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| AB 398 | |
|---|---|
| Title | AB 398 |
| Introduced | 2017 |
| Enacted | 2017 |
| Jurisdiction | California |
| Authors | Tomas Calderón |
| Status | Enacted |
AB 398 is a 2017 California legislative bill that amended state law to extend and modify the cap-and-trade program instituted under prior climate legislation. The bill affected regulatory frameworks established by earlier statutes and engaged a wide array of California State Legislature actors, governors, energy producers, environmental groups, and legal litigants. Its passage intersected with federal policy debates involving the United States Environmental Protection Agency, EPA actions, and interstate climate collaborations such as the Western Climate Initiative.
AB 398 built on earlier California statutes including Assembly Bill 32, which established statewide greenhouse gas reduction goals in the California Global Warming Solutions Act of 2006, and the Cap-and-Trade Program administered by the California Air Resources Board. The bill emerged amid negotiations involving the California Chamber of Commerce, labor unions like the AFL–CIO, and environmental organizations including the Sierra Club, the Natural Resources Defense Council, and the Union of Concerned Scientists. Its context included parallel actions by the California Legislature and interactions with regional partners such as Quebec and Ontario within the Western Climate Initiative linkage framework. High-profile policymakers engaged included the Speaker of the California State Assembly, the California State Senate President pro tempore, and the Governor of California.
The bill extended authority for the California Air Resources Board to implement market-based compliance mechanisms and set parameters for emission allowances, carbon offsets, and auction revenues. It modified provisions related to cap-and-trade allocation, introduced mechanisms for price containment including reserve sale features, and delineated expenditure directions for revenues to programs administered by entities such as the California Energy Commission and the California Department of Conservation. AB 398 included provisions addressing industrial facilities protections, electricity sector interactions, and provisions intended to align with California Environmental Quality Act processes. The measure also specified sunset and review dates, and directed coordination with regional partners including the Western Climate Initiative participants.
AB 398 moved through committees in the California State Assembly and the California State Senate, where amendments were negotiated among authors, committee chairs, and interest groups including the California Building Industry Association and the California Manufacturers & Technology Association. Floor debates engaged legislators associated with caucuses such as the California Legislative Black Caucus and the California Latino Legislative Caucus. Amendments incorporated language on allowance allocation, offsets, and revenue uses; they reflected negotiations with the Governor of California's office and budget committees. The bill's final votes followed procedural steps in the California Constitution governing fiscal bills and were accompanied by concurrent budget trailer legislation.
Supporters included environmental organizations like the Natural Resources Defense Council, labor unions such as the California Federation of Labor, and businesses participating in carbon markets including utilities such as Pacific Gas and Electric Company and Southern California Edison. Opponents included trade groups like the California Chamber of Commerce and some oil industry interests represented by entities such as Chevron Corporation and ExxonMobil affiliates operating in California. Debates concerned impacts on job markets in regions like the Central Valley, allowance allocation fairness for firms such as Valero Energy Corporation, and interactions with federal entities like the United States Department of Energy. Litigation risk and compliance costs were focal points for stakeholders including municipal actors such as the City and County of San Francisco and regional agencies like the Bay Area Air Quality Management District.
Implementation responsibility rested primarily with the California Air Resources Board, with coordination from the California Environmental Protection Agency and fiscal oversight involving the California State Controller's Office. Enforcement mechanisms used administrative procedures established under the California Health and Safety Code and drew on monitoring protocols from agencies including the California Energy Commission and regional bodies like the South Coast Air Quality Management District. Compliance instruments included allowance tracking systems, auction schedules, and reporting requirements aligned with registries used by jurisdictions such as Quebec.
Analyses from entities including the Legislative Analyst's Office, research nonprofits such as the RAND Corporation, and academic centers like the Stanford Precourt Institute for Energy examined projected impacts on sectors including transportation and electric power in regions like Los Angeles County and San Joaquin Valley. Proponents pointed to emissions reductions consistent with targets of the California Global Warming Solutions Act of 2006, while critics cited potential cost pass-through to consumers and competitive effects for industrial firms headquartered in places like Sacramento. Revenue allocations were assessed for investments in clean energy projects managed by the California Energy Commission and infrastructure programs in municipalities including San Diego.
Following enactment, lawsuits were filed by a coalition of opponents including industry groups and municipal plaintiffs in state courts asserting constitutional or statutory claims under the California Constitution and contesting administrative actions by the California Air Resources Board. Cases referenced procedural compliance with budgetary rules and alleged impacts on entities such as refineries in Contra Costa County. Litigants included organizations similar to the California Chamber of Commerce and local governments; outcomes involved judicial review by state superior courts and potential appeals to the California Court of Appeal.
Category:California legislation