BILL ANALYSIS Ó
AB 2348
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Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2348 (Stone) - As Amended: April 22, 2014
Policy Committee: Natural
ResourcesVote:6-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill creates the Natural Resources Climate Improvement
Program (NRCIP), to be administered by the Natural Resources
Agency (NRA) in coordination with the Air Resources Board (ARB),
to assist in the development and implementation of natural
resource projects that maximize greenhouse gas (GHG) emissions
reductions or sequestration. Specifically, this bill:
1)Requires NRA in coordination with ARB to develop NRCIP
guidelines consistent with the Global Warming Solutions Act
(AB 32) and requirements for AB 32 investments in community
revitalization.
2)Requires AB 32 cap-and-trade revenues from the Greenhouse Gas
Reduction Fund (GGRF) to be available upon appropriation by
the Legislature to fund the NRCIP.
3)Requires State Conservancies and the Wildlife Conservation
Board, to identify, prioritize and establish projects as
specified.
4)Requires NRA, in coordination with ARB, to comply with
specific requirements to inform and coordinate with various
state agencies
FISCAL EFFECT
1)Costs pressures in the tens of millions of dollars for various
agencies to fund the implementation stages of the NRCIP
(GGRF).
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2)Unknown, potentially significant costs to the NR, likely in
the million dollar range to perform required climate research
and resource assessments (GGRF).
3)Increased annual costs of approximately $300,000 (GGRF) for
the ARB to coordinate with the NR.
COMMENTS
1)Purpose. According to the author, in order to achieve
California's climate goals, the state needs to invest
cap-and-trade auction revenue on projects that maximize GHG
emission reductions. This bill establishes a program to
require state conservancies and WCB to establish guidelines
for natural resources projects that maximize GHG emission
reductions or sequestration.
1)Background. The AB 32 cap-and-trade program sets a statewide
limit or cap on the sources of GHGs and establishes a
financial incentive for long-term investments in cleaner fuels
and more efficient energy use. Currently, GHG emissions from
electricity and large industrial sources are subject to the
cap. Starting in 2015, fuel distributors will be subject to
the cap. As part of the program, ARB will allocate free
allowances to the state's large industrial emitters as well as
the state's electric utilities to reduce the economic impact
of the cap-and-trade program.
ARB has conducted six quarterly auctions since November 2012
of GHG emission allowances as part of the market-based
compliance mechanism. These auctions resulted in
approximately $663 million in proceeds to the state (auctions
will continue to occur quarterly).
2)Climate Adaptation Strategy. Executive Order S-13-08
(Governor Schwarzenegger), ordered NRA, through the Climate
Action Team, to coordinate with local, regional, state and
federal public and private entities to develop, a state
Climate Adaptation Strategy by 2009 . The strategy identified
potential climate change impacts on the states resources as
well as potential solutions. The Climate Adaptation Strategy
was updated in 2013.
3)Proposed Cap and Trade Revenue Expenditure Plan. The
Governor's 2014-15 budget proposes to spend $850 million in
2014-15 on three different types of programs: a) sustainable
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communities and clean transportation (which includes, among
other things, $250 million for high speed rail projects); b)
energy efficiency and clean energy; and c) natural resources
and waste diversion. Under the "natural resources and waste
diversion" expenditures, the Governor proposes to spend $50
million on fire prevention and urban forestry, $30 million on
wetlands restoration, and $30 million on waste diversion.
4)Similar Legislation. SB 1268 (Jim Beall), similar to
this bill, is pending before the Senate Environmental
Quality Committee.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081