BILL ANALYSIS �
AB 1970
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Date of Hearing: April 7, 2014
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 1970 (Gordon) - As Introduced: February 19, 2014
SUBJECT : California Global Warming Solutions Act of 2006:
Community Investment and Innovation Program
SUMMARY : Requires the Strategic Growth Council (SGC) to
establish the Community Investment and Innovation Program (CIIP)
to provide grants and other financial assistance to eligible
local government recipients for the purposes of developing and
implementing greenhouse gas (GHG) emission reduction projects.
EXISTING LAW :
1)Requires the Air Resources Board (ARB), pursuant to California
Global Warming Solutions Act of 2006 (AB 32), to adopt a
statewide 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 permit the use of market-based compliance
mechanisms to comply with GHG reduction regulations, once
specified conditions are met.
3)Establishes the Greenhouse Gas Reduction Fund (GHGRF) and
requires all moneys, except for fines and penalties, collected
by ARB from the auction or sale of allowances pursuant to a
market-based compliance mechanism (i.e., the cap-and-trade
program adopted by ARB under AB 32) to be deposited in the
GHGRF and available for appropriation by the Legislature.
4)Establishes the GHGRF Investment Plan and Communities
Revitalization Act [AB 1532 (John A. P�rez), Chapter 807,
Statutes of 2012] to set procedures for the investment of GHG
allowance auction revenues. AB 1532 authorizes a range of GHG
reduction investments and establishes several additional
policy objectives.
5)Requires the investment plan to allocate (1) a minimum of 25
percent of the available moneys in the fund to projects that
provide benefits to identified disadvantaged communities and
(2) a minimum of 10 percent of the available moneys in the
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fund to projects located within identified disadvantaged
communities [SB 535 (De Leon), Chapter 830, Statutes of 2012].
THIS BILL :
1)Creates the CIIP and provides that moneys in the GHGRF shall
be available for its purposes, upon appropriation by the
Legislature.
2)Requires SGC to administer CIIP, in coordination with ARB, to
provide grants and other financial assistance to eligible
local government applicants for the purposes of developing and
implementing GHG emissions reduction projects.
3)Defines eligible grant applicants as a city, county, city and
county, charter city, charter county, special district,
regional energy network, environmental justice community, or a
collection of cities, counties, or special districts.
4)Requires SGC to develop guidelines, in consultation with ARB,
to do all of the following:
a) Allow for project implementation by eligible grant
applicants, as well as metropolitan planning organizations,
regional climate authorities, joint powers authorities, air
districts, regional collaboratives, or nonprofit
organizations working in coordination with the eligible
grant applicant.
b) Provide for a portfolio of projects to be implemented
that reduce GHGs and maximize the ability to achieve one or
more of the following:
i) Decrease air or water pollution.
ii) Reduce the consumption of natural resources or
energy.
iii) Increase localized energy resources.
iv) Promote public-private partnerships to implement
energy efficiency and clean energy projects.
v) Promote financing incentives for residential and
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commercial facilities.
vi) Increase the reliability of local water supplies.
vii) Increase solid waste diversion from landfills.
viii) Increase electric vehicle infrastructure.
ix) Reduce vehicle miles traveled.
x) Prevent conversion of agricultural, forest, and open
space lands to uses that result in higher greenhouse gas
emissions.
c) Maximize the development of community-level projects
that reduce GHG emissions.
d) Provide opportunities for both small- and
large-population participants and take into consideration
regional context when determining project eligibility.
e) Provide incentives for projects that are in addition to
projects already being implemented at the local level.
f) Provide opportunities for the development and
implementation of innovative projects that create new
systems or technologies.
g) Provide opportunities for existing, proven GHG emissions
reducing or sequestering projects, including, but not
limited to, those projects and programs already adopted by
local agencies.
h) Provide for the aggregation of community- and
regional-scale emissions reduction or sequestration
projects.
i) Ensure projects funded pursuant to this chapter maximize
moneys appropriated, provide environmental benefits, create
jobs, and are consistent with law.
5)Requires SGC and ARB to give priority to projects that
demonstrate one or more of the following characteristics:
a) Regional integrated implementation.
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b) The ability to leverage additional public and private
funding.
c) The potential for "cobenefits" or "multibenefit"
attributes.
d) The potential for the project or program to be
replicated.
e) Consideration of geographic and socioeconomic issues.
f) Demonstration of innovative strategies and approaches to
reducing GHG emissions.
6)Requires 25 percent of the moneys appropriated to be set aside
for projects that include and specifically benefit
environmental justice communities, as defined.
