BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
31 (Pavley)
Hearing Date: 05/26/2009 Amended: 05/05/2009
Consultant: Brendan McCarthy Policy Vote: EQ 5-2, EU&C 6-3
SB 31 (Pavley)
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BILL SUMMARY: SB 31 would specify that funds in the Air
Pollution Control Fund, including revenues generated from a cap
and trade program, can be spent for renewable energy and energy
efficiency programs, investments in technologies to reduce
greenhouse gas emissions, and green job development and
training.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Air Resources Board Absorbable within existing
resourcesSpecial *
staffing costs
* Air Pollution Control Fund.
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STAFF COMMENTS:
Under existing law (AB 32, Nunez, 2006), the Air Resources Board
is required to reduce greenhouse gas emissions to 1990 levels by
2020. Market-based compliance measures, such as a cap and trade
program, are among the regulatory measures that the Air
Resources Board is authorized to use to achieve these goals.
Under a cap and trade program, the total amount of allowed
emissions would be capped by the Air Resources Board. Emitters
of greenhouse gasses would either be given permits to emit,
permits would be auctioned off, or some combination of the two.
Emitters could then trade emission permits between themselves in
order to meet the overall emission reduction target at least
cost. Existing law also grants the Air Resources the authority
to adopt fees on greenhouse gas emitters to pay for the costs
carrying out the state's greenhouse gas reduction activities.
As part of its plan to meet the state's greenhouse gas emission
reduction goals, the Air Resources Board is developing a cap and
trade program, which will be implemented by 2012. The Air
Resources Board is considering an auction system to allocate
emission permits, but final regulations have not been adopted.
At this point, the Air Resources Board does not have an estimate
SB 31 (Pavley)
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of the revenues that would be generated from an emission permit
auction.
SB 31 would specify that revenues generated pursuant to AB 32
would be available for the purposes of carrying out the
requirements of AB 32, including, but not limited to AB 32
administration, renewable energy and energy efficiency programs,
investments in technologies to reduce greenhouse gas emissions,
and green jobs development and training that will reduce
greenhouse gas emissions.
SB 31 would specify that these revenues would include any
revenues generated from a compliance mechanism such as a cap and
trade program.
Because the Air Resources Board is already developing a cap and
trade program under its existing authority and has the authority
to raise revenues under AB 32, this bill should not
significantly increase the Air Resources Board's costs or give
the Air Resources Board additional fee authority.