BILL NUMBER: SB 527 CHAPTERED
BILL TEXT
CHAPTER 769
FILED WITH SECRETARY OF STATE OCTOBER 12, 2001
APPROVED BY GOVERNOR OCTOBER 11, 2001
PASSED THE SENATE SEPTEMBER 14, 2001
PASSED THE ASSEMBLY SEPTEMBER 14, 2001
AMENDED IN ASSEMBLY SEPTEMBER 13, 2001
AMENDED IN ASSEMBLY SEPTEMBER 6, 2001
AMENDED IN ASSEMBLY SEPTEMBER 4, 2001
AMENDED IN SENATE MAY 3, 2001
INTRODUCED BY Senator Sher
FEBRUARY 22, 2001
An act to amend Sections 42400.4, 42801, 42810, 42821, 42822,
42823, 42824, 42840, 42841, 42842, 42843, 42860, 42870, and 43021,
and to add Sections 42410, 42801.1, and 43023 to, the Health and
Safety Code, relating to air pollution.
LEGISLATIVE COUNSEL'S DIGEST
SB 527, Sher. Air pollution.
(1) Existing law prescribes various civil penalties that may be
imposed by the State Air Resources Board for a violation of specified
state board regulations relating to vehicular and nonvehicular air
pollution control. Existing law also authorizes any city attorney,
with the consent of the district attorney, upon the complaint of the
state board, to bring an action for unfair trade practices.
This bill would authorize the state board to impose administrative
penalties as an alternative to seeking civil penalties for certain
violations. The bill would authorize the state board to impose an
administrative penalty up to the maximum amount the state board is
authorized to impose as a civil penalty for that violation. The bill
would also limit the state board's authority to impose an
administrative penalty to a maximum of $10,000 per day in which there
is a violation not to exceed $100,000 per penalty assessment
proceeding for any violation arising from the same conduct. The bill
would also provide for administrative review under existing state
board administrative hearing procedure regulations, except that this
bill would require that the hearings be conducted by an
administrative law judge appointed by the Office of Administrative
Hearings. The bill would also provide for judicial review of an
administrative hearing in conformance with existing law. The bill
would also prohibit the state board from causing an action to be
brought by any city attorney against any person upon whom the state
board has imposed an administrative penalty.
(2) Existing law requires the Secretary of the Resources Agency to
establish the California Climate Action Registry as a public benefit
nonprofit corporation, governed by a prescribed board of directors,
that is required to record and register voluntary greenhouse gas
emission reductions made by California entities after 1990.
This bill would define the terms, "annual emissions results,"
"baseline," "certification," "de minimis emissions," "emissions,"
"emissions inventory," and "material" for purposes of those
provisions governing the registry.
Existing law also requires the registry to perform various
functions, including, among other things, adopting standards for
verifying emissions reductions, adopting a list of approved auditors
that would verify emissions reductions, establishing emissions
reductions goals, designing and implementing efficiency improvement
plans, maintaining a record of all emissions baselines and
reductions, and recognizing, publicizing, and promoting entities that
participate in the registry.
This bill would revise the functions and duties of the registry,
as prescribed, and would require the registry, in coordination with
the State Energy Resources Conservation and Development Commission,
to adopt industry-specific reporting metrics at one or more public
meetings.
Existing law requires participants in the registry to report
emissions baselines and annual emissions results expressed by a
fraction in terms of emissions efficiency rates, as prescribed, and
to adopt guidelines encouraging participants to report emissions in
relation to the annual average business as usual rate of improvement
in the energy efficiency of the state economy, as determined by the
commission.
This bill would delete those requirements, and would require
participants to report direct or indirect emissions separately, and
would authorize the registry, on or after January 1, 2004, in
coordination with the commission, to revise the scope of indirect
emission source types that participants may be required to report,
after a public workshop and review process, if the commission
approves that revision at a public hearing, and makes specified
determinations. The bill would specify that participants shall not
be required to report emissions of any greenhouse gas that is de
minimis, as defined, in quantity, when summed across all applicable
sources of the participating entity.
The bill would prescribe certain requirements for the registration
and certification of a participant in the registry.
Existing law requires the registry, not later than July 1, 2003,
and periodically thereafter, to report to the Governor and the
Legislature on the number of organizations participating in the
registry, the percentage of the state's emissions represented by the
participants in the registry, and the reductions in greenhouse gas
emissions achieved by those participants.
This bill would additionally require the registry to report to the
Governor and the Legislature on ways to make the registry more
workable for participants that are consistent with the goals and
intent of the registry. The bill would make various other changes
with respect to the functions and obligations of the registry, as
prescribed.
(3) Existing law also prescribes criminal penalties for a
violation of a federally enforceable operating permit issued pursuant
to specified provisions of the federal Clean Air Act or for a
violation of specified laws under that act relating to stationary
sources. Under existing law, the recovery of civil penalties for a
violation of specified state laws relating to nonvehicular emission
limitations precludes criminal prosecution for the violations under
the act. Other existing law, as of January 1, 2003, makes a person
who transports, or who provides a vehicle to transport, motor vehicle
fuel for a motor vehicle fuel distributor who is not in compliance
with specified laws, liable for a civil penalty.
