BILL NUMBER: AB 32	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 15, 2005
	AMENDED IN ASSEMBLY  MARCH 31, 2005

INTRODUCED BY   Assembly Member Pavley
   (Coauthors: Assembly Members Chan, Hancock, Koretz, and Laird)
   (Coauthor: Senator Simitian)

                        DECEMBER 6, 2004

   An act to amend Sections 42801 and 42823 of  , and to add
Chapter 6.5 (commencing with Section 42875) to Part 4 of Division 26
of,  the Health and Safety Code, relating to air pollution.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 32, as amended, Pavley  Greenhouse gas emissions  :
California Climate Action Registry  .
    Existing law requires the Secretary of the Resources Agency to
establish the California Climate Action Registry (hereafter registry)
as a public benefit nonprofit corporation, and makes legislative
findings and declarations relating to the registry. Existing law
requires the registry to perform various functions, including, among
other things, the adoption of procedures and protocols for the
reporting and certification of greenhouse gas  emission
  emissions  reductions resulting from a project or
an action of a participant in the registry.
    This bill would revise the functions and duties of the registry
by requiring the registry, in coordination with the California
Environmental Protection Agency and the State Energy Resources
Conservation and Development Commission, to adopt specified
procedures and protocols for monitoring, estimating, calculating,
reporting, and certifying greenhouse gas emissions resulting from
specified industrial sectors, as provided. This bill would require
the registry to coordinate with state agencies to promote the
development of harmonized reporting standards, as specified, and
would require the registry, to the extent possible, to coordinate
with other states and regions to ensure that businesses and
organizations operating both in this state and out of state follow
uniform protocols when reporting to multiple registries, states, or
regions.
    The bill would   enact   the California
Climate Act of   2006   to require the Secretary of
the California Environmental Protection Agency to institute a cap on
greenhouse gas emissions from the electrical power, industrial, and
commercial sectors of the economy, institute a schedule of emissions
reductions for specified entities, develop an enforcement mechanism
for reducing greenhouse gas emissions to the target level, and
establish a program to track and report greenhouse gas emissions and
to monitor and enforce compliance with the greenhouse gas emissions
cap. The bill would require the secretary, on or before January 1,
2008, to submit a detailed plan to achieve the greenhouse gas
emissions cap to the Governor and the Legislature, and to submit a
report, on or before January 1, 2009, and annually thereafter, on the
progress made toward meeting the greenhouse gas emissions cap. The
bill would set standards for the schedule of greenhouse gas emissions
reductions, and would require, by regulation, any entity subject to
the greenhouse gas emissions cap to be   prohibited from
meeting those obligations using emissions reductions achieved outside
the scope of the greenhouse gas emissions cap. This bill would also
ma   ke legislative findings and declarations with regard to
reducing greenhouse gas emissions associated with climate change.

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  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.
   (g) The state has supported developing standardized greenhouse gas
 emission   emissions  accounting,
reporting, and certifying guidelines through the creation of the
California Climate Action Registry. Further industry-specific and
project greenhouse gas emissions reporting protocols are needed to
facilitate participation in the registry and to provide streamlined
guidance for certain sectors. To the extent feasible, the state
hereby commits to coordinate greenhouse gas emissions programs with
other states and regions, until a national program is established to
limit greenhouse gas emissions.
  SEC. 2.  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  
emissions  reduction targets.
   (4) Designing plans for the conservation and management of native
forest reservoirs as a means to assist participants in attaining
 emission   emissions  reduction goals and
reporting annual emissions results.
   (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. The registry shall coordinate with the Department of
Forestry and Fire Protection and the State Board of Forestry and Fire
Protection to provide referrals to providers for purposes of
paragraph (4) of subdivision (a).
   (c) The registry shall adopt procedures and protocols for the
reporting and certification of greenhouse gas  emission
  emissions  reductions resulting from a project or
an action of a participant. A participant shall report 
emission   emissions  reductions as a separate item
in its annual emissions results.
   (d) In coordination with the California Environmental Protection
Agency and the State Energy Resources Conservation and Development
Commission, the registry shall adopt procedures and protocols for
monitoring, estimating, calculating, reporting, and certifying
greenhouse gas emissions resulting from all of the following
industrial sectors:
   (1) Oil and natural gas exploration, extraction, processing,
refining, transmission, and distribution.
   (2) Cement production.
   (3) Municipal solid waste and industrial waste hauling and
disposal.
   (e) In coordination with the Resources Agency and consistent with
the data and information acquired and developed pursuant to
subdivision (b) of Section 25730 of the Public Resources Code, the
registry shall adopt procedures and protocols for the monitoring,
estimating, calculating, reporting, and certifying of carbon stocks
and carbon dioxide emissions resulting from the conservation and
conservation-based management, including reforestation, of native
forest reservoirs in California in order to permit participants to
include the results of those activities as a participant's registered
emissions results, or as a part thereof. Procedures and protocols
shall require, at a minimum, that those forestry activities meet the
following criteria in order to be reported as a participant's
emissions results, or as a part thereof:
   (1) Forestry activities that are reported as a participant's
emissions results, or as a part thereof, shall be based on forest
management practices within a defined project area that exceed
applicable federal, state, and local land use laws and regulations,
including, but not limited to, the Z'berg-Nejedly Forest Practice Act
of 1973 (Chapter 8 (commencing with Section 4511) of Part 2 of
Division 4 of the Public Resources Code). Applicable federal, state,
and local land use laws and regulations shall be those in effect each
time a participant registers a defined project area in the registry.

