR: De Leon
AMENDED: August 20, 2010
FISCAL: Yes HEARING DATE: August 25,
2010
URGENCY: No CONSULTANT: Randy Pestor
SUBJECT : COMMUNITY BENEFITS FUND
SUMMARY :
Existing law , under the California Global Warming Solutions
Act of 2006 (CGWSA):
1) 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 sets
various requirements to meet this requirement. (Health and
Safety Code 38500 et seq.).
2) Requires ARB to prepare and approve a scoping plan by
January 1, 2009, for achieving the maximum technologically
feasible and cost-effective reductions in GHG emissions
from sources or categories of sources of GHGs by 2020. ARB
must evaluate the total potential costs and total potential
economic and noneconomic benefits of the plan for reducing
GHGs to the state's economy and public health, using the
best economic models, emission estimation techniques, and
other scientific methods. The plan must be updated at
least once every five years. (38561).
3) Requires ARB to adopt GHG emission limits and emission
reduction measures by regulation on or before January 1,
2011, and meet certain requirements in adopting the
regulations. ARB may include the use of market-based
mechanisms to comply with these regulations. (38562,
38570).
AB 1405
Page 2
4) Requires ARB to ensure that GHG emission reduction
requirements and programs, to the extent feasible, direct
public and private investment toward the most disadvantaged
communities in the state and provide an opportunity for
certain entities to participate in and benefit from
statewide efforts to reduce GHG emissions (38565). ARB
must convene an environmental justice advisory committee to
advise it in implementing the Act (38591(a)), and a
Technology Advancement Advisory Committee to advise it on
activities to facilitate investment in technology matters
(38591(d)).
5) Authorizes ARB to adopt a schedule of fees to be paid by
GHG emission sources regulated under CGWSA, to be deposited
into the Air Pollution Control Fund and available upon
appropriation by the Legislature for carrying out the CGWSA
(38597).
As amended , under the CGWSA:
1) Establishes a Community Benefits Fund in the State Treasury
and requires a minimum of 30% of fees generated under the
CGWSA to be deposited by the ARB into the Fund.
2) Requires funds appropriated by the Legislature from the
Fund to be used for certain purposes in the most impacted
and disadvantaged communities (e.g., reduce GHG emissions,
increase water and energy efficiency, install clean
distributed generation systems, initiate or enhance public
mass transit).
3) Requires ARB to adopt methodology by June 30, 2010, to
identify the most impacted and disadvantaged communities
that meets certain requirements.
4) Establishes ARB reporting requirements.
5) Authorizes costs incurred to implement the above
requirements to be recovered from fees authorized under the
CGWSA.
6) Provides that projects can only be funded if ARB determines
AB 1405
Page 3
that use of moneys is consistent with Article XIIIA of the
state Constitution, and requires ARB to ensure that no
feepayer pays for a disproportionate share of global
warming harm addressed by the above requirements.
Senate Floor amendments strike all provisions of this bill and
enact the California Climate Change Community Benefits Fund
Law that:
1) Creates a California Climate Change Community Benefits Fund
in the State Treasury, requires at least 10% of the
revenues generated from the state sale of "compliance
instruments for market-based compliance mechanisms [under
the CGWSA], other than revenues collected for
administrative purposes," to be deposited into the Fund.
2) Requires moneys in the Fund to be used solely in the most
impacted and disadvantaged communities for certain purposes
(e.g., reduce GHG emissions or mitigate direct health or
environmental impacts of climate change, green collar
employment opportunities). The Secretary for Environmental
Protection must establish criteria and procedures for
implementing the Law, which must be implemented no more
than six months after a compliance mechanism becomes
operative.
3) Sets procedures for determining the most impacted and
disadvantaged communities.
4) Establishes Secretary for Environmental Protection
reporting requirements.
5) Requires the Secretary for Environmental Protection to
convene a review panel to make recommendations and review
the development of policies, plans and programs as they
relate to this bill; and to the extent practical, current
"existing support structures, frameworks, and programs
shall be used to implement this [bill]."
COMMENTS :
1) Purpose of Bill . According to the author, "The California
AB 1405
Page 4
Global Warming Solutions Act of 2006 (AB 32) positions
California as a global leader in reducing greenhouse gas
(GHG) emissions within the most environmentally derogating
sectors. The direct impacts of climate change will largely
affect disadvantaged communities who are already suffering
from adverse health impacts such as respiratory and cardiac
illnesses and episodes of extreme heat waves that have
forced many into the emergency room. During the summer of
2006 alone, an astonishing 145 heat-related deaths were
recorded and 2,537 heat-related emergency room visits."
According to the author in response to these concerns, "In the
State Treasury there will be established the California
Climate Change Community Benefits Fund. A portion of the
revenues generated each year through the implementation of
the California Global Warming Solutions Act of 2006 shall
be placed in the California Climate Change Community
Benefits Fund. The funds shall be invested in the most
impacted and most disadvantaged communities in California
to accelerate greenhouse gas emission reductions and
mitigate direct health impacts of climate change, and
create Green Jobs."
