Cap and Trade Negotiations Continue

The full Senate Budget Committee met on Tuesday to discuss the Senate’s revised long- term Cap and Trade proposal. The item, which Budget Conference Committee held open this week, is the latest in a series of proposals to come out of the Legislature. Both Senator Steinberg and Senator De Leon introduced their long-term investment strategy to the Budget Committee, which they are aiming to include in the budget, along with the 14-15 allocation. The Senate proposal, which looks in large part like Senator Steinberg’s April proposal with some adjustments to funding levels, lays out percentages to be allocated to certain sectors.

The updated proposal reveals Senator Steinberg has given some ground, dropping from 40% to 20% the portion of cap and trade proceeds that would go to “affordable housing and sustainable communities”, and within that dropping the percentage for affordable housing from Steinberg’s original 20% down to 10%. A long term investment strategy would cover Cap and Trade allocations in future years by allocating dollars to specific programs. In addition to changes to the sustainable Communities and affordable housing categories, the Senate proposal would allocate 25% to Transit, 15% to low carbon transportation, 13% to Energy projects, 7% to Natural Resources, 15% to High Speed Rail, and 5% to Inter-City Rail. Discussions and negotiations continue on both the long term and fiscal year approaches.

The following is a breakdown of the various Cap and Trade proposals for FY 14-15:

• Governor’s Plan ($870 million). The Governor’s plan provides $870 million for 2014-15 (including $40 million approved as part of the 2014 drought legislation) for 11 different departments and boards to administer programs designed to reduce GHG emissions, such as energy efficiency projects, low-emission vehicle rebates, and the state’s high-speed rail system. With regard to local government, the Governor’s Plan includes $100 million in funding for Sustainable Communities, which includes funding to regions for the implementation of SB 375, and like projects for those regions outside SB 375, that reduce greenhouse gas emissions (GHG) and promote sustainable growth, including the preservation of agricultural lands, and local planning that promotes infill development and the reduction of vehicle miles traveled. Local governments would potentially be eligible under other categories as well, include energy efficiency and solid waste diversion.
• Senate Plan Designates Programs to Receive Funding ($870 million). The Senate’s plan provides $870 million on a one-time basis for nine programs. Each program would be administered by a different state department. Some projects would be run by state departments, while in other cases, the administering state department would review and approve project applications, generally from local governments or private entities. The Senate’s Plan also includes $100 for Sustainable Communities.
• Assembly Plan Makes Programs Compete for Funding ($1,040 million). The Assembly’s plan provides over $1 billion on a one-time basis. Most of this funding—$800 million—would be split evenly between two competitive grant programs to be administered by the Strategic Growth Council (SGC). The first program would be primarily for local agencies to implement projects designed to reduce GHG emissions, such as housing and transit-related projects. This program would also include projects within the energy and natural resources sector, and most closely aligns with CSAC’s local government proposal. Under the second program, state agencies could apply for funding for projects designed to reduce GHG emissions. This could include the types of programs included in the Governor’s plan, though none of these programs would be guaranteed a particular funding level. The Assembly’s plan would also provide $200 million for low-emission vehicle programs and $40 million for water efficiency programs.

Land Use/Flood Protection

AB 2108 (Eggman) – Support
As Amended May 13, 2014

AB 2108, by Assembly Member Susan Eggman, would provide two exceptions to the current prohibition on a city or county approving projects in an area that does not meet the 200-year level of flood protection as required by SB 5 (Machado, Chapter 364, Statutes of 2007). Specifically, it would authorize the Central Valley Flood Protection Board (the Flood Board) to determine, in its sole discretion, that preconstruction planning or design activities of a flood protection system by the local flood management agency are sufficient to constitute “adequate progress”. The second exception would allow a discretionary permit to be issued if it will not result in more than a 50% increase in building occupancy. 

CSAC believes that absent the proposed changes, all development will cease in any Sacramento/San Joaquin Valley urban or urbanizing area that does not have 200-year flood protection. Unfortunately, one of the only ways for cities and counties to pay for such flood improvements is through the imposition of developer fees. Without developer fees affected cities and counties will be paralyzed to make needed levee improvements on their own.

We agree with the other supporters of this bill that it would provide an important and reasonable accommodation to cities and counties facing a potential moratorium. It would do so by providing the Flood Board with a role in determining if an affected city or county has made adequate progress on pre-construction planning and design of the flood protection system improvement. A positive determination by the Flood Board would as prescribed, allow the city or county to continue to move forward with development agreements, permits, and tentative maps. 

AB 2108 is expected to be heard in the Senate Natural Resources and Water Committee on Tuesday, June 10, 2014.