BILL NUMBER: SB 1572 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 25, 2012
AMENDED IN SENATE MAY 29, 2012
AMENDED IN SENATE MAY 1, 2012
INTRODUCED BY Senator Pavley
FEBRUARY 24, 2012
An act to add Section 38575 to the Health and Safety Code
Art icle 2 (commencing with Section 16440)
to Chapter 3 of Part 2 of Division 4 of Title 2 of the
Government Code , relating to greenhouse gases.
LEGISLATIVE COUNSEL'S DIGEST
SB 1572, as amended, Pavley. California Global Warming Solutions
Act of 2006: Greenhouse Gas Reduction Account.
AB 32 Investment Fund.
The California Global Warming Solutions Act of 2006 designates the
State Air Resources Board as the state agency charged with
monitoring and regulating sources of emissions of greenhouse gases.
The act requires the state board is required
to adopt a statewide greenhouse gas emissions limit
equivalent to the statewide greenhouse gas emissions level in 1990 to
be achieved by 2020, and to adopt rules and regulations in an open
public process to achieve the maximum, technologically feasible, and
cost-effective greenhouse gas emission reductions. The act authorizes
the state board to include use of market-based compliance
mechanisms. The state board has adopted by regulation a program
pursuant to the act to cap greenhouse gas emissions and provide for
market-based compliance mechanisms, including the auction of
allowances (cap-and-trade program). The act authorizes the
state board to adopt a schedule of fees to be paid by the sources of
greenhouse gas emissions regulated pursuant to the act, and requires
the revenues collected pursuant to that fee schedule be deposited
into the Air Pollution Control Fund and be available, upon
appropriation by the Legislature, for the purposes of carrying out
the act.
This bill would create the Greenhouse Gas Reduction Fund. The bill
would require moneys, as specified, collected pursuant to a
market-based compliance mechanism to be deposited in this fund. The
bill also would require those moneys, upon appropriation by the
Legislature, be used for purposes of carrying out the act.
This bill, with certain exceptions, would require revenues
collected by the state board and derived from the auction or sale of
allowances to be deposited in the Greenhouse Gas Reduction Account
which the bill would establish. Under the bill, a specified portion
of the money in the fund would be available, subject to appropriation
by the Legislature, to administering agencies to fund prescribed
projects that meet certain goals relating to greenhouse gas emissions
reductions. The bill would require administering agencies to prepare
and submit to the Legislature quarterly reports on funded projects
and activities. The bill would require the state board to publish
information on projects on its Internet Web site.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares the
following:
(a) In accordance with its discretionary authority to adopt
market-based compliance mechanisms pursuant to Part 5 (commencing
with Section 38570) of Division 25.5 of the Health and Safety Code,
the State Air Resources Board adopted on December 22, 2011, a final
regulation order establishing the cap-and-trade program, which took
effect on January 1, 2012.
(b) California's cap-and-trade program is authorized by the
California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code).
(c) To mitigate the risk of market manipulation and windfall
profits and to ensure the market price of a greenhouse gas emissions
allowance is transparent and publicly discoverable, the State Air
Resources Board will auction a limited number of allowances to
qualifying market participants, though the majority of allowances
will be freely allocated to covered entities.
(d) If the cap-and-trade regulation remains substantially
unchanged, the State Air Resources Board will auction greenhouse gas
emissions allowances beginning on November 14, 2012.
(e) Proceeds from the auction of allowances must be spent to
further purposes of the California Global Warming Solutions Act of
2006, including the reduction of statewide greenhouse gas emissions
to 1990 levels by 2020, and the maintenance of those levels beyond
2020.
(f) To further the purposes of the California Global Warming
Solutions Act of 2006, and in light of current budgetary pressures
facing families, small businesses, particularly those in
disadvantaged communities, energy-intensive trade-exposed industries,
as well as local and regional governmental entities throughout
California, it is necessary and appropriate to immediately allocate a
portion of auction proceeds anticipated to be generated in the
2012-13 fiscal year, excluding those allowances consigned to auction
by investor-owned utilities, to be used to expeditiously alleviate
budgetary pressure, create jobs in the near term, utilize existing
programs with a proven track record of transparently and efficiently
expending public funds to reduce greenhouse gas emissions and
accelerate the achievement of the goals of the California Global
Warming Solutions Act of 2006 in a manner that has a sustained
positive impact on the state's fiscal health and economic leadership
in global clean technology markets.
