BILL NUMBER: SB 1572 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 24, 2012
AMENDED IN ASSEMBLY AUGUST 22, 2012
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 Article 2 (commencing with Section 16440)
to Chapter 3 of Part 2 of Division 4 of Title 2 of
Sections 16428.81, 16428.82, and 16428.83 to the Government
Code, relating to greenhouse gases , and making an appropriation
therefor .
LEGISLATIVE COUNSEL'S DIGEST
SB 1572, as amended, Pavley. California Global Warming Solutions
Act of 2006: 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 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). Existing
law requires all moneys, except for fines and penalties, collected
by the state board from the auction or sale of allowances as part of
a market-based compliance mechanism to be deposited in the Greenhouse
Gas Reduction Fund and to be available upon appropriation by the
Legislature. Existing law requires a state agency, prior to
expending any money appropriated to it by the Legislature
from the fund, to prepare a record consisting of a description of
proposed expenditures and of how they will further the regulatory
purposes of the California Global Warming Solutions Act of 2006,
how they will achieve specified greenhouse gas emissions
reductions, how the agency considered other objectives of that act,
and how the agency will document expenditure results.
This bill, with certain exceptions, would in addition
require the same revenues appropriate moneys
collected by the state board and derived from the auction or sale of
allowances to be deposited in in the 2012-13
fiscal year from the Greenhouse Gas Reduction Account,
which the bill would establish Fund to the state
board . Under the bill, a specified portion of the money
in the fund appropriated to the state board
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. This bill would authorize the state board and the
Treasurer to adopt emergency regulations for the purposes of funding
eligible projects, as prescribed. The bill would require
administering agencies the Treasurer and the
Strategic Growth Council to prepare and submit to the
Legislature quarterly Legislature, until January 1,
2017, annual reports on funded projects and activities. The
bill would require the state board to publish information on projects
on its Internet Web site.
This bill would create the Higher Education Greenhouse Gas
Emissions Reduction Account within the Greenhouse Gas Reduction Fund.
This bill would provide that any revenue collected by the state
board from the sale of an allowance to the University of California
or the California State University is required to be deposited into
this account. This bill would continuously appropriate the moneys in
this account, without regard to fiscal years, to the state board for
purposes that are determined, based on the best available evidence,
to reduce greenhouse gas emissions, as specified, and would prescribe
additional criteria for the expenditure of moneys in the account.
This bill would require the state board to submit to the Legislature
a 5-year investment plan detailing the projects and activities to be
funded. This bill would require, no later than December 31, 2013, and
each December 31 thereafter, the University of California and the
California State University to submit to the state board and the
Legislature a specified report.
This bill would create the Water Suppliers Greenhouse Gas
Emissions Reduction Account within the Greenhouse Gas Reduction Fund.
This bill would provide that any revenue collected by the state
board from the sale of an allowance to a water supplier, as defined,
is required to be deposited into this account. This bill would
continuously appropriate the moneys in this account, without regard
to fiscal years, to the state board for the purposes of reducing
greenhouse gas emissions associated with water suppliers, and would
prescribe additional criteria for the expenditure of moneys in the
account. This bill would require, no later than November 1, 2013, and
each November 1 thereafter, a water supplier that received funds
from the account to submit to the state board and the Legislature a
specified report.
Vote: majority. Appropriation: no yes
. 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 beginning on November 14, 2012, though
the majority of allowances will be freely allocated to covered
entities.
(d) 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.
(e) In order to further the purposes of the California Global
Warming Solutions Act of 2006, it is necessary and appropriate to
immediately allocate a portion of auction proceeds anticipated to be
generated in the 2012-13 fiscal year, excluding proceeds from
allowances consigned to auction by electrical distribution utilities,
to fund projects that reduce greenhouse gas emissions and that also
achieve the following purposes to the extent feasible:
(1) Maintain and create jobs for industries with covered entities
by reducing leakage risk through cost-effective investments in
greenhouse gas emissions reductions measures.
