BILL NUMBER: AB 32	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 23, 2006
	AMENDED IN SENATE  AUGUST 9, 2006
	AMENDED IN SENATE  AUGUST 7, 2006
	AMENDED IN SENATE  JUNE 22, 2006
	AMENDED IN SENATE  APRIL 18, 2006
	AMENDED IN SENATE  AUGUST 15, 2005
	AMENDED IN ASSEMBLY  MARCH 31, 2005

INTRODUCED BY   Assembly Members Nunez and Pavley
   (Principal coauthor: Assembly Member Nation)
   (Coauthors: Assembly Members  Arambula,   Baca, 
Bass, Berg,  Chan,   Bermudez,  
Calderon,   Chan,   Chavez,  Chu, Cohn, 
Coto,   De La Torre,  Dymally, Evans, Frommer,
Goldberg, Hancock,  Jerome Horton,  Jones, Karnette, Klehs,
Koretz, Laird, Leno, Levine, Lieber, Lieu, Montanez, Mullin, Nava,
Oropeza, Ridley-Thomas, Ruskin, Saldana,  Salinas,  
Torrico,   Vargas,  Wolk, and Yee)
   (Coauthors: Senators  Alarcon,  Bowen, Chesbro, Escutia,
 Figueroa,  Kehoe, Kuehl, Lowenthal,  Migden, 
Romero, Simitian,  Speier,   Soto,  
Speier,   Torlakson,  and Vincent)

                        DECEMBER 6, 2004

   An act to amend Section 39003 of, and to add  Chapter 7
(commencing with Section 42875) to Part 4 of Division 26 of, the
  Division 25.5 (commencing with Section 38500) to, the
 Health and Safety Code, and to  amend  
repeal  Section 25730 of the Public Resources Code, relating to
air pollution.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 32, as amended, Nunez  Air pollution: greenhouse gases:
California Global Warming Solutions Act of 2006.
   (1) Under existing law, the State Air Resources Board  (state
board)  , the State Energy Resources Conservation and
Development Commission (Energy Commission), and the California
Climate Action Registry all have responsibilities with respect to the
control of emissions of greenhouse gases, as defined, and the
Secretary for Environmental Protection is required to coordinate
emission reductions of greenhouse gases and climate change activity
in state government.  
   This bill would enact the California Global Warming Solutions Act
of 2006. The act would create and specify the membership of the
California Greenhouse Gas Reduction Council (council) with the
purpose of coordinating the development and implementation of the
State Agency Greenhouse Gas Emission Plan. The bill would require
state bodies, as defined, to submit and the council to adopt a
statewide greenhouse gas emissions reduction plan and plan elements
and would require state bodies to adopt and implement the measures
specified in the plan or plan updates and to report annually to the
council on the progress of its plan elements. The bill would require
the council, by January 1, 2008, to prepare and submit to the
Governor and Legislature a report that makes recommendations for
changes to state law and regulation that will assist in providing
financial or other incentives to greenhouse gas emission sources and
other entities to undertake actions to reduce greenhouse gas
emissions to comply with the act. 
   This bill would  provide that the state board is the state
agency charged with monitoring and regulating the sources and
reducing emissions of gases that cause global warming. The bill would
enact the California Global Warming Solutions Act of 2006, to
 require the state board to adopt regulations on or before
January 1, 2008, establishing a program to require the reporting and
verification of statewide greenhouse gas emissions, as defined. 
The bill would authorize the state board to adopt a schedule of fees
to   be paid by the sources of greenhouse gas emissions to
cover the actual cost of the monitoring and reporting program. 
The bill would require the state board to adopt, on or before January
1, 2008, a statewide greenhouse gas emissions limit equivalent to
the statewide greenhouse gas emissions levels in 1990 to 
become effective in   be achieved by 2020, as
specified. The bill would also require the state board to establish
 a series of   by January 1, 2010, 
enforceable interim emissions limits , to become operative on
January 1, 2012, and January 1, 2016,  that progressively reduce
emissions levels to contribute to meeting the 2020 limit, as
specified. The bill would require the state board to adopt greenhouse
gas emissions  reduction strategies   measures
 , as defined  , by regulation in order to achieve the
maximum feasible reductions in greenhouse gas emissions to meet the
statewide emissions limit. The bill would authorize the state board
to adopt market   mechanisms, as defined, meeting specified
requirements. The bill would require the state board to monitor
compliance with and enforce any rule, regulation, order, emission
limitation, em   issions reduction measure, or market 
 mechanism adopted by the state board, pursuant to specified
provisions of existing law  .  
   The bill would require the Governor to establish an interagency
task force to coordinate investments of state moneys and state
programs that reduce emissions of greenhouse gases, promote economic
growth, make information publicly available to assist sources of
greenhouse gases to meet the requirements of the bill, ensure that
existing state programs support the emissions limits established by
the state board, monitor conditions and coordinate planning and the
state's response to changing climate conditions as they impact state
water supplies, air quality, environmental and public health
conditions, and the state's economy, and create and maintain an
Internet Web site, as specified. 
   Because the bill would require the state board to establish
emissions limits and other requirements, the violation of which would
be a crime, this bill would create a state-mandated local program.
   (2) Under existing law the Energy Commission, in consultation with
certain state agencies, departments, and boards with jurisdiction
over matters affecting climate change, is required, by January 1,
2002, to update the inventory of greenhouse gas emissions from all
sources located in the state, as identified in a specified report, to
update its inventory every 5 years, and to report on the updated
inventory to the Governor and the Legislature.  Existing law requires
the Energy Commission to conduct at least one public workshop prior
to finalizing each updated inventory and to post its report and
inventory on the Internet. Existing law additionally requires the
Energy Commission to convene an interagency task force consisting of
state agencies with jurisdiction over matters affecting climate
change to ensure policy coordination for those activities, and to
establish a climate change advisory committee, as provided, to make
recommendations to the Energy Commission on the most equitable and
efficient ways to implement international and national climate change
requirements, as provided.
   This bill would delete the above-described requirements and
instead  require that the Energy Commission update its
inventory of emissions of greenhouse gases to supplement the
information collected by the state board and enable the state board
to maintain a reasonably comprehensive inventory of the state's
emissions of greenhouse gases   transfer the duty of
preparing an inventory of greenhouse gas emissions, as specified,
from the Energy Commission to the state board  .
  (3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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


   SECTION 1.    Division 25.5 (commencing with Section
38500) is added to the   Health and Safety Code   ,
to read: 

       DIVISION 25.5.  CALIFORNIA GLOBAL WARMING SOLUTIONS ACT OF
2006


      PART 1.  GENERAL PROVISIONS

      CHAPTER 1.  TITLE OF DIVISION

   38500.  This division shall be known, and may be cited, as the
California Global Warming Solutions Act of 2006.
      CHAPTER 2.  FINDINGS AND DECLARATIONS