SEC. 2. Article 2 (commencing with Section 16440)
is added to Chapter 3 of Part 2 of Division 4 of Title 2
of the Government Code , to read:
Article 2. AB 32 Investment Fund
16440. As used in this article:
(a) "Act" means the California Global Warming Solutions Act of
2006 (Division 25.5 (commencing with Section 38500) of the Health and
Safety Code).
(b) "Cap-and-trade program" means any program adopted by
regulation of the State Air Resources Board pursuant to Division 25.5
(commencing with Section 38500) of the Health and Safety Code to cap
greenhouse gas emissions and provide for market-based compliance
mechanisms.
(c) "Energy Commission" means the State Energy Resources
Conservation and Development Commission.
(d) "Fund" means the Greenhouse Gas Reduction Account established
in Section 16441.
(e) "State board" means the State Air Resources Board.
16441. (a) The Greenhouse Gas Reduction Account is hereby
established as a special fund in the State Treasury.
(b) All revenues collected by the state board and derived from any
auction or sale of allowances pursuant to a market-based compliance
mechanism authorized by the act and established by regulations
adopted by the state board, excluding fines, penalties, or moneys
collected from the auction or sale of allowances consigned to the
state board by investor-owned utilities, shall be deposited in the
fund and shall be available, upon appropriation by the Legislature,
for the purposes of this article.
16442. (a) (1) Notwithstanding any other law, one-half of the
revenues collected in the 2012-13 fiscal year, or two hundred fifty
million dollars ($250,000,000), whichever amount is less, from the
auction or sale of greenhouse gas emissions allowances, that are not
allocated or otherwise used by the Director of Finance to make
commensurate reductions to General Fund expenditure authority, as
authorized by Section 15.11 of the Budget Act of 2012, shall be
available, upon appropriation by the Legislature, to be expended for
priority projects in accordance with this article.
(2) All funds appropriated by the Legislature that are not
allocated by the administering agency by the end of the 2012-13
fiscal year shall revert back to the fund to be expended according to
a long-term expenditure plan, in accordance with subsequent
legislation.
(3) If revenues of less than five hundred fifty million dollars
($550,000,000) are derived from the auction or sale of greenhouse gas
emissions allowances in the 2012-13 fiscal year, excluding those
allowances consigned by investor-owned utilities to the state board,
no money shall be expended in accordance with this article.
(b) Priority projects funded in accordance with Section 16443
shall comply with the following:
(1) Achieve greenhouse gas emissions reductions at a reasonable
cost.
(2) Rapidly achieve budgetary savings for families, small
businesses, schools, universities, companies regulated under the
cap-and-trade program, community institutions, and state, local, and
regional governments.
(3) Advance the purposes of the cap-and-trade program, in
particular the purpose of the auction to reduce the risk of market
manipulation and windfall profits.
(4) Protect existing jobs in the state by minimizing leakage, as
defined in Section 38505 of the Health and Safety Code.
(5) Benefit the most adversely impacted and disadvantaged
communities to the maximum extent feasible.
(6) Provide opportunities, where appropriate, for small
businesses, schools, local governments, not-for-profit entities,
state and local certified conservation corps, state conservancies,
and other community institutions to participate in and benefit from
statewide and regional efforts to reduce greenhouse gas emissions.
