SB 535

SB 535
Title	SB 535
Enacted by	California State Legislature
Introduced	2012
Chapter	Chapter 830
Status	enacted

SB 535 is a California legislative bill enacted in 2012 that directs a portion of cap-and-trade revenue toward disadvantaged communities. The law amended state statutes to allocate proceeds from the California Air Resources Board's cap-and-trade auctions to projects benefiting communities identified by environmental and public health criteria. It has influenced statewide policy debates involving climate finance, public health, and urban planning.

Background and Legislative History

SB 535 originated in the context of California's statewide climate policy debates following passage of Assembly Bill 32 and implementation actions by the California Air Resources Board. Sponsors sought to ensure that auction revenue from cap-and-trade programs would address local pollution burdens in areas such as Los Angeles County, Sacramento, and the San Joaquin Valley. Proponents included legislators from the California State Senate and advocacy groups such as Sierra Club, Natural Resources Defense Council, and Greenlining Institute, while opponents included some California Chamber of Commerce members and industry coalitions. The bill underwent committee hearings in the California State Assembly Committee on Appropriations and the California Senate Committee on Environmental Quality before garnering votes in both houses and receiving gubernatorial approval.

Provisions of the Bill

Key provisions require that a defined percentage of cap-and-trade auction proceeds be invested in projects that benefit disadvantaged communities identified through mapping tools developed by the California Environmental Protection Agency, Office of Environmental Health Hazard Assessment, and the California Air Resources Board. Allocation categories include public transit investments in Metropolitan Transportation Commission jurisdictions, energy efficiency upgrades in multifamily housing often located in Oakland and Fresno, and clean truck and freight programs at ports such as the Port of Los Angeles and Port of Long Beach. The statute specifies reporting and tracking mechanisms to ensure funds flow to projects aligned with criteria established by CalEPA and local agencies like the South Coast Air Quality Management District.

Environmental Justice and Equity Impacts

The bill frames investments through the lens of environmental justice as articulated by advocates including leaders from Communities for a Better Environment, Asian Pacific Environmental Network, and Coalition for Clean Air. Mapping and targeting were informed by tools similar to those used in CalEnviroScreen to identify neighborhoods in East Oakland, Richmond, and Bakersfield with elevated pollution exposure and health risk. Implementation aimed to reduce disparities highlighted in studies from institutions such as University of California, Berkeley, Stanford University, and UCLA Fielding School of Public Health, and to coordinate with programs run by California Department of Public Health and local health departments.

Implementation and Funding Allocation

Administration of allocations has involved multiple state bodies, including the California Department of Finance, California Air Resources Board, and regional agencies like the San Joaquin Valley Air Pollution Control District. Funding streams have supported projects developed by municipal governments such as City of Los Angeles, transit agencies like Bay Area Rapid Transit, and nonprofit implementers including GRID Alternatives and Enterprise Community Partners. Investment categories have ranged from renewable energy installations in Fresno County to transit-oriented development in San Diego and workforce training programs coordinated with California Community Colleges and labor unions such as the International Brotherhood of Teamsters.

Criticism and Controversy

Critics from industry groups including Western States Petroleum Association and business lobbies raised concerns about economic impacts on California's trade sectors and employment in areas like Richmond and Contra Costa County. Environmental justice advocates debated whether the fraction of revenue designated was sufficient and whether project selection favored large agencies over grassroots organizations such as East Yard Communities for Environmental Justice. Legal scholars at University of Southern California and policy analysts at Public Policy Institute of California published critiques about accountability, while state legislators from rural districts argued allocations overlooked needs in areas like Imperial County and the Mojave Desert.

Legal Challenges and Amendments

Post-enactment, the statute intersected with litigation over cap-and-trade authority and funding allocations raised in cases heard in California Superior Court and considered in analyses by the California Attorney General's office. Subsequent legislative actions and budget agreements by the Governor of California and the California State Legislature adjusted appropriation mechanisms and reporting requirements. Amendments and budget trailer bills refined definitions and oversight, and administrative guidance from California Air Resources Board and CalEPA updated implementation frameworks to respond to court rulings and stakeholder feedback.

Category:California statutes Category:Environmental justice in California