   (2) Forestry activities that are reported as a participant's
emissions results, or a part thereof, shall occur on forest land that
is permanently dedicated to forest use through a restriction,
granted in perpetuity, on the use that may be made of real property
that is consistent with the conservation purposes listed in Section
170(h)(4)(A)(ii) and (iii) of Title 26 of the United States Code.
   (3) Forestry activities reported as emissions results, or as a
part thereof, shall reflect the amount of time that net carbon gains
are stored.
   (4) Forestry activities maintain and promote native forest types.

   (5) If emissions results are derived from forest lands undergoing
harvest and regeneration, those results are derived from natural
forest management practices.
   (f) 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.
   (g) 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.
   (h) Adopt procedures and protocols, including a uniform format for
reporting emissions baselines and emissions results to facilitate
their recognition in any future regulatory regime.
   (i) 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 portion of the data or information
that is exempt from disclosure pursuant to the California Public
Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code).
   (j) Coordinate with state agencies to promote the development of
harmonized reporting standards for measuring, accounting, reporting,
and certifying greenhouse gas emissions. The registry shall also
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, and, to the extent possible, coordinate its policies and
programs with policies and programs in other states and regions to
ensure that businesses and organizations operating both in this state
and out of state follow uniform and consistent protocols when
reporting to multiple registries, states, or regions.
   (k) Recognize, publicize, and promote participants.
   (l) In coordination with the State Energy Resources Conservation
and Development Commission and the state board, adopt
industry-specific reporting metrics at one or more public meetings.
   (m) In consultation with the state board, adopt procedures and
protocols for the reporting and certification of reductions in
emissions of greenhouse gases, to the extent permitted by state and
federal law, for those reductions achieved prior to the operative
date of the regulations adopted pursuant to subdivision (a) of
Section 43018.5.   
  SEC. 3.   Chapter 6.5 (commencing with Section 42875) is added
to Part 4 of Division 26 of the Health and Safety Code, to read:

      CHAPTER 6.5.  CALIFORNIA CLIMATE ACT OF 2006

   42875.  This chapter shall be known, and may be cited, as the
California Climate Act of 2006.
   42876.  The Legislature hereby finds and declares all of the
following:
   (a) The world's leading scientists, including the National Academy
of Sciences from 11 nations, have definitively established that
human activity in the form of greenhouse gas emissions is changing
the global climate, with consensus estimates of an average increase
in temperature between 2 and 10 degrees by the end of the century.
   (b) The impacts of climate change include the likelihood of a rise
in sea level that could displace tens of thousands of coastal
residents, changes in weather patterns that could negatively affect
water supplies and food production, increases in disease outbreaks
and heat-related deaths in some areas, and degradation of air
quality, among other worldwide impacts.
   (c) A study by the Union of Concerned Scientists in 2004 indicated
that, without controls on greenhouse gas emissions, California's
summer temperatures could increase by as much as 10 degrees annually
in some parts of the state by 2100, resulting in increased mortality
among the elderly and other vulnerable populations, increased
respiratory illness, a profound transformation of the landscape,
including the potential wipeout of several animal species, increased
disease and death from insect-borne illnesses, loss of the annual
Sierra snowpack and related water supply problems, rising sea levels
that could impact coastal cities, towns, and valuable coastal
wetlands, changes in agricultural production, and a dramatic increase
in state energy needs to keep parts of the state habitable in the
summer.
   (d) The Kyoto Protocol, which has been ratified by 140 countries,
went into effect on February 16, 2005, requiring reductions in
greenhouse gas emissions on the part of signatories that include many
countries that emit a smaller quantity of greenhouse gases than
California.
   (e) Over 170 mayors of cities around the country have made a
commitment to reduce greenhouse gas emissions to meet targets
consistent with the Kyoto Protocol.
   (f) California has led the United States in taking action to
reduce greenhouse gas emissions by enacting legislation in 2002 to
reduce vehicular emissions of greenhouse gases, and by the subsequent
adoption of regulations to reduce greenhouse gases from cars and
light trucks beginning in 2009.
   (g) California is also taking a leadership role in promoting the
use of clean renewable energy, including solar and wind power, and
noncarbon transportation fuels, including hydrogen.
   (h) To protect the environment, public health, and quality of
life, California should take aggressive steps to further reduce
greenhouse gas emissions in order to help lessen the negative impacts
of global climate change.
   (i) Global warming will have serious adverse consequences on the
economy, health, and environment of California.
   (j) The control and reduction of emissions of greenhouse gas
pollutants are critical to slow the effects of global warming.
   (k) Many California businesses face multiple financial risks based
on their emissions of greenhouse gases, and businesses that
substantially reduce emissions will reduce these risks and may gain a
competitive advantage. Decisions about new commitments to
carbon-emitting resources should take into account potential
exposures of California consumers to future pollution-control costs.