16443. The following are priority projects:
(a) K-12 energy projects:
(1) The greater of 35.6 percent of funds deposited in the fund in
the 2012-13 fiscal year, or eighty-nine million dollars
($89,000,000), shall be deposited in the Public School Energy Savings
Account, which is hereby established as a subaccount within the
Energy Conservation Assistance Account. The funds in the Public
School Energy Savings Account shall be available to the Energy
Commission for allocation to qualified projects at public schools for
kindergarten and grades 1 to 12, inclusive, in accordance with the
Energy Conservation Assistance Act of 1979 (Chapter 5.2 (commencing
with Section 25410) of Division 15 of the Public Resources Code), as
follows:
(A) Of the funds deposited in the Public Schools Energy Savings
Account, 56.25 percent shall be available as loans pursuant to
existing guidelines and regulations established by the Energy
Commission, with the following exceptions:
(i) Loans shall have a 2 percent interest rate and a 20-year term.
(ii) Only public schools will be eligible for loans from the
Public Schools Energy Savings Account.
(B) Of the funds deposited in the Public Schools Energy Savings
Account, 18.75 percent shall be available as loans pursuant to
existing guidelines and regulations established by the Energy
Commission, with the following exceptions:
(i) Loans shall have a 1 percent interest rate and a 20-year term.
(ii) Only public schools with 35 percent or greater proportion of
students with free and reduced lunches shall be eligible for these
loans.
(C) Of the funds deposited in the Public Schools Energy Savings
Account, 25 percent shall be available as grants to qualifying public
schools, using an existing program within the jurisdiction of the
Energy Commission, including, but not limited to, the Bright Schools
Program, or in collaboration with the Office of Public School
Construction, through either the new construction or modernization
programs of the School Facility Program implemented pursuant to
regulation, if the Energy Commission determines that adequate energy
audit, measurement, and verification procedures are employed to
ensure greenhouse gas emission reductions occur in compliance with
the act.
(b) Public university projects:
(1) Of funds deposited in the fund in the 2012-13 fiscal year, 8
percent, or twenty million dollars ($20,000,000), whichever amount is
greater, shall be deposited in the Higher Education Climate
Solutions Fund, which is hereby established as a subaccount of the
fund, to be available for allocation to public university governing
boards for projects and activities that are determined, based on the
best available evidence, to reduce greenhouse gas emissions
associated with public universities that are covered entities for
purposes of any cap-and-trade program, including, but not limited to,
the following projects and activities:
(A) Energy efficiency upgrades that reduce electricity and natural
gas consumption at university-controlled facilities.
(B) Procurement of biomethane or biogas that displaces natural gas
usage at university facilities.
(C) Procurement of carbon-neutral electricity that displaces
conventional electricity generation at university facilities.
(D) Administrative costs to directly support any of the activities
listed in subparagraphs (A), (B), and (C), not in excess of 1
percent of total funds deposited in the Higher Education Climate
Solutions Fund.
(2) In order to be eligible for funds from the Higher Education
Climate Solutions Fund, a public university applying for funds shall
do the following:
(A) Agree to make an additional investment in greenhouse gas
abatement projects and activities, equal in value to 25 percent of
the funds it receives.
(B) Submit to the Legislature a five-year investment plan
detailing the projects and activities to be funded with an
anticipated allocation.
(3) At the end of the calendar year, each public university that
receives funding from the Higher Education Climate Solutions Fund
shall submit a report to the Legislature describing the disposition
of funds received in the previous calendar year and the planned
expenditures for allowance revenue in the coming calendar year.
(c) Rapid transition assistance for industrial facilities:
Of funds deposited in the fund in the 2012-13 fiscal year, 12
percent, or thirty million dollars ($30,000,000), whichever amount is
greater, shall be available for appropriation to the Public
Utilities Commission to carry out the self-generation incentive
program in accordance with Section 379.6 of the Public Utilities
Code, subject to the following limitations:
(1) Incentives shall only be available to covered entities subject
to allowance surrender requirements under any cap-and-trade program,
excluding electrical corporations that receive all of their
allowances for free, and including, but not limited to, food
processors, manufacturers of glass, cement, and other industrial
products, oil and gas production facilities and refineries, and
thermal energy suppliers.
(2) The Public Utilities Commission shall not award incentives
under the self-generation incentive program funded pursuant to this
article for emissions reduction measures that are otherwise
specifically required by statute, regulation, or court order.
