BILL NUMBER: AB 1404	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Members De Leon and V. Manuel Perez

                        FEBRUARY 27, 2009

   An act to add Sections 38572 and 38573 to the Health and Safety
Code, relating to air pollution.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1404, as introduced, De Leon. California Global Warming
Solutions Act of 2006: offsets.
   The California Global Warming Solutions Act of 2006 designates the
State Air Resources Board as the state agency charged with
monitoring and regulating sources of emissions of greenhouse gases.
The state board is required to adopt a statewide greenhouse gas
emissions limit equivalent to the statewide greenhouse gas emissions
level in 1990 to be achieved by 2020, and to adopt rules and
regulations in an open public process to achieve the maximum
technologically feasible and cost-effective greenhouse gas emission
reductions. The state board is authorized to adopt market-based
compliance mechanisms, as defined, meeting specified requirements to
be used for compliance with those regulations. The state board is
required, before including any market-based compliance mechanism, to
maximize additional environmental and economic benefits for
California, as appropriate.
   This bill would require the state board, if the state board allows
the use of market-based compliance mechanisms, to create an
independent entity to be regulated by the state board to
independently verify a greenhouse gas emission offset to ensure the
emission reduction claim is real, permanent, and additional. Both
providers and users of offsets would be required to pay a fee to this
entity, in amounts to be determined by the state board, to pay for
the costs of the verification.
   The bill would require an offset used for compliance to be
similarly as effective in reducing emissions of pollutants in
addition to greenhouse gases as would a direct emission reduction
measure by the user of that offset. The bill would also require an
offset to be located in the same air pollution control district or
air quality management district in which the user of the offset emits
greenhouse gas emissions that makes them subject to emission
reduction requirements pursuant to this act, or if an offset cannot
be found that meets this requirement, an offset in California in an
environmentally disadvantaged community would be required to be
purchased, if an offset can be found that meets this requirement. In
addition, a source would be prohibited from using more than 10%
emission offsets to meet the greenhouse gas emission reductions
required during a compliance period created by the state board.
   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 38572 is added to the Health and Safety Code,
to read:
   38572.  (a) If the state board allows the use of market-based
compliance mechanisms pursuant to Section 38570, the state board
shall create an independent entity to be regulated by the state board
to independently verify a greenhouse gas emission offset to ensure
the emission reduction claim is real, permanent, and additional,
including the creation of an auditing system to ensure the permanency
of an offset.
   (b) Any individual or entity may sell an offset if the offset
meets criteria to be developed by the state board, and the offset has
been verified pursuant to subdivision (a).
   (c) Both providers and users of offsets shall pay a fee, in
amounts to be determined by the state board, to the entity created
pursuant to subdivision (a) to pay for the costs of the verification.
The fee shall be set in a manner to ensure that an offset user pays
increased fees as the user purchases more offsets to meet the
emission reduction requirements established by the state board. All
fees shall be deposited pursuant to Section 38597.
  SEC. 2.  Section 38573 is added to the Health and Safety Code, to
read:
   38573.  If the state board allows the use of market-based
compliance mechanisms pursuant to Section 38570, offsets may be used
to meet the requirements of this act only as follows:
   (a) An offset shall be similarly as effective in reducing
emissions of pollutants in addition to greenhouse gases as would a
direct emission reduction measure by the user of that offset.
   (b) (1) An offset may only be used for compliance, if the emission
reduction or sequestration project that generated the offset is
located in the same air pollution control district or air quality
management district in which the user of the offset emits greenhouse
gas emissions that makes them subject to emission reduction
requirements pursuant to this act.
   (2) If an offset cannot be found that meets the requirement of
paragraph (1), an offset shall be purchased where the emission
reduction or sequestration project that generated the offset is
located in California in an environmentally disadvantaged community.
   (3) If the state board verifies that an offset cannot be found
that meets the requirements of paragraphs (1) and (2), an offset
consistent with subdivision (a) may be used for compliance.
   (c) A source shall not be allowed to use more than 10 percent
emission offsets to meet the greenhouse gas emission reductions
required during a compliance period created by the state board.