   38501.  The Legislature finds and declares all of the following:
   (a) Global warming poses a serious threat to the economic
well-being, public health, natural resources, and the environment of
California. The potential adverse impacts of global warming include
the exacerbation of air quality problems, a reduction in the quality
and supply of water to the state from the Sierra snow pack, a rise in
sea levels resulting in the displacement of thousands of coastal
businesses and residences, damage to marine ecosystems and the
natural environment, and an increase in the incidences of infectious
diseases, asthma, and other human health related problems.
   (b) Global warming will have detrimental effects on some of
California's largest industries, including agriculture, wine,
tourism, skiing, recreational and commercial fishing, and forestry.
It will also increase the strain on electricity supplies necessary to
meet the demand for summer air-conditioning in the hottest parts of
the state.
   (c) California has long been a national and international leader
on energy conservation and environmental stewardship efforts,
including the areas of air quality protections, energy efficiency
requirements, renewable energy standards, natural resource
conservation, and greenhouse gas emission standards for passenger
vehicles. The program established by this division will continue this
tradition of environmental leadership by California by placing it at
the forefront of the national and international efforts to reduce
emissions of greenhouse gases.
   (d) National and international actions are necessary to fully
address the issue of global warming. However, action taken by
California to reduce emissions of greenhouse gases will have
far-reaching effects by encouraging other states, the federal
government, and other countries to act.
   (e) By exercising a global leadership role, California will also
position its economy, technology centers, financial institutions, and
businesses to benefit from national and international efforts to
reduce emissions of greenhouse gases. More importantly, investing in
the development of innovative and pioneering technologies will assist
California in achieving the 2020 statewide limit upon emissions of
greenhouse gases established by this division and provides an
opportunity for the state to take a global economic and technological
leadership role in reducing emissions of greenhouse gases.
   (f) It is the intent of the Legislature that the California
Greenhouse Gas Reduction Council created in this division develop a
Statewide Greenhouse Gas Reduction Plan to meet the statewide limits
on the emissions of greenhouse gases established pursuant to this
division, and that the council coordinate with state agencies, as
well as consult with the environmental justice community, industry
sectors, business groups, academic institutions, environmental
organizations, and other stakeholders in the development of the
statewide plan.
   (g) It is the intent of the Legislature that the State Air
Resources Board cooperate with the Public Utilities Commission in the
development of emissions reduction measures, including limits on
emissions of greenhouse gases applied to electricity and natural gas
providers regulated by the Public Utilities Commission in order to
ensure that electricity and natural gas providers are not required to
meet duplicative or inconsistent regulatory requirements.
   (h) It is the intent of the Legislature that the State Air
Resources Board design emissions reduction measures to meet the
statewide emissions limits for greenhouse gases established pursuant
to this division in a manner that minimizes costs and maximizes
benefits for California's economy, improves and modernizes California'
s energy infrastructure, maximizes additional environmental and
economic co-benefits for California, and complements the state's
efforts to improve air quality.
   (i) It is the intent of the Legislature that the state board
consider the appropriate emissions reduction measures for each
covered source or category of sources and not require that each
individual source reduce emissions to its own 1990 level unless it is
determined to be appropriate by the state board.
      CHAPTER 3.  DEFINITIONS

   38505.  For the purposes of this division, the following terms
have the following meanings:
   (a) "Allowance" means an authorization to emit, during a specified
year, up to one ton of carbon dioxide equivalent.
   (b) "Alternative compliance mechanism" means an action taken by a
source that reduces greenhouse gas emissions over the same time
period in a manner that is real, permanent, quantifiable,
enforceable, and provides equivalent or greater emission reductions
as required by the State Air Resources Board.
   (c) "Carbon dioxide equivalent" means the amount of carbon dioxide
by weight that would produce the same global warming impact as a
given weight of another greenhouse gas, based on the best available
science, including from the Intergovernmental Panel on Climate
Change.
   (d) "Cost-effective" or "cost-effectiveness" means the cost per
unit of reduced emissions of greenhouse gases from a particular
source or category of sources resulting from an emissions reduction
strategy, compared to the cost of reduced emissions resulting from
other emissions reduction measures for the same source or categories
of sources.
   (e) "Council" means the California Greenhouse Gas Reduction
Council established pursuant to Part 2 (commencing with Section
38510).
   (f)  "Emissions reduction measure" means programs, measures,
standards, alternative compliance mechanisms, and market mechanisms
authorized pursuant to this division applicable to sources or
categories of sources.
   (g) "Greenhouse gases" means all of the following gases: carbon
dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons, and sulfur hexaflouride.
   (h) "Greenhouse gas emissions limit" means an authorization,
during a specified year, to emit up to a level of greenhouse gases
specified by the State Air Resources Board, expressed in tons of
carbon dioxide equivalents.
   (i) "Interim greenhouse gas emissions limit" means a maximum
annual allowable level of greenhouse gas emissions established by the
State Air Resources Board.
   (j) "Leakage" means a reduction in emissions of greenhouse gases
within the state that is offset by an increase in emissions of
greenhouse gas outside the state.
   (k) "Market mechanism" means an action that reduces emissions of
greenhouse gases in a manner that is real, permanent, quantifiable,
and enforceable, including banking, borrowing, and other multisector
market-based mechanisms adopted pursuant to Part 7 (commencing with
Section 38570).
   (l) "Plan element" means a plan set forth pursuant to Part 3
(commencing with Section 38530) by a state body that will be
implemented to meet greenhouse gas emissions reductions under the
statewide plan.
   (m) "Significant greenhouse gas source" means any source of
emissions of greenhouse gases whose emissions are at a level that the
state board determines that their participation in the program
established pursuant to Part 4 (commencing with Section 38540) will
further the objective of enabling the state board to effectively
monitor compliance with the statewide emissions limit. Significant
sources shall include any entity that provides electricity to retail
end-use customers, including entities under Sections 218, 218.3,
218.5, 366.2, 2802, or 9604 of the Public Utilities Code.
   (n) "State board" means the State Air Resources Board.
   (o) "State body" means an agency from the following list, or a
constituent board, department, commission, or other state entity
within an agency from the following list, that has the authority to
implement actions that achieve greenhouse gas emissions reductions:
   (1) The Business, Transportation and Housing Agency.
   (2) The California Environmental Protection Agency.
   (3) The Public Utilities Commission.
   (4) The Resources Agency.
   (5) The State and Consumer Services Agency.
   (6) The Secretary of the Department of Food and Agriculture.
   (p)  "Statewide emissions" means the total annual emissions of
greenhouse gases from all sources in the state, including all
emissions of greenhouse gases from the generation of electricity
delivered to and consumed in California, accounting for transmission
and distribution line losses, whether the electricity is generated in
state or imported.  Statewide emissions shall be expressed in tons
of carbon dioxide equivalents.
   (q)  "Statewide emissions limit" means a maximum allowable level
of statewide emissions in 2020.
   (r) "Statewide greenhouse gas emission reduction plan" means the
plan, including plan elements, approved by the council pursuant to
Part 3 (commencing with Section 38530), to implement statewide
greenhouse gas reductions to achieve the statewide emissions limit by
2020.

      PART 2.  CALIFORNIA GREENHOUSE GAS REDUCTION COUNCIL

      CHAPTER 1.  MEMBERSHIP AND GENERAL PROVISIONS

   38510.  (a) The California Greenhouse Gas Reduction Council is
hereby established in state government.
   (b) The council shall consist of nine voting members, as follows:

   (1) The Secretary for Environmental Protection who will serve as
the chair.
   (2) The Chair of the State Air Resources Board.
   (3) The President of the Public Utilities Commission.
   (4) The Chair of the State Energy Resources Conservation and
Development Commission.
   (5) One public member appointed by the Governor for a fixed term
of four years, subject to Senate confirmation.
   (6) Two public members appointed by the Senate Rules Committee for
a fixed term of four years. One of the public members shall have
expertise in economics.
   (7) Two public members appointed by the Speaker of the Assembly,
for a fixed term of four years. One of the public members shall have
expertise in climate policy or climate science.
   (c) The council shall meet at least quarterly, beginning March 1,
2007, and may meet more frequently as necessary to complete its
agenda in any given year.
   38511.  The following persons, or their designees, shall serve as
nonvoting ex officio members of the council:
   (a) The Secretary of the Business, Transportation and Housing
Agency.
   (b) The Secretary of the State and Consumer Services Agency.
   (c) The Director of the Department of Food and Agriculture.
   (d) The Chair of the California Integrated Waste Management Board.

