BILL NUMBER: SB 1114	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Florez

                        FEBRUARY 17, 2010

   An act to amend Section 44281 of, and to add Section 40708.5 to,
the Health and Safety Code, relating to air pollution.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1114, as introduced, Florez. Emission reduction credits:
private and public moneys.
   Existing law prohibits the creation of an emission reduction
credit from air pollution reductions funded by certain public
programs. Existing law creates air quality management districts and
air pollution control districts and requires these districts, except
as otherwise provided, to establish a system by which all reductions
in the emission of air contaminants that are to be used to offset
certain future increases in the emission of air contaminants are to
be banked prior to use to offset future increases in emissions.
   This bill would authorize a district to create an emission
reduction credit from a marine vessel or locomotive emission
reduction project that is funded by both public and private moneys.
An emission reduction credit created pursuant to this provision would
be created only for the percentage of the emission reduction project
that is paid for by private moneys. The bill would provide that the
state share of the credit would be 80%, and the Treasurer would be
required to sell this ownership share, and deposit the proceeds into
the Emission Reduction Credit Sales Fund, which the bill would
create.
   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 40708.5 is added to the Health and Safety Code,
to read:
   40708.5.  (a) A district may authorize the creation of an emission
reduction credit from a marine vessel or locomotive emission
reduction project, including an emission capture project, that is
funded by both public and private moneys.
   (b) An emission reduction credit shall be created pursuant to
subdivision (a) only for the percentage of the emission reduction
project that is paid for by private moneys. The emission reduction
credit created from the portion of the project paid for by private
moneys shall be divided between the person or persons who contributed
the private moneys and the state. The state shall receive 20 percent
of the credit and the private contributor or contributors shall
receive 80 percent of the credit.
   (c) The Treasurer shall sell the state's ownership interests in
the credits created pursuant to this section. The Treasurer shall
deposit the proceeds from these sales into the Emission Reduction
Credit Sales Fund, which is hereby created in the State Treasury. The
moneys in the Emission Reduction Credit Sales Fund shall be
available, upon appropriation by the Legislature.
   (d) This section shall be implemented in a manner consistent with
the federal Clean Air Act (42 U.S.C. Sec. 4901 et seq.).
  SEC. 2.  Section 44281 of the Health and Safety Code, as amended by
Section 7 of Chapter 707 of the Statutes of 2004, is amended to
read:
   44281.  (a) Eligible projects include, but are not limited to, any
of the following:
   (1) Purchase of new very low or zero-emission covered vehicles or
covered heavy-duty engines.
   (2) Emission-reducing retrofit of covered engines, or replacement
of old engines powering covered sources with newer engines certified
to more stringent emissions standards than the engine being replaced,
or with electric motors or drives.
   (3) Purchase and use of emission-reducing add-on equipment that
has been verified by the state board for covered vehicles.
   (4) Development and demonstration of practical, low-emission
retrofit technologies, repower options, and advanced technologies for
covered engines and vehicles with very low emissions of oxides of
nitrogen.
   (5) Light- and medium-duty vehicle projects in compliance with
guidelines adopted by the state board pursuant to Title 13 of the
California Code of Regulations.
   (b)  No   A  project shall  not
 be funded under this chapter after the compliance date required
by any local, state, or federal statute, rule, regulation, memoranda
of agreement or understanding, or other legally binding document,
except that an otherwise qualified project may be funded even if the
State Implementation Plan assumes that the change in equipment,
vehicles, or operations will occur, if the change is not required by
the compliance date of a statute, regulation, or other legally
binding document in effect as of the date the grant is awarded.
 No   Except as provided in Section 40708.5, a
 project funded by the program shall  not  be used for
credit under any state or federal emissions averaging, banking, or
trading program.  No   Except as provided in
Section 40708.5, an  emission reduction generated by the program
shall  not  be used as marketable emission reduction
credits or to offset any emission reduction obligation of any person
or entity.  Projects   Except as provided in
Section 40708.5, projects  involving new engines that would
otherwise generate marketable credits under state or federal
averaging, banking, and trading programs shall include transfer of
credits to the engine end user and retirement of those credits toward
reducing air emissions in order to qualify for funding under the
program. A purchase of a low-emission vehicle or of equipment
pursuant to a corporate or a controlling board's policy, but not
otherwise required by law, shall generate surplus emissions
reductions and may be funded by the program.
   (c) The program may also provide funding toward installation of
fueling or electrification infrastructure as provided in Section
44284.
   (d) Eligible applicants may be any individual, company, or public
agency that owns one or more covered vehicles that operate primarily
within California or otherwise contribute substantially to the NOx,
PM  ,  or ROG emissions inventory in California.
   (e) It is the intent of the Legislature that all emission
reductions generated by this chapter shall contribute to public
health by reducing, for the life of the vehicle being funded, the
total amount of emissions in California.
   (f)  This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
  SEC. 3.  Section 44281 of the Health and Safety Code, as added by
Section 7.5 of Chapter 707 of the Statutes of 2004, is amended to
read:
   44281.  (a) Eligible projects are any of the following:
   (1) Purchase of new very low or zero-emission covered vehicles or
covered engines.
   (2) Emission-reducing retrofit of covered engines, or replacement
of old engines powering covered sources with newer engines certified
to more stringent emissions standards than the engine being replaced,
or with electric motors or drives.
   (3) Purchase and use of emission-reducing add-on equipment for
covered vehicles.
   (4) Development and demonstration of practical, low-emission
retrofit technologies, repower options, and advanced technologies for
covered engines and vehicles with very low emissions of oxides of
nitrogen.
   (b)  No   A    new purchase,
retrofit, repower, or add-on equipment shall  not  be funded
under this chapter if it is required by any local, state, or federal
statute, rule, regulation, memoranda of agreement or understanding,
or other legally binding document, except that an otherwise qualified
project may be funded even if the State Implementation Plan assumes
that the change in equipment, vehicles, or operations will occur, if
the change is not required by a statute, regulation, or other legally
binding document in effect as of the date the grant is awarded.
 No   Except as provided in Section 40708.5, a
 project funded by the program shall  not  be used for
credit under any state or federal emissions averaging, banking, or
trading program.  No   Except as provided in
Section 40708.5, an  emission reduction generated by the program
shall  not  be used as marketable emission reduction
credits or to offset any emission reduction obligation of any entity.
 Projects   Except as provided in Section
40708.5, projects  involving new engines that would otherwise
generate marketable credits under state or federal averaging,
banking, and trading programs shall include transfer of credits to
the engine end user and retirement of those credits toward reducing
air emissions in order to qualify for funding under the program. A
purchase of a low-emission vehicle or of equipment pursuant to a
corporate or a controlling board's policy, but not otherwise required
by law, shall generate surplus emissions reductions and may be
funded by the program.
   (c) The program may also provide funding toward installation of
fueling or electrification infrastructure as provided in Section
44284.
   (d) Eligible applicants may be any individual, company, or public
agency that owns one or more covered vehicles that operate primarily
within California or otherwise contribute substantially to the NOx
emissions inventory in California.
   (e) It is the intent of the Legislature that all emission
reductions generated by this chapter shall contribute to public
health by reducing, for the life of the vehicle being funded, the
total amount of emissions in California.
   (f) This section shall become operative on January 1, 2015.