Assembly Bill (AB) 1550 relates to greenhouse gases and investments in communities and would require the Greenhouse Investment Fund plan to allocate a minimum percentage of the available moneys in the Greenhouse Gas Reduction Fund to projects located within disadvantaged communities and a minimum percentage to projects that benefit low-income households, with a fair share of the moneys targeting households with incomes below a percentage of the federal poverty level.
Status: 06/09/2016 To SENATE Committee on ENVIRONMENTAL QUALITY.
The Metropolitan Transportation Commission has taken an "Oppose Unless Amended" position on AB 1550 due to its concerns about the definition of "Disadvantaged communities" (DACs), which presently excludes many communities characterized by poor socio-economic conditions. The position letter is attached (Attachment B), as are the requested amendments (Attachment C).
Bill Analysis - 06/01/2016
SUMMARY: Requires that 25% of the Greenhouse Gas Reduction Fund (GGRF) be spent on projects located within disadvantaged communities, and requires that an additional 25% be spent on projects that benefit low-income households. Specifically, this bill:
1) Revises the requirement that 25% of the GGRF be expended to benefit disadvantaged communities to require that the funding be allocated for projects located within the boundaries of, and benefiting individuals in, disadvantaged communities.
2) Requires that an additional 20% of the GGRF be allocated for projects that benefit low-income households.
3) Requires that, to the extent feasible, a "fair share" of the moneys allocated to benefit low-income households target households with incomes at or below 200% of the federal poverty level.
FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill has the following state costs:
1) Increased GGRF expenditures in disadvantaged and low-income communities. The Governor's budget proposes appropriating $3.1 billion GGRF funds this year.
2) Increased annual ongoing costs of approximately $600,000 (GGRF) for the California Air Resources Board (ARB) to modify existing guidelines and tracking systems, provide guidance to state agencies, and conduct outreach.
COMMENTS: According to the author, the best greenhouse gas (GHG) reduction strategies are those that benefit low-income households, whether they lie inside or outside CalEnviroScreen-designated disadvantaged communities. Low-income Californians often lack adequate transportation choices, spend a significant percentage of their budgets on necessities like energy, and are least able to relocate or afford energy-saving appliances, vehicles, and household improvements to adapt to our changing climate. This bill is intended to ensure that the state takes advantage of every opportunity to lift poor and working Californians out of poverty, while reducing GHG emissions.
The California Global Warming Solutions Act of 2006 (AB 32 (Nunez), Chapter 488, Statutes of 2006) requires ARB to adopt a statewide GHG emissions limit equivalent to 1990 levels by 2020 and adopt regulations, including market-based compliance mechanisms, to achieve maximum technologically feasible and cost-effective GHG emission reductions. As part of the implementation of AB 32 market-based compliance measures, ARB adopted a cap-and-trade program that caps the allowable statewide emissions and provides for the auctioning of emission credits, the proceeds of which are quarterly deposited into the GGRF available for appropriation by the Legislature.
The Budget continuously appropriates 35% of cap-and-trade funds for investments in transit, affordable housing, and sustainable communities. Twenty-five percent of the revenues are continuously appropriated to continue the construction of high-speed rail. The remaining 40% are to be appropriated annually by the Legislature for investments in programs that include low-carbon transportation, energy efficiency and renewable energy, and natural resources and waste diversion. An expenditure plan for the 40% was not included in the 2015-16 Budget Act, with the exception of $227 million appropriated to continue funding for specified existing programs. The remaining 2015-16 revenues, along with 2016-17 revenues, totaling $3.1 billion are available for appropriation this year.
SB 535 (De Leon), Chapter 830, Statutes of 2012, requires no less than 10% of cap-and-trade revenues fund projects located within disadvantaged communities (DACs), and that 25% of available revenues fund projects that benefit those communities. In October 2014, CalEPA released its list of disadvantaged communities for the purpose of SB 535. CalEPA relied on CalEnviroScreen to identify the areas disproportionately burdened by and vulnerable to multiple sources of pollution. CalEnviroScreen is a tool that assesses all census tracts in California to identify the areas disproportionally affected and vulnerable to multiple sources of pollution.
Areas (census tracts) identified as disadvantaged for SB 535's purposes by CalEnviroScreen include: the majority of the San Joaquin Valley; much of Los Angeles and the Inland Empire; pockets of other communities near ports, freeways, and major industrial facilities such as refineries and power plants; and large swaths of the Coachella Valley, Imperial Valley and Mojave Desert.
This bill modifies SB 535 by requiring the entire 25% allocated to benefit DACs is used to fund projects located within the communities and establishes a new allocation category to target low-income households located outside DACs such as rural communities in northern and southeastern California as well as urban districts in places like the Bay Area and San Diego regions. Under this proposal, 50% (rather than 75% under current law) of all funds would be available for communities and households other than low-income and those not located in DACs.
Analysis Prepared by: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0003333
Attachment A includes the bill text. |