BILL ANALYSIS �
SB 1018
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SENATE THIRD READING
SB 1018 (Budget and Fiscal Review Committee)
As Amended June 25, 2012
Majority vote. Budget Bill Appropriation Takes Effect
Immediately
SENATE VOTE :Vote not relevant
SUMMARY : Contains necessary statutory and technical changes to
implement the Budget Act of 2012 related to resources.
Specifically, this bill :
1)Provides for funding flexibility for state parks by providing
a two-year continuous appropriation from the State Parks and
Recreation Fund for revenue generating activities, creates an
Enterprise Fund for entrepreneurial capital projects,
increases flexibility of existing funding sources for all
state parks, and provides a funding for water and wastewater
projects.
2)Reduces the number of members on each regional water quality
control board from nine to seven, eliminates categorical
selection of individuals who may serve on a board, and revises
conflict of interest rules for board members to more closely
mirror the Political Reform Act of 1974.
3)Establishes new legislative oversight and controls over the
California Air Resources Board (CARB) including: the creation
of a separate expenditure fund for funds from the auction or
sale of allowances pursuant to the market-based compliance
mechanism (Cap and Trade program); the establishment of a
separate Cost of Implementation Fee account for oversight and
tracking of funds; oversight of actions taken on behalf of the
State of California related to market-based compliance and
auctions, specific to the Western Climate Initiative and
Western Climate Initiative, Incorporated; and, provides for
return of funds to certain ratepayers of Investor Owned
Utilities from funds related to the auction or sale of
allowances.
4)Allows for the creation of an Electricity Procurement
Investment Charge (EPIC) fund for the sole purposes of
creating an investment plan for proceeds of the EPIC
proceeding at the California Public Utilities Commission. No
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funding from this item is proposed or allowed to be used for
any existing or new policies in the California Energy
Commission. Provides for the elimination of defunct statutes
funded under the previous Public Goods Charge.
5)Removes existing barriers on the funding of the New Solar
Homes (NSHs) program thereby providing a steady stream of
funding and a signal to multiple markets that California
values clean solar electricity and the attendant good paying
jobs. These changes also support the California Solar
Initiative (CSI) as they help ensure that the NSH program does
not cannibalize the CSI.
6)Requires payments to the Beverage Container Recycling Fund, as
of July 1, 2012, to be made no later than the last day of the
month following the sale of a qualifying beverage. Provides
necessary amendments to require a business that generates four
cubic yards or more of commercial solid waste per week to
arrange for required recycling services. Shifts enforcement
of electronic waste primarily to the Department of Resources
Recycling and Recovery from the Department of Toxic Substances
Control.
7)Provides necessary statutory changes to reduce underutilized
program activities funded by in the Department of Toxic
Substances Control. Provides necessary statutory changes from
budget reductions and adjustments to the Toxic Substances
Control Account. Eliminates statutory references to the now
defunct Registered Environmental Assessor program.
8)Provides for expanded permitting and inspection fee
requirements, and revised assessment of fees related to
production, licensing and inspection of milk and dairy
products.
9)Provides statutory changes to allow for an ongoing transfer of
funds from the Harbors and Watercraft Revolving Loan Fund for
reimbursement of costs of the State Water Resources
Development system incurred for related recreation and fish
and wildlife enhancements, including in particular for the
ongoing obligation for boating and fishing related activities
at facilities within the system. Provides for a legislative
hearing and notification for new long-term water contract
terms and conditions prior to final approval by the parties.
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10)Provides for, within the Fish and Game Code, the elimination
of the Salton Sea Restoration Council on January 1, 2013.
Requires the Department of Fish and Game to provide
certification of the full mitigation of identified significant
environmental impacts and for a fee structure to fully cover
all costs of the department prior administering permits to
operate vacuum or suction dredge equipment.
11)Provides necessary changes to: adjust expenditure authority
for the purpose of hazardous or idle-deserted wells in a given
year; extend the period of liquidation in the School District
Act from the Underground Storage Tank Cleanup Fund; and,
requires local unexpended bond funds from the Lower-Emission
School Bus Program to be re-allocated locally rather than
revert to the State Air Resources Control Board.
12)Provides necessary cleanup to provisions related to the San
Gabriel and Lower Los Angeles Rivers and Mountains Conservancy
relative to appointment of state personnel.
13)Contains an appropriation allowing this bill to take effect
immediately upon enactment.
COMMENTS : Sustainable Funding Proposal for State Parks. In the
2011 Budget, the Legislature approved a reduction to the
Department of Parks and Recreation of $11 million in the current
year and a $22 million ongoing starting this year. To implement
the reduction, the department submitted a list of 70 parks
slated for closure.
In the interim, members of the public, local agencies, federal
agencies, and non-profit organizations have made efforts to find
other ways to fund parks on the closure list. According to the
department, to date, 16 parks have been removed from the closure
list. Extensive review during the Budget Subcommittee process,
revealed that not even simply funding the department at previous
year levels is not sufficient to address the structural problems
inherent at the department. The breadth of the problem includes
a deferred maintenance backlog in excess of $1 billion,
increasing operations and maintenance costs, collapse of septic
and wastewater systems designed for a much lower capacity,
restrictive funding sources, and a need for a cultural shift to
match the changed funding streams at the department.
