80R5840 JTS-F

By: Rodriguez H.B. No. 2143

A BILL TO BE ENTITLED

AN ACT

relating to the Texas Global Warming Solutions Act; imposing a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle C, Title 5, Health and Safety Code, is amended by adding Chapter 391 to read as follows: CHAPTER 391. TEXAS GLOBAL WARMING SOLUTIONS ACT

Sec. 391.001. DEFINITIONS. In this chapter:

(1) "Allowance" means an authorization to emit, during a specified year, up to one ton of carbon dioxide equivalent.

(2) "Alternative compliance mechanism" means an authorized action undertaken by a greenhouse gas emission source that achieves the equivalent reduction of greenhouse gas emissions over the same period as a direct emission reduction. The term includes:

(A) a flexible compliance schedule;

(B) an alternative control technology;

(C) a process change; or

(D) a product substitution.

(3) "Carbon dioxide equivalent" means the amount of carbon dioxide by weight that would produce the same global warming impact as a given weight of another greenhouse gas, based on the best available science.

(4) "Commission" means the Texas Commission on Environmental Quality.

(5) "Cost-effective" means maximizing the reduction of greenhouse gas emissions at the lowest cost per unit.

(6) "Direct emission reduction" means a greenhouse gas emission reduction action taken by a greenhouse gas emission source at that source.

(7) "Emission reduction measure" means a program, measure, standard, or alternative compliance mechanism authorized under this chapter that is applicable to sources or categories of sources and that is designed to reduce emissions of greenhouse gases.

(8) "Greenhouse gas" includes:

(A) carbon dioxide;

(B) methane;

(C) nitrous oxide;

(D) hydrofluorocarbons;

(E) black carbon;

(F) perfluorocarbons; and

(G) sulfur hexafluoride.

(9) "Greenhouse gas emission limit" means an authorization to a specific source or category of sources, during a specified year, to emit up to a certain level of greenhouse gases expressed in tons of carbon dioxide equivalents.

(10) "Greenhouse gas emission source" or "source" means a person who:

(A) generates greenhouse gas emissions at a level significant enough to impact statewide greenhouse gas emissions; or

(B) generates greenhouse gas that when combined with other similar sources generates greenhouse gas emissions at a level significant enough to impact statewide greenhouse gas emissions.

(11) "Market-based compliance mechanism" means:

(A) a system of market-based declining annual aggregate emission limits for sources or categories of sources that emit greenhouse gases; or

(B) a greenhouse gas emission exchange, banking, credit, and other transaction that results in the same greenhouse gas emission reduction over the same period as direct compliance with a greenhouse gas emission limit or emission reduction measure adopted under Section 391.003.

(12) "Statewide greenhouse gas emissions" means the total annual emissions of greenhouse gases in the state expressed in tons of carbon dioxide equivalents, including all emissions of greenhouse gases associated with the generation or consumption of electricity.

(13) "Statewide greenhouse gas emission limit" means the maximum allowable level of statewide greenhouse gas emissions in 2020.

Sec. 391.002. GREENHOUSE GAS EMISSION REPORTING AND STATEWIDE LIMIT. (a) Not later than June 30, 2008, the commission by rule shall:

(1) identify greenhouse gas emission sources and categories of sources and require the reporting and verification of statewide greenhouse gas emissions in order to monitor and enforce compliance with this chapter;

(2) require the monitoring and annual reporting of greenhouse gas emissions from greenhouse gas emission sources beginning with the sources or categories of sources that contribute the most to statewide greenhouse gas emissions;

(3) ensure rigorous and consistent accounting of greenhouse gas emissions and provide reporting tools and formats to ensure collection of necessary information; and

(4) ensure that greenhouse gas emission sources maintain comprehensive records of all reported greenhouse gas emissions.

(b) Not later than June 30, 2008, the commission shall:

(1) determine, using the best available scientific, technological, and economic information, what the statewide greenhouse gas emission level was in 1990; and

(2) by rule establish a statewide greenhouse gas emission limit to be achieved by 2020 that is equivalent to the level determined under Subdivision (1).

(c) Not later than June 30, 2014, the commission shall make recommendations to the governor and the legislature on how to continue reductions of statewide greenhouse gas emissions after 2020.

Sec. 391.003. GREENHOUSE GAS EMISSION REDUCTION PLAN. (a) Not later than December 31, 2009, the commission shall prepare and approve a plan for achieving the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions from sources or categories of sources of greenhouse gases by 2020.

(b) The plan must identify and make recommendations on emission reduction measures, alternative compliance mechanisms, market-based compliance mechanisms, and potential monetary and nonmonetary incentives for sources and categories of greenhouse gas emission sources that the commission finds are necessary or desirable to facilitate the achievement of the maximum feasible and cost-effective reductions of greenhouse gas emissions by 2020.

