BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 32
                                                                  Page  1

            Date of Hearing:   April 6, 2005 

                                   Judy Chu, Chair

                     AB 32 (Pavley) - As Amended:  March 31, 2005

          Policy Committee:                              Natural Resources  
                       Vote:                            6-2

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               


          This bill requires the California Climate Action Registry (CAR),  
          a legislatively-established public benefit nonprofit corporation  
          administered jointly by the Resources Agency and the CalEPA, to  
          adopt procedures and protocols relating to greenhouse gas  
          emissions and to projects designed to reduce these emissions for  
          the following activities:

          1)Oil and natural gas exploration, extraction, processing,  
            refining, transmission and distribution.

          2)Cement production.

          3)Municipal solid waste and industrial waste hauling and  

           FISCAL EFFECT  

          Moderate costs, about $210,000 in FY 2005-06, to the CAR to  
          develop the specified procedures and protocols.  These costs  
          will probably be equally covered by revenues generated by fees  
          paid to the CAR by companies in the affected industries who  
          voluntarily participate in the registry process and by grants  
          awarded by the California Energy Commission.  (Energy Resources  
          Programs Account and the CAR registration account.)


           1)Rationale  .  The author believes the CAR should focus on  
            developing procedures and protocols to establish a greenhouse  
            gas inventory and to evaluate projects designed to reduce  


                                                                  AB 32
                                                                  Page  2

            those emissions resulting from activities in the oil and  
            natural gas industry, the cement production industry and the  
            hauling and disposal of municipal solid waste.  In addition,  
            representatives of those industries are interested in  
            participating in the registry so that the industries' efforts  
            to reduce greenhouse emissions are reflected in the baseline  
            emissions that may someday be established by state, federal or  
            international requirements.

           2)Background  .  The CAR was established by SB 1771 (Sher) -  
            Chapter 1018, Statutes of 2000.  The registry's purpose is to  
            help companies and other entities with industrial operations  
            in California establish greenhouse gas emissions baselines  
            against which any future emission reduction requirements may  
            be applied.  The CAR encourages voluntary industry actions to  
            increase energy efficiency and decrease greenhouse gas  
            emissions.  In return, the State of California pledges to make  
            its best effort to ensure participants receive appropriate  
            credit for early actions.  Registry participants include  
            businesses, nonprofit organizations, local governments, and  
            state agencies.

           3)Procedures and Protocols  .  The CAR has developed a general  
            protocol and several industry-specific protocols to help  
            participants establish a greenhouse gas emission inventory.   
            The CAR requires participants to report only carbon dioxide  
            emissions for the first three years, with the emissions of the  
            five other greenhouse gases covered by the Kyoto Protocol  
            required to be reported after three years.

           4)Opposition in the Natural Resources Committee  focused on the  
            state subsidy provision that was removed by the author with  
            the March 31st amendments.

           Analysis Prepared by  :    Steve Archibald / APPR. / (916)