This bill would correct erroneous cross-references and delete an
obsolete cross-reference in those provisions.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature in the enactment of
this act to do all of the following:
(a) Provide the State Air Resources Board with an alternative to
pursuing civil penalties through the court system by allowing the
state board to pursue penalties for less significant violations
through an administrative hearing process.
(b) Provide administrative penalty authority only for those
categories of violations for which the state board maintains the
authority to impose civil penalties.
(c) It is not the intent of the Legislature to modify the level of
penalty impositions beyond historic levels.
SEC. 2. Section 42400.4 of the Health and Safety Code is amended
to read:
42400.4. (a) In any district where a Title V permit program has
been fully approved by the federal Environmental Protection Agency,
any person who knowingly violates any federally enforceable permit
condition or any fee or filing requirement applicable to a Title V
source is guilty of a misdemeanor and is subject to a fine of not
more than ten thousand dollars ($10,000).
(b) In any district in which a Title V permit program has been
fully approved by the federal Environmental Protection Agency, any
person who knowingly makes any false material statement,
representation, or certification in any form or in any notice or
report required of a Title V source of a federally enforceable permit
requirement, or who knowingly renders inaccurate any monitoring
device or method required of a Title V source, is guilty of a
misdemeanor and is subject to a fine of not more than ten thousand
dollars ($10,000).
(c) The recovery of civil penalties pursuant to Section 42402,
42402.1, 42402.2, or 42402.3 precludes prosecution pursuant to this
section for the same offense. When a district refers a violation to
a prosecuting agency, the filing of a criminal complaint is grounds
requiring the dismissal of any civil action brought pursuant to this
article for the same offense.
(d) Each day during any portion of which a violation of
subdivision (a) or (b) occurs is a separate offense.
(e) This section shall not become operative in a district until
the federal Environmental Protection Agency fully approves that
district's Title V permit program.
(f) This section applies only to violations described in
subdivisions (a) and (b) that are not otherwise subject to a fine of
ten thousand dollars ($10,000) or more pursuant to Section 42400.1,
42400.2, or 42400.3.
SEC. 3. Section 42410 is added to the Health and Safety Code, to
read:
42410. (a) As an alternative to seeking civil penalties under
Sections 39674, 42401, 42402, 42402.1, 42402.2, and 42402.3 for a
violation of regulations of the state board, the state board may
impose an administrative penalty, as specified in this section. Any
administrative penalty imposed under this section shall be imposed as
an alternative to, and not in addition to, a civil penalty imposed
pursuant to this article. No administrative penalty imposed by the
state board pursuant to this section shall exceed the amount that the
state board is authorized to seek as a civil penalty for the
applicable violation, and no administrative penalty imposed pursuant
to this section shall exceed ten thousand dollars ($10,000) for each
day in which there is a violation up to a maximum of one hundred
thousand dollars ($100,000) per penalty assessment proceeding.
(b) Nothing in this section restricts the authority of the state
board to negotiate mutual settlements under any other penalty
provision of law that exceeds ten thousand dollars ($10,000) for each
day in which there is a violation of one hundred thousand dollars
($100,000) per penalty assessment proceeding.
(c) The administrative penalties authorized by this section shall
be imposed and recovered by the state board in administrative
hearings established pursuant to Article 3 (commencing with Section
60065.1) and Article 4 (commencing with Section 60075.1) of
Subchapter 1.25 of Chapter 1 of Division 3 of Title 17 of the
California Code of Regulations, except that the hearings shall be
conducted by an administrative law judge appointed by the Office of
Administrative Hearings.
(d) Nothing in this section authorizes the state board to seek
penalties for categories of violations for which the state board may
not recover penalties in a civil action.
(e) If the state board imposes any administrative penalties
pursuant to this section, the state board may not bring any action
pursuant to, or rely upon, Chapter 4 (commencing with Section 17000)
of Part 2 of Division 7 of the Business and Professions Code.
(f) In determining the amount of any administrative penalty
imposed pursuant to this section, the state board shall take into
consideration all relevant circumstances, including, but not limited
to, those factors specified in subdivision (b) of Section 42403.
(g) After an order imposing an administrative penalty becomes
final pursuant to the hearing procedures identified in subdivision
(c), and no petition for a writ of mandate has been filed within the
time allotted for seeking judicial review of the order, the state
board may apply to the Superior Court for the County of Sacramento
for a judgment in the amount of the administrative penalty. The
application, which shall include a certified copy of the final order
of the administrative hearing officer, shall constitute a sufficient
showing to warrant the issuance of the judgment.
(h) For any violation that is within the enforcement jurisdiction
of both the state board and the districts, the state board may impose
an administrative penalty pursuant to this section only if the
district in which the violation has occurred has not commenced an
enforcement action for that violation.
(i) This section is not intended, and shall not be construed, to
grant the state board authority to assess an administrative penalty
for any category of violation that was not subject to enforcement by
the state board as of January 1, 2002.
(j) Any administrative penalty assessed pursuant to this section
shall be paid to the State Treasurer for deposit in the General Fund.
(k) A party adversely affected by the final decision in the
administrative hearing may seek independent judicial review by filing
a petition for a writ of mandate in accordance with Section 1094.5
of the Code of Civil Procedure.
(l) This section shall only apply to violations that occur on or
after January 1, 2002.
