BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2593|
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THIRD READING
Bill No: AB 2593
Author: Bradford (D)
Amended: 8/21/14 in Senate
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 5-2, 6/25/14
AYES: Hill, Hancock, Jackson, Leno, Pavley
NOES: Gaines, Fuller
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/14/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters, Gaines
ASSEMBLY FLOOR : 53-22, 5/28/14 - See last page for vote
SUBJECT : Greenhouse gases: diversity reporting
SOURCE : Author
DIGEST : This bill requires businesses with gross annual
revenues exceeding $25 million that participate in programs
administered by the Air Resources Board (ARB) that receive
funding from the Greenhouse Gas Reduction Fund (GGRF) to report
to ARB on efforts to increase procurement from women, minority,
and disabled veteran business enterprises.
Senate Floor Amendments of 8/21/14 specify how the diversity
report shall be submitted and require the ARB to make the report
available on their Internet Web site.
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ANALYSIS : Existing law:
1.Requires, under the California Global Warming Solutions Act of
2006 (AB 32, Nunez, Chapter 488, Statutes of 2006), the 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 to adopt
GHG emissions reductions measures by regulation. ARB is
authorized to include the use of market-based mechanisms to
comply with these regulations.
2.Establishes the GGRF in the State Treasury and requires all
moneys, except for fines and penalties, collected pursuant to
a market-based mechanism be deposited in the fund and requires
the Department of Finance, in consultation with the state
board and any other relevant state agency, to develop, as
specified, a three-year investment plan for the moneys
deposited in GGRF.
3.Requires moneys from GGRF be used to facilitate the
achievement of reductions of greenhouse gas emissions in this
state consistent with AB 32.
This bill:
1.Requires businesses participating in programs funded through
the State's Cap-and-Trade Program to report on efforts to
increase procurement from women, minorities, and disabled
veteran business enterprises.
2.Applies to business enterprises with gross annual revenues
exceeding $25 million, funded in whole or in part from the
GGRF.
3.Defines "control," "operate," "women business enterprise," and
"minority business enterprise" consistent with similar
provisions already in statute that are used in a similar
program to report on procurement efforts by regulated
utilities.
4.Requires the business enterprise to submit the report in an
electronic format, as determined by the ARB, and requires ARB
make the report available to the public on its Internet Web
site.
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5.Exempts a business enterprise participating in a program
administered by a governmental agency that is not the ARB.
Background
Cap-and-trade auction revenue . ARB has conducted seven auctions
of GHG emission allowances so far. These auctions have resulted
in approximately $734 million in proceeds to the state. Several
bills in 2012 provided legislative direction for the expenditure
of auction proceeds including the following:
SB 535 (de Le�n, Chapter 830, Statutes of 2012) requires
that 25% of auction revenue be used to benefit
disadvantaged communities and requires that 10% of auction
revenue be invested in disadvantaged communities.
AB 1532 (J. P�rez, Chapter 807, Statutes of 2012)
directs the Department of Finance to develop and
periodically update a three-year investment plan that
identifies feasible and cost-effective GHG emission
reduction investments to be funded with cap-and-trade
auction revenues. AB 1532 specifies that reduction of GHG
emissions through strategic planning and development of
sustainable infrastructure projects, are eligible
investments of GGRF.
SB 1018 (Budget Committee, Chapter 39, Statutes of 2012)
created the GGRF, into which all auction revenue is to be
deposited. The legislation requires that before
departments can spend monies from GGRF, they must prepare a
record specifying: (1) how the expenditures will be used,
(2) how the expenditures will further the purposes of AB
32, (3) how the expenditures will achieve GHG emission
reductions, (4) how the department considered other
non-GHG-related objectives, and (5) how the department will
document the results of the expenditures.
Legal consideration of cap-and-trade auction revenues . The
2012-13 budget analysis of cap-and-trade auction revenue by the
Legislative Analyst's Office noted that, based on an opinion
from the Office of Legislative Counsel, the auction revenues
should be considered mitigation fee revenues, and their use
requires that a clear nexus exist between an activity for which
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a mitigation fee is used and the adverse effects related to the
activity on which that fee is levied. Therefore, in order for
their use to be valid as mitigation fees, revenues from the
cap-and-trade auction must be used to mitigate GHG emissions or
the harms caused by GHG emissions.
AB 32 auction revenue investment plan . The first three-year
investment plan for cap-and-trade auction proceeds, submitted by
Department of Finance, in consultation with ARB and other state
agencies in May of last year, identified sustainable communities
and clean transportation as one of the key sectors that provide
the best opportunities for achieving the legislative goals and
supporting the purposes of AB 32, including maximizing GHG
emission reductions and cobenefits to the state. The plan
recommended the aforementioned sector receive the largest
allocation of funds from the GGRF. The other two areas
recommended for auction revenue allocation in the investment
plan are energy efficiency and clean energy, and natural
resources and waste diversion.
Cap-and-trade budget expenditures . The Budget Act of 2014, SB
852 (Leno, Chapter 25) passed both houses on June 15.
Expenditure categories for $870 million of cap-and-trade funds
include transit, affordable housing and sustainable communities,
high speed rail, low carbon transportation, energy efficiency
and renewable energy, and natural resources, and waste
diversion.
Diversity reporting . In 1988, the Public Utilities Commission
(PUC) adopted General Order 156 (GO 156) to establish the Women
Owned and Minority Owned Business Enterprise program to increase
diversity in various utility operations and procurement
processes. Subsequent legislation has codified and expanded the
program. GO 156 requires PUC regulated electrical, gas, water,
wireless telecommunications service provider, and telephone
corporations with gross annual revenues exceeding $25 million to
submit annual detailed and verifiable plans that include goals
and timelines for increasing procurement from minority, women,
and disabled veteran business entities. GO 156 includes rules
and regulations for the utilities' compliance with the program,
and requires participating utilities to inform, recruit, and
obtain at least 20% of their products and services purchased
within a five-year period from women- and minority-owned
businesses (15% from minority-owned businesses and 5% from
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women-owned businesses) and an additional 1.5% from disabled
veteran business enterprises.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, annual costs
ranging from $150,000 to $300,000 from the General Fun to the
ARB to collect the required information.
ASSEMBLY FLOOR : 53-22, 5/28/14
AYES: Alejo, Ammiano, Bloom, Bocanegra, Bonilla, Bonta,
Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,
Chesbro, Cooley, Dababneh, Daly, Dickinson, Eggman, Fong,
Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall, Roger
Hern�ndez, Holden, Jones-Sawyer, Levine, Lowenthal, Medina,
Mullin, Muratsuchi, Nazarian, Pan, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Weber, Wieckowski,
Williams, Yamada, Atkins
NOES: Achadjian, Allen, Bigelow, Ch�vez, Conway, Dahle,
Donnelly, Fox, Beth Gaines, Grove, Hagman, Harkey, Jones,
Logue, Maienschein, Mansoor, Melendez, Nestande, Olsen,
Wagner, Waldron, Wilk
NO VOTE RECORDED: Frazier, Gorell, Linder, Patterson, Vacancy
RM:nl 8/22/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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