   (e) The Secretary of the Resources Agency.
   38512.  (a) The affirmative vote of at least five voting members
shall be required for the transaction of any business of the council.
The council shall not conduct business prior to the appointment of
all public members.
   (b) A vacancy on the council shall not impair the right of the
remaining voting members to exercise all the powers of the council,
and five members of the council shall at all times constitute a
quorum.
   (c) The council shall comply with both of the following:
   (1) The Bagley-Keene Open Meeting Act (Article 9 (commencing with
Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the
Government Code).
   (2) The Political Reform Act of 1974 (Title 9 (commencing with
Section 81000) of the Government Code).
   38513.  The Attorney General shall represent the council and the
state in any litigation concerning the affairs of the council.
   38514.  (a) The council shall establish an advisory committee of
representatives from communities in the state with the most
significant exposure to air pollution, including, but not limited to,
communities with minority populations or low-income populations, or
both. The Governor, the President pro Tempore of the Senate, and the
Speaker of the Assembly shall each appoint one member of the
committee. The committee may make recommendations to the council on
any matters pertinent to this division.
   (b) The council shall appoint an Economic and Technology
Advancement Advisory Committee to advise the council on activities
that will facilitate investment in and implementation of
technological research and development opportunities. Such
opportunities include, but are not limited to, identifying new
technologies, research, demonstration projects, and funding
opportunities; developing state, national, and international
partnerships and technology transfer opportunities; and identifying
and assessing research and advanced technology investment and
incentive opportunities that will assist in the reduction of
greenhouse gas emissions. The committee may also advise the council
on state, regional, national, and international economic and
technological developments related to greenhouse gas emission
reductions.
      CHAPTER 2.  POWERS AND DUTIES OF THE CALIFORNIA GREENHOUSE GAS
REDUCTION COUNCIL

   38520.  (a) The purpose of the council is to coordinate the
development and implementation of the Statewide Greenhouse Gas
Emissions Reduction Plan, required by Part 3 (commencing with Section
38530), and develop a program for enhancing research, development,
and demonstration of greenhouse gas emissions reduction methods as
specified in this division.
   (b) For purposes of carrying out this division, the council shall
do all of the following:
   (1) Coordinate with all state bodies, as appropriate, to ensure
that specified reductions of greenhouse gas emissions are met.
   (2) Coordinate with the federal government and other states and
countries on the development of protocols for the reporting of
greenhouse gas emissions.
   (3) Conduct its activities that substantially affect human health
or the environment in a manner that ensures the fair treatment of
people of all races, cultures, and income levels, including minority
populations and low-income populations of the state pursuant to
Section 71110 of the Public Resources Code.
   (4) Promote economic growth by encouraging industries that develop
and deploy in the state, and export from the state, to use
technologies and processes that reduce greenhouse gas emissions by
working with the Economic and Technology Advancement Advisory
Committee appointed pursuant to subdivision (b) of Section 38514.
   (5) Perform an economic analysis of the statewide greenhouse gas
emissions reduction plan and plan updates.
   (6) Evaluate and report annually to the Legislature on the current
level of greenhouse gases and on the progress of greenhouse gas
emission reduction programs in the state that support the emission
reduction measures established by this division and contribute to
meeting the statewide emissions limit.
   (7) Monitor the state's response to the impacts of climate change
on water availability and quality, public health, natural resources,
and energy supply.
   (8) Make information publicly available about state programs that
may provide assistance for sources of greenhouse gases to meet
emission reductions outlined in this division.
   (9) Promote a multigenerational public education campaign relating
to climate change.
   (10) Create and maintain an Internet Web site clearinghouse for
information on the state's policies and emissions reduction
strategies to reduce greenhouse gas emissions, the activities of the
council, and any other information on the state's efforts to meet the
purposes of this division.
   (11) Provide information to cities, counties, and local agencies
to help reduce greenhouse gas emissions in their jurisdictions.
   (12) Coordinate statewide efforts to obtain and maximize available
funding, including leveraging any investments made by the academic
or private sector.
   (13) Review the proposed incentives identified by each state body
in its plan element to reduce greenhouse gases.
   (14) Establish and maintain a clearinghouse of research,
development, demonstration, and funding opportunities.
   (c) This division does not confer any regulatory authority upon
the council and does not limit or expand the regulatory authority or
duties of any state body, except as expressly provided in this
division.
   38521.  On or before January 1, 2008, the council shall do both of
the following:
   (a) Evaluate the current progress of climate change emission
reduction programs in the state.
   (b) Prepare and submit to the Governor and the Legislature a
report that makes recommendations for changes to state law and
regulation that will assist in providing financial or other
incentives to greenhouse gas emission sources and other entities to
undertake actions to reduce greenhouse gas emissions in compliance
with this division.
   38522.  (a) If the federal government enacts a law limiting
greenhouse gas emissions that the council determines is of equivalent
or greater effectiveness in achieving the statewide emissions limits
and timeframes established pursuant to this division, the council
may modify or elect not to adopt emissions reduction measures in a
noticed public hearing pursuant to this division for any greenhouse
gas or source included in the federal law.
   (b) Prior to modifying or electing not to adopt emissions
reduction measures pursuant to subdivision (a), the council shall
provide the Legislature with at least 30 days' notice of the intended
action, while the Legislature is in regular session. Within 30 days
of receiving notice, the Legislature shall review and hold a public
hearing on the proposed action by the council.

      PART 3.  STATEWIDE GREENHOUSE GAS EMISSIONS REDUCTION PLAN

      CHAPTER 1.  PUBLIC STAKEHOLDER PROCESS

   38530.  By June 1, 2007, the council and assigned state bodies
shall convene a stakeholder process to advise in the development of
the statewide greenhouse gas emissions reduction plan and plan
elements to reduce emissions of greenhouse gases in California.
      CHAPTER 2.  PLAN DEVELOPMENT AND IMPLEMENTATION

