CA AB642

Establishes the Salton Sea Stabilization and Agricultural Algae Cultivation Act, authorizing the Secretary of the Natural Resources Agency to create an Algae Production Program in the Imperial Valley.

Provides grants to research institutions and commercial enterprises for algae research, development, and demonstration projects focused on producing fuels, foods, medicines, and clean water while improving air and water quality around the Salton Sea.

Requires commercial enterprises receiving demonstration project grants to agree to royalty or revenue-sharing arrangements, with collected revenues deposited into the newly created Algae Production Program Fund for Salton Sea restoration.

Mandates the Secretary to publish a report by July 1, 2013 detailing environmental and economic benefits of algae production and recommendations on production zones, permitting, state land use, tax incentives, and procurement policies.

Requires the Secretary to initiate rulemaking for the Algae Production Program by July 1, 2013 and publish final rules implementing the report recommendations by July 1, 2014.