(m) On or before January 30, 2005, the state board shall prepare
and submit to the Legislature and the Governor a report summarizing
the administrative penalties imposed by the state board pursuant to
this section for calendar years 2002, 2003, 2004, and 2005.
SEC. 4. Section 42801 of the Health and Safety Code is amended to
read:
42801. The Legislature finds and declares all of the following:
(a) It is in the best interest of the State of California, the
United States of America, and the earth as a whole, to encourage
voluntary actions to achieve all economically beneficial reductions
of greenhouse gas emissions from California sources.
(b) Mandatory greenhouse gas emissions reductions may be imposed
on California sources at some future point, and in view of this, the
state has a responsibility to use its best efforts to ensure that
organizations that voluntarily inventory their emissions receive
appropriate consideration for changes in emissions quantities made
prior to the implementation of any mandatory programs.
(c) Past initiatives in the state that took early and responsible
action to reduce air pollution and ozone smog have demonstrated
political, economic, and technological leadership, and have proven to
benefit the state.
(d) The state's tradition of environmental leadership should be
recognized through the establishment of a registry to provide
documentation of greenhouse gas emissions levels voluntarily achieved
by sources in the state. The registry will provide participants an
opportunity to register greenhouse gas emissions information in a
consistent format using publicly reviewed and adopted procedures and
protocols.
(e) The state hereby commits to use its best efforts to ensure
that organizations that establish greenhouse gas emissions baselines
and register emissions results that are certified in accordance with
this chapter receive appropriate consideration under any future
international, federal, or state regulatory scheme relating to
greenhouse gas emissions. The state cannot guarantee that any
regulatory regime relating to greenhouse gas emissions will recognize
the baselines and annual results recorded in the registry.
(f) The state hereby commits to review future international or
federal programs related to greenhouse gas emissions and to make
reasonable efforts to promote consistency between the state program
and these programs and to reduce the reporting burden on
participants, if changes to the state program are consistent with the
goals and intent of Section 42810.
SEC. 5. Section 42801.1 is added to the Health and Safety Code, to
read:
42801.1. For purposes of this chapter, the following terms have
the following meanings:
(a) "Annual emissions results" means the participant's applicable
data on the release of greenhouse gas emissions, both direct and
indirect, from one particular year.
(b) "Baseline" means a datum against which to measure greenhouse
gas emissions performance over time, usually annual emissions in a
selected base year. For the purposes of this subdivision, the
baseline shall start on or after January 1, 1990.
(c) "Certification" means the determination of whether a given
participant's greenhouse gas emissions inventory (either baseline or
annual result) has met a minimum quality standard and complied with
an appropriate set of registry-approved procedures and protocols for
submitting emissions inventory information. The process for
certification of emissions results will be specified within the
procedures and protocols approved for industry-specific emissions
inventory reporting, and may involve a range of options depending
upon the nature of the emissions, complexity of a company's
facilities and operations, or both, and the procedures deemed
necessary by the registry board to validate a participant's emissions
information.
(d) "De minimis emissions" means emissions that are below a
certain threshold, when summed across all applicable sources of the
participating entity. The State Energy Resources Conservation and
Development Commission shall recommend to the registry for adoption a
threshold emissions level for each type of greenhouse gas emission
that shall be considered de minimus.
(e) "Emissions" means the release of greenhouse gases into the
atmosphere.
(f) (1) "Emissions inventory" means an accounting of the amount of
greenhouse gases discharged into the atmosphere. It is generally
characterized by all of the following factors:
(A) The chemical or physical identity of the pollutants included.
(B) The geographic area covered.
(C) The institutional entities covered.
(D) The time period over which emissions are estimated.
(E) The types of activities that cause emissions.
(2) An emissions inventory shall include sufficient documentation
and supporting data to make transparent the underlying assumptions
and calculations for all of the reported results.
(g) "Greenhouse gases" includes all of the following gases:
carbon dioxide, methane, nitrous oxide, hydroflurocarbons,
perfluorocarbons, and sulfur hexafluoride.
(h) "Material" means any emission of greenhouse gas that is not de
minimis.
SEC. 6. Section 42810 of the Health and Safety Code is amended to
read:
42810. The purposes of the California Climate Action Registry
shall be to do all of the following:
(a) Help various entities in the state to establish emissions
baselines against which any future federal greenhouse gas emission
reduction requirements may be applied.
(b) Encourage voluntary actions to increase energy efficiency and
reduce greenhouse gas emissions.
(c) Enable participating entities to voluntarily record greenhouse
gas emissions made after 1990 in a consistent format that is
certified.
(d) Ensure that sources in the state receive appropriate
consideration for certified emissions results under any future
federal regulatory regime relating to greenhouse gas emissions.
(e) Recognize, publicize, and promote participants in the
registry.
(f) Recruit broad participation in the process from all economic
sectors and regions of the state.
SEC. 7. Section 42821 of the Health and Safety Code is amended to
read:
42821. (a) The registry shall be governed by a seven-member board
of directors, to be composed of all of the following members:
(1) The Secretary of the Resources Agency, or his or her designee.
(2) The Secretary for Environmental Protection, or his or her
designee.
(3) Five public members representing business, local government,
and public interest environmental organizations, to be appointed by
the Governor for two-year terms, staggered so that, initially, three
public members serve one-year terms and two members serve two-year
terms. In the event of a vacancy, the Governor shall appoint a
replacement public board member.