   38535.  (a) Each state body shall submit a plan element to the
council by June 1, 2008, and by June 1 of each fourth year
thereafter.
   (b) The plan element, or plan element update, shall set forth the
greenhouse gas emission reductions the state body plans to achieve,
and how the state body proposes to achieve the emission reductions,
by the relevant deadlines established by this division. For that
purpose, the plan element or plan element update shall describe the
measures that the state body plans will implement including, but not
limited to, incentive measures, best management practices, and
regulations. The plan element and plan element updates shall do all
of the following:
   (1) Identify investment opportunities, technologies, public and
private sector programs to reduce greenhouse gases, and identify
funding needs, and technology gaps to encourage innovation and
dissemination and adoption of low-cost technologies that will help
reduce greenhouse gases.
   (2) Analyze and recommend state incentives to encourage the
development and adoption of low-carbon technologies.
   (3) Identify regulatory and legal barriers to the implementation
of greenhouse gas emission reductions.
   (4) Recommend further policies and programs to achieve ongoing and
permanent greenhouse gas emission reductions.
   (5) Include alternative compliance mechanisms.
   (6) Include an evaluation and recommendations on multisector
market-based mechanisms which may be adopted pursuant to Part 7
(commencing with Section 38570).
   (c) In selecting the measures for inclusion in the plan element,
or plan element update, the state body shall consider relevant
factors including, but not limited to the following:
   (1) Achievement of maximum reductions in the emission of
greenhouse gases.
   (2) Protection of public health and the environment.
   (3) Impacts on the California economy.
   (4) Technological feasibility.
   (5) Cost-effectiveness.
   (6) The requirements set forth in Section 38536, that the
statewide greenhouse gas emission reduction plan and plan updates, to
the extent feasible, achieve the following:
   (A) Maximize the total benefit to the economy.
   (B) Not disproportionately impact low-income communities.
   (C) Compliance flexibility, where appropriate.
   (D) Ensure that entities that have voluntarily reduced their
emissions of greenhouse gases and reported with the Climate Action
Registry, receive appropriate credit for emissions reductions made
prior to the implementation of this program.
   (E) Minimize the administrative burden of implementing and
complying with the program.
   (F) Minimize leakage.
   38536.  (a) The council shall review the plan elements and plan
element updates submitted pursuant to Section 38535 by each state
body.
   (b) The state bodies shall cooperate with the council to ensure
that the sum of the actions identified in the plan elements and plan
element updates at least equals the greenhouse gas emission
reductions that are necessary to meet the statewide greenhouse gas
emissions limit adopted by the state board pursuant to Part 5
(commencing with Section 38550).
   (c) On or before January 1, 2009, and by January 1 of every fourth
year thereafter, the council shall adopt a Statewide Greenhouse Gas
Emission Reduction Plan, based on plan elements or plan element
updates that the council has reviewed, to meet the statewide
greenhouse gas emission limit adopted pursuant to Part 5 (commencing
with Section 38550). The council shall submit the plan, and each
updated plan, to the Legislature and make it publicly available.
   (d) The plan and updated plans adopted by the council shall, to
the extent feasible, do all the following:
   (1) Achieve maximum reductions in the emission of greenhouse
gases.
   (2) Maximize the total benefit to the economy.
   (3) Not disproportionately impact low-income communities.
   (4) Provide compliance flexibility where appropriate.
   (5) Ensure that entities that have voluntarily reduced their
emissions of greenhouse gases and reported with the Climate Action
Registry, receive appropriate credit for emissions reductions made
prior to the implementation of this program.
   (6) Minimize the administrative burden of implementing and
complying with the program.
   (7) Minimize leakage.
   38537.  (a) After the council adopts or updates the statewide
greenhouse gas emission reduction plan, each state body shall adopt
and implement the measures specified in the plan or plan update for
that state body.
   (b) The state body shall report annually to the council on the
progress of its plan elements.

      PART 4.  MANDATORY GREENHOUSE GAS EMISSIONS REPORTING

   38540.  (a) On or before January 1, 2008, the state board shall
adopt, and periodically update, regulations to establish a program to
require the reporting and verification of statewide greenhouse gas
emissions and to monitor and enforce compliance with this program.
                                   (b) The regulations shall do all
of the following:
   (1) Require the monitoring and annual reporting of greenhouse gas
emissions from significant greenhouse gas sources beginning with the
sources or categories of sources that contribute the most to
statewide emissions.
   (2) Account for all electricity consumed in the state, including
transmission and distribution line losses from electricity generated
within the state or imported from outside the state.
   (3) Where appropriate and to the maximum extent feasible,
incorporate the standards and protocols developed by the California
Climate Action Registry, established pursuant to Chapter 6
(commencing with Section 42800) of Part 4 of Division 26. Entities
that voluntarily participated in the California Climate Action
Registry prior to December 31, 2006, and have developed a greenhouse
gas emission reporting program, shall not be required to
significantly alter their reporting or verification program except as
necessary to ensure that reporting is complete and verifiable for
the purposes of compliance with this act as determined by the state
board.
   (4) Ensure rigorous and consistent accounting of emissions, and
provide reporting tools and formats to ensure collection of necessary
data.
   (5) Ensure that significant greenhouse gas emission sources
maintain comprehensive records of all reported greenhouse gas
emissions.
   (c) The state board shall do both of the following:
   (1) Periodically review and update its emission reporting
requirements, as necessary, to reflect new technologies or
methodologies.
   (2) Review existing and proposed international, federal, and state
greenhouse gas emission reporting programs and make reasonable
efforts to promote consistency among the programs established
pursuant to this part and other programs, and to streamline reporting
requirements on greenhouse gas emission sources.
   38542.  The state board may, on or after July 1, 2007, and after
one or more public workshops, adopt a schedule of fees to be paid by
the sources of greenhouse gas emissions regulated by the state board
under this part. The revenues collected from the imposition of these
fees shall be deposited into the Air Pollution Control Fund, upon
appropriation, shall be used solely to cover the actual costs of the
monitoring and reporting programs established pursuant to this part,
and shall not be expended for any other purpose.

      PART 5.  GREENHOUSE GAS EMISSIONS LIMITS

   38550.  By January 1, 2008, the state board, in consultation with
the council, shall determine what the statewide emissions levels were
in 1990, and approve in a public hearing, a statewide emissions
limit that is equivalent to that level, to be achieved by 2020. In
order to ensure the most accurate determination feasible, the state
board shall evaluate the best available scientific and economic
information on greenhouse gas emissions to determine the 1990 level
of greenhouse gas emissions.
   38551.  (a) By January 1, 2010, the state board shall establish a
series of enforceable interim emissions limits applicable to sources
or categories of sources, or both, to become operative beginning on
January 1, 2012, that progressively reduce emissions levels of
greenhouse gases, to contribute to meeting the 2020 limit. In
determining which sources and categories of sources will be subject
to the interim emissions limits, the state board shall consider
factors for each source or category of sources including, but not
limited to, all the following:
   (1) The significance of its contribution to statewide emissions.
   (2) The effectiveness of existing emissions reduction measures in
reducing greenhouse gas emissions.
   (3) The ease of implementation and cost-effectiveness of further
greenhouse gas emission reductions from these sources.
   (4) Provide equitable treatment of sources and categories of
sources.
   (b) The state board shall evaluate the best available economic and
scientific information and existing and projected technological
capabilities for the purpose of adopting these regulations.
   38552.  On or before January 1, 2015, the state board shall adopt
regulations that establish a statewide emissions limit, to become
effective on January 1, 2030, including a scheduled series of limits
that will progressively reduce emissions of greenhouse gases from the
2020 emissions limit to the 2030 limit. The state board shall
evaluate the best available economic and scientific information and
existing and projected technological capabilities.

