Bill Text: CA AB985 | 2013-2014 | Regular Session | Amended
Bill Title: California Global Warming Solutions Act of 2006: market-based compliance mechanisms.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2014-08-04 - Withdrawn from committee. Re-referred to Com. on RLS. From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on RLS. [AB985 Detail]
Download: California-2013-AB985-Amended.html
BILL NUMBER: AB 985 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 4, 2014
AMENDED IN SENATE JULY 3, 2014
AMENDED IN SENATE AUGUST 12, 2013
AMENDED IN ASSEMBLY MAY 24, 2013
AMENDED IN ASSEMBLY APRIL 4, 2013
INTRODUCED BY Assembly Member Cooley
FEBRUARY 22, 2013
An act to add Section 38575 to the Health and Safety Code,
relating to greenhouse gases , and declaring the urgency
thereof, to take effect immediately .
LEGISLATIVE COUNSEL'S DIGEST
AB 985, as amended, Cooley. California Global Warming Solutions
Act of 2006: market-based compliance mechanisms.
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 emissions
reductions. The act authorizes the state board to include the use of
market-based compliance mechanisms.
This bill would require the state board, for any market-based
compliance mechanism that the state board might adopt, to allow
participating entities to freely sell or transfer greenhouse gas
emissions allowances held in a holding account, as defined, or
compliance account, as defined, except for allowances that have been
expressly retired to meet a compliance obligation, as defined. The
bill also would require the state board to require those
participating entities to disclose only corporate associations,
direct corporate associations, and indirect corporate associations
with entities registered with the state board as part of a
market-based compliance mechanism and to exclude legal services, as
specified, obtained by a participating entity from being disclosed to
the state board. The bill would exempt from the Administrative
Procedure Act and the California Environmental Quality Act a
regulation adopted by the state board pursuant to this act.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: majority 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)
was adopted to create limitations on the carbon emissions associated
with the state's economy. Section 38560 of the Health and Safety Code
charges the State Air Resources Board with the duty of adopting
rules and regulations "to achieve the maximum technologically
feasible and cost-effective greenhouse gas emissions reductions from
sources or categories of sources."
(b) One measure that the state board has implemented in
furtherance of the act is a market-based compliance mechanism.
(c) For a market-based compliance mechanism to operate effectively
and allow entities covered by participating
in the market-based compliance mechanism the efficiency and
flexibility to achieve emissions reductions at the lowest possible
cost, the market for emissions allowances must promote liquidity
while also preventing market manipulation.
(d) As part of the market-based compliance mechanism, the state
board has adopted a holding limit, placing a limitation on the total
number of allowances that any entity participating in the program can
hold at one time, subject to certain exceptions. The current holding
limit could adversely affect the liquidity and efficiency of the
emissions allowance market in that the holding limit functions to
require some entities covered by
participating in the market-based compliance mechanism to
surrender instruments for compliance prior to established regulatory
compliance deadlines, creating artificial scarcity in the market.
(e) Revising the holding limit to permit entities covered
by participating in the market-based compliance
mechanism to freely transfer allowances from a compliance and
holding account to meet their obligations under the market-based
compliance mechanism will promote market efficiency and fairness
while maintaining the state board's ability to preserve market
integrity and prevent market manipulation.
(f) The state board also requires disclosure of a participating
entity's affiliation with other entities. As currently structured,
the state board requires that participating entities to disclose all
of their corporate associates, as defined by the state board,
regardless of whether those corporate associates are enrolled in the
market-based compliance mechanism. The Legislature finds that this
expanded requirement is overly broad, unduly burdensome, and not
reasonably necessary to ensure the integrity of the market for
emissions allowances.
(g) The state board also requires disclosure of consultants or
advisors, as defined by the state board. The Legislature finds that
all entities in the state have a right to consult outside legal
counsel confidentially, and any requirements to disclose this
consultation may put the confidentiality of that consultation at risk
and will not promote the purpose of the act
California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code)
or the market-based compliance mechanism.
SEC. 2. Section 38575 is added to the Health and Safety Code, to
read:
38575. (a) Any market-based compliance mechanism that the state
board might adopt pursuant to this part shall provide for all of the
following:
(1) (A) Participating entities may freely sell or transfer
greenhouse gas emissions allowances held in a holding account or
compliance account, except for allowances that have been expressly
retired to meet a compliance obligation. This paragraph also applies
to allowances held jointly by a group of entities with a direct
corporate association.
(B) For purposes of this paragraph, the following terms have the
following meanings:
(i) "Compliance account" means an account created by the state
board for an entity participating in a market-based compliance
mechanism and that has a compliance obligation,
obligation to which the entity transfers allowances and
offsets to meet its compliance obligations.
(ii) "Compliance obligation" means the quantity of verified
reported greenhouse gas emissions or assigned greenhouse gas
emissions for which an entity participating in a market-based
compliance mechanism is required to submit compliance instruments to
the state board.
(iii) "Holding account" means an account created for each entity
participating in a market-based compliance mechanism, or a
voluntarily associated entity, to hold allowances or offsets.
(iv) "Offset" means a greenhouse gas emissions reduction or
greenhouse gas emissions removal enhancement verified by the state
board that may be used by an entity participating in a market-based
compliance mechanism to satisfy a compliance obligation.
(2) Participating entities shall disclose only corporate
associations, direct corporate associations, and indirect corporate
associations with entities registered with the state board as part of
a market-based compliance mechanism.
(3) Participating entities shall not disclose legal services, or
the names of any persons providing legal services, obtained by
participating entities.
(b) No later than June 30, 2015, the state board shall promulgate
a regulation conforming to the requirements of this section. A
regulation adopted pursuant to this section shall be exempt from the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code) and
the California Environmental Quality Act (Division 13 (commencing
with Section 21000) of the Public Resources Code).
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:
To address 2014 compliance deadlines imposed by the State Air
Resources Board pursuant to the California Global Warming Solutions
Act of 2006 (Division 25.5 (commencing with Section 38500) of the
Health and Safety Code), it is necessary for this act to take effect
immediately.
