California Assembly Bill AB1532 Amended / Bill

 BILL NUMBER: AB 1532AMENDED BILL TEXT AMENDED IN SENATE AUGUST 31, 2012 AMENDED IN SENATE AUGUST 24, 2012 AMENDED IN SENATE AUGUST 21, 2012 AMENDED IN SENATE AUGUST 6, 2012 AMENDED IN SENATE JUNE 18, 2012 AMENDED IN ASSEMBLY MAY 1, 2012 AMENDED IN ASSEMBLY APRIL 17, 2012 INTRODUCED BY Assembly Member John A. Prez  (   Principal coauthor:   Senator   De Len  )  (Coauthors: Assembly Members Blumenfield, Bonilla, Bradford, Butler, Carter, Chesbro, Dickinson, Gordon, Roger Hernndez, Hill, Bonnie Lowenthal, Monning, Skinner, Wieckowski, Williams, and Yamada) JANUARY 23, 2012 An act  to amend Section 12894 of the Government Code, and  to add  Part 8 (commencing with Section 38700) to Division 25.5   Chapter 4.1   (commencing with Section 39710) to Part 2 of Division 26  of the Health and Safety Code, relating to greenhouse gas emissions. LEGISLATIVE COUNSEL'S DIGEST AB 1532, as amended, John A. Prez. California Global Warming Solutions Act of 2006: Greenhouse Gas Reduction Fund. The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to adopt a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020, and to adopt rules and regulations in an open public process to achieve the maximum, technologically feasible, and cost-effective greenhouse gas emissions reductions. The act authorizes the state board to include use of market-based compliance mechanisms.  Existing   Existing law imposes limitations on any link, as defined, between the state and another state, province, or country for purposes of a market-based compliance mechanism by, among other things, prohibiting any state agency, including the state board, from taking any action to create such a link unless the state agency notifies the Governor, and the Governor issues specified written findings on the proposed link that consider the advice of the Attorney General.   This bill would prohibit the Governor's written findings on the proposed link from being subject to judicial review.   Existing  law requires all moneys, except for fines and penalties, collected by the state board from the auction or sale of allowances as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation by the Legislature. This bill would require the moneys in the Greenhouse Gas Reduction Fund to be used for specified purposes.  The bill would require administering agencies, including the state board and any other state agency identified by the Legislature, to allocate those moneys to measures and programs that meet specified criteria. The bill would require the California Environmental Protection Agency to develop a methodology that identifies priority community areas for investment opportunities, as specified.  The bill would require the  state board   Department of Finance, in consultation with the state board and any other relevant state entity,  to develop, as specified,  3   a 3-year  investment  plans   plan  that  include   includes  specified analysis and information  ,   and  to submit  each   the  plan to the  budget committees of each house of the  Legislature, as specified  , and to adopt each investment plan, as specified. The bill would require the Governor to submit a budget to the Legislature that includes specified appropriations consistent with each investment plan and would require the Legislature to consider these appropriations when adopting the Budget Act  . The bill would require the  state board   Department of Finance  to submit a report no later than  December   March  1  of each year  , 2014, and annually thereafter,  to the appropriate committees of the Legislature containing specified information  and to hold old one public hearing on the report prior to its submission to the Legislature  .  This bill would make its provisions contingent on the enactment of other legislation, as specified.  Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Section 12894 of the   Government Code   is amended to read:  12894. (a) (1) The Legislature finds and declares that the establishment of nongovernmental entities, such as the Western Climate Initiative, Incorporated, and linkages with other states and countries by the State Air Resources Board or other state agencies for the purposes of implementing Division 25.5 (commencing with Section 38500) of the Health and Safety Code, should be done transparently and should be independently reviewed by the Attorney General for consistency with all applicable laws. (2) The purpose of this section is to establish new oversight and transparency over any such linkages and related activities undertaken in relation to Division 25.5 (commencing with Section 38500) of the Health and Safety Code by the executive agencies in order to ensure consistency with applicable laws. (b) (1) The California membership of the board of directors of the Western Climate Initiative, Incorporated, shall be modified as follows: (A) One appointee or his or her designee who shall serve as an ex officio nonvoting member shall be appointed by the Senate Committee on Rules. (B) One appointee or his or her designee who shall serve as an ex officio nonvoting member shall be appointed by the Speaker of the Assembly. (C) The Chairperson of the State Air Resources Board or her or his designee. (D) The Secretary for Environmental Protection or his or her designee. (2) Sections 11120 through 11132 do not apply to the Western Climate Initiative, Incorporated, or to appointees specified in subparagraphs (C) and (D) of paragraph (1) when performing their