(d) Residential energy efficiency:
(1) Of funds deposited in the fund in the 2012-13 fiscal year, 4
percent, or ten million dollars ($10,000,000), whichever amount is
greater, shall be available for appropriation to the Department of
Community Services and Development for expenditure pursuant to the
Weatherization Assistance Program administered by that department.
(2) The Department of Community Services and Development shall
expend at least 50 percent of the funds it receives pursuant to this
section for eligible energy efficiency improvements within
multifamily rental housing developments subject to affordability
restrictions meeting the Department of Housing and Community
Developments standards with remaining terms of at least 10 years.
(e) Energy in agriculture priority projects:
Of funds deposited in the fund in the 2012-13 fiscal year, 1.6
percent, or four million dollars ($4,000,000), whichever amount is
greater, shall be available for appropriation to the Energy
Commission for expenditure in accordance with the Agricultural
Industry Energy Program established pursuant to Section 25650 of the
Public Utilities Code, for projects that meet the criteria
established for that program. Projects may include the adoption of
renewable energy and energy-efficient technologies and management
practices that reduce greenhouse gas emissions, energy and water use,
production costs, and minimize negative environmental impacts while
improving economic sustainability.
(f) Sustainable land use and transportation:
(1) Of funds deposited in the fund in the 2012-13 fiscal year, 20
percent, or thirty million dollars ($30,000,000), whichever amount is
greater, shall be available for appropriation to the Strategic
Growth Council established in Section 75121 of the Public Resources
Code, for allocation to metropolitan planning organizations, or,
within the Southern California Association of Governments region, to
a county transportation commission, or to other local governmental
entities in regions not within a metropolitan planning organization,
that further the purposes of Chapter 728 of the Statutes of 2008 or
Chapter 729 of the Statutes of 2008, the California Regional
Blueprint Planning Program, or other regional planning processes.
(A) Project funding determinations shall be made at the regional
level in accordance with statewide criteria developed by the
Strategic Growth Council that prioritize investments in projects that
do the following:
(i) Cost-effectively reduce greenhouse gas emissions and provide
other cobenefits as defined by the act.
(ii) Integrate transportation, land use, and water and other
resource conservation strategies.
(iii) Occur in regions with sustainable community strategies that
meet greenhouse gas emission reduction targets, or in other regions,
for equivalent blueprint plans or other regional plans.
(B) Funds allocated by the Strategic Growth Council may be used
for integrated infrastructure development, design, construction, or
planning, including modeling and verification systems that impose
greenhouse gas emission reduction performance measurement tools for
local and regional actions, and operation and maintenance of
transportation infrastructure, provided that the integrated
infrastructure development, design, construction, or planning or
operation and maintenance measures are part of a comprehensive
regional or local plan that directly results in overall greenhouse
gas emission reduction and provisions of cobenefits as defined by the
act. Projects shall be selected based on the net greenhouse gas
emissions reductions and cobenefits provided per dollar invested.
(C) Of funds made available to the Strategic Growth Council
pursuant to this subdivision, 40 percent shall be available to the
Department of Housing and Community Development to be expended for
loans consistent with subdivision (b) of Section 53562 of the Health
and Safety Code.
(i) These funds shall finance only housing units that will be
available at an affordable rent to persons of very low or low income
for at least 55 years, although these units may be located in either
all-affordable or mixed-income developments.
(ii) The Department of Housing and Community Development shall not
use project size as a scoring criterion but shall use density as a
scoring criterion.
(iii) The Department of Housing and Community Development shall
further give priority to developments that achieve additional
greenhouse gas emission reductions or energy conservation through
onsite renewable energy, discount transit passes, car sharing, or
other features.
(iv) Funds expended shall be coordinated with and complement, and
are encouraged to be combined with, funds expended by the Strategic
Growth Council pursuant to subdivision (f).
(h) Goods movement:
Of funds deposited in the fund in the 2012-13 fiscal year, 4.8
percent, or twelve million dollars ($12,000,000), whichever amount is
greater, shall be available for appropriation to the state board to
be expended in a manner consistent with Section 39625.5 of the Health
and Safety Code. Funds expended pursuant to this section shall be
consistent with the goods movement efficiency measures included in
the Climate Change Scoping Plan adopted by the state board pursuant
to the act.