FISCAL EFFECT : Unknown
COMMENTS :
1)Background . According to ARB, a total reduction of 80 million
metric tons (MMT), or 16 percent compared to business as
usual, is necessary to achieve the 2020 limit. Approximately
78 percent of the reductions will be achieved through
identified direct regulations. ARB proposes to achieve the
balance of reductions necessary to meet the 2020 limit
(approximately 18 MMT) through a cap-and-trade program that
covers an estimated 600 entities.
The 2012-13 Budget Act authorized Department of Finance (DOF)
to allocate at least $500 million from cap-and-trade revenue,
and make commensurate reductions to General Fund (GF)
expenditure authority, to support the regulatory purposes of
AB 32. AB 1532 established a long-term spending strategy for
moneys in the Fund, including procedures for deposit and
expenditure of cap-and-trade auction revenues pursuant to an
investment plan. AB 1532 specifically authorizes "(f)unding
to reduce (GHG) emissions through investments in programs
implemented by local and regional agencies, local and regional
collaboratives, and nonprofit organizations coordinating with
local governments.
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While DOF and ARB developed a three-year investment plan for
the auction proceeds pursuant to AB 1532, the 2013-14 Budget
Act provided that the first $500 million in auction revenue be
loaned to the GF and did not appropriate any funds pursuant to
the investment plan. For the 2014-15 Budget, the Governor has
proposed spending $850 million on a variety of programs,
including $100 million for grants to local governments to
support implementation of Sustainable Communities Strategies,
$50 million for inter-city rail grants, $30 million for
organic waste diversion infrastructure, and $20 million for
water and energy saving projects.
Projects and recipients described in this bill are already
eligible for funding from cap-and- trade auction revenue under
AB 1532. Though this bill provides no funding, the GHG
reduction projects contemplated in the bill are candidates for
funding from auction revenues. By requiring SGC and ARB to
establish the CIIP in advance of receiving any funds, this
bill seems to emphasize projects initiated by local
governments, and perhaps prioritize eventual funding in the
eyes of the local recipient proponents. Although the bill is
not explicit, the author and proponents indicate that it is
not intended to fund SB 375 implementation, for which the
Governor has proposed allocating $100 million in 2014-15
through the SGC.
2)Author's statement :
AB 1970 will address the absence of a statutory program
providing local governments with access to?the
cap-and-trade auction revenue, for GHG reducing projects,
which will allow local governments to serve as a delivery
tool for projects that will help the state reach its GHG
reduction goals set forth in AB 32.
Projects at the local and regional level that could achieve
a portion of the state's GHG emission reduction targets are
lacking investment. Absent AB 1970, local-scale and
regional-scale emission reduction initiatives are not
likely to be undertaken for a variety of reasons, including
the small scale of some local projects, a lack of knowledge
or understanding about the local emission reduction
opportunities that exist, the lack of community partner
relationships, the lack of incentives to coordinate and
aggregate local-scale small or micro projects, and the lack
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of credits, funds, and incentives to engage in community,
local, and regional-scale projects.
AB 1970 ensures that direct investments reach California
communities for GHG reducing projects, enhancing the
environments and economies of local and regional areas
through multi-benefit projects. This bill addresses the
need for investments within our local communities by
allowing local governments to deliver these investments for
the state. These types of investments will have two main
goals: (1) the reduction of GHG emissions, and (2) the
creation of local jobs and other benefits that meet the
unique needs of each local area.
3)Committee amendments . The committee suggests technical and
clarifying amendments, including clarifying the eligibility of
local air districts as direct recipients of funds and striking
surplus and/or duplicative language. A draft of the proposed
amendments will be available at the hearing.
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4)Prior legislation . This bill is similar to AB 2404 (Fuentes),
which was approved by this committee in April 2012 and later
held in the Assembly Appropriations Committee. The bill is
nearly identical to AB 416 (Gordon), which was approved by
this committee in April 2013 and later held in the Assembly
Appropriations Committee.
5)Double referral . This bill is double-referred to the Assembly
Local Government Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of California Healthcare Districts
California Association of Sanitation Agencies
California State Association of Counties
California Special Districts Association
County of Alpine
County of San Bernardino
County of Santa Clara
East Bay Municipal Utility District (if amended)
Environmental Defense Fund
Fulton-El Camino Recreation and Park District
Hayward Area Recreation and Park District
League of California Cities
Local Government Commission
San Luis Obispo County Board of Supervisors
Santa Barbara County
San Mateo County Board of Supervisors
Sierra County Board of Supervisors
Sonoma County Water Agency
Three Valleys Municipal Water District
Upper Salinas-Las Tablas Resource Conservation District
Urban Counties Caucus
Opposition
California Chamber of Commerce
California League of Food Processors
California Manufacturers and Technology Association
California Taxpayers Association
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
AB 1970
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319-2092