(b) The board of directors of the registry is responsible for
ensuring that the registry fulfills the purposes established by this
chapter and meets the financial, reporting, and operating
requirements of its articles of incorporation. The board of
directors shall appoint and supervise an executive director, who
shall hire and direct staff.
(c) The board of directors shall adopt bylaws that ensure that, at
each regularly scheduled meeting of the registry, there will be an
opportunity for members of the public to comment on matters being
considered by the registry, as specified on the registry meeting
agenda.
SEC. 8. Section 42822 of the Health and Safety Code is amended to
read:
42822. (a) The procedures and protocols for monitoring,
estimating, calculating, reporting, and certifying greenhouse gas
emissions established by, or approved pursuant to, this chapter shall
be the only procedures and protocols recognized by the state for the
purposes of the registry, as described in Section 42810. These
procedures shall be, to the extent practicable, consistent with the
methods and practices used for the statewide inventory of greenhouse
gas emissions prepared by the State Energy Resources Conservation and
Development Commission, as required by Section 25730 of the Public
Resources Code.
(b) The registry shall adopt a schedule of fees and, after an
initial startup period, charge participants for registry services to
cover the reasonable costs of its operations.
SEC. 9. Section 42823 of the Health and Safety Code is amended to
read:
42823. The registry shall perform all of the following functions:
(a) Provide participants with referrals to approved providers for
technical assistance and advice, upon the request of a participant,
on any or all of the following:
(1) Designing programs to establish greenhouse gas emissions
baselines and to monitor, estimate, calculate, report, and certify
greenhouse gas emissions.
(2) Establishing emissions reduction goals based on international
or federal best practices for specific industries and economic
sectors.
(3) Designing and implementing organization-specific plans that
improve energy efficiency or utilize renewable energy, or both, and
that are capable of achieving emission reduction targets.
(b) In coordination with the State Energy Resources Conservation
and Development Commission, the registry shall adopt and periodically
update a list of organizations recognized by the state as qualified
to provide the detailed technical assistance and advice in
subdivision (a) and assist participants in identifying and selecting
providers that have expertise applicable to each participant's
circumstances.
(c) Adopt procedures and protocols for certification of reported
baseline emissions and emissions results. When adopting procedures
and protocols for the certification, the registry shall consider the
availability and suitability of simplified techniques and tools.
(d) Qualify third-party organizations that have the capability to
certify reported baseline emissions and emissions results, and that
are capable of certifying the participant-reported results as
provided in this chapter.
(e) Adopt procedures and protocols, including a uniform format for
reporting emissions baselines and emissions results to facilitate
their recognition in any future regulatory regime.
(f) Maintain a record of all certified greenhouse gas emissions
baselines and emissions results. Separate records shall be kept for
direct and indirect emissions results. The public shall have access
to this record, except for any portions of a participant's emissions
results that a participant may deem confidential.
(g) Encourage organizations from various sectors of the state's
economy, and those from various geographic regions of the state, to
report emissions, establish baselines and reduction targets, and
implement efficiency improvement and renewable energy programs to
achieve those targets.
(h) Recognize, publicize, and promote participants.
(i) In coordination with the State Energy Resources Conservation
and Development Commission and the State Air Resources Board, adopt
industry-specific reporting metrics at one or more public meetings.
SEC. 10. Section 42824 of the Health and Safety Code is amended to
read:
42824. Participation in the registry is voluntary, and
participants may withdraw at any time. If participants cease, and
then resume participation, they will be expected to fill in any
interim emissions information or set a new baseline. Any entity
conducting business in the state may register its emissions results,
including emissions generated outside of the state, on an entitywide
basis with the registry, and may utilize the services of the
registry.
SEC. 11. Section 42840 of the Health and Safety Code is amended to
read:
42840. (a) Participants shall utilize the following reporting
procedures to establish a greenhouse gas emissions baseline,
participants shall report their certified emissions for the most
recent year for which they have complete energy use and fuel
consumption data as specified in this chapter. Participants that
have complete energy use or fuel consumption data for earlier years
that can be certified may establish their baseline as any year
beginning on or after January 1, 1990. After establishing baseline
emissions, participants shall report their certified emissions
results in each subsequent year in order to show changes in emissions
levels with respect to their baseline year. Participants may report
annual emission results without establishing an emissions baseline.
Participants shall also report using industry-specific metrics once
the registry adopts an industry-specific metric for the industry in
question.
(b) (1) Participants shall report direct emissions and indirect
emissions separately. Direct emissions are those emissions from
applicable sources that are under management control of a
participating entity, including onsite combustion, fugitive
noncombustion emissions, and vehicles owned and operated by the
participant. Indirect emissions that are required to be reported by
participants are those emissions embodied in net electricity and
steam imports, including offsite steam generation and district
heating and cooling. Participants are encouraged, but are not
required, to report other indirect emissions based on guidance that
is adopted by the registry.
(2) On or after January 1, 2004, the registry board, in
coordination with the State Energy Resources Conservation and
Development Commission, may revise the scope of indirect emission
source types that are required to be reported by participants
specified in paragraph (1) after a public workshop and review process
conducted by the registry if all of the following requirements have
been met.