duties under this section. (c) The State Air Resources Board shall provide notice to the Joint Legislative Budget Committee, consistent with that required for Department of Finance augmentation or reduction authorizations pursuant to subdivision (e) of Section 28.00 of the annual Budget Act, of any funds over one hundred fifty thousand dollars ($150,000) provided to the Western Climate Initiative, Incorporated, or its derivatives or subcontractors no later than 30 days prior to transfer or expenditure of these funds. (d) The Chairperson of the State Air Resources Board and the Secretary for Environmental Protection, as the California voting representatives on the Western Climate Initiative, Incorporated, shall report every six months to the Joint Legislative Budget Committee on any actions proposed by the Western Climate Initiative, Incorporated, that affect California state government or entities located within the state. (e) For purposes of this section, "link," "linkage," or "linking" means an action taken by the State Air Resources Board or any other state agency that will result in acceptance by the State of California of compliance instruments issued by any other governmental agency, including any state, province, or country, for purposes of demonstrating compliance with the market-based compliance mechanism established pursuant to Division 25.5 (commencing with Section 38500) of the Health and Safety Code and specified in Sections 95801 to 96022, inclusive, of Title 17 of the California Code of Regulations. (f) A state agency, including, but not limited to, the State Air Resources Board, shall not link a market-based compliance mechanism established pursuant to Division 25.5 (commencing with Section 38500) of the Health and Safety Code and specified in Sections 95801 to 96022, inclusive, of Title 17 of the California Code of Regulations with any other state, province, or country unless the state agency notifies the Governor that the agency intends to take such action and the Governor, acting in his or her independent capacity, makes all of the following findings: (1) The jurisdiction with which the state agency proposes to link has adopted program requirements for greenhouse gas reductions, including, but not limited to, requirements for offsets, that are equivalent to or stricter than those required by Division 25.5 (commencing with Section 38500) of the Health and Safety Code. (2) Under the proposed linkage, the State of California is able to enforce Division 25.5 (commencing with Section 38500) of the Health and Safety Code and related statutes, against any entity subject to regulation under those statutes, and against any entity located within the linking jurisdiction to the maximum extent permitted under the United States and California Constitutions. (3) The proposed linkage provides for enforcement of applicable laws by the state agency or by the linking jurisdiction of program requirements that are equivalent to or stricter than those required by Division 25.5 (commencing with Section 38500) of the Health and Safety Code. (4) The proposed linkage and any related participation of the State of California in Western Climate Initiative, Incorporated, shall not impose any significant liability on the state or any state agency for any failure associated with the linkage. (g) The Governor shall issue findings pursuant to subdivision (f) within 45 days of receiving a notice from a state agency, and shall provide those findings to the Legislature. The findings shall consider the advice of the Attorney General. The findings to be submitted to the Legislature shall not be unreasonably withheld.  The findings shall not be subject to judicial review.   SECTION 1.   Part 8 (commencing with Section 38700) is added to Division 25.5 of the Health and Safety Code, to read: PART 8. GREENHOUSE GAS REDUCTION FUND 38700. For purposes of this part, the following terms have the following meanings: (a) "Fund"   SEC. 2.   Chapter 4.1 (commencing with Section 39710) is added to Part 2 of Division 26 of the   Health and Safety Code   , to read:  CHAPTER  4.1.   GREENHOUSE GAS REDUCTION FUND INVESTMENT PLAN AND COMMUNITIES REVITALIZATION ACT   39710.   For purposes of this part, fund  means the Greenhouse Gas Reduction Fund, created pursuant to Section 16428.8 of the Government Code.  (b) "Qualified recipients" means public agencies, businesses, nonprofit organizations, academic institutions, public-private partnerships, and workforce training partnerships.   38702.   39712.  (a)  (1)    It is the intent of the Legislature that moneys shall be appropriated from the fund only in a manner consistent with the requirements of this part and Article 9.7 (commencing with Section 16428.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code.  (2) The state shall not approve allocations for a measure or program using moneys appropriated from the fund except after determining, based on the available evidence, that the use of those moneys furthers the regulatory purposes of Division 25.5 (commencing with Section 38500) and is consistent with law. If any expenditure of moneys from the fund for any measure or project is determined by a court to be inconsistent with law, the allocations for the remaining measures or projects shall be severable and shall not be affected.  (b) Moneys shall be used to facilitate the achievement of  feasible and cost-effective  reductions of greenhouse gas emissions in this state consistent with this division and, where applicable and to the extent feasible  , do all of the following  : (1) Maximize economic, environmental, and public health benefits to the state. (2) Foster job creation by promoting in-state greenhouse gas emissions reduction projects carried out by California workers and businesses. (3) Complement efforts to improve air quality. (4) Direct investment toward the most disadvantaged communities and households in the state. (5) Provide opportunities for  small  businesses,  schools, affordable housing developers, water and wastewater agencies, local governments,   public agencies, nonprofits,  and other community institutions to participate in and benefit from statewide efforts to reduce greenhouse gas emissions. (6)  Mitigate   Lessen  the impacts and effects of climate change on the state's communities, economy, and environment. (c) Moneys appropriated from the fund may be allocated, consistent with subdivision (a), for the purpose of reducing greenhouse gas emissions in this state through investments that may include, but are not limited to, any of the following:  (1) Investments in clean and efficient energy, including, but not limited to, any of the following:   (A) Industrial and manufacturing facilities to reduce greenhouse gas emissions by investment in energy efficiency, energy storage, and clean and renewable energy projects.   (B) Public universities, schools, water and wastewater agencies, local governments, and other public facilities and fleets and their energy suppliers to reduce greenhouse gas emissions by investment in energy and water use efficiency, energy storage, and clean and renewable energy and fuel projects.   (C) Single-family and multifamily residential and commercial distributed generation and energy efficiency programs that serve to reduce greenhouse gas emissions, including, but not limited to, the federal Energy Efficiency and Conservation Block Grant Program, established pursuant to Section 542 of the federal Energy Independence and Security Act of 2007 (42 U.S.C. Sec. 17152), the program established pursuant to Section 25943 of the Public Resources Code, and the Weatherization Assistance Program (42 U.S.C. Sec. 6861 et seq.).   (D) Increasing the in-state diversion of municipal solid waste from disposal through waste reduction, reuse, and low-carbon, recycled-content processing, manufacturing, and other market development activities consistent with the policy goal established pursuant to subdivision (a) of Section 41780.01 of the Public Resources Code and that directly reduce greenhouse gas emissions.   (2) Investments in low-carbon transportation, sustainable development, and infrastructure, including, but not limited to, any of the following:   (A) Public transportation and infrastructure development, including, but not limited to, transit, bicycle, and pedestrian facilities.   (B) Programs for clean vehicles and the advancement of transportation technologies, including, but not limited to, the Alternative and Renewable Fuel and Vehicle Technology Program (Article 2 (commencing with Section 44272) of Chapter 8.9 of Part 5 of Division 26) and the Air Quality Improvement Program (Article 3 (commencing with Section 44274) of Chapter 8.9 of Part 5 of Division 26).   (C) Advanced transportation and fueling infrastructure.   (D) Local and regional sustainable development efforts, such as planning, development, financing, and implementation of multielement transportation infrastructure and rural infrastructure projects or other planning processes, including, but not limited to, the updating of general plans or the creation of specific plans, consistent with the implementation of Section 65080 of the Government Code or other greenhouse gas emissions reduction strategies in local and regional plans, including, but not limited to, any of the following:   (i) Transit-oriented residential development consistent with paragraph (4) of subdivision (b).   (ii) Transportation efficiency measures that expand transit service and transportation systems within existing developed areas to support infill development, and demand management strategies.   (iii) Improved transportation options and land use incentives, including, but not limited to, municipal infrastructure to support transit-oriented development and infill, multimodal connectivity, including, but not limited to, crossings, transit infrastructure and electrification, and other measures to assist in achieving the implementation of Section 65080 of the Government Code.   (E) Low-carbon goods movement and freight vehicle technologies and infrastructure, including, but not limited to, locomotives and heavy-duty fleets.   (3) Investments in natural resource protection, including, but not limited to, any of the following:   (A) Natural resource management programs and projects, including, but not limited to, watershed projects with cobenefits of water quality, flood protection, and coastal and ocean protection.   (B) Land conservation, habitat restoration, or other stewardship activities, such as projects administered by state conservancies, state and certified local conservation corps pursuant to Section 14315 of the Public Resources Code, and the Wildlife Conservation Board.   (C) Development and implementation of sustainable agriculture, forestry, urban greening, preservation, and open space programs.   (1) Funding to reduce greenhouse gas emissions through energy efficiency, clean and renewable energy generation, distributed renewable energy generation, transmission and storage, and other related actions, including, but not limited to, at public universities, state and local public buildings, and industrial and manufacturing facilities.   (2) Funding to reduce greenhouse gas emissions through the development of state-of-the-art systems to move goods and freight, advanced technology vehicles and vehicle infrastructure, advanced biofuels, and low-carbon and efficient public transportation.   (3) Funding to reduce greenhouse gas emissions associated with water use and supply, land and natural resource conservation and management, forestry, and sustainable agriculture.   (4) Funding to reduce greenhouse gas emissions through strategic planning and development of sustainable infrastructure projects, including, but not limited to, transportation and housing.   (5) Funding to reduce greenhouse gas emissions through increased in-state diversion of municipal solid waste from disposal through waste reduction, diversion, and reuse.   (4) Investments   (6)     Funding to reduce greenhouse gas emissions through investments  in  community climate innovation  programs  that foster the implementation of projects consistent with paragraphs (1), (2), and (3). Eligible applicants shall be cities, counties, cities and counties, charter cities, state conservancies, metropolitan planning organizations, regional climate authorities, special districts, air pollution control and air quality management districts, joint powers authorities, regional collaboratives, and nonprofit organizations coordinating with local governments   implemented by local and regional agencies, local and regional collaboratives, and nonprofit organizations coordinating with local governments  .  (5) Investments   (7)     Funding  in research, development, and deployment of innovative technologies, measures, and practices related to programs and projects funded pursuant to this part.  38702.5. The California Environmental Protection Agency shall develop a methodology that identifies priority community areas for investment opportunities related to this part. These priority community investment areas shall be identified and updated no less than every two years, based on geographic, socioeconomic, and environmental hazard criteria, which may include, but not be limited to, any of the following: (a) Areas disproportionately adversely affected by within close proximity to sources that produce high criteria and toxic air pollution levels, environmental pollution, and other hazards that can lead to negative public health effects, exposure, and environmental degradation. (b) Areas that contain or produce material that, because of its quantity, concentration, or physical or chemical characteristics, pose a significant hazard to human health and safety. (c) Areas with concentrations of people that are of low income, high unemployment, low levels of homeownership, high rent burden, sensitive populations, and low levels of educational attainment.   38703. (a) The state board and any other state agency identified by the Legislature are the administering agencies for moneys appropriated in accordance with this part. (b) (1) The administering agencies shall, upon appropriation by the Legislature, carry out a program to allocate moneys appropriated pursuant to this part through competitive grants, revolving loans, loan guarantees, loans, credit enhancements, or other appropriate funding measures to qualified recipients to reduce greenhouse gas emissions consistent with subdivisions (b) and (c) of Section 38702. (2) The state board shall develop guidelines for administering agencies for purposes of allocating moneys to projects that maximize benefits for priority community areas, as described in Section 38702.5. (3) Administering agencies shall have the authority to set aside a percentage of their appropriated moneys from the fund for projects that maximize benefits to priority community investment areas, as described in Section 38702.5. (4) In implementing this subdivision, administering agencies shall ensure the investments maximize the benefits described in subdivision (b) of Section 38702 for investments to priority community investment areas, as described in Section 38702.5, through activities that include, but are not limited to, any of the following: (A) Participatory program guideline development. (B) Targeted solicitation outreach. (C) Education and training efforts. (D) Solicitation scoring criteria priority. (c) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code and prior to the initial allocation of moneys in accordance with this part, the state board shall, after one or more public hearings, adopt guidelines to provide state agencies guidance as well as guidance to potential funding applicants and the public regarding the allocation and allowable uses of moneys. The guidelines shall, at a minimum, do all of the following: (1) Establish minimum criteria for receiving funding and additional criteria, including, but not limited to, those identified in subdivision (b) of Section 38702, that the state agencies shall take into account in establishing preferences for awarding moneys. (2) Provide a process to verify the qualifications of recipients. (3) Provide for the monitoring and, as deemed necessary, the audit of expenditures. (4) Establish minimum criteria and provide for the tracking of outcomes. (d) Any state agency that allocates moneys pursuant to subdivision (b) shall adopt guidelines that are consistent with the guidelines adopted by the state board pursuant to subdivision (c).   