BILL NUMBER: AB 2563	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Smyth

                        FEBRUARY 24, 2012

   An act to add Part 8 (commencing with Section 38600) to Division
25.5 of the Health and Safety Code, relating to climate change, and
declaring the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2563, as introduced, Smyth. California Global Warming Solutions
Act of 2006: offsets.
   The California Global Warming Solutions Act of 2006 requires the
State Air Resources Board to adopt regulations to require the
reporting and verification of emissions of greenhouse gases and to
monitor and enforce compliance with the reporting and verification
program, and requires the state board to adopt a statewide greenhouse
gas emissions limit equivalent to the statewide greenhouse gas
emissions level in 1990 to be achieved by 2020. The act requires the
state board to adopt rules and regulations in an open public process
to achieve the maximum technologically feasible and cost-effective
greenhouse gas emission reductions. The act authorizes the state
board to include use of market-based compliance mechanisms.
   This bill would require the state board to consider adopting
specified compliance offset protocols. The bill would require the
state board to review annually the offset protocol process and to
consider the implications of international, national, state, and
local regulation of offsets on the ability to create offsets and
sector-based offsets. If the state board adopts regulations regarding
offset credits, the bill would require those regulations to permit
offset credits to account for not less than 15% of a covered entity's
compliance obligation and would require sector-based offset credits
to be able to account for up to 4% of a covered entity's compliance
obligation. The bill would require the state board to consider
additionality only in the context of greenhouse gases. The bill would
require the state board to compile specified reports by specified
dates.
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Part 8 (commencing with Section 38600) is added to
Division 25.5 of the Health and Safety Code, to read:

      PART 8.  Offsets


   38600.  (a) On or before September 1, 2012, and in accordance with
Section 38571, the state board shall consider adopting compliance
offset protocols for the verification of each of the following:
   (1) Projects for methane collection at mines, landfills, and
natural gas systems.
   (2) Projects involving fugitive emissions from the oil and gas
sector that reduce greenhouse gas emissions that would otherwise have
been flared or vented.
   (3) Projects for nonlandfill projects that involve collection,
combustion, or avoidance of emissions from organic waste streams that
would have otherwise emitted methane into the atmosphere, including,
but not limited to, composting projects.
   (4) Projects for forest management resulting in an increase in
forest carbon stores, including, but not limited to, harvested wood
products.
   (5) Projects for forest-based manufactured products.
   (6) Projects involving recycling and waste minimization.
   (7) Projects to abate the production of nitrous oxide at
stationary sources not subject to regulation under this division.
   (8) Projects for biochar production and use.
   (9) Projects relating to agricultural, grassland, and rangeland
sequestration and management practices, including all of the
following:
   (A) Altered tillage practices, including, but not limited to, the
avoided abandonment of conservation practices.
   (B) Winter cover cropping, continuous cropping, and other means to
increase biomass returned to soil in lieu of planting followed by
fallowing.
   (C) The use of technology or practices to improve the management
of nitrogen fertilizer use, including, but not limited to, slow and
controlled-release fertilizers, such as absorbed, coated, occluded,
or reacted fertilizers, and stabilized nitrogen fertilizers, such as
including urease, nitrification inhibitors, and nitrogen stabilizers,
that are recognized by state regulators of fertilizers.
   (D) Reduction in methane emissions from rice cultivation.
   (E) Reduction in carbon emissions from organically managed soils
and farming practices used on certified organic farms.
   (F) Resource-conserving crop rotations.
   (G) Practices that will increase the sequestration of carbon in
soils on cropland, hayfields, native and planted grazing land,
grassland, or rangeland.
   (10) Projects for changes in carbon stocks attributed to land
management change, including all of the following:
   (A) Improved management or restoration of forest land, cropland,
grassland, and rangeland, including, but not limited to, grazing
practices.
   (B) Reduced deforestation.
   (C) Management and restoration of peatland or wetland.
   (D) Urban tree-planting, landscaping, greenway construction, and
maintenance.
   (E) Projects to restore or prevent the conversion, loss, or
degradation of vegetated marine coastal habitats.
   (11) Projects that reduce the intensity of greenhouse gas
emissions per unit of agricultural production.
   (b) If the state board adopts an offset protocol process pursuant
to this division, the state board shall review annually the offset
protocol process and shall consider the implications of
international, national, state, and local regulation of offsets on
the ability to create offsets and sector-based offsets.
   (c) If the state board adopts regulations regarding offset credits
pursuant to this division, both of the following shall apply:
   (1) Those regulations shall permit offset credits to account for
not less than 15 percent of a covered entity's compliance obligation.

   (2) Those regulations shall permit sector-based offset credits to
account for not less than 4 percent of a covered entity's compliance
obligation.
   (d) If the state board adopts regulations regarding additionality
pursuant to this division, the state board shall consider
additionality only in the context of greenhouse gases.
   (e) If the state board adopts an offset protocol process pursuant
to this division, the state board shall present at a board meeting no
later than July 1, 2013, an economic assessment of the role of
offsets in reducing the cost of complying with this division for the
state's economy and a report considering the advantages and
disadvantages of an expanded offset supply.
   (f) (1) The state board shall provide, no later than January 1,
2013, a report to the appropriate committees of the Legislature on
the current and future supply potential for each compliance offset
protocol reviewed pursuant to subdivision (a), including, but not
limited to, proposed and rejected compliance offset protocols.
   (2) The requirement for submitting a report imposed under this
subdivision is inoperative on January 1, 2017, pursuant to Section
10231.5 of the Government Code.
   (3) A report to be submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795 of the Government Code.
   (g) (1) The state board shall provide, no later than July 1, 2013,
a report to the appropriate committees of the Legislature on which
compliance offset protocols and offset projects could be used for
early action purposes in the first compliance period and identify
opportunities to increase the potential for additional greenhouse gas
reductions through offset project opportunities.
   (2) The requirement for submitting a report imposed under this
subdivision is inoperative on July 1, 2017, pursuant to Section
10231.5 of the Government Code.
   (3) A report to be submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795 of the Government Code.
  SEC. 2.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to obtain additional flexibility, certainty, and
accountability with regard to the implementation of compliance offset
protocols by the State Air Resources Board under the California
Global Warming Solutions Act of 2006, it is necessary for this act to
take effect immediately.