(A) The State Energy Resources Conservation and Development
Commission has approved that revision at a public hearing following a
public workshop.
(B) Prior to approving that proposed revision, the commission
determines all of the following:
(i) A reasonable and generally-accepted methodology exists that
will enable participants to accurately estimate and report the
emissions for the indirect source type in question.
(ii) The proposed revision will not create an unreasonable
reporting burden on the participants.
(iii) The proposed revision is necessary to achieve the purposes
listed in Section 42810.
(C) The registry, at any time it acts to revise the scope of
indirect emission source types that are required to be reported by
participants, establishes a timeframe for the phase in of the revised
scope so that participants shall have at least four months before
the start of the next annual reporting cycle that incorporates the
revised scope.
(3) In cases of joint ownership, emissions are reported by the
managing entity, unless the owners decide to report emissions on a
pro rata basis.
(4) Participants shall not be required to report emissions of any
greenhouse gas that is de minimis in quantity, when summed up across
all applicable sources of the participating entity. The State Energy
Resources Conservation and Development Commission shall recommend to
the registry a definition of de minimis emissions that reasonably
accounts for differences in the size, activities, and sources of
direct and indirect baseline emissions of participants, and is
consistent with the goals and intent of subdivision (f) of Section
42801.
(c) (1) All participants shall report direct and indirect carbon
dioxide (CO2) emissions that are material to their operations.
(2) The registry shall also encourage participants to monitor and
report emissions of the following gases:
(A) Hydrofluorocarbons (HFCs).
(B) Methane (CH4).
(C) Oxides of nitrogen (N2O).
(D) Perfluorocarbons (PFCs).
(E) Sulfur hexafluoride (SF6).
(3) The report of information specified in paragraph (2) is
optional for three years after a participant joins the registry.
After participating in the registry for a total of three years,
participants shall report emissions required by both paragraphs (1)
and (2).
(4) Emissions of all gases under this subdivision shall be
reported in mass units.
(d) The basic unit of participation in the registry shall be an
entity in its entirety such as a corporation or other legally
constituted body, any city or county, and each state government
agency. The registry shall not record emissions baselines and
reductions for individual facilities or projects, except to the
extent they are included in an entity's emissions reporting.
(1) Corporations may report emissions baselines and annual
emissions results from subsidiaries if the parent corporation is
clearly defined.
(2) Participants shall report emissions from all of their
applicable sources in the state when they initially register.
(3) Participants may, and are encouraged to, at any time, register
emissions from all applicable sources based in the United States, so
long as this reporting meets all the other requirements established
by this chapter. Those participants with emissions in other states
that report California emissions only may not be able to receive
equal consideration for their emissions records in future national or
international regulatory regimes relating to greenhouse gas
emissions. In addition, participants with operations outside of the
United States are encouraged to register their total worldwide
emissions baselines and annual emissions results. Within three
years, the registry shall review and report to the Legislature with a
recommendation on whether the registry should require, rather than
encourage, participants to report all of their greenhouse gas
emissions in the United States, not just California emissions.
(4) To ensure that reported emissions reflect actual emissions,
participants that outsource production or services shall report
emissions associated with the outsourced activity, and remove these
emissions from their emissions baseline. The subcontracted entity,
if it voluntarily chooses to participate in the registry shall report
emissions associated with the outsourced activities it has taken
over. Participants shall attest at least once each year that the
entity has not outsourced any emissions, or that if it has, that all
emissions associated with the outsourced activity have been reported
and subtracted from the entity's baseline emissions.
(5) To prevent changes in vertical integration within corporations
from leading to apparent emissions reductions when in fact no
reductions have occurred, the registry shall treat mergers,
acquisitions, and divestitures as follows:
(A) The emissions baselines of any merged or acquired entity shall
be added together, and the registry shall treat the resulting entity
as if it had been one corporation from the beginning.
(B) In divestitures, the emissions baselines of the affected
corporations shall be split, with the effect that the registry shall
treat them as if they had been separate corporations from the
beginning. If the divested corporation is purchased by another firm,
the registry shall treat that purchase as a merger with the
purchasing corporation. If the divested corporation remains a
separate entity after the divestiture, its registry baseline shall
reflect the emissions associated with the entity's operations before
the divestiture. Corporations that divest operations may allocate
certified emissions results achieved prior to the divestiture among
the divesting and the divested entities, and the registry shall
adjust their baselines accordingly.
(C) Any adjustments for changes in vertical integration shall be
verified in the annual emissions certifications required for
recordation of emissions results.
(6) If a participant changes from statewide to national reporting
under this program, changes to its baseline will be treated in a
similar manner as changes in vertical integration as described in
paragraph (5).
(7) To ensure that reported emissions accurately reflect shifts in
operations to or from other states, the registry shall adopt, in
consultation with the State Energy Resources Conservation and
Development Commission, at a public meeting
and following at least one public workshop, reporting
procedures for participants that choose to report greenhouse
emissions on a statewide basis that require participants to show both
of the following:
(A) Changes in a participant's operations, such as a facility
startup or shutdown, that result in a significant and long-term shift
of greenhouse gas emissions from California to other states or from
other states to California.
(B) The corresponding change in the participant's baseline.