   (l) California, when compared against countries around the globe,
is the 10th largest emitter of carbon dioxide pollution in the world.

   (m) California's consumption of imported electricity is
responsible for carbon dioxide pollution emitted from powerplants in
other parts of the western United States.
   (n) Addressing global warming early and aggressively may result in
substantial economic benefits. California and the region are rich in
renewable energy resources and advanced energy efficiency
technologies that will create new jobs, make California a global
leader, and provide a hedge against the economic impact of price
spikes for natural gas and oil.
   (o) Climate change prevention strategies will have numerous public
health and environmental benefits by reducing the pollutants that
cause smog, soot, haze, and toxic air pollution, and will also help
to ensure adequate water supplies, preserve farm and forest land
uses, and reduce traffic congestion.
   (p) A set of representative low-carbon policies analyzed for the
West Coast Governors' Global Warming Initiative estimates that the
west coast region would save a net cumulative total of almost forty
billion dollars ($40,000,000,000) by 2020.
   (q) Current state and federal policies alone will not lead to a
reduction in current greenhouse gas emissions levels associated with
global warming.
   42877.  (a) On or before January 1, 2008, the Secretary of the
California Environmental Protection Agency shall do all of the
following:
   (1) Implement, by regulation and in an economically efficient
manner, a greenhouse gas emissions cap for the electrical power,
industrial, and commercial sectors of the California economy, based
on carbon dioxide equivalence, in consultation with the Business,
Transportation and Housing Agency, the Department of Food and
Agriculture, the Resources Agency, the state board, the Energy
Commission, and the Public Utilities Commission.
   (2) Institute a schedule of greenhouse gas emissions reductions by
regulation for entities that own, control, or contract for a source
of greenhouse gas emissions in the electrical power, industrial, or
commercial sectors; refine or import petroleum products for use in
transportation; or produce or import hydrofluorocarbons,
perfluorocarbons, or sulfur hexafluoride.
   (3) Develop an enforcement mechanism for reducing greenhouse gas
emissions to the target level by regulation.
   (4) Establish a program to track and report greenhouse gas
emissions from the electrical power, industrial, and commercial
sectors of the economy, and to monitor and enforce compliance with
the greenhouse gas emissions cap by regulation.
   (b) Upon implementation of the greenhouse gas emissions reduction
cap, the Secretary of the California Environmental Protection Agency
shall consider the feasibility of expanding the program to include
trading with other emissions reduction programs in other states,
regions, or countries.
   (c) The Secretary of the California Environmental Protection
Agency shall, at a minimum, set the greenhouse gas emissions cap at a
level that would ensure that entities in the electrical power,
industrial, and commercial sectors meet or exceed the level set by
the greenhouse gas emissions cap. Any emissions allowances shall be
determined by the annual limits on emissions established to comply
with the schedule of greenhouse gas emissions reductions. In
instituting the schedule of greenhouse gas emissions reductions, the
Secretary of the California Environmental Protection Agency shall, at
a minimum, comply with all of the following requirements:
   (1) The reduction schedule shall not create large windfall profits
for private businesses.
   (2) The reduction schedule shall not penalize industries or
companies that have acted prior to the date of the enactment of the
act that adds this chapter to reduce greenhouse gas emissions.
   (3) The reduction schedule shall not result in disproportionate
impacts to consumers.
   (4) The reduction schedule shall not place a disproportionate
burden on any geographic or socioeconomic group.
   (5) The reduction schedule shall ensure that entities are
appropriately motivated to make investments that will reduce
emissions.
   (6) The reduction schedule shall minimize the administrative
burden involved in implementation.
   (d) Regulations developed and established pursuant to subdivision
(a) shall prohibit entities subject to the greenhouse gas emissions
cap from meeting obligations using emissions reductions achieved
outside the scope of the greenhouse gas emissions cap.
   42878.  (a) On or before January 1, 2008, the Secretary of the
California Environmental Protection Agency shall prepare and provide
to the Governor and the Legislature a detailed plan for achieving the
greenhouse gas emissions cap, with a full explanation of the
methodology used to arrive at the cap level. The plan shall include
recommendations to reduce greenhouse gas emissions in all sectors of
the economy.
   (b) On or before January 1, 2009, and annually thereafter, the
Secretary of the California Environmental Protection Agency shall
submit a report to the Governor and the Legislature on the progress
made toward meeting the greenhouse gas emissions cap.  Text --
Pages 4, 5, 8, 9, and 10.
                    ____ CORRECTIONS  Text -- Pages 4, 5, 8, 9, and
10.
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