BILL ANALYSIS Ó
SB 726
Page 1
Date of Hearing: September 10, 2013
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
SB 726 (Lara) - As Amended: September 9, 2013
SUMMARY : Imposes specified conditions on the participation of
the California board members of the Western Climate Initiative,
Incorporated (WCI, Inc.). Requires the California Air Resources
Board (ARB) to develop a comprehensive strategy to reduce the
emissions of short-lived climate pollutants (SLCPs) by January
1, 2016.
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
SB 726
Page 2
expenditure of these funds.
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.
4)Requires ARB, pursuant to AB 32 (Nunez), Chapter 488, Statutes
of 2006, to adopt a statewide greenhouse gas (GHG) emissions
limit equivalent to 1990 levels by 2020 and adopt regulations
to achieve maximum technologically feasible and cost-effective
GHG emission reductions.
5)Authorizes ARB to permit the use of market-based compliance
mechanisms to comply with GHG reduction regulations, to be
adopted by 2011 and operative by 2012, under limited
circumstances once specified conditions are met.
6)Requires any direct regulation or market-based compliance
mechanism to achieve GHG reductions that are real, permanent,
quantifiable, verifiable, and enforceable by ARB.
7)Requires ARB, in adopting regulations, including market-based
compliance mechanisms, to design the regulations in a manner
that is equitable, seeks to minimize costs and maximize the
total benefits to California, and encourages early action to
reduce GHG emissions.
THIS BILL :
SB 726
Page 3
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 (GHG) emissions reduction
programs of California and other jurisdictions, and do not
allow WCI, Inc. to have policymaking authority.
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.
4)Requires ARB, no later than January 1, 2016, to develop a
comprehensive strategy to reduce the emissions of SLCPs. In
developing the strategy, requires ARB to:
a) Complete an inventory of sources and emissions of SLCPs
in the state based on available data.
b) Identify research needed to address data gaps.
c) Identify existing and potential new control measures to
reduce emissions from oil and gas production, agriculture,
waste, and any other sector identified by ARB.
d) Prioritize the development of new measures for SLCPs
that offer cobenefits by reducing other air pollutants that
impact community health.
e) Coordinate with other state agencies and districts to
develop and implement measures beyond the authority of ARB.
SB 726
Page 4
5)Requires ARB to consult with experts in academia, industry,
and the community on SLCPs, as specified.
6)Requires ARB to hold at least one public workshop during the
development of the strategy.
7)Requires ARB, no later than December 31, 2014, to propose a
regulation to reduce emissions from oil and gas extraction,
processing, and storage to ensure near-term reductions of
SLCPs.
8)Requires ARB, no later than December 31, 2014, to publish its
evaluation, including the findings of independent third-party
audits, of the opportunities for the largest industrial
sources of GHG emissions in the state to improve efficiency
and reduce onsite emissions of GHGs.
9)Defines SLCP as an agent that has a relatively short lifetime
in the atmosphere, from a few days to a few decades, and a
warming influence on the climate.
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. Unknown costs for the development of the SLCP
strategy.
COMMENTS :
Western Climate Initiative : 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 GHG 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.
SB 726
Page 5
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
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 GHG emissions, participate in a multi-state registry to
track and manage GHG 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.
Short-Lived Climate Pollutants . SLCPs refer to emissions that
have a relatively short lifetime in the atmosphere, from a few
days to a few decades, and have a warming influence on climate.
These mainly include black carbon, methane, tropospheric ozone,
and hydrofluorocarbons (HFCs), and are the most significant GHGs
after carbon dioxide (CO2). SLCPs are responsible for a
substantial amount of current global warming, with particularly
large impacts in urban areas and sensitive regions of the world
like the Arctic, and have negative impacts on public health and
the environment. For example, methane has a global warming
potential 25 times that of CO2. HFCs have the highest global
warming potential at up to 14,800 times that of CO2.
In February 2012, the United National Environment Programme
launched the Climate and Clean Air Coalition to Reduce
Short-Lived Climate Pollutants (Coalition), which includes the
governments of the United States, Bangladesh, Canada, Ghana,
Mexico, and Sweden. According to the Coalition, addressing
SLCPs will have multiple, immediate benefits by protecting
public health now and slowing the rate of climate change in the
SB 726
Page 6
first half of this century.
While ARB has taken some actions that affect SLCP emissions,
such as requiring methane capture at solid waste landfills, it
has not developed a comprehensive strategy for these emissions.
According to the author, this bill is critical to improve public
health and "[builds] upon the great work related to AB 32."
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 has been
enrolled to the Governor.
Prior Legislation. SB 1018, the 2012 Resources Budget Trailer
Bill, among other provisions, exempted WCI, Inc. from
Bagley-Keene.
REGISTERED SUPPORT / OPPOSITION :
Support
Asian Americans Advancing Justice, Los Angeles
Asian Immigrant Women Advocates
Asian Neighborhood Design
Asian Pacific Environmental Network
Asian Pacific Policy & Planning Council
Asthma Coalition of Los Angeles County
Bay Localize
California Air Resources Board
California Environmental Justice Alliance
California Healthy Nail Salon Collaborative
California Nurses Association
Catholic Charities, Diocese of Stockton
Center on Race, Poverty & the Environment
Clean Power Campaign
Coalition for Clean Air
Communities for a Better Environment
EndOil/Communities for Clean Ports
Environmental Defense Fund
Environmental Justice Project
Environmental Justice Task Force
Filipino American Coalition for Environmental Solidarity
SB 726
Page 7
Forests Forever
Friends of the Earth
Global Alliance for Incinerator Alternatives
Greenpeace
Green Education, Inc.
Hastings Environmental Law Association
InNative
Justice in Nigeria Now
Kebetkache Women Development and Resource Centre
Local Clean Energy Alliance
Long Beach Alliance for Children with Asthma
New York Mayor's Office of Long-Term Planning and Sustainability
Physicians for Social Responsibility, Los Angeles
People's Community Organization for Reform and Empowerment
Rainforest Resource and Development Centre
Rising Sun Energy Center
Sacramento Housing Alliance
The City Project
The Greenlining Institute
The Nature Conservancy
One individual
Opposition
California Cattlemen's Association
California Chamber of Commerce
California Citrus Mutual
California Cotton Growers Association
California Cotton Ginners Association
California Farm Bureau Federation
California Grape and Tree Fruit League
California League of Food Processors
California Manufacturers & Technology Association
California Nevada Cement Association
Coalition for Sustainable Cement Manufacturing & Environment
Nisei Farmers League
Western Agricultural Processors Association
Western Plant Health Association
Western States Petroleum Association
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092
SB 726
Page 8