SEC. 12. Section 42841 of the Health and Safety Code is amended to
read:
42841. (a) To support the estimation, calculation, reporting, and
certification of emissions in a consistent format, the registry
shall adopt standardized forms that all participants shall use to
calculate, report, and certify emissions, unless an alternative
format is (1) reviewed and recommended by the State Energy Resources
Conservation and Development Commission and the State Air Resources
Board, and (2) adopted by the registry, and deemed to be consistent
with the goals and intent of this chapter. In cooperation with the
State Energy Resources Conservation and Development Commission, the
registry shall review commonly available emissions tracking software
to determine whether existing software packages are able to generate
reports for the registry.
(b) The procedures established for all of the following shall
conform to the requirements of Article 6 (commencing with Section
42870):
(1) Establishing electricity and fuel usage and for calculating
associated emissions.
(2) Mass-balance calculations, stack testing, or continuous
emissions monitoring of greenhouse gases from onsite fuel combustion
are all acceptable ways of reporting greenhouse gases from onsite
fuel combustion.
(3) Estimating, calculating, reporting, and certifying
noncombustion emissions of the gases listed in paragraphs (1) and (2)
of subdivision (c) of Section 42840.
(4) Collecting and maintaining data and records of energy, fuel,
and chemical consumption sufficient to allow contemporaneous and ex
post certification of direct and indirect emissions.
SEC. 13. Section 42842 of the Health and Safety Code is amended to
read:
42842. (a) Participants registering baseline emissions and
emissions results in the registry shall provide certification of
their methodologies and results. The registry board may, upon
recommendation of the State Energy Resources Conservation and
Development Commission and the state board, following a public
process, adopt simplified procedures to certify emissions results as
appropriate. Participants shall follow registry-approved procedures
and protocols in determining emissions, and supply the quantity and
quality of information necessary to allow an independent ex post
certification of the emissions baseline and emissions results
reported under this program.
(b) The registry shall adopt a list of approved third-party
organizations recognized as competent to certify emissions results as
provided in this chapter. The process for evaluating and approving
these organizations shall be developed in coordination with the State
Energy Resources Conservation and Development Commission. The
registry may reopen the qualification process periodically in order
for new organizations to be added to the approved list.
(c) As appropriate, the registry shall refer participants to the
organization on the approved list described in subdivision (b).
(d) Where required by the registry for certification,
organizations approved pursuant to subdivision (b) shall do all of
the following:
(1) Evaluate whether the participant has a program, consistent
with registry-approved procedures and protocols, in place for
preparation and submittal of the information reported under this
chapter.
(2) Check, during certification, the reasonableness of the
emissions information being reported for a random sample of estimates
or calculations.
(3) Summarize its review in a report to the board of directors, or
equivalent governing body, of the participating entity, attesting to
the existence of a program that is consistent with registry-approved
procedures and protocols and the reasonableness of the reported
emissions results and noting any exceptions, omissions, limitations,
or other qualifications to their representations.
(e) In conducting certification for a participant under this
program, the approved organization shall schedule any meeting or
meetings with the participant in advance at one or more
representative locations and allow the participant to control
property access. The meetings shall be conducted in accordance with
a protocol that is agreed upon in advance by the participant and the
approved organization. The approved organization shall not perform
facility inspection, direct measurement, monitoring, or testing
unless authorized by the participant.
(f) To ensure the integrity and constant improvement of the
registry program, the State Energy Resources Conservation and
Development Commission shall perform on a random basis an occasional
review and evaluation of participants' emissions reporting,
certifications, and the reasonableness of the emissions information
being reported for analysis of estimates or calculations. The
commission shall report any findings in writing to the registry. The
registry shall include a summary of these findings in the biennial
report to the Governor and the Legislature required by Article 5
(commencing with Section 42860).
SEC. 14. Section 42843 of the Health and Safety Code is amended to
read:
42843. Not later than July 1, 2003, and periodically thereafter,
the registry shall evaluate and review the approaches to emissions
reporting described in subdivision (b) of Section 42840, in light of
knowledge gained from the actual practices of estimating,
calculating, reporting, and certifying emissions, and, upon
recommendation of the State Energy Resources Conservation and
Development Commission following a public process, may modify or
revise reporting requirements as appropriate to further the purposes
of this chapter.
SEC. 15. Section 42860 of the Health and Safety Code is amended to
read:
42860. Not later than July 1, 2003, and biennially thereafter,
the registry shall report to the Governor and the Legislature on the
number of organizations participating in the registry, the percentage
of the state's emissions represented by the participants in the
registry, the reductions in greenhouse gas emissions achieved by
those participants, and ways to make the registry more workable for
participants that are consistent with the goals and intent of this
chapter.
SEC. 16. Section 42870 of the Health and Safety Code is amended to
read:
42870. The State Energy Resources Conservation and Development
Commission shall do all of the following:
(a) Develop a process to identify and qualify third-party
organizations approved to provide technical assistance and advice,
upon the request of a participant in any or all of the following
areas:
(1) Determining greenhouse gas emissions.
(2) Developing industry-specific emissions reduction targets.
(3) Developing and implementing efficiency improvement programs
appropriate to various industries and economic sectors.
The process shall do all of the following:
(A) Define the minimum technical and organizational capabilities
and other qualifications approved firms are required to meet.
(B) Call for applications or otherwise encourage interested
organizations to submit their qualifications for review.
(C) Evaluate applicant organizations according to this list of
qualification standards.
(D) Recommend, not later than six months following the first
registry board meeting, specific organizations to the registry as
qualified to provide the technical assistance functions of this
chapter.
(E) Update the list of approved technical assistance providers
periodically by doing all of the following:
(i) Reviewing the capabilities of already approved providers.
(ii) Reviewing applications of new providers.
(iii) Recommending to the registry specific organizations to be
added to the approved list, and specific organizations no longer
qualified to provide the technical assistance duties of this chapter.
(b) Develop or update certain emissions reporting metrics by doing
all of the following:
(1) Review, in coordination with the State Air Resources Board,
industry-specific greenhouse gas reporting metrics linked to or based
on international or federal standards, as these become available
periodically, and advise the registry of its opinion as to whether
the adoption of sectoral or industry-specific metrics complement the
reporting procedures.
(2) By July 1, 2003, recommend to the registry for possible
adoption a procedure for defining and measuring transportation-based
emissions associated with registry participants' activities,
including, but not limited to, shipping of products and materials,
employee commuting, and purchased air travel.
(c) Develop, not later than six months following the first
registry board meeting, guidance to the registry on all of the
following processes to facilitate participation in the program:
(1) Recommendations for threshold emissions of each greenhouse gas
that are considered de minimis to a participant's operations.
(2) Establishing entities' electricity usage and calculating CO2
emissions associated with that usage.
(3) Establishing entities' fuel usage and calculating CO2
emissions associated with that usage.
(4) Determining emissions from onsite fuel combustion.
(5) Determining the noncombustion emissions of the six greenhouse
gases with which the registry is concerned, as applicable.
(6) Establishing procedures and protocols to certify greenhouse
gas emissions baselines and emissions results.
(7) Collecting and maintaining data and records of energy, fuel,
and chemical consumption sufficient to allow ex post certification of
emission results of direct and indirect emissions on an entity-wide
basis.
(d) Develop, not later than six months after the first meeting of
the registry board, a process for qualifying third-party
organizations recognized by the State of California as competent to
certify the emissions results of the types of entities that may
choose to participate in this registry, by doing all of the
following:
(1) Developing a list of the minimum technical and organizational
capabilities and other qualification standards that approved
third-party organizations shall meet. Those qualifications shall
include the ability to sign an opinion letter, for which they may be
held financially at risk, and certifying the participant-reported
emissions results as provided in this chapter.
(2) Publicizing an applications process or otherwise encouraging
interested organizations to submit their qualifications for review.
(3) Evaluating applicant organizations according to the list of
qualifications described in paragraph (1).
(4) Recommending specific third-party organizations to the
registry as qualified to certify participants' actual emissions
results in accordance with this chapter.
(5) Periodically updating the list of approved third-party
organizations by doing any of the following:
(A) Reviewing the capabilities of approved organizations.
(B) Reviewing applications of organizations seeking to become
approved.
(C) Recommending to the registry specific organizations to be
added to the approved list, and specific organizations no longer
qualified to perform the duties of this chapter.
(e) (1) Occasionally, and on a random basis, accompany third-party
organizations on scheduled visits to observe and evaluate, during
any certification visit, both the following:
(A) Whether the participant has a program, consistent with
registry-approved procedures and protocols, in place for the
preparation and submittal of the information required under this
chapter.
(B) The reasonableness of the emissions information being reported
for a sample of estimates or calculations.
(2) To help the registry report to the Legislature, the State
Energy Resources Conservation and Development Commission shall
report, in writing, to the registry on these findings to further
ensure that reported emissions accurately reflect annual emissions of
greenhouse gases.
(f) Review future international or federal programs related to
greenhouse gas emissions, and make reasonable efforts to promote
consistency between the state program and these programs, and to
reduce the reporting burden on participants.
SEC. 17. Section 43021 of the Health and Safety Code is amended to
read:
43021. (a) For purposes of this section, "motor vehicle fuel
distributor" means any person who (1) refines, blends, or otherwise
produces motor vehicle fuel, or (2) with an ownership interest in the
fuel, transports or causes the transport of motor vehicle fuel at
any point between a production or import facility and a retail
outlet, or sells, offers for sale, or supplies motor vehicle fuel to
motor vehicle fuel retailers.
(b) Any motor vehicle fuel distributor who conducts business
within the state, annually on January 1, shall inform the state board
in writing of the distributor's principal place of business, which
shall be a physical address and not a post office box, and any other
place of business at which company records are maintained or refining
activities are conducted.
(c) The state board shall supply each complying motor vehicle fuel
distributor with a certificate of compliance with this section not
later than June 30. The certificate shall be effective from July 1
of the year of issuance through June 30 of the following year.
(d) All motor vehicle fuel distributors shall maintain complete
records of each purchase, delivery, or supply of motor vehicle fuel
for a period of not less than two years in the physical locations
reported pursuant to subdivision (b) and shall not move the records
to another physical location without notifying the state board of the
new location. A complete record for each delivery shall consist of
not less than a copy, or the information contained therein, of the
bills of lading from the refinery or bulk terminal from which the
fuel is received, the delivery ticket or receipt showing the location
of the fuel at the time of sale, and the invoice showing the
purchaser of the fuel. All those records may be kept in physical or
electronic format and are subject to inspection and duplication by
the state board.