      PART 6.  GREENHOUSE GAS EMISSIONS MEASURES

   38560.  On and after January 1, 2009, the state board shall adopt
greenhouse gas emissions reduction measures by regulation in order to
achieve the maximum feasible reductions in greenhouse gas emissions
to meet the statewide emissions limit adopted by the state board. In
adopting emissions reduction measures, the state board shall to the
maximum extent feasible do all of the following:
   (a) Design emissions reduction measures, including distribution of
emissions allowances where appropriate, in a manner that is
equitable, seeks to minimize costs and maximize the total benefits to
California, and encourages early action to reduce greenhouse gas
emissions.
   (b) Ensure that emissions reduction strategies do not
disproportionately impact low-income communities.
   (c) Ensure that entities that have voluntarily reduced their
greenhouse gas emissions prior to the implementation of this section
receive appropriate credit for early voluntary reductions.
   (d) Ensure that the implementation of this section complements and
does not interfere with efforts to achieve and maintain federal and
state health based ambient air quality standards and to address toxic
air contaminant emissions.
   (e) Ensure that emission reduction measures offer opportunities
for schools, small businesses, affordable housing, and community
institutions that provide community and public benefit to low-income
and moderate-income communities to participate in and benefit from
reducing greenhouse gas emissions.
   (f) Evaluate the long-term cost-effectiveness of emissions
reduction measures.
   (g) Evaluate the societal benefits of emissions reduction
measures, including reductions in other air pollutants,
diversification of energy sources, and other benefits to the economy,
environment, and public health.
   (h) Minimize the administrative burden of implementing and
complying with the emissions reduction measures.
   (i) Design emissions reduction measures in a manner that minimizes
leakage of greenhouse gas emissions.
   (j) Where feasible, coordinate with other states, the federal
government, and other countries in the design and implementation of
emissions reduction measures in order to minimize leakage of
greenhouse gas emissions, maximize the effectiveness of California's
program, and facilitate the development of effective regional,
national, and global programs for reducing emissions of greenhouse
gases.

      PART 7.  MARKET AND ALTERNATIVE COMPLIANCE MECHANISMS

   38570.  (a) The state board shall provide for alternative
compliance mechanisms, as appropriate.
   (b) In order to reach the greenhouse gas emissions limit required
by this division, the state board may adopt multisector market-based
mechanisms as described in this part.
   (c) (1) The state board shall evaluate and make recommendations to
the council on multisector market-based mechanisms that could be
used to achieve greenhouse gas emission reductions under this
division.
   (2) The state board's evaluation shall consider the potential for
direct, indirect, and cumulative emission impacts from these
mechanisms, including localized impacts in communities that are
already disproportionately impacted by air pollution.
   (3) The state board's recommendations shall address overall
design, major programmatic components, and other environmental and
economic safeguards to be included in any market-based mechanisms.
   (d) Only regulated entities subject to emission limits and
mandatory emission reporting requirements may use multisector market
based mechanisms except as provided in subdivision (e).
   (e) The state board shall develop and approve protocols for
verifying individual greenhouse gas emission reduction projects by
nonregulated entities that will be credited to regulated entities to
fully or partially comply with any emission limitations established
by the state board. The protocols shall ensure that these reductions
are real, permanent, quantifiable, verifiable, enforceable, and do
not duplicate any other greenhouse gas reductions required by
statute, regulation, or relied upon in an approved statewide
greenhouse gas emission reduction plan.
   (f) The council shall evaluate and approve market mechanisms
recommended by the state board before they can be used for the
purposes of this division. The state board shall establish
regulations governing the use of any market mechanism approved by the
council.
   (g) The regulations adopted pursuant to this section may not take
effect prior to one calendar year from their final adoption, in order
to give the Legislature time to review the regulations and determine
whether further legislation should be enacted prior to the effective
date of the regulations.

      PART 8.  ENFORCEMENT

   38580.  (a) The state board shall monitor compliance with and
enforce any rule, regulation, order, emission limitation, emissions
reduction measure, or market mechanism adopted by the state board
pursuant to this division.
   (b) (1) Any violation of any rule, regulation, order, emission
limitation, or other emissions reduction measure adopted by the state
board pursuant to this division may be enjoined pursuant to Section
41513, and the violation is subject to those penalties set forth in
Article 3 (commencing with Section 42400) of Chapter 4 of Part 4 of,
and Chapter 1.5 (commencing with Section 43025) of Part 5 of,
Division 26.
   (2) Any violation of any rule, regulation, order, emission
limitation, or other emissions reduction measure adopted by the state
board pursuant to this division shall be deemed to result in an
emission of an air contaminant for the purposes of the penalty
provisions of Article 3 (commencing with Section 42400) of Chapter 4
of Part 4 of, and Chapter 1.5 (commencing with Section 43025) of Part
5 of, Division 26.
   (3) The state board may develop a method to convert a violation of
any rule, regulation, order, emission limitation, or other emissions
reduction measure adopted by the state board pursuant to this
division into the number of days in violation, where appropriate, for
the purposes of the penalty provisions of Article 3 (commencing with
Section 42400) of Chapter 4 of Part 4 of, and Chapter 1.5
(commencing with Section 43025) of Part 5 of, Division 26.
   (c) Section 42407 and subdivision (i) of Section 42410 shall not
apply to this part.
   38582.  (a) In the event of extraordinary circumstances,
catastrophic events, or the threat of extreme economic disruption
that pose an imminent and substantial threat to the state's
population, environment, public health, or economy, the Governor may
adjust the required greenhouse gas reduction deadlines upon a
recommendation approved by a two-thirds vote of all of the voting
members of the council made in a noticed public meeting.
   (b) The adjustment period may not exceed one year or the period of
the emergency, whichever is shorter, unless the council makes a
further recommendation for an additional adjustment.
   (c) Nothing in this section affects the powers and duties
established in the California Emergency Services Act (Chapter 7
(commencing with Section 8550) of Division 1 of Title 2 of the
Government Code).
   (d) The Governor shall, within 10 days of invoking subdivision
(a), provide written notification to the Legislature of the action
undertaken and the extraordinary circumstances caused by greenhouse
gas emission reduction activities justifying the action.