(2) Rapidly achieve greenhouse gas emissions reductions at a
reasonable cost.
(3) Ensure investments in emissions reductions benefit
disadvantaged communities to the maximum extent feasible.
(4) Provide near-term relief of budgetary pressure facing
universities, state, regional, and local government, and other public
agencies.
(5) Provide opportunities for small businesses, local governments,
nonprofit entities, state-certified local conservation corps, state
conservancies, and other community institutions to participate in and
benefit from statewide and regional efforts to reduce greenhouse gas
emissions.
(f) It is necessary and appropriate to prioritize near-term
investments from auction proceeds in emissions reductions at covered
entities that will generate most of the initial proceeds, in order to
ensure a low-cost transition to a clean-energy economy for the
benefit of their customers.
(g) A wider range of investments should be eligible longer term,
including increased investment in fuels-related emissions reductions
as the coverage of the cap-and-trade program expands,
transformational technology innovation, uncapped sectors such as
natural resources and sustainable agriculture where some of the most
cost-effective emissions reductions are possible, and other areas of
investment with broad public benefits that private markets may not
otherwise adequately fund.
SEC. 2. Section 16428.81 is added to the
Government Code , to read:
16428.81. (a) For purposes of this section:
(1) "Covered entities" means an entity subject to allowance
surrender requirements under any cap-and-trade program adopted by the
state board as of December 31, 2012, 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) "State board" means the State Air Resources Board.
(b) (1) Notwithstanding subdivision (c) of Section 16428.8, moneys
collected in the 2012-13 fiscal year and deposited into the
Greenhouse Gas Reduction Fund 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, are hereby appropriated from the Greenhouse
Gas Reduction Fund to the state board to be expended in accordance
with this section. In accordance with Government Code Section 16304,
funds not encumbered within three years shall revert back to the
Greenhouse Gas Reduction Fund.
(2) Funds expended pursuant to this section shall meet the
requirements of subdivision (a) of Section 16428.9 and shall benefit
disadvantaged communities to the maximum extent feasible. The
definition of a disadvantaged community shall be determined by the
California Environmental Protection Agency.
(c) The funds appropriated to the state board pursuant to
subdivision (b) shall be allocated as follows:
(1) Sixty percent to fund eligible projects in a timely manner
that would maximize the use of private capital and innovative
technology and accommodate unique cost and project financing
attributes of the particular industry of a covered entity. The state
board may allocate any of these moneys to the Treasurer for use in
accordance with his or her authority under the California Pollution
Control Financing Authority Act to fund eligible projects, if the
state board determines that the allocation maximizes the use of
private capital and innovative technology and accommodates unique
cost and project financing attributes of the particular covered
entities' industry.
(A) For purposes of this paragraph, eligible projects are those
projects that are determined by the state board to reduce greenhouse
gas emissions at covered entities that the state board determines
meet the following criteria:
(i) The project will reduce greenhouse gas emissions associated
with the operations of a covered entity under any cap-and-trade
program as reported to the state board pursuant to the mandatory
greenhouse gas emissions reporting regulation with a compliance
obligation commencing in the 2013 program year.
(ii) The covered entity's projected greenhouse gas emissions in
2013 will exceed any free allocation of emission allowances in 2013
by at least 10 percent.
(iii) The project is related to compliance with the California
Global Warming Solutions Act of 2006 (Division 2.5 (commencing with
Section 38500) of the Health and Safety Code) and is not required by
any other law, regulation, or court order.
(iv) The project applicant agrees to reporting and audit
requirements.
(B) The value of the benefits that may be received in a fiscal
year pursuant to this paragraph for eligible projects at a covered
entity shall not exceed the actual costs incurred by the covered
entity from purchasing auctioned allowances.
(C) Types of eligible projects may include, but are not limited
to, switching to the production or use of low-carbon fuels, on-site
efficiency measures, clean energy generation, increasing the use of
recycled content, energy storage, and waste heat recovery.
