BILL ANALYSIS
AB 231
Page 1
ASSEMBLY THIRD READING
AB 231 (Huffman)
As Amended April 29, 2009
Majority vote
NATURAL RESOURCES 6-3 APPROPRIATIONS 11-5
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|Ayes:|Skinner, Brownley, |Ayes:|De Leon, Ammiano, Charles |
| |Chesbro, | |Calderon, Davis, Fuentes, |
| |De Leon, Hill, Huffman | |Hall, John A. Perez, Price, |
| | | |Skinner, Torlakson, |
| | | |Krekorian |
| | | | |
|-----+--------------------------+-----+----------------------------|
|Nays:|Gilmore, Knight, Logue |Nays:|Nielsen, Duvall, Harkey, |
| | | |Miller, |
| | | |Audra Strickland |
| | | | |
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SUMMARY : Revises extent and purpose of the Air Resources
Board's (ARB) authority to levy greenhouse gas (GHG) emission
fees pursuant to the California Global Warming Solutions Act (AB
32) and establishes a Climate Protection Trust Fund (Trust Fund)
for deposit of fee revenues. Specifically, this bill:
1)Requires ARB to adopt fees on sources of GHG emissions by
March 30, 2010.
2)Establishes the Trust Fund for deposit of fee revenues, as
well as all other compliance or penalty revenues, in place of
the Air Pollution Control Fund.
3)Requires the fees to be designed to allocate the costs of
implementing AB 32 based on the contribution of the source to
statewide emissions of greenhouse gases, and to meet the goals
of AB 32, including, but not limited to, reducing GHG
emissions; minimizing costs and maximizing total benefits to
California, while achieving the statewide GHG limit; and
reducing disproportionate impacts on low-income communities.
EXISTING LAW requires ARB, pursuant to AB 32, to adopt a
statewide GHG emissions limit equivalent to 1990 levels by 2020
and adopt regulations to achieve maximum technologically
AB 231
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feasible and cost-effective GHG emission reductions. Among its
provisions, AB 32 authorizes ARB to adopt fees to be paid by the
sources of GHG emissions regulated pursuant to AB 32. Fee
revenues must be deposited in the Air Pollution Control Fund
(APCF) and may be spent for purposes of carrying out AB 32.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, one-time annual costs in 2009-10 of about $150,000 to
establish the Trust Fund; possible fee revenue, potentially in
the hundreds of millions of dollars annually; potential shift in
funds, possibly in hundreds of millions of dollars annually,
from the APFC to the Trust Fund created by this bill, to the
extent this bill results in fee revenue.
COMMENTS : AB 32 authorizes ARB to adopt via regulation "a
schedule of fees to be paid by the sources of greenhouse gas
emissions" and deposit revenues into the Air Pollution Control
Fund. AB 32 also authorizes, but does not require, the use of
market-based mechanisms to achieve GHG emission reductions,
provided specified conditions are met.
Thus far, ARB has proposed only to use its fee authority for the
limited purpose of funding its own and other state agencies' AB
32 implementation costs, and to repay loans of other state funds
that previously have been approved by the Legislature for these
purposes. The fee revenue necessary for these purposes is
estimated at $55 million per year. The proposed administrative
fee is scheduled for adoption by ARB in June 2009. It's
possible that a more expansive fee on GHG emitters, the auction
of GHG emission allowances, or another market mechanism will
produce significantly higher revenues over the course of AB 32
implementation.
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092
FN: 0001157