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Governor Signs More Climate Change Bills and $900 Million Cap-and-Trade Expenditure Plan

September 15, 2016
In an effort to assist communities most impacted by pollution and climate change, Gov. Jerry Brown on Sept. 14 signed additional bills to implement and allocate $900 million in Cap-and-Trade auction proceeds.
This is the first meaningful discretionary spending of Cap-and-Trade auction proceeds in nearly two years.
“These cap-and-trade investments will help spur innovation of all kinds to curb carbon pollution,” said Governor Brown at a signing ceremony in Fresno. “With these bills, we also will help communities hard hit by pollution and climate change.”
The Governor signed AB 2722 (Burke), a measure that establishes the programmatic framework for the new Transformative Climate Communities Program (TCCP) that received $140 million from the Cap-and-Trade expenditure plan. The TCCP is very similar to a program that the League, the California State Association of Counties, the Local Government Commission, and other have sought the last three years. Its purpose is to provide funding to develop and implement neighborhood-level climate community plans that include multiple, coordinated GHG emissions reduction projects that provide local economic, environmental, and health benefits to disadvantaged communities.
AB 1550 (Gomez) was also signed by the Governor, increasing the amount of Cap-and-Trade auction proceeds that must be spent in disadvantaged or low-income communities to 35 percent.
Specific Cap-and Trade expenditure plan allocations include the following:
  • $135 million for the Transit and Intercity Rail Capitol Program to fund essential local capital projects for bus and commuter rail;
  • $10 million for the Active Transportation Program to fund bicycle and pedestrian programs;
  • $133 million for the Clean Vehicle Rebate Program to assist with the purchase of clean vehicles;
  • $150 million for the Heavy Duty and Off-Road Investments to help develop and pilot cleaner industrial vehicles;
  • $80 million for the Enhanced Vehicle Fleet Modernization program to provide low income families help replacing old vehicles with new, cleaner vehicles;
  • $40 million to the Department of Resources Recycling and Recovery for waste diversion and greenhouse gas reduction financial assistance;
  • $140 million for the Transformative Climate Communities Program to fund a community-wide approach for disadvantage communities to implement an integrated transportation, housing, and green space development plan to reduce pollution, GHG emissions, and improve local communities;
  • $80 million for the Urban Greening Program to fund green spaces and parks in local communities;
  • $15 million for the Urban Forestry Program to assist disadvantaged communities with tree planting and care; and
  • $2 million for the Strategic Growth Council to assist disadvantage communities and local governments with developing climate. 
Next Steps
There is likely to be significant activity this fall related to the Cap-and-Trade program and implementation of the newly adopted climate change legislation. In particular, the outcome of the pending court challenge to the legality of the Cap-and-Trade program should be determined in the coming weeks.
The November 2016 election will also add to the dynamics of the situation. It is possible that the Democrats in the Assembly and the Senate could win enough seats to regain a two-thirds super majority. If this happens, it is much more likely that the Legislature will resolve the uncertainty around the Cap-and-Trade program by approving it with a two-thirds vote, making it a tax, instead of a fee.
League staff will also closely monitor and update cities on developments associated with the California Air Resources Board’s actions as they relate to implementation of the new GHG emission reduction targets contained in SB 32.
Finally, in the next few weeks, League staff will update its website and the Cap-and-Trade Guide to reflect the FY 2016-17 Cap-and-Trade expenditure plan. These resource materials are meant to assist cities with accessing Cap-and-Trade funds.

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