2) AB 1405 referred to Committee under Senate Rule 29.10 . As
approved by the Committee July 13, 2009 (5-2), and with
certain subsequent amendments, AB 1405 amended the CGWSA
(Health and Safety Code 38500 et seq.) to establish a
Community Benefits Fund in the State Treasury, require at
least 30% of the funds generated annually under the CGWSA
to be deposited into the fund, specify the purposes of the
fund to be used in the most impacted and disadvantaged
communities, require ARB to develop methodology to identify
those communities, and contain ARB reporting requirements.
Senate amendments strike provisions of this bill, create the
Climate Change Community Benefits Fund Law (Public
Resources Code 71420 et seq.) that establishes the Climate
Change Community Benefits Fund in the State Treasury,
requires at least 10% of revenues generated annually by the
state sale of compliance instruments for market-based
mechanisms under the CGWSA to be deposited into the Fund,
provides more general purposes for use of the funds to be
AB 1405
Page 5
used in the most impacted and disadvantaged communities,
requires the Secretary for Environmental Protection to
establish criteria for implementation of the Law and to
report on certain matters, and specifies related
requirements.
According to a sponsor, these amendments seek to respond to
concerns by the Administration.
3) Opposition and support concerns . Opponents note "AB 1405
takes an arbitrary 10% of an unknown amount of revenue to
be raised by CARB in a cap and trade program for purposes
that are not in the AB 32 scoping plan and that do not meet
the criteria of AB 32." Opponents also note that AB 1405
grants broad new authority to ARB; provides funding "for
broad unrelated purposes with unknown economic and
environmental impacts;" and final regulations are expected
to be adopted before January 1, 2011, and more information
"on the amount of revenue, expenditure plans, and
co-pollutant impacts of cap and trade will be available
soon."
According to supporters, "In adopting the [CGWSA] California
promised to ensure that low-income and most-impacted
communities are protected from and strengthened by efforts
to tackle California's climate crisis. However, to date
the State has not adequately established the resources to
meet the promise. Therefore, legislation is needed to
ensure that these neighborhoods are not left behind."
Supporters note that this bill would ensure that "we invest
in the neighborhoods that have suffered the most from
pollution and will struggle the most with the consequences
of the climate crisis."
4) Related legislation . SB 31 (Pavley) of 2009-10 requires
revenues generated from certain purposes to be appropriated
by the Legislature "in furtherance of [the CGWSA] for
purposes determined by the Legislature." SB 31 was
approved by the Environmental Quality Committee April 20,
2009 (5-2), and failed on the Senate Floor June 3, 2009
(16-19).
AB 1405
Page 6
AB 231 (Huffman) of 2009-10 required compliance revenues to be
deposited into a Climate Protection Trust Fund for purposes
of carrying out the CGWSA. AB 231 was subsequently amended
to address findings of overriding consideration under the
California Environmental Quality Act, and was approved by
the Environmental Quality Committee August 2, 2010 (5-0).
AB 2534 (Fuentes) of 2010 authorizes ARB to establish a fund
and deposit a portion of revenues from the distribution of
allowances for expenditure on communities experiencing
increased exposure to air pollutants to the extent that ARB
establishes that increased exposure to air pollutants is
caused by the implementation of the market-based compliance
mechanism regulation. Assembly Natural Resource Committee
hearings on AB 2534 were canceled at the request of the
author.
SOURCE : California NAACP; California Environmental
Justice Alliance, Coalition for Clean Air, Ella
Baker Center for Human Rights, Greenlining
Institute
SUPPORT : American Lung Association, Association for
Irritated Residents, Breathe California, COFEM,
Central Valley Air Quality Coalition, Community
Resources Project, Inc., Diocese of Stockton,
Environmental Defense Fund, Planning and
Conservation League, Sierra Club, Union of
Concerned Scientists,
OPPOSITION : Agricultural Council of California, Amcor PET
Packaging N.A., American Council of Engineering
Companies California, Automotive Aftermarket
Industry Association, Building Owners and
Managers Association, California Automotive
Wholesalers' Association, California Building
Industry Association, California Business
Properties Association, California Cement
Manufacturers Environmental Coalition,
California Chamber of Commerce, California
Construction and Industrial Materials
Association, California Council for
AB 1405
Page 7
Environmental and Economic Balance, California
Farm Bureau Federation, California Forestry
Association, California Grocers Association,
California Independent Oil Marketers
Association, California Independent Petroleum
Association, California Large Energy Consumers
Association, California League of Food
Processors, California Manufactures and
Technology Association, California Natural Gas
Producers Association, California Retailers
Association, California Taxpayers Association,
Chemical Industry Council of California, Del
Monte Foods, Engineering & Utility Contractors
Association, Golden State Builders Exchanges,
Industrial Environmental Association,
International Council of Shopping Centers,
NAIOP - Commercial Real Estate Development
Association, National Federation of Independent
Business, Orange County Business Council,
Pacific Gas and Electric, Santa Barbara
Technology and Industry Association, Stop
Hidden Taxes Coalition, Western Growers
Association, Western States Petroleum
Association
[SUPPORT AND OPPOSITION NOT VERIFIED BY COMMITTEE]