(i) Lower-Emission School Bus Program:
Of funds deposited in the fund in the 2012-13 fiscal year, 2
percent, or five million dollars ($5,000,000), whichever amount is
greater, shall be available for appropriation to the state board to
fund qualifying applications for incentives through its
Lower-Emission School Bus Program.
(j) Clean Vehicle Rebate Project:
Of the funds deposited in the fund in the 2012-13 fiscal year, 12
percent, or thirty million dollars ($30,000,000), whichever is
greater, shall be available for appropriation to the state board to
implement its Clean Vehicle Rebate Project, subject to the following
limitations:
(1) Rebates shall only be available for appropriation to
households with a combined gross annual income of less than eighty
thousand dollars ($80,000) per year.
(2) Only one rebate shall be available per qualifying household.
16444. (a) To ensure funds are expended efficiently,
transparently, and in a manner that reduces greenhouse gas emissions,
administering agencies and recipients of funds pursuant to this
article shall comply with the following requirements:
(1) An agency shall not award funds pursuant to this article
unless it finds, based on available evidence, that the project or
activity to be funded reduces greenhouse gas emissions in furtherance
of the act.
(2) An agency subject to the requirements of this article shall
prepare and submit to the Legislature quarterly reports that include,
but are not limited to, a detailed list of projects and activities
for which funds were expended or obligated, including, but not
limited to, the following information for each project or activity:
(A) The name of the project or activity.
(B) A description of the project or activity.
(C) An evaluation of the completion status.
(b) The state board shall publish on its Internet Web site
information on projects funded pursuant to this article, including
the status, costs, benefits, location, and other information relating
to a project in a manner that is easily accessible and
comprehensible to the public, in order to understand the effects the
funded projects are having on California's environment and economy.
(c) (1) The report to be submitted pursuant to paragraph (2) of
subdivision (a) shall be submitted in compliance with Section 9795.
(2) The requirement for submitting a report imposed under
paragraph (2) of subdivision (a) is inoperative on January 1, 2017,
pursuant to Section 10231.5.
16445. The provisions of this article are severable. If any
provision of this article or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
SECTION 1. The Legislature finds and declares
all of the following:
(a) In accordance with its discretionary authority to adopt
market-based compliance mechanisms pursuant to Part 5 (commencing
with Section 38570) of Division 25.5 of the Health and Safety Code,
the State Air Resources Board adopted on December 22, 2011, a final
regulation order establishing the cap-and-trade program, which took
effect on January 1, 2012.
(b) California's cap-and-trade program is authorized by the
California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code), and
the funds generated by the program are regulatory fees, the use of
which is required to conform with Sinclair Paint Co. v. State Bd. of
Equalization (1997) 15 Cal.4th 866.
(c) Provided the cap-and-trade regulation remains substantially
unchanged, the state board will auction greenhouse gas emissions
allowances beginning in the 2012 calendar year.
(d) Pursuant to the California Global Warming Solutions Act of
2006 (Division 25.5 (commencing with Section 38500) of the Health and
Safety Code), proceeds from the auction of allowances will be
deposited in the Air Pollution Control Fund, and will only be
available, upon appropriation by the Legislature, for the purposes
designated in the act.
(e) If the cap-and-trade regulation does not remain in effect, the
state board may consider alternate rules or regulations that would
be adopted pursuant to the California Global Warming Solutions Act of
2006 (Division 25.5 (commencing with Section 38500) of the Health
and Safety Code) in an open public process to ensure that statewide
greenhouse gas emissions are reduced to 1990 levels by 2020.
SEC. 2. Section 38575 is added to the Health
and Safety Code, to read:
38575. (a) The Greenhouse Gas Reduction Fund is hereby created.
(b) Notwithstanding Section 38597, all moneys collected pursuant
to this part, excluding penalties and fines, shall be deposited in
the Greenhouse Gas Reduction Fund and shall be available, upon
appropriation by the Legislature, for purposes of carrying out this
division.