38704.   39716.  (a)  (1)   The  state board   Department of Finance, on behalf of the Governor, and in consultation with the state board and any other relevant state entity,  shall develop  and adopt, beginning April 1, 2013, three investment plans for the following time periods: 2013 to 2014, 2015 to 2017, and 2018 to 2020. Each   and submit to the Legislature at the time of the department's adjustments to the proposed 2013-14 fiscal year budget pursuant to subdivision (e) of Section 13308 of the Government Code a three-year investment plan. Commencing with the 2016-17 fiscal year budget and every three years thereafter, with the release of the Governor's budget proposal, the Department of Finance shall include updates to the investment plan following the public process described in subdivisions (b) and (c). The  investment plan, consistent with the requirements of Section  38702   39712  , shall do all of the following:  (A)   (1)  Identify the state's near-term and long-term greenhouse gas emissions reduction goals and targets by sector  , including, but not limited to, an analysis of all of the following:   .   (i) Current and projected sector greenhouse gas emissions.   (ii) Progress toward achievement of sector greenhouse gas emissions reduction targets.   (iii) The sectors' greenhouse gas emissions reduction achievements as compared to state greenhouse gas emissions targets.   (iv) Any additional greenhouse gas emissions reduction goals for sectors that do not have targets.   (B) List and describe the key measures and strategies that the state is relying on to achieve greenhouse gas emissions reductions goals and targets by sector. For each measure and strategy, the state board shall include, at a minimum, all of the following:   (i) A description of expected greenhouse gas emissions reductions and other benefits anticipated from the measure's or strategy's implementation.   (ii) Current funding levels and sources for the measure or strategy, as applicable.   (iii) A projection of greenhouse gas emissions reductions and other impacts based on continued progress at current implementation schedules.   (C)   (2)  Analyze gaps, where applicable, in current state strategies to meeting the state's greenhouse gas emissions reduction goals by sector  , including, but not limited to, all of the following:   .   (i) Funding.   (ii) Policies.   (iii) Compliance.   (iv) Market preparedness.   (v) State authority, local authority, or other relevant considerations.   (D)   (3)  Identify priority programmatic investments of moneys  appropriated from the fund  that will facilitate the achievement of feasible and cost-effective greenhouse gas emissions reductions toward achievement of greenhouse gas reduction goals and targets by sector, consistent with subdivision (c) of Section  38702, including, but not limited to, all of the following:   39712.   (i) The expected greenhouse gas emissions reductions and other cobenefits of the investment.   (ii) The administering agency that will implement the investment.   (iii) Other relevant information the state board deems appropriate to explain and justify the investment pursuant to Section 38702.   (E) Maximize benefits to priority community investment areas, as described in Section 38702.5, through activities that include, but are not limited to, any of the following:   (i) Participatory program guideline development.   (ii) Targeted solicitation outreach.   (iii) Education and training efforts.   (iv) Solicitation scoring criteria priority.   (v) Fund set-asides.   (2) The state board shall, prior to adopting each investment plan, consult with the Public Utilities Commission to ensure the investment plan is coordinated with, and does not conflict with or unduly overlap with, activities under the oversight or administration of the Public Utilities Commission undertaken pursuant to Part 5 (commencing with Section 38570) or other activities under the oversight or administration of the Public Utilities Commission that facilitate greenhouse gas emissions reductions consistent with this division.   (b) The Public Utilities Commission shall develop and send to the state board a report to be included in each investment plan adopted by the state board pursuant to subdivision (a). The Public Utilities Commission's report shall include its requirements regarding the use of any allowance auction moneys the investor-owned utilities might collect pursuant to a market-based compliance mechanism.   (c) The state board shall receive input from an advisory body that shall provide information and oversight to the state board to assist in its adoption of each investment plan. The advisory body shall include the secretaries for the Natural Resources Agency, the California Environmental Protection Agency, the Department of Food and Agriculture, the Labor and Workforce Development Agency, and the Business, Transportation and Housing Agency.   (b)     (1)   The state board shall hold at least two public workshops in different regions of the state and one public hearing prior to  adopting any   the Department of Finance submitting the  investment plan.  The advisory body shall participate in each public workshop on an investment plan and provide testimony to the state board on each investment plan.   (d) The state board shall submit to the relevant committee of each house of the Legislature with jurisdiction over the state budget, 30 days prior to adoption, each investment plan proposed to be adopted pursuant to subdivision (a) or any amendment to an investment plan adopted pursuant to subdivision (a).   (2) The state board shall, prior to the submission of each investment plan, consult with the Public Utilities Commission to ensure the investment plan is coordinated with, and does not conflict with or unduly overlap with, activities under the oversight or administration of the Public Utilities Commission undertaken pursuant to Part 5 (commencing with Section 38570) of Division 25.5 or other activities under the oversight or administration of the Public Utilities Commission that facilitate greenhouse gas emissions reductions consistent with this division. The investment plan shall include a description of the use of any moneys generated by the sale of allowances received at no cost by the investor-owned utilities pursuant to a market-based compliance mechanism.   (c) The Climate Action Team, established under Executive Order S-3-05, shall provide information to the Department of Finance and the state board to assist in the development of each investment plan. The Climate Action Team shall participate in each public workshop held on an investment plan and provide testimony to the state board on each investment plan. For purposes of this section, the Secretary of Labor and Workforce Development shall assist the Climate Action Team in its efforts.   38705. (a) The state board shall annually provide to the Governor, concurrent with the submission required pursuant to Section 13320 of the Government Code, a plan consistent with the relevant investment plan adopted pursuant to Section 38704, detailing proposed appropriations from the fund. (b) (1) As part of the Governor's annual budget submission to the Legislature, pursuant to subdivision (a) of Section 12 of Article IV of the California Constitution, the Governor shall include proposed appropriations consistent with the plan submitted pursuant to subdivision (a). (2) If the state board, in consultation with the California Environmental Protection Agency, finds in its report to the Legislature, pursuant to Section 38706, that the investments made in the prior fiscal year did not result in at least 25 percent of the available moneys from that fiscal year being allocated to projects that provide benefits described in subdivision (b) of Section 38702 to priority community investment areas, as described in Section 38702.5, and that at least 10 percent of all of the available moneys from that fiscal year were not invested in projects located in priority community investment areas, as described in Section 38702.5, then the Governor shall include as part of the Governor's annual budget submission to the Legislature, pursuant to subdivision (a) of Section 12 of Article IV of the California Constitution, allocations to administering agencies to make investments in eligible projects in priority community investment areas in an amount equal to the difference between the total investments in the prior fiscal year that benefited priority community investment areas and an amount equal to 25 percent of the total allocations from the prior fiscal year. This allocation shall not be considered part of the next fiscal year's priority community investment area considerations for purposes of this part and shall be separately identified in the Governor's annual budget submission to the Legislature to provide transparency to the investment. (c) The Legislature shall consider adopting the appropriations submitted by the Governor pursuant to subdivision (b) as part of the annual Budget Act.   39718.   (a) Moneys in the fund shall be appropriated through the annual Budget Act consistent with the investment plan developed and submitted pursuant to Section 39716.   (b) Upon appropriation, moneys in the Greenhouse Gas Reduction Fund shall be available to the state board and to administering agencies for administrative purposes in carrying out this chapter.   (c) Any repayment of loans, including interest payments and all interest earnings on or accruing to any money, resulting from implementation of this chapter shall be deposited in the Greenhouse Gas Reduction Fund for the purposes of this chapter.   38706.   39720.  (a) Notwithstanding Section 10231.5 of the Government Code, the  state board   Department of Finance  shall submit a report on or before  December 1 of each year   March 1, 2014, and annually thereafter,  to the appropriate committees of the Legislature on the status of projects funded pursuant to this part and their outcomes  , any changes the state board recommends to the investment plan completed pursuant to Section 38705, and a description of how agencies have Section 38702.5, including, but not limited to, the percentage of funds allocated to date and in the prior fiscal year that have been invested in projects in priority community investment areas and that have provided benefits, as defined in subdivision (b) of Section 38702, to priority community investment areas. It is the intent of the Legislature that the appropriations required for the implementation of these changes to the three-year investment plan shall be included in the annual Budget Act for the subsequent fiscal year  .  (b) The state board shall hold one public hearing on the report submitted pursuant to subdivision (a) prior to its submission to the Legislature.   (c)   (b)  A report submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.  SEC. 3.   This act shall not become operative unless Senate Bill 535 of the 2011-12 Regular Session is enacted.