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
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          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
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          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 


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