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Rather than look for one-time solutions solely, the Assembly and
Senate Budget and Policy Committee propose a suite of changes
designed to address the structural funding problem and promote
cultural shift within the department, including authorizing a
specialty license plate and an opt-in vehicle license fee
check-off.
Cap-and-Trade Program. The Cap-and-Trade program is a key
element in the state's climate plan to reduce greenhouse gas
(GHG) emissions to 1990 levels by the end of this decade. It
sets a limit on major sources of greenhouse gases and
establishes a financial incentive for long-term investments in
cleaner fuels and more efficient energy use. As part of its
program, CARB will give free allowances to the state's large
industrial emitters as well as the state's electric utilities in
order to reduce the economic impact of the cap-and-trade
program.
In 2012, the CARB will begin auctioning GHG emission allowances
as part of the cap-and-trade program. The Budget authorizes at
least $500 million be used to offset existing General Fund costs
of GHG mitigation activities. It also specifies that any
additional expenditures related to GHG emissions reductions be
made pursuant to future legislation.
The Administration continues to move forward with a proposal to
"link" auctions to the Quebec Cap and Trade system. This would
allow for more credits to be auctioned in multiple
jurisdictions. In order to facilitate this multi-government
auction, the CARB assisted in the creation of the Western
Climate Initiative, Inc. (WCI), an independent non-profit that
would develop compliance, tracking, and market monitoring
functions for jurisdictions participating in the auctions. In
order to address concerns about the WCI, the Trailer Bill
establishes legislative oversight and control over linkages,
including requiring: two ex-officio, non-voting members of
WCI's board of directors be appointed by the Senate Rules
Committee and the Speaker of the Assembly. The CARB give notice
to the Joint Legislative Budget Committee prior to any funds
transfers over $150,000 to WCI, and restricting linkages to
other jurisdictions unless the Governor issues findings that
such jurisdiction has adopted and enforces equivalent or more
stringent laws and regulations.
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Electricity Program Investment Charge Program. In December
2011, funding for the state's Public Goods Charge (PGC) on
electricity ratepayers expired. Efforts to continue the
surcharge were not successful. The PGC funded energy efficiency
research and development and renewable energy programs. The
charge constituted about a quarter of the total energy
efficiency programs funded by the state and energy utilities.
In September 2011, the Governor sent a letter to the California
Public Utilities Commission (CPUC) requesting that the
Commission take action under the Commission's authority to
ensure that programs funded like those funded under the PGC
would be continued. In December 2011, the CPUC initiated a
rulemaking to attempt to continue the programs of the PGC with a
sole focus on the investor-owned utilities (IOUs). The CPUC
selected the Energy Commission to be the administrator for the
majority of the EPIC program.
Concerns were raised about the legislative oversight and
priorities given the new policy direction by the Administration
to fund programs that were previously authorized under the PGC.
As a compromise, the Budget approves half the proposal (funding
and positions) gives the Legislature time to work with the
Administration on a final EPIC policy. This bill's language
cleans up defunct PGC authority and ensures that funding only
goes to programs eligible under the new program.
Beverage Container Recycling Fund Redemption Payments.
CalRecycle makes payments from the Beverage Container Recycling
Fund to container recyclers and processors within 20 days, but
under current law distributor payments to the Fund have to be
made within 60 to 90 days. This bill proposes to require
beverage container distributors to submit beverage container
redemption payments to CalRecycle by the last day of the first
month following sale, rather than the last day of the second or
third month following sale. This proposal will better align the
state's cashflows with container recyclers and processors.
General Fund Reduction. Last year, the Legislature approved a
General Fund reduction to the California Department of Food and
Agriculture of $19 million in 2011-12 and an additional $12
million (total of $31 million) in 2012-13 and ongoing. One
component of the additional $12 million reduction in 2012-13 is
a $1.028 million General Fund cut to the Milk and Dairy Food
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Safety program. The 2012-13 Budget includes $1.028 million
Agriculture Fund to offset this reduction. To collect the
additional revenue in the Agriculture Fund, this bill raises
specified fees sufficient to cover the additional $1.028 million
Agriculture Fund appropriation.
Davis-Dolwig Act. The Budget proposes a $10 million continuous
appropriation from the Harbors and Watercraft Revolving Fund to
fund the state's obligations under the Davis-Dolwig Act, which
requires the state to pay for recreational, fish and wildlife
benefits at State Water Project facilities. This bill provides
statutory changes to allow for this ongoing transfer of funds.
This proposal will resolve a long-standing problem and will
provide a reliable source of funding for the department and
state water contractors as they continue to manage and improve
the state's water delivery system.
Analysis Prepared by : Gabrielle Meindl / BUDGET / (916)
319-2099
FN: 0004205