BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 527
                                                                  Page  1

          Date of Hearing:   May 15, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                   AB 527 (Beth Gaines) - As Amended:  May 7, 2013 

          Policy Committee:                              Natural  
          ResourcesVote:10-0
                        Judiciary                               8-0   

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill requires a contract between the state and the Western  
          Climate Initiative, Incorporated (WCI, Inc.) to be subject to  
          audit by the California State Auditor.

           FISCAL EFFECT  

          1)State costs (special fund) per audit for both WCI, Inc. and  
            ARB in the range of $40,000 to $200,000, depending on the  
            scope of the audit. One audit annually is likely.

          2)Potential redirection of funds in the office of the California  
            State Auditor.
           



           COMMENTS  

          1)Rationale.  According to the author, California businesses  
            will pay hundreds of millions of dollars to comply with the  
            greenhouse gas reductions required under AB 32.  Some of these  
            funds will be used by the WCI, Inc.  under contract to develop  
            and maintain systems for emissions trading programs.  By  
            subjecting WCI to state audit, the state will ensure the funds  
            are subject to accounting and public review.  

          1)Background.   In November 2011, the Western Climate Initiative  
            formed WCI, Inc., a non-profit corporation formed to provide  
            administrative and technical services to support the  








                                                                  AB 527
                                                                  Page  2

            implementation of state and provincial greenhouse gas  
            emissions trading programs.  
             
             According to their website, WCI, Inc. will develop a  
            compliance tracking system that tracks both allowances and  
            offsets; administer allowance auctions; and conduct market  
            monitoring of allowance auctions and offset certificate  
            trading.   

            This bill applies to any contracts the state enters into with  
            the WCI, Inc.

             
             


           
           Analysis Prepared by  :    Jennifer Galehouse / APPR. / (916)  
          319-2081