BILL NUMBER:  AB 1404
  VETOED	DATE: 10/11/2009




To the Members of the California State Assembly:

I am returning Assembly Bill 1404 without my signature.

This bill limits a regulated entity's use of greenhouse gas (GHG)
emission compliance offsets to no more than ten percent of its GHG
reductions achieved through market mechanisms during any given
compliance period.

This bill is premature and restricts the design approaches the Air
Resources Board (ARB) is considering for cap-and-trade under the
Climate Change Scoping Plan.

ARB is working diligently to craft the proper balance of regulatory
and market mechanisms to achieve mandated emission reductions while
protecting and enhancing California's economy.  To that end, ARB has
convened a panel of nationally recognized economic and financial
experts to serve on the Economic and Allocation Advisory Committee to
help design market-based compliance mechanisms as part of AB 32
(Chapter 488, Statutes of 2006) implementation.

A balanced approach is of vital importance and this bill would only
serve to foreclose the opportunity to consider more options and fully
vet the State's design of an effective compliance offset program.

For these reasons, I am unable to sign this bill.

Sincerely,



Arnold Schwarzenegger