(c) In developing the plan, the commission shall:

(1) evaluate the total potential costs and total potential economic and noneconomic benefits of the plan for reducing greenhouse gases to this state's economy, environment, and public health using the best available economic models, emission estimation techniques, and other scientific methods;

(2) take into account the relative contribution to statewide greenhouse gas emissions of each source or category of sources and the potential for adverse effects of those emissions on small businesses;

(3) recommend a de minimis threshold of greenhouse gas emissions below which emission reduction requirements will not apply;

(4) identify opportunities for greenhouse gas emission reduction measures from all verifiable voluntary actions, including but not limited to carbon sequestration projects and best management practices;

(5) ensure that the greenhouse gas emission reduction activities to be adopted and implemented by the commission are complementary and nonduplicative and can be implemented in an efficient and cost-effective manner; and

(6) consult with state agencies with jurisdiction over sources of greenhouse gas emissions, including the Public Utility Commission of Texas, on all elements of the plan that pertain to energy-related matters.

(d) The commission shall update the plan at least once every five years.

Sec. 391.004. GREENHOUSE GAS LIMITS AND EMISSION REDUCTION. (a) Not later than December 31, 2010, the commission by rule shall adopt greenhouse gas emission limits and emission reduction measures to achieve the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions in order to achieve the statewide greenhouse gas emission limit established under Section 391.002.

(b) In adopting the rules under Subsection (a) the commission shall, to the extent feasible:

(1) ensure that the greenhouse gas emission reductions to be achieved are permanent, quantifiable, verifiable, and enforceable;

(2) include the equitable distribution of allowances when appropriate and in a manner that minimizes costs and that promotes the goals and purposes of this chapter;

(3) ensure that costs of the emission reduction measures are minimized;

(4) maximize the total benefits to this state;

(5) encourage early action to reduce greenhouse gas emissions;

(6) ensure that activities undertaken to comply with the rules do not have a disproportionate negative impact on low-income individuals;

(7) ensure that activities undertaken under the rules complement and do not interfere with efforts to:

(A) achieve and maintain federal and state ambient air quality standards; and

(B) reduce toxic air contaminant emissions;

(8) consider cost-effectiveness;

(9) consider overall societal benefits, including:

(A) reductions in other air pollutants;

(B) diversification of energy sources; and

(C) other benefits to the economy, environment, and public health;

(10) minimize the administrative burden of implementing and complying with proposed rules;

(11) consider the significance of the contribution of each source or category of sources to statewide greenhouse gas emissions;

(12) ensure that the reduction is in addition to any emission reduction measure otherwise required by law or any other emission reduction measure that otherwise would occur;

(13) if using an alternative compliance mechanism, ensure that the greenhouse gas emission reductions occur over the same period and are equivalent in amount to any direct emission reduction required under this chapter;

(14) rely upon the best available:

(A) economic and scientific information; and

(B) assessment of existing and projected technological capabilities;

(15) consult with the Public Utility Commission of Texas in the development of rules affecting electric and natural gas utilities in order to minimize any duplicative or inconsistent regulatory requirements; and

(16) ensure, when applicable and to the extent feasible, that public and private investment in greenhouse gas emission reduction efforts be directed toward the most disadvantaged communities in this state and provide an opportunity for small businesses, schools, affordable housing associations, and other community institutions to participate in and benefit from statewide efforts to reduce greenhouse gas emissions.

(c) The commission shall develop methodologies to quantify and verify voluntary greenhouse gas emission reductions while ensuring that sources that have voluntarily reduced their greenhouse gas emissions before the implementation of Subsection (a) receive appropriate credit for those voluntary reductions.

Sec. 391.005. MARKET-BASED EMISSION LIMITS AND COMPLIANCE. (a) Not later than December 31, 2010, the commission may adopt rules that establish a system of market-based compliance mechanisms that the commission determines will achieve the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions, in the aggregate, from sources or categories of sources.

(b) In adopting rules under Subsection (a), the commission shall:

(1) consider the potential for direct, indirect, and cumulative adverse impacts from these mechanisms, including localized impacts in communities that are already adversely impacted by air pollution;

(2) design any market-based compliance mechanism to prevent an increase in the emissions of toxic air contaminants or other air pollutants;

(3) provide procedures for governing the use of market-based compliance mechanisms to achieve compliance with the statewide greenhouse gas emission limit by a source that is subject to greenhouse gas emission limits and mandatory emission reporting requirements; and

(4) maximize additional environmental and economic benefits for this state, as appropriate.

(c) Rules adopted under this section may not allow a localized adverse impact in a community that is already adversely impacted by air pollution.

Sec. 391.006. FEES. The commission by rule may establish a schedule of fees to be paid by greenhouse gas emission sources regulated under this chapter. The fees must:

(1) be based on the relative contribution of greenhouse gas emissions from the source or category of sources; and

(2) be commensurate with the source's fair share of the commission's costs of regulating greenhouse gas emission sources under this chapter.

Sec. 391.007. GREENHOUSE GAS EMISSION CONTROL ACCOUNT. (a) The greenhouse gas emission control account is an account in the general revenue fund.

(b) The commission shall deposit fees collected under Section 391.006 to the credit of the account.

(c) Money in the account may be appropriated only to the commission and only for the purposes of administering this chapter.

(d) Interest earned on money in the account is credited to the account.

(e) Section 403.095, Government Code, does not apply to the account.

SECTION 2. This Act takes effect September 1, 2007.