      PART 9.  Miscellaneous Provisions

   38590.  If the regulations adopted pursuant to Section 43018.5 do
not remain in effect, the state board shall implement alternative
regulations to control mobile sources of greenhouse gas emissions to
achieve equivalent or greater reductions.
   38591.  By January 1, 2008, the state board shall hold a publicly
noticed hearing and report to the Legislature on additional
substances, contaminants, and particles suspected to cause or
contribute to climate change, including, but not limited to,
tropospheric ozone and ozone precursors, carbon monoxide,
chlorofluorocarbons, and their substitutes, including recommendations
based on its findings.
   38592.  (a) All state agencies shall consider and implement
strategies to reduce greenhouse gas emissions.
   (b) Nothing in this division shall relieve any entity of
compliance with state air and water quality requirements, or other
requirements for protecting public health or the environment.
   38593.  (a) Nothing in this division affects the authority of the
Public Utilities Commission.
   (b) Nothing in this division affects the obligation of an
electrical corporation to provide customers with safe and reliable
electric service.
   38594.  Nothing in this division shall limit or expand the
existing authority of any district, as defined in Section 39025.
   38595.  Nothing in this division shall preclude, prohibit, or
restrict the construction of any new facility or the expansion of an
existing facility subject to regulation under this division, if all
applicable permitting requirements are met and the facility is in
compliance with regulations adopted pursuant to this division.
   38596.  The provisions of this division are severable. If any
provision of this division or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
   38597.  (a) Notwithstanding any other provision of law, the state
board succeeds to, and is vested with, all the duties, powers,
purposes, responsibilities, and jurisdiction of the State Energy
Resources Conservation and Development Commission to prepare or
update any inventory of greenhouse gas emissions from sources located
in the state.
   (b) The state board, in consultation with the State Energy
Resources Conservation and Development Commission, the Public
Utilities Commission, the Department of Forestry and Fire Protection,
the Department of Transportation, the State Water Resources Control
Board, the California Integrated Waste Management Board, and other
state agencies with jurisdiction over matters affecting climate
change, shall do both of the following:
   (1) Acquire and develop data and information on global climate
change, and provide state, regional, and local agencies, utilities,
business, industry, and other energy and economic sectors with
information on the costs, technical feasibility, and demonstrated
effectiveness of methods for reducing or mitigating the production of
greenhouse gases from in-state sources, including net reductions
through the management of natural forest reservoirs.
   (2) Update its inventory of emissions of greenhouse gases
sufficient to enable the state board to maintain a reasonably
comprehensive inventory of the state's emissions of greenhouse gases.
The inventory shall include information on the greenhouse gas
emissions associated with petroleum products consumed in California
based on and including, but not limited to, data collected pursuant
to the Petroleum Industry Information Reporting Act of 1980 (Chapter
4.5 (commencing with Section 25350) of Division 15 of the Public
Resources Code). 
   SEC. 2.    Section 39003 of the   Health and
Safety Code   is amended to read: 
   39003.  The State Air Resources Board is the state agency charged
with coordinating efforts to attain and maintain ambient air quality
standards, to conduct research into the causes of and solution to air
pollution,  to monitor and regulate the sources of emissions of
greenhouse gases that cause global warming in order to reduce
emissions of those greenhouse gases,  and to systematically
attack the serious problem caused by motor vehicles, which is the
major source of air pollution in many areas of the state.
   SEC. 3.    Section 25730 of the   Public
Resources Code   is repealed.  
   25730.  The commission, in consultation with the State Air
Resources Board, the Department of Forestry and Fire Protection, the
Department of Transportation, the State Water Resources Control
Board, the California Integrated Waste Management Board, and other
state agencies with jurisdiction over matters affecting climate
change, shall do all of the following:
   (a) On or before January 1, 2002, update the inventory of
greenhouse gas emissions from all sources located in the state, as
identified in the commission's 1998 report entitled, "Appendix A:
Historical and Forecasted Greenhouse Gas Emissions Inventories for
California." Information on natural sources of greenhouse gas
emissions shall be included to the extent that information is
available. The inventory shall include information that compares
emissions from similar inventories prepared for the United States and
other states or countries, and shall include information on relevant
current and previous energy and air quality policies, activities,
and greenhouse gas emissions reductions and trends since 1990, to the
extent that information is available.
   (b) Acquire and develop data and information on global climate
change, and provide state, regional, and local agencies, utilities,
business, industry, and other energy and economic sectors with
information on the costs, technical feasibility, and demonstrated
effectiveness of methods for reducing or mitigating the production of
greenhouse gases from in-state sources, including net reductions
through the management of natural forest reservoirs. The commission,
in consultation with the State Air Resources Board, shall provide a
variety of forums for the exchange of that information among
interested parties, and shall provide other state agencies with
information on cost-effective and technologically feasible methods
that can be used to reduce or mitigate the emissions of greenhouse
gases.
   (c) Update its inventory every five years using current scientific
methods, and report on the updated inventory to the Governor and the
Legislature.
   (d) Conduct at least one public workshop prior to finalizing each
updated inventory. The commission shall post its report and inventory
on the commission's web page on the Internet.
   (e) Convene an interagency task force consisting of state agencies
with jurisdiction over matters affecting climate change to ensure
policy coordination at the state level for those activities.
   (f) Establish a climate change advisory committee, to the extent
that the commission determines that it can do so within existing
resources. This advisory committee shall make recommendations to the
commission on the most equitable and efficient ways to implement
international and national climate change requirements based on cost,
technical feasibility, and relevant information on current energy
and air quality policies and activities and on greenhouse gas
emissions reductions and trends since 1990. The commission shall
designate one of its commissioners as chair, and shall include on the
advisory committee members who represent business, including major
industrial and energy sectors, utilities, forestry, agriculture,
local government, and environmental groups. The meetings of the
advisory committee shall be open to the public, and shall provide an
opportunity for the public to be heard on matters considered by the
advisory committee.   
  SECTION 1.    Section 39003 of the Health and
Safety Code is amended to read:
   39003.  The State Air Resources Board is the state agency charged
with coordinating efforts to attain and maintain ambient air quality
standards, to conduct research into the causes of and solution to air
pollution, to monitor and regulate the sources and reduce emissions
of gases that cause global warming, and to systematically attack the
serious problem caused by motor vehicles, which is the major source
of air pollution in many areas of the state.   
  SEC. 2.    Chapter 7 (commencing with Section
42875) is added to Part 4 of Division 26 of the Health and Safety
Code, to read:
      CHAPTER 7.  California Global Warming Solutions Act of 2006

   42875.  This chapter shall be known, and may be cited, as the
California Global Warming Solutions Act of 2006.
   42875.5.  The Legislature finds and declares all of the following:

   (a) Global warming poses a serious threat to California's economic
well-being, public health, and environment.  The potential adverse
consequences include the degradation of air quality, the loss of
mountain snowpack leading to serious water supply problems and risk
of catastrophic flooding, rising sea levels displacing thousands of
coastal businesses and residences, and severe damage to California's
marine ecosystems and the natural environment.
   (b) Global warming will directly affect some of California's
largest industries, including agriculture, wine, tourism, skiing,
recreational and commercial fishing, and forestry.
   (c) Global warming will increase the strain on electricity
supplies necessary to meet demand for summer air-conditioning in the
hottest parts of the state.
   (d) California has a strong record of leadership on environmental
issues, including enacting some of the nation's first air quality
protections, energy efficiency requirements, renewable energy
standards, and landmark greenhouse gas emission standards for
passenger vehicles.
   (e) California's leadership and actions to reduce global warming
will have a significant impact by encouraging other states, the
federal government, and other countries to act, all of which will be
necessary to fully address this issue. In addition, by exercising
early leadership, California will position its economy, technology
centers, and businesses to benefit from national and international
efforts to reduce greenhouse gas emissions now and in the future.
   42876.  For the purposes of this chapter, the following terms have
the following meanings:
   (a) "Allowance" means an authorization to emit, during a specified
year, up to one ton of carbon dioxide equivalence.
   (b) "Carbon dioxide equivalence" means the amount of carbon
dioxide by weight that would produce the same global warming impact
as a given weight of another greenhouse gas, based on the most recent
information available from the Intergovernmental Panel on Climate
Change.
   (c) "Cost-effectiveness" means the cost per unit of reduced
emissions of greenhouse gases from a particular source or category of
sources resulting from an emissions reduction strategy compared to
the cost of reduced emissions resulting from other emissions
reduction strategies for the same source or categories of sources.
   (d) "Displacement" means a reduction in greenhouse gas emissions
within the state that is offset by an increase in greenhouse gas
emissions outside the state.
   (e) "Emissions reduction strategies" means programs, measures,
standards, and flexible compliance mechanisms pursuant to this
                                      chapter applicable to sources
or categories of sources.
   (f) "Flexible compliance mechanisms" means mechanisms, including
banking, borrowing, and market mechanisms, that provide compliance
flexibility to entities that are required to ensure that their
greenhouse gas emissions do not exceed their emissions allowances.
   (g) "Greenhouse gases" or "greenhouse gas" means "greenhouse gases"
as defined in Section 42801.1.
   (h) "Interim emissions limit" means a maximum annual allowable
level of greenhouse gas emissions established by the state board for
sources or categories of sources.
   (i) "Significant sources" means sources or categories of sources
whose emissions are at a level that the state board determines that
their participation in the program established pursuant to Section
42877 will further the objective of enabling the state board to
effectively monitor compliance with the statewide emissions limit.
   (j) "Statewide emissions" means the total annual emissions of
greenhouse gases from all sources in the state, including all
emissions of greenhouse gases from the generation of electricity
delivered and consumed in California, accounting for transmission and
distribution line losses, whether the electricity is generated
in-state or imported.  Statewide emissions shall be expressed in tons
of carbon dioxide equivalence.
   (k) "Statewide emissions limit" means a maximum annual allowable
level of statewide emissions.
   42876.5.  All state agencies shall consider and implement
strategies to reduce greenhouse gas emissions. It is the intent of
the Legislature that the state board cooperate with other state
agencies to achieve the statewide emissions limits created pursuant
to Section 42878 and account for projected reductions in greenhouse
gas emissions from state agency programs not subject to this chapter.