(D) The Treasurer and the state board may consult with the
Governor's Office of Business and Economic Development for the
purposes of administering this paragraph.
(E) In addition to any other authority the California Pollution
Control Financing Authority may have, the authority may provide a
rebate to the applicant in the amount of the sales and use tax paid
on the qualifying equipment within 30 days of receipt of a
determination by the state board that the requirements of
subparagraph (A) have been met and receipt of proof of purchase of
qualifying property associated with the eligible project.
(F) If the state board finds that moneys provided pursuant to this
paragraph were used for purposes other than those described in
subparagraph (A), the project applicant shall be required to repay
any moneys received with interest.
(G) The state board and the Treasurer may adopt emergency
regulations for the purposes of implementing this paragraph. The
adoption of emergency regulations shall be deemed necessary for the
immediate preservation of the public peace, health, safety, or
general welfare for the purposes of Section 11346.1.
(H) Total project cost associated with any eligible project is
eligible for funding.
(I) Any activities undertaken as part of any funded eligible
project shall complement and shall not interfere with efforts to
achieve and maintain federal and state ambient air quality standards
and reduce toxic air contaminant emissions.
(2) Ten percent to the Strategic Growth Council to be awarded, on
a competitive basis, to metropolitan planning organizations or
councils of governments, in accordance with subparagraph (A), and to
local climate innovation projects, in accordance with subparagraph
(B).
(A) Metropolitan planning organizations or in regions not within a
metropolitan planning organization, the council of governments, are
eligible for funding to develop and implement regional or local plans
to reduce greenhouse gas emissions through investments in
transportation infrastructure and operations and changes in land use.
(i) Project funding determinations shall be made at the regional
level in accordance with statewide criteria developed by the
Strategic Growth Council and the state board that prioritize
investments in projects that cost-effectively reduce greenhouse gas
emissions, integrate transportation infrastructure and land use
strategies, and achieve additional greenhouse gas emissions
reductions and community benefits through integration with local
energy, water, public health, or resource conservation strategies.
(ii) In regions with sustainable community strategies or an
alternative planning strategy for which the state board has accepted
a metropolitan planning organization's determination that the
sustainable communities strategy or the alternative planning strategy
would, if implemented, achieve the greenhouse gas emissions
reduction targets pursuant to subparagraph (H) of paragraph (2) of
subdivision (b) of Section 65080, projects shall implement the
adopted strategy within existing urbanized areas.
(iii) In regions that do not have strategies that meet the
requirements of clause (ii), projects shall meet criteria developed
by the Strategic Growth Council, in collaboration with the state
board, to ensure that projects provide measurable and verifiable
greenhouse gas emissions reductions.
(iv) Funds allocated by the Strategic Growth Council may be used
for any of the following:
(I) Integrated land use and transportation infrastructure
development, design, construction, or planning, including, but not
limited to, complete street retrofits, street scape improvements,
multiuse traits, electric vehicle charging infrastructure, natural
gas refueling infrastructure, and transit infrastructure implemented
with complementary land use changes, including passenger or commuter
rail, transit-oriented affordable housing, and other infrastructure
that provides access to a diverse mix of housing types, jobs,
schools, and recreational, commercial, retail, and other services of
the neighborhood level, as well as other integrated infrastructure
and land use strategies that demonstrate greenhouse gas emission
reductions.
(II) Transportation efficiency measures that provide greenhouse
gas emissions reduction benefits, including, but not limited to,
expansion and greenhouse gas reduction of transit services, road and
bridge maintenance with safety retrofits, roadway operations, and
demand management strategies.
(III) Performance measurement systems to evaluate greenhouse gas
emissions reductions from integrated projects and program
administrative costs.
(v) Within each region, projects shall be selected based on the
net greenhouse gas emissions reductions per dollar invested.
