BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 2329 (Ruskin) Hearing Date: 08/12/2010 Amended: 08/02/2010 Consultant: Brendan McCarthy Policy Vote: EQ 5-2 AB 2329 (Ruskin), Page 2 _________________________________________________________________ ____ BILL SUMMARY: AB 2329 requires the Natural Resources Agency to develop a climate change adaptation strategy by 2012 and update it every three years. The bill establishes in statute the Climate Action Team and directs it to coordinate state policy to achieve the state's greenhouse gas emission reduction targets. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Developing adaptation plan $175 $350 $350Various * Climate Action Team staffing $250 $500 $500Special ** * General Fund, bond funds, and several special funds. Ultimately, these costs could be offset with fees. ** Air Pollution Control Fund. Ultimately, these costs are likely to be offset with fees. _________________________________________________________________ ____ STAFF COMMENTS: SUSPENSE FILE. Under Executive Orders S-3-05 and S-20-06, the Governor established goals for the reduction of greenhouse gas emissions in the state and directed the California Environmental Protection Agency to coordinate multi-agency efforts to meet those goals. Under this authority, the Secretary for Environmental Protection created the Climate Action Team, which is made up of the heads several state agencies and departments. Under AB 32 (Nunez, Chapter 488, Statutes of 2006), the Air Resources Board is required to approve a statewide greenhouse gas emission limit, such that statewide emissions in 2020 are equal to emissions in 1990. The Air Resources Board is required to implement regulatory measures to reduce emissions to meet that target. Pursuant to AB 32, the Air Resources Board is currently considering the imposition of a fee on greenhouse gas emitters to pay for the state's regulatory costs under AB 32. Pursuant to Executive Order S-13-08, the Natural Resources AB 2329 (Ruskin), Page 2 Agency prepared the 2009 California Climate Adaptation Strategy. The document summarizes the current scientific research into climate change impacts and provides recommendations on how to manage those impacts. AB 2329 requires the Natural Resources Agency, in coordination with other state agencies, to prepare a climate change adaptation report by June 1, 2012 and update that report every three years. The plan required under the bill shall follow up on the findings of the 2009 plan and address progress on the strategies identified in that plan. The bill specifies that the required plan will serve as the state's climate adaptation document for purposes of any federal law requiring such a plan. Based on the requirements in the bill and the state's experience developing the previous plan, staff estimates the cost to develop the new plan and required updates to be about $350,000 per year. These costs would be covered with a variety of funding sources, including the General Fund, bond funds, and several special funds. Once the Air Resources Board begins collecting its greenhouse gas emission fee, those fee revenues could be used to offset these costs. AB 2329 establishes the Climate Action Team in statute. The Climate Action Team is to be chaired by the Secretary for Environmental Protection, with a specified membership of agency and department heads. The bill authorizes the Climate Action Team to establish staff working groups to address issues relating to specific issues. The bill directs the Climate Action Team to coordinate state efforts to achieve the state's greenhouse gas emission reduction targets. While the Climate Action Team currently operates based on executive orders and administrative action by the Secretary for Environmental Protection, AB 2329 puts these requirements into law. This creates ongoing funding requirements on CalEPA and other departments (which cannot be undone by a future governor, unlike executive orders and administrative decisions). Therefore the bill imposes ongoing costs to the various agencies and departments. CalEPA indicates that it currently has five staff positions supporting activities of the Climate Action Team. Continuing this level of support will cost about $500,000 per year. These costs are currently supported from the Air Pollution Control Fund (which has been supported by several loans from other AB 2329 (Ruskin), Page 2 special funds). The Air Resources Board is currently considering the imposition of a fee on greenhouse gas emitters which will likely support Climate Action Team activities in the future.