(e) Any motor vehicle fuel distributor who intentionally fails to
comply with subdivision (b) or (d) is liable for a civil penalty not
to exceed one thousand dollars ($1,000) for each day of
noncompliance.
(f) No person shall knowingly transport motor vehicle fuel for any
motor vehicle fuel distributor who is not in possession of a current
certificate of compliance as described in subdivision (c). Any
person who transports or provides vehicles to transport motor vehicle
fuel for a noncomplying distributor is liable for a civil penalty
not exceeding ten thousand dollars ($10,000) for each day. However,
any person who transports, or provides vehicles to transport, motor
vehicle fuel for a distributor who is in possession of a current
certificate of compliance shall not be liable for any penalties under
this subdivision unless that person has specific knowledge of
noncompliance.
(g) Any retailer who knowingly sells or supplies motor vehicle
fuel that was delivered to the retailer by, or on behalf of, a
noncomplying motor vehicle fuel distributor is liable for a civil
penalty not to exceed ten thousand dollars ($10,000) for each
transaction.
(h) Any retailer who sells motor vehicle fuel that does not comply
with regulations of the state board, after both oral and written
notice to cease have been delivered to the owner, manager, or
attendant on duty at the facility, and upon failure to comply with
that notice, is subject to the issuance of a cease and desist order
by the state board and a penalty of ten thousand dollars ($10,000)
for each day of noncompliance with the cease and desist order.
(i) The state board shall annually compile and publish a complete
listing of all certified wholesale petroleum distributors, and shall
mail a copy to every licensed transporter of petroleum products.
(j) This section shall become operative January 1, 2003.
SEC. 18. Section 43023 is added to the Health and Safety Code, to
read:
43023. (a) As an alternative to seeking civil penalties under
Chapter 1 (commencing with Section 43000) to Chapter 4 (commencing
with Section 43800), inclusive, and Chapter 6 (commencing with
Section 44200), for violation of state board regulations, the state
board may impose an administrative penalty, as specified in this
section, for a violation of this part, or any rule, regulation,
permit, variance, or order of the state board pertaining to vehicular
air pollution control except as otherwise provided in this division.
No administrative penalty imposed pursuant to this section shall
exceed the amount that the state board is authorized to seek as a
civil penalty for the applicable violation, and no administrative
penalty imposed pursuant to this section shall exceed ten thousand
dollars ($10,000) for each day in which there is a violation up to a
maximum of one hundred thousand dollars ($100,000) per penalty
assessment proceeding for any violation arising from the same
conduct. This one hundred thousand dollar ($100,000) maximum penalty
limitation does not apply in any judicial proceeding involving
violations committed under this part.
(b) Nothing in this section restricts the authority of the state
board to negotiate mutual settlements under any other penalty
provision of law that exceeds ten thousand dollars ($10,000) for each
day in which there is a violation up to a maximum of one hundred
thousand dollars ($100,000) per penalty assessment proceeding.
(c) The administrative penalties authorized by this section shall
be imposed and recovered by the state board in administrative
hearings established pursuant to Article 3 (commencing with Section
60065.1) and Article 4 (commencing with Section 60075.1) of
Subchapter 1.25 of Chapter 1 of Division 3 of Title 17 of the
California Code of Regulations, except that the hearings shall be
conducted by an administrative law judge appointed by the Office of
Administrative Hearings.
(d) Nothing in this section authorizes the state board to impose
penalties for categories of violations for which the state board may
not seek penalties in a civil action.
(e) If the state board imposes any administrative penalties
pursuant to this section, the state board may not bring any action
pursuant to, or rely upon, Chapter 4 (commencing with Section 17000)
of Part 2 of Division 7 of the Business and Professions Code.
(f) In determining the amount of any administrative penalty
imposed pursuant to this section, the state board shall take into
consideration all relevant circumstances, including, but not limited
to, those factors specified in subdivision (b) of Section 43031.
(g) After an order imposing an administrative penalty becomes
final pursuant to the hearing procedures identified in subdivision
(c), and no petition for a writ of mandate has been filed within the
time allotted for seeking judicial review of the order, the state
board may apply to the Superior Court for the County of Sacramento
for a judgment in the amount of the administrative penalty. The
application, which shall include a certified copy of the final order
of the administrative hearing officer, shall constitute a sufficient
showing to warrant the issuance of the judgment.
(h) This section does not apply to any violation for which a
penalty may be assessed pursuant to Chapter 1.5 (commencing with
Section 43025).
(i) This section is not intended, and shall not be construed, to
grant the state board authority to assess an administrative penalty
for any category of violation that was not subject to enforcement by
the state board as of January 1, 2002.
(j) Any administrative penalty assessed pursuant to this section
shall be paid to the State Treasurer for deposit in the General Fund.
(k) A party adversely affected by the final decision in the
administrative hearing may seek independent judicial review by filing
a petition for a writ of mandate in accordance with Section 1094.5
of the Code of Civil Procedure.
(l) This section applies only to violations that occur on or after
January 1, 2002.
(m) On or before January 1, 2005, the state board shall prepare
and submit to the Legislature and the Governor a report summarizing
the administrative penalties imposed by the state board pursuant to
this section for calendar years 2002, 2003, 2004, and 2005.