California Assembly Bill AB2563 Amended / Bill

 BILL NUMBER: AB 2563AMENDED BILL TEXT AMENDED IN ASSEMBLY JUNE 6, 2012 AMENDED IN ASSEMBLY APRIL 30, 2012 AMENDED IN ASSEMBLY MARCH 29, 2012 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 amended, 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 the use of market-based compliance mechanisms. This bill, if the state board uses its authority to include the use of market-based compliance mechanisms, would require the state board, on or before January 1, 2013, to adopt a specified process for the review and consideration of new offset protocols and, commencing in  2012   2013  and continuing annually thereafter, use that process to review and consider new offset protocols. 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. The Legislature finds and declares all of the following: (a) The California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) requires the state to reduce greenhouse gas emissions to 1990 levels by 2020. (b) On October 20, 2011, the State Air Resources Board adopted the final cap-and-trade regulation pursuant to the act, to become effective January 1, 2012, as required by that act, and also adopted Resolution 11-32 to require that its executive officer develop implementation documents laying out the process for the review and consideration of new offset protocols. (c) The cap-and-trade regulation is part of the state's global warming scoping plan and is intended to provide covered entities under the act the flexibility to seek out and implement the lowest-cost options to reduce greenhouse gas emissions and will provide an estimated 20 percent of the  emission   emissions  reductions required to achieve 1990 emission levels by 2020, as required by the act. (d) The cap-and-trade regulation allows offset credits to be used as a means by which parties subject to the regulation can lower their cost to comply with the regulation while still ensuring a reduction of greenhouse gas emissions and caps the use of offset credits at no more than 8 percent of a covered entity's compliance obligation. (e) The State Air Resources Board has adopted four compliance offset protocols for use in the United States that can be used to certify high-quality offset credits that are additional, real, measurable, and verifiable as required by the California Global Warming Solutions Act of 2006  (Division 25.5 (commencing with Section 38500) of the Health and Safety Code)  : Livestock Manure projects, Urban Forests projects, Ozone Depleting Substances Destruction projects, and Forests projects. (f) The four adopted protocols, as currently written, are not expected to generate the volume of offset credits necessary to supply the full amount of  useable   allowable  credits under the cap-and-trade regulation between 2013 and 2020.  More   If approved by the State Air Resources Board, additional  protocols  will need to be approved to   could increase the  supply  real, measurable, additional, and verifiable   of additional, real, permanent, quantifiable, verifiable, and enforceable  offsets in additional categories of uncapped emissions, including, for example, improved or maintained agriculture yields with less greenhouse gas emissions, recycling, organic composting, landfill gas reductions,  and  coal mine gas  reductions, and others for both Phases I and II   reductions  . (g) To facilitate the future adoption of offset protocols that achieve additional, real,  measurable, and verifiable   quantifiable, verifiable, and enforceable  carbon dioxide reductions, as required by the California Global Warming Solutions Act of 2006  (Division 25.5 (commencing with Section 38500) of the Health and Safety Code)  , and to provide  offset market   greater clarity and  certainty for project developers and regulated entities,  the State Air Resources Board should adopt  an offset protocol review and approval process  should be adopted by the State Air Resources Board  . (h) While a state comprehensive offset protocol review process would provide more certainty for carbon dioxide offset suppliers and purchasers to invest in environmentally worthwhile projects that meet certain criteria under the California Global Warming Solutions Act of 2006  (Division 25.5 (commencing with Section 38500) of the Health and Safety Code)  , it is the intent of the Legislature that only high-quality offset credits that represent rigorously evaluated offset protocols and that meet the statutory requirements of the  California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code)   act  be allowed for compliance with the cap-and-trade regulation. SEC. 2. Part 8 (commencing with Section 38600) is added to Division 25.5 of the Health and Safety Code, to read: PART 8.  Certification of Compliance  Offsets 38600. (a) On or before January 1, 2013, if the state board has exercised its authority pursuant to subdivision (a) of Section 38570, the state  board shall,   board,  in accordance with Section 38571,  shall  adopt a process for the review and consideration of new offset protocols. The process shall include, but not be limited to, all of the following: (1) A schedule, to be posted  online,   on the state board's Internet Web site,  that depicts the timeline for review and consideration of  adoption of  new offset protocols  submitted to   by  the state board. This schedule shall be updated  regularly and at least  annually. (2) An online tracking system that will allow the public to track the progress of new offset protocols  submitted to   under review and consideration by  the state board  for review and consideration  . (3) A point of contact at the state board for entities  that have submitted   interested in the process of review and consideration of  new offset protocols  to   by  the state board  for review and consideration  . (4) An explanation of how the review and consideration process will accommodate public  review   input  and comments on new offset protocols under consideration. (5) An explanation of the criteria used for consideration of new offset protocols, including, but not limited to, a description of the standards for protocol approval, rejection, and delay. This description also shall include, to the extent feasible, a description of the social, environmental, and financial impacts analysis used in making offset protocol decisions as well as  a forecast   an estimate  of potential supply and expected development costs. (b) Commencing in  2012,   2013,  and continuing annually thereafter, if the state board has exercised its authority pursuant to subdivision (a) of Section 38570, the state board shall use the process adopted pursuant to subdivision (a) to review and consider new offset protocols. SEC. 3. 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.