BILL ANALYSIS Ó SB 726 Page 1 SENATE THIRD READING SB 726 (Lara) As Amended August 22, 2013 Majority vote SENATE VOTE :39-0 NATURAL RESOURCES 9-0 JUDICIARY 10-0 ----------------------------------------------------------------- |Ayes:|Chesbro, Grove, Bigelow, |Ayes:|Wieckowski, Wagner, | | |Garcia, Muratsuchi, | |Alejo, Chau, Dickinson, | | |Patterson, Skinner, | |Garcia, Gorell, | | |Stone, Williams | |Maienschein, Muratsuchi, | | | | |Stone | ----------------------------------------------------------------- APPROPRIATIONS 17-0 ----------------------------------------------------------------- |Ayes:|Gatto, Harkey, Bigelow, | | | | |Bocanegra, Bradford, Ian | | | | |Calderon, Campos, | | | | |Donnelly, Eggman, Gomez, | | | | |Hall, Holden, Linder, | | | | |Pan, Quirk, Wagner, Weber | | | ----------------------------------------------------------------- SUMMARY : Imposes specified conditions on the participation of the California board members of the Western Climate Initiative, Incorporated (WCI, Inc.). Specifically, this bill : 1)Requires WCI, Inc.'s California board members to participate on the board so long as WCI, Inc. maintains: a) An open meetings policy consistent with the Bagley-Keene Open Meeting Act (Bagley-Keene). b) A public records policy consistent with the California Public Records Act (CPRA). c) Bylaws that limit its activities to the technical and operational support of the greenhouse gas emissions reduction programs of California and other jurisdictions, and do not allow WCI, Inc. to have policymaking authority. SB 726 Page 2 2)Requires the Air Resources Board (ARB) to provide notice to the Joint Legislative Budget Committee (JLBC) for all procurements over $150,000 proposed by WCI, Inc. that are expected to result in a contract no later than 30 days prior to execution of those contracts. 3)Requires ARB to include information in the Governor's Budget on all proposed expenditures and allocations of money to WCI, Inc. EXISTING LAW : 1)Imposes, pursuant to SB 1018 (Budget and Fiscal Review Committee), Chapter 39, Statutes of 2012 (Resources Budget Trailer Bill), conditions on the non-governmental entity WCI, Inc., created to assist ARB in the implementation of AB 32 (Núñez), Chapter 488, Statutes of 2006. a) Finds and declares that the establishment of WCI, Inc. should be done transparently and should be independently reviewed by the Attorney General for consistency with all applicable laws. b) Establishes the California membership of the board of directors of WCI, Inc. as follows: i) One appointee or his or her designee who shall serve as an ex officio nonvoting member shall be appointed by the Senate Rules Committee. ii) One appointee or his or her designee who shall serve as an ex officio nonvoting member shall be appointed by the Speaker of the Assembly. iii) The Chairperson of the ARB or her or his designee. iv) The Secretary for Environmental Protection or his or her designee. c) Requires ARB to provide notice to the JLBC of any funds over $150,000 provided to WCI, Inc. or its derivatives or subcontractors no later than 30 days prior to transfer or expenditure of these funds. SB 726 Page 3 d) Exempts WCI, Inc. and its ARB and CalEPA appointees from Bagley-Keene when performing their duties. 2)Bagley-Keene generally requires that all meetings of a state body be open and public. Defines a "state body" to include a board, commission, committee, or similar multimember body on which a member of a body that is a state body serves in his or her official capacity as a representative of that state body and that is supported, in whole or in part, by funds provided by the state body, whether the multimember body is organized and operated by the state body or by a private corporation. 3)CPRA requires that all records maintained by local and state governmental agencies are open to public inspection unless specifically exempt. Defines "public records" to include any writing containing information relating to the conduct of the public's business prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics. FISCAL EFFECT : According to the Assembly Appropriations Committee, potential costs of up to $75,000 from the Cost of Implementation (COI) Account to comply with the Public Records Act, depending on the number and complexity of actual requests. Minor, if any, costs to comply with the Bagley-Keene Open Meeting Act. COMMENTS : In November 2011, the Western Climate Initiative formed WCI, Inc., a non-profit corporation formed to provide administrative and technical services to support the implementation of state and provincial greenhouse gas emissions trading programs. According to their Web site, 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. The Board of Directors includes officials from the provinces of Quebec and British Columbia, and public officials from the State of California. The Western Climate Initiative, not to be confused with WCI, Inc., is a collaboration of independent jurisdictions working together to identify, evaluate, and implement emissions trading SB 726 Page 4 policies to tackle climate change at a regional level. It began in February 2007 when the Governors of Arizona, California, New Mexico, Oregon, and Washington signed an agreement directing their respective states to develop a regional target for reducing greenhouse gas emissions, participate in a multi-state registry to track and manage greenhouse gas emissions in the region, and develop a market-based program to reach the target. In the following years, the Governors of Montana and Utah along with the Premiers of British Columbia, Manitoba, Ontario, and Quebec joined the original five states in committing to tackle climate change at a regional level. In July 2010, all 11 jurisdictions collaborated in the development of the design for the WCI Regional Program, which provides a roadmap to inform WCI partner jurisdictions as they implement the cap-and-trade program in their jurisdictions. All states except for California, withdrew as partners from WCI in 2011. California, along with British Columbia, Ontario, Quebec and Manitoba are continuing to work together, as partners in WCI, to develop and harmonize their emissions trading program policies. Related Legislation. SB 527 (Gaines) of the current legislative session repeals WCI, Inc.'s exemption from Bagley-Keene and provides that a contract between the state and WCI, Inc. shall be subject to audit by the State Auditor. SB 527 is pending on the Senate Floor. Prior Legislation. SB 1018, the 2012 Resources Budget Trailer Bill, among other provisions, exempted WCI, Inc. from Bagley-Keene. Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916) 319-2092 FN: 0002245