BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 237 (Wolk)
Hearing Date: 01/19/2012 Amended: 03/29/2011
Consultant: Brendan McCarthy Policy Vote: EQ 5-2
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BILL SUMMARY: SB 237 creates the California Agriculture Climate
Benefits Advisory Committee, with specified membership. The bill
authorizes the use of revenues generated through the regulation
of greenhouse gasses for grants relating to agriculture.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Grants for agriculture Potentially in the millions per
yearSpecial *
activities
Grant administration Likely up to $500 per year Special
*
* Air Pollution Control Fund.
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Under AB 32 (Nunez, 2006), the Air Resources Board is required
to approve a statewide greenhouse gas emission limit, such that
statewide emissions in 2020 are equal to emissions in 1990. The
Air Resources Board is required to implement regulatory measures
to reduce emissions to meet that target. The Air Resources Board
is authorized to use "market mechanisms" as one potential method
to reduce greenhouse gas emissions. Examples of market
mechanisms are carbon taxes or cap and trade systems, in which
greenhouse gas emitters may be required to purchase credits for
their emissions. The Air Resources Board has included a cap and
trade program as part of its plan to implement AB 32. Under the
Air Resources Board's plan, most emission credits will be
distributed freely to current emitters at first, with future
credits increasingly distributed by auction. The revenues
generated by auctioning future emissions credits are unknown,
but ultimately revenues are likely to be in the tens of millions
per year. (The environmental analysis of the cap and trade
regulation is currently under judicial review.)
SB 237 authorizes the use of funds generated by market
mechanisms under AB 32 that are allocated to the agricultural
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sector for grants for a variety of purposes relating to
greenhouse gas emissions from agriculture and adaptation to
climate change by the agricultural sector, as well as for
administrative costs. The bill generally limits cost-share
requirements on grant recipients to 25 percent of project costs.
The bill directs an unnamed state agency to establish the
California Agriculture Climate Benefits Advisory Committee with
a specified membership. The bill directs the unnamed agency to
seek input from the Committee in carrying out the provisions of
the bill.
The bill does not specify how much funding from market
mechanisms should be made available for grants under the bill.
Given the considerable anticipated revenues under the proposed
cap and trade program, grant amounts authorized under the bill
could be in the millions per year, with grant administration
costs likely to be in the hundreds of thousands per year.
SB 535 (De Leon) requires at least ten percent of any revenues
generated under AB 32 be used in disadvantaged communities for
greenhouse gas emission reduction projects, mitigation of health
impacts of climate change, and support for green collar jobs.
That bill will be heard in this committee.
SB 1241 (Wolk, 2009) was similar to this bill. That bill was
held in this committee.
The proposed author's amendments specify that the Department of
Food and Agriculture would be responsible for overseeing the
program; continuously appropriate funds allocated to agriculture
programs under the bill; and eliminate the advisory panel.
Staff notes that the author's proposed amendments inadvertently
direct all cap and trade auction revenues to the agricultural
benefits program created under the bill.
SB 237 (Wolk)
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