(a) The Department of Finance, on behalf of the Governor, and in consultation with the state board and any other relevant state entity, shall develop and submit to the Legislature at the time of the department’s adjustments to the proposed 2013–14 fiscal year budget pursuant to subdivision (e) of Section 13308 of the Government Code a three-year investment plan. Commencing with the 2016–17 fiscal year budget and every three years thereafter, with the release of the Governor’s budget proposal, except for the 2025–26 fiscal year budget, the Department of Finance shall include updates to the investment plan following the public process described in subdivisions (b) and (c). The investment plan, consistent with the requirements of Section 39712, shall do all of the following:

1. (1) Identify the state’s near-term and long-term greenhouse gas emissions reduction goals and targets by sector.
2. (2) Analyze gaps, where applicable, in current state strategies to meeting the state’s greenhouse gas emissions reduction goals and targets by sector.

3. (3)

   1. (A) Identify priority programmatic investments of moneys that will facilitate the achievement of feasible and cost-effective greenhouse gas emissions reductions toward achievement of greenhouse gas reduction goals and targets by sector, consistent with subdivision (c) of Section 39712.

   2. (B) In identifying priority programmatic investments, the investment plan shall do both of the following:

      1. (i) Assess how proposed investments interact with current state regulations, policies, and programs.
      2. (ii) Evaluate if and how those proposed investments could be incorporated into existing programs.
4. (4) Recommend metrics that would measure progress and benefits from the proposed programmatic investments.

(b)

1. (1) The state board shall hold at least two public workshops in different regions of the state and one public hearing prior to the Department of Finance submitting the investment plan.
2. (2) The state board shall, prior to the submission of each investment plan, consult with the Public Utilities Commission to ensure the investment plan is coordinated with, and does not conflict with or unduly overlap with, activities under the oversight or administration of the Public Utilities Commission undertaken pursuant to Part 5 (commencing with Section 38570) of Division 25.5 or other activities under the oversight or administration of the Public Utilities Commission that facilitate greenhouse gas emissions reductions consistent with this division. The investment plan shall include a description of the use of any moneys generated by the sale of allowances received at no cost by the investor-owned utilities pursuant to a market-based compliance mechanism.