   42877.  (a) On or before January 1, 2008, the state board shall
adopt regulations establishing a program to require the reporting and
verification of statewide greenhouse gas emissions and to monitor
and enforce compliance.
   (b) The regulations shall require the monitoring and annual
reporting of greenhouse gas emissions from significant sources
identified by the state board, beginning with the sources or
categories of sources that contribute the most to statewide
emissions. The reporting program shall also account for all
electricity consumed in the state, including transmission and
distribution line losses from electricity generated within the state
or imported from outside the state.
   (c) The state board may add other significant sources to the
program no later than January 1, 2010.
   (d) The regulations shall, where appropriate and feasible,
incorporate the standards and protocols developed by the California
Climate Action Registry, established pursuant to Chapter 6
(commencing with Section 42800). Entities that voluntarily
participated in the California Climate Action Registry prior to
December 31, 2006, and have a fully developed reporting program,
shall not be required to significantly alter their reporting or
verification program except as necessary to ensure that reporting is
complete and verifiable for the purposes of state regulation and
tracking of greenhouse gas emissions.
   42877.5.  If the federal government enacts a law limiting
greenhouse gas emissions that the state board determines is of
equivalent or greater effectiveness in achieving the statewide
emissions limits and timeframes established pursuant to this chapter,
the state board may modify or elect not to adopt emissions reduction
strategies pursuant to this chapter for any greenhouse gas or source
included in the federal law.
   42878.  (a) (1) It is the intent of the Legislature that the state
board design emissions reduction strategies to meet the statewide
emissions limits established pursuant to this section in a manner
that minimizes costs and maximizes benefits for California's economy,
improves and modernizes California's energy infrastructure,
maximizes additional environmental and economic cobenefits for
California, and complements state efforts to improve air quality.
   (2) (A) The state board shall consult broadly with stakeholders in
developing regulations to meet the purposes of this chapter and to
meet the statewide emissions limits in a beneficial and
cost-effective manner.
   (B) By March 1, 2007, the state board shall convene a stakeholder
process to inform the development of regulations and programs to
reduce greenhouse gases in California. The state board shall solicit
information and input from regulated entities on the most efficient,
low-cost, and beneficial ways they can reduce their greenhouse gas
emissions, identify regulatory and legal barriers to implementing
emissions reduction strategies, evaluate state investment strategies
in research and development and applied technologies, and work with
regulated entities to develop draft plans that may be used in
conjunction with regulatory process to reduce greenhouse gas
emissions. The purpose of these plans shall be to reduce regulatory
costs and obligations, where feasible, in achieving greenhouse gas
reductions called for in this chapter.
   (3) It is the intent of the Legislature that the state board
coordinate and consult with other state agencies that regulate
significant emitters of greenhouse gases. It is the further intent of
the Legislature that the Public Utilities Commission and the state
board cooperate in the development of emissions reduction strategies,
including limits on greenhouse gas emissions applied to electricity
and natural gas providers regulated by the Public Utilities
Commission in order to ensure that electricity and natural gas
providers are not required to meet duplicative or inconsistent
requirements, and to ensure that consistent requirements are met.
   (b) On or before January 1, 2008, the state board shall determine
what the statewide greenhouse gas emissions levels were in 1990, and
adopt a statewide emissions limit that is equivalent to that level to
become effective in 2020. The state board shall evaluate the best
available scientific and economic information on greenhouse gas
emissions to determine the 1990 level.
   (c) The state board shall establish an advisory committee
consisting of three representatives from communities in the state
with the most significant exposure to air contaminants or localized
air contaminants, or both, including, but not limited to, communities
with minority populations or low-income populations, or both. The
Governor, the President pro Tempore of the Senate, and the Speaker of
the Assembly shall each appoint one of the members of the committee.
This committee shall make recommendations to the state board during
the public process to develop and adopt emissions reduction
strategies.
   (d) Beginning January 1, 2009, the state board shall adopt
greenhouse gas emissions reduction strategies by regulation. In
adopting emissions reduction strategies, the state board shall do all
of the following:
   (1) Design emissions reduction strategies, including distribution
of emissions allowances where appropriate, in a manner that is
equitable, seeks to minimize costs and maximize the total benefits to
California, and encourages early action to reduce greenhouse gas
emissions.
   (2) Ensure that emissions reduction strategies do not
disproportionately burden low- and moderate-income households.
   (3) (A) Consider providing flexible compliance mechanisms,
including providing for conditions on flexible compliance mechanisms,
based on recommendations from the stakeholder process pursuant to
subparagraph (B) or based on the report pursuant to subparagraph (C).
The state board shall ensure that the flexible compliance
mechanisms, in conjunction with the other emissions reduction
strategies adopted by the state board, achieve, at a minimum, the
emissions reductions required by this chapter.
   (B) Prior to considering market mechanisms to reduce greenhouse
gas emissions, the state board shall work with the advisory committee
established pursuant to subdivision (c), as well as with other
stakeholders, to identify circumstances under which the operation of
market-based programs to reduce greenhouse gas emissions may worsen
localized air pollution problems, particularly in communities that
are already disproportionately impacted by pollution from power
plants, refineries, commercial trucking routes, ports, and other
major large industrial facilities. The state board shall consider the
potential for direct, indirect, and cumulative impacts on air
quality from these programs.
   (C) Prior to considering flexible compliance mechanisms pursuant
to this chapter, the state board shall evaluate and report to the
Legislature the types, need, and costs and benefits of these
mechanisms with the purpose of identifying which mechanisms would be
most beneficial in achieving reductions in greenhouse gases. The
report shall recommend which mechanisms should be considered in
regulations to reduce greenhouse gases, and should prioritize and
recommend conditions for mechanisms to protect air quality, the
environment, and public health, and reduce the costs of
implementation. The state board shall work with the stakeholder
community and other appropriate parties and state agencies in this
study.
   (4) Ensure that entities that have voluntarily reduced their
greenhouse gas emissions prior to the implementation of this section
receive appropriate consideration for early voluntary reductions.
   (5) Ensure that the implementation of this section complements and
does not interfere with efforts to achieve and maintain federal and
state health based ambient air quality standards and to address toxic
air contaminant emissions.
   (6) Evaluate the long-term cost-effectiveness of emissions
reduction strategies.
   (7) Evaluate the societal benefits of emissions reduction
strategies, including reductions in other air pollutants,
diversification of energy sources, and other benefits to the economy,
environment, and public health.
   (8) Minimize the administrative burden of implementing and
complying with the emissions reduction strategies.
   (9) Design emissions reduction strategies in a manner that
minimizes displacement of greenhouse gas emissions.
   (10) Where feasible, coordinate with other states, the federal
government, and other countries in the design and implementation of
emissions reduction strategies in order to minimize displacement of
greenhouse gas emissions, maximize the effectiveness of California's
program, and facilitate the development of effective regional,
national, and global programs for reducing emissions of greenhouse
gasses.
   (e) On or before January 1, 2010, the state board shall establish
a series of enforceable interim emissions limits applicable to
sources or categories of sources, or both, to become effective
beginning on January 1, 2012, that progressively reduce emissions
levels to contribute to meeting the 2020 limit. In determining which
sources and categories of sources will be subject to the interim
emissions limits, the state board shall consider factors including,
but not limited to, the following for each source or category of
sources:
   (1) The significance of its contribution to statewide emissions.