(B) A city, county, or city and county, state conservancy,
regional climate authority, special district, air district, joint
powers authority, regional collaborative, nonprofits coordinating and
communicating with local governments, or state-certified local
conservation corps is eligible for funding to develop, plan, design,
implement, or construct approved local climate innovation projects
that do all of the following:
(i) Result in replicable models.
(ii) Quantifiably reduce greenhouse gas emissions reductions.
(iii) Have clear, accurate, transparent reporting procedures in
place, including, but not limited to, clean energy generation, energy
efficiency, urban and community greening, stormwater reductions,
urban river restoration, water efficiency, agricultural and open
space protection, and natural community conservation plan development
and implementation.
(d) (1) To ensure that funds are expended efficiently and
transparently, all of the following shall occur:
(A) The Treasurer, for the purposes of any allocation made
pursuant to paragraph (1) of subdivision (c), and the Strategic
Growth Council, for the purposes of paragraph (2) of subdivision (c),
shall prepare and submit to the Legislature an annual report that
includes, but is not limited to, a detailed list of projects and
activities for which funds were expended or obligated. For each
project or activity, the detailed list shall include at least the
following information:
(i) The name of the project or activity.
(ii) A description of the project or activity.
(iii) An evaluation of the completion status.
(B) The state board shall publish on its Internet Web site
information on projects funded pursuant to this section, 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.
(2) Any recipient of funds pursuant to this section shall provide
the state agency from which the recipient received the funds any
information necessary for that state agency to comply with the
requirements of paragraph (1).
(3) (A) The report to be submitted pursuant to subparagraph (A) of
paragraph (1) shall be submitted in compliance with Section 9795.
(B) The requirement for submitting a report imposed pursuant to
subparagraph (A) of paragraph (1) is inoperative on January 1, 2017,
pursuant to Section 10231.5.
(e) In addition to subdivision (c) of Section 16428.9, the
provisions of this section are severable. If any provision of this
section 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.
SEC. 3. Section 16248.82 is added to the
Government Code , to read:
16248.82. (a) For purposes of this section, "state board" shall
mean the State Air Resources Board.
(b) The Higher Education Greenhouse Gas Emissions Reduction
Account is hereby created within the Greenhouse Gas Reduction Fund.
Notwithstanding Section 16428.8, any moneys that may be collected by
the state board from the sale of an allowance to the University of
California or the California State University as part of any
market-based compliance mechanism that may be adopted by the state
board shall be deposited into this account.
(c) Notwithstanding Section 13340, the moneys in the Higher
Education Greenhouse Gas Emissions Reduction Account are continuously
appropriated, without regard to fiscal years, to the state board to
be expended as follows:
(1) The requirements of subdivision (a) of Section 16428.9 shall
be met prior to expending any funds.
(2) Funds may be expended only for purposes that are determined,
based on the best available evidence, to reduce greenhouse gas
emissions associated with public segments of the state's
postsecondary education system that are covered entities for purposes
of any cap-and-trade program. These projects and activities may
include, but are not limited to, the following:
(A) Projects or activities that reduce electricity and natural gas
consumption at facilities controlled by the University of California
or the California State University, including energy efficiency,
distributed generation, waste heat recovery, and energy storage.
(B) Procurement of energy sources that reduce natural gas usage at
university facilities.
(C) Procurement of carbon-neutral electricity that displaces
conventional electricity generation at university facilities.
(3) Funds may be expended for administrative costs to directly
support any of the activities funded by this section. Administrative
costs shall not exceed 2.7 percent of the total moneys deposited in
the Higher Education Greenhouse Gas Emissions Reduction Account each
fiscal year.
(4) Expenditure of funds shall be contingent upon an additional
investment by the University of California or the California State
University in greenhouse gas abatement projects and activities, equal
in value to 20 percent of the funds it receives pursuant to this
section, either direct or in kind.
(d) The state board shall submit to the Legislature a five-year
investment plan detailing the projects and activities to be funded
with an anticipated allocation.
