BILL ANALYSIS �
SB 1572
Page 1
SENATE THIRD READING
SB 1572 (Pavley)
As Amended August 24, 2012
Majority vote
SENATE VOTE :23-13
NATURAL RESOURCES 6-3 APPROPRIATIONS 11-5
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|Ayes:|Chesbro, Brownley, |Ayes:|Gatto, Blumenfield, |
| |Dickinson, Huffman, | |Bradford, |
| |Monning, Skinner | |Charles Calderon, Campos, |
| | | |Davis, Fuentes, Hall, |
| | | |Hill, Cedillo, Mitchell |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Knight, Grove, Halderman |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Specifies expenditure of funds derived from the
auction of greenhouse gas (GHG) allowances pursuant to the
cap-and-trade program adopted by the Air Resources Board (ARB)
pursuant to AB 32 (N��ez), Chapter 488, Statutes of 2006.
Specifically, this bill :
1)Appropriates auction revenues collected in the 2012-13 fiscal
year, that are not used by the Department of Finance (DOF) to
offset General Fund expenditures pursuant to the Budget Act,
to ARB to be allocated as follows:
a) 60% to fund GHG reduction projects undertaken by
industries covered by the cap-and-trade program.
b) 10% to the Strategic Growth Council to be awarded to
metropolitan planning organizations or councils of
governments for regional and local GHG reduction plans and
local climate innovation projects.
2)Continuously appropriates to ARB any moneys collected by ARB
from the sale of allowances to the University of California
(UC) and the California State University (CSU) for ARB to
expend on GHG reduction projects undertaken by UC or CSU.
SB 1572
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3)Continuously appropriates to ARB any moneys collected by ARB
from the sale of allowances to a water supplier for ARB to
expend for purposes of reducing GHG emissions associated with
water suppliers.
4)Provides that the provisions of the bill are severable.
5)Establishes related findings regarding ARB's cap-and-trade
program.
EXISTING LAW :
1)Requires ARB, pursuant to AB 32, to adopt a statewide GHG
emissions limit equivalent to 1990 levels by 2020 and adopt
regulations to achieve maximum technologically feasible and
cost-effective GHG emission reductions.
2)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.
3)Creates the Greenhouse Gas Reduction Fund and requires all
moneys, except for fines and penalties, collected by ARB from
the auction or sale of allowances pursuant to a market-based
compliance mechanism to be deposited in the Fund and available
for appropriation by the Legislature.
4)Requires the DOF to submit proposed legislation, on or before
January 10, 2013, that provides a detailed spending plan for
moneys in the Fund, unless the Legislature passes a bill on or
before August 31, 2012, that establishes a long-term spending
strategy for moneys in the Fund. Requires any state agency,
prior to expending any moneys appropriated from the Fund, to
prepare a specified record.
5)Authorizes the DOF to allocate or otherwise use an amount of
at least $500 million from moneys deposited in the Fund, and
make commensurate reductions to General Fund expenditure
authority, to support the regulatory purposes of AB 32.
Requires ARB and DOF, at least 60 days prior to allocating any
funds to submit a plan for the expenditure or use of the funds
to the chairpersons of the Senate and Assembly Appropriations
Committees and the Chairperson of the Joint Legislative Budget
Committee. Prohibits the use of funds for the purpose of
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developing a high-speed rail system for at least two years.
FISCAL EFFECT : Unknown
COMMENTS : According to ARB, a total reduction of 80 million
metric tons (MMT), or 16% compared to business as usual, is
necessary to reduce statewide GHG emissions to 1990 levels by
2020. ARB intends to achieve approximately 78% of the
reductions through identified "regulatory" measures. ARB
proposes to achieve the balance of reductions necessary to meet
the 2020 limit (approximately 18 MMT) through a cap-and-trade
program. The first auction of allowances in the cap-and-trade
program will take place on November 14, 2012, and the auctions
will be held quarterly thereafter.
The 2012-13 Budget Act (AB 1464) authorizes DOF to allocate at
least $500 million from cap-and-trade revenue, and make
commensurate reductions to General Fund expenditure authority,
to support the regulatory purposes of AB 32. The Resources
Budget Trailer Bill (SB 1018 (Committee on Budget and Fiscal
Review) Chapter 39, Statutes of 2012) creates the Greenhouse Gas
Reduction Fund for cap-and-trade auction revenues and requires
DOF to submit proposed legislation, on or before January 10,
2013, that provides a detailed spending plan for moneys in the
Fund, unless the Legislature passes a bill on or before August
31, 2012, that establishes a long-term spending strategy for
moneys in the Fund. AB 1532 (John A. P�rez) establishes
procedures for deposit and expenditure of cap-and-trade auction
revenues pursuant to an investment plan.
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092
FN: 0005627