   (2) The effectiveness of existing emissions reduction strategies
in reducing greenhouse gas emissions.
   (3) The ease of implementation and cost-effectiveness of further
greenhouse gas emission reductions from these sources.
   (f) On or before January 1, 2015, the state board shall adopt
regulations that establish a statewide emissions limit, to become
effective on January 1, 2030, including a scheduled series of limits
that will progressively reduce emissions of greenhouse gases from the
2020 emissions limit to the 2030 limit. The state board shall
evaluate the best available economic and scientific information and
existing and projected technological capabilities for the purpose of
adopting these regulations.
   42878.5.  Any violation of any rule, regulation, order, emission
limitation or other emissions reduction strategy adopted by the state
board pursuant to Sections 42877 and 42878 shall be subject to the
penalty provisions of Article 3 (commencing with Section 42400) of
Chapter 4 of Part 4. The state board shall be responsible for
enforcing these penalty provisions.
   42879.  (a) Nothing in this chapter shall relieve any entity of
compliance with state air and water quality requirements, or other
requirements for protecting public health or the environment.
   (b) Nothing in this chapter shall limit or expand the existing
authority of any district.
   (c) This chapter shall not be interpreted to preclude, prohibit,
or restrict the construction of any new facility or the expansion of
an existing facility subject to regulation under this chapter if all
applicable permitting requirements are met and the facility is in
compliance with regulations adopted pursuant to this chapter.
   42880.  No later than January 1, 2008, the state board shall
complete a study to identify additional substances, contaminants, and
particles suspected to cause or contribute to climate change,
including, but not limited to, tropospheric ozone and ozone
precursors, carbon monoxide, chlorofluorocarbons, and their
substitutes.
   42880.5.  If the regulations adopted pursuant to Section 43018.5
do not remain in effect, the state board shall implement alternative
regulations to control mobile sources of greenhouse gas emissions to
achieve equivalent or greater reductions.
   42880.7.  (a) The state board may provide information and
assistance to cities, counties, and local agencies to help reduce
greenhouse gas emissions in their jurisdictions.
   (b) It is the intent of the Legislature that the state board
consult with the districts in the development of measures for the
reduction of emissions of greenhouse gases that will affect emissions
of criteria air pollutants from stationary sources.
   42881.  On or before January 1, 2009, and annually thereafter, the
state board, in consultation with the task force established
pursuant to Section 42883, shall report to the Legislature on the
current level of emissions of greenhouse gases and progress made
toward compliance with the statewide emissions limits on greenhouse
gases established by the state board. The report shall include an
inventory of current emissions of greenhouse gases and shall evaluate
the adequacy of the regulations adopted to meet the emissions limits
of this chapter.
   42883.  (a) The Governor shall establish an interagency task
force, to be convened by the Secretary for Environmental Protection
which shall consist of the following:
   (1) The Secretary of the Resources Agency or his or her designee.

   (2) The Secretary of the Business, Transportation and Housing
Agency or his or her designee.
   (3) The Secretary of the State and Consumer Services Agency or his
or her designee.
   (4) The President of the Public Utilities Commission or his or her
designee.
   (5) The chairperson of the state board or his or her designee.
   (6) The Chairperson of the State Energy Resources Conservation and
Development Commission or his or her designee.
   (7) Representatives of other state agencies or departments that
the Governor determines have an important role in reducing emissions
of greenhouse gases.
   (b) The interagency task force shall establish an advisory
committee consisting of stakeholders including representatives from
industry groups, environmental and environmental justice groups,
experts, and others, to inform its activities.
   (c) The interagency task force, to the extent feasible, shall do
all of the following:
   (1) Coordinate state investments and programs that reduce
emissions of greenhouse gases.
   (2) Promote economic growth by encouraging California industries
to develop and deploy technologies and processes that reduce
greenhouse gas emissions for use both in California and for export.

   (3) Make education and outreach information publicly available
about state programs that provide assistance for sources of
greenhouse gases to meet the requirements of this chapter.
   (4) Ensure that existing state programs support the emissions
limits on greenhouse gases established by the state board pursuant to
this chapter.
   (5) Monitor conditions and coordinate planning and the state's
response to changing climate conditions as they impact state water
supplies, air quality, environmental and public health conditions,
and the state's economy.
   (6) Create and maintain an Internet Web site clearinghouse for
information on the state's policies and emissions reduction
strategies to reduce greenhouse gas emissions, the activities of the
interagency task force, and any other information on the state's
efforts to meet the purposes of this chapter.   
  SEC. 3.    Section 25730 of the Public Resources
Code is amended to read:
   25730.  The commission, in consultation with the State Air
Resources Board, the Department of Forestry and Fire Protection, the
Department of Transportation, the State Water Resources Control
Board, the California Integrated Waste Management Board, and other
state agencies with jurisdiction over matters affecting climate
change, shall do both of the following:
   (a) Acquire and develop data and information on global climate
change, and provide state, regional, and local agencies, utilities,
business, industry, and other energy and economic sectors with
information on the costs, technical feasibility, and demonstrated
effectiveness of methods for reducing or mitigating the production of
greenhouse gases from in-state sources, including net reductions
through the management of natural forest reservoirs. The commission,
in consultation with the State Air Resources Board, shall provide a
variety of forums for the exchange of that information among
interested parties, and shall provide other state agencies with
information on cost-effective and technologically feasible methods
that can be used to reduce or mitigate the emissions of greenhouse
gases.
   (b) Update its inventory of emissions of greenhouse gases in order
to supplement the information collected by the State Air Resources
Board pursuant to Section 42877 of the Health and Safety Code, and to
enable the State Air Resources Board to maintain a reasonably
comprehensive inventory of the state's emissions of greenhouse gases.
The inventory shall include information on the greenhouse gas
emissions associated with petroleum products consumed in California
based on, and including, but not limited to, data collected pursuant
to the Petroleum Industry Information Reporting Act of 1980 (Chapter
4.5 (commencing with Section 25350) of Division 15).  
  SEC. 4.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.