(e) (1) No later than December 31, 2013, and each December 31
thereafter, the University of California and the California State
University shall submit to the state board and to the Legislature a
report describing the respective disposition of funds received in
that calendar year and the planned expenditures for funding that may
be received pursuant to this section in the coming calendar year.
(2) (A) The requirement for submitting a report imposed pursuant
to paragraph (1) is inoperative on December 31, 2017, pursuant to
Section 10231.5.
(B) A report to be submitted pursuant to paragraph (1) shall be
submitted in accordance with Section 9795.
SEC. 4. Section 16428.83 is added to the
Government Code , to read:
16428.83. (a) For the purposes of this section, the following
terms have the following meanings:
(1) "State board" means the State Air Resources Board.
(2) "Water supplier" means any publicly owned supplier or
contractor for water, including, but not limited to, the Metropolitan
Water District of Southern California and, for purposes of managing
the State Water Project, the Department of Water Resources, that
distributes or sells water for ultimate resale to customers and that
is a regulated entity pursuant to Section 38570 of the Health and
Safety Code.
(b) The Water Suppliers Greenhouse Gas Emissions Reduction Account
is hereby created within the Greenhouse Gas Reduction Fund.
Notwithstanding Section 16428.8, any revenue that may be collected by
the state board from the sale of an allowance to a water supplier as
part of any market-based compliance mechanism that may be adopted by
the state board shall be deposited into this account.
(c) Notwithstanding Section 13340 of the Government Code, the
moneys in the Water Suppliers Greenhouse Gas Emissions Reduction
Account are continuously appropriated, without regard to fiscal
years, to the state board, to be expended as follows:
(1) The requirements of subdivision (a) of Section 16428.9 shall
be met prior to the expenditure of any funds.
(2) Funds may be expended only for the purpose of reducing
greenhouse gas emissions associated with water suppliers.
(3) Expenditure of funds shall be contingent upon an additional
investment by a water supplier that receives funds pursuant to this
section in greenhouse gas abatement projects and activities, equal in
value to 25 percent of the funds it receives, either direct or in
kind.
(d) No later than November 1, 2013, and each November 1
thereafter, each water supplier that has received funds pursuant to
this section shall submit to the state board and the Legislature a
report describing the disposition of funds received during that
calendar year and the status of projects funded by this section.
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 one hundred
sixty-one million dollars ($161,000,000), 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) Public university projects:
(1) Of funds deposited in the fund in the 2012-13 fiscal year,
12.5 percent, or twenty million nine hundred thousand dollars
($20,900,000), 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.
(b) Rapid transition assistance for industrial facilities:
Of funds deposited in the fund in the 2012-13 fiscal year, 16.5
percent, or thirty-one million three hundred thousand dollars
($31,300,000), 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.
(c) Residential energy efficiency:
(1) Of funds deposited in the fund in the 2012-13 fiscal year, 8.5
percent, or ten million four hundred thousand dollars ($10,400,000),
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.
(d) Energy in agriculture priority projects:
Of funds deposited in the fund in the 2012-13 fiscal year, 6.1
percent, or four million two hundred thousand dollars ($4,200,000),
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.
(e) Sustainable land use and transportation:
(1) Of funds deposited in the fund in the 2012-13 fiscal year,
24.5 percent, or thirty-one million three hundred thousand dollars
($31,300,000), 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 allocated by the Strategic
Growth Council pursuant to this subdivision.
(f) Goods movement:
Of funds deposited in the fund in the 2012-13 fiscal year, 9.3
percent, or twelve million five hundred thousand dollars
($12,500,000), 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.
(g) Lower-Emission School Bus Program:
Of funds deposited in the fund in the 2012-13 fiscal year, 6.5
percent, or five million two hundred thousand dollars ($5,200,000),
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.
(h) Clean Vehicle Rebate Project:
Of the funds deposited in the fund in the 2012-13 fiscal year,
16.5 percent, or thirty-one million three hundred thousand dollars
($31,300,000), 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.