80R6690 SLO-F
 
  By: Ellis S.B. No. 945
 
 
 
   
 
 
A BILL TO BE ENTITLED
AN ACT
relating to the Texas Global Warming Solutions Act; imposing a fee
and providing a penalty.
       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
SUBCHAPTER A. GENERAL PROVISIONS
       Sec. 391.001.  SHORT TITLE. This chapter may be cited as the
Texas Global Warming Solutions Act.
       Sec. 391.002.  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
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 and that is approved by the
commission. The term includes a flexible compliance schedule,
alternative control technology, process change, or product
substitution.
             (3)  "Carbon dioxide equivalent" means the amount of
carbon dioxide by weight that would produce the same global warming
effect as a given weight of another greenhouse gas, based on the
best available science, including that available from the
Intergovernmental Panel on Climate Change.
             (4)  "Commission" means the Texas Commission on
Environmental Quality.
             (5)  "Cost-effective" means economical, in terms of
cost per unit of reduced emissions of greenhouse gases relative to
the global warming potential of those emissions.
             (6)  "Direct emission reduction" means a greenhouse gas
emission reduction made by an action taken by a greenhouse gas
emission source at that source.
             (7)  "Electric utility" has the meaning assigned by
Section 31.002, Utilities Code.
             (8)  "Emissions reduction measure" means a program,
measure, standard, or alternative compliance mechanism applicable
to a source that is designed to reduce emissions of greenhouse gases
and that is authorized under this chapter.
             (9)  "Greenhouse gas" includes carbon dioxide,
methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and
sulfur hexafluoride.
             (10)  "Greenhouse gas emissions limit" means an
authorization during a specified year to emit greenhouse gases
specified by the commission not to exceed a specified amount,
expressed in tons of carbon dioxide equivalents.
             (11)  "Greenhouse gas emission source" or "source"
means any source or category of sources of greenhouse gas emissions
whose emissions are at such a level of significance, as determined
by the commission, that participation of the source or category of
sources in the program established under this chapter will enable
the commission to effectively reduce greenhouse gas emissions and
monitor compliance with the statewide greenhouse gas emissions
limit.
             (12)  "Market-based compliance mechanism" means
either:
                   (A)  a system of market-based declining annual
aggregate emissions limitations for sources that emit greenhouse
gases; or
                   (B)  greenhouse gas emissions exchanges, banking,
credits, and other transactions, governed by rules and protocols
established by the commission, that result in the same greenhouse
gas emission reduction over the same period as direct compliance
with a greenhouse gas emissions limit or emissions reduction
measure adopted by the commission under this chapter.
             (13)  "Municipally owned utility" has the meaning
assigned by Section 11.003, Utilities Code.
             (14)  "Retail electric provider" has the meaning
assigned by Section 31.002, Utilities Code.
             (15)  "Statewide greenhouse gas emissions" means the
total annual emissions of greenhouse gases in this state, expressed
in tons of carbon dioxide equivalents, including all emissions of
greenhouse gases from the generation of electricity delivered to
and consumed in this state, accounting for transmission and
distribution line losses, whether the electricity is generated in
this state or imported.
             (16)  "Statewide greenhouse gas emissions limit" or
"statewide emissions limit" means the maximum allowable level of
statewide greenhouse gas emissions in 2021, as determined by the
commission under Subchapter C.
       Sec. 391.003.  ROLE OF COMMISSION. The commission shall
monitor and regulate greenhouse gas emission sources that cause
global warming in order to reduce those emissions.
       Sec. 391.004.  ROLE OF OTHER STATE AGENCIES. Each state
agency shall consider and implement strategies to reduce greenhouse
gas emissions generated by the agency.
       Sec. 391.005.  AUTHORITY OF PUBLIC UTILITY COMMISSION;
OBLIGATION OF ELECTRIC UTILITIES.  This chapter does not affect:
             (1)  the authority of the Public Utility Commission of
Texas; or
             (2)  the obligation of an electric utility to provide
customers with safe and reliable electric service.
       Sec. 391.006.  CONSTRUCTION OF CHAPTER. This chapter does
not:
             (1)  relieve a person from complying with other
applicable federal, state, or local laws or regulations, including
state air and water quality requirements and other requirements
designed to protect public health or the environment;
             (2)  preclude, prohibit, or restrict the construction
of a new facility, as defined by Section 382.003, or the expansion
of an existing facility subject to regulation under this chapter if
the facility:
                   (A)  meets all applicable requirements; and
                   (B)  is in compliance with rules adopted under
this chapter;
             (3)  limit the existing authority of a state entity to
adopt and implement greenhouse gas emissions reduction measures; or
             (4)  relieve any state entity of its legal obligation
to comply with an existing law, rule, or regulation.
       Sec. 391.007.  EFFECT OF CHAPTER ON OTHER PROGRAMS.  This
chapter does not confer authority on the commission to alter
programs administered by other state agencies for the reduction of
greenhouse gas emissions.
       Sec. 391.008.  ADJUSTMENT OF DEADLINES. (a) In the event of
extraordinary circumstances, a catastrophic event, or the threat of
significant economic harm, the governor may adjust a deadline
established under this chapter to the earliest feasible date after
that deadline.
       (b)  The deadline adjustment period may not exceed one year
unless the governor makes an additional deadline adjustment under
Subsection (a).
       (c)  Not later than the 10th day after the date the governor
invokes a deadline adjustment under Subsection (a), the governor
shall provide written notification to each member of the
legislature of the adjustment.
       (d)  This section does not affect the powers and duties
established under Chapter 418, Government Code.
       Sec. 391.009.  CONSULTATION WITH OTHER GOVERNMENTAL
ENTITIES. In developing its plans to reduce greenhouse gas
emissions under this chapter, the commission shall consult with
other states, the federal government, and other nations to identify
the most effective strategies and methods for reducing greenhouse
gases, managing greenhouse gas control programs, and facilitating
the development of integrated and cost-effective regional,
national, and international greenhouse gas reduction programs.
       Sec. 391.010.  ALTERNATIVE RULES TO CONTROL CERTAIN
GREENHOUSE GAS EMISSIONS. If Chapter 386 is repealed or expires,
the commission by rule shall implement alternative rules for
controlling mobile sources of greenhouse gas emissions in order to
achieve equivalent or greater reductions compared to those achieved
under that chapter.
[Sections 391.011-391.050 reserved for expansion]
SUBCHAPTER B. GREENHOUSE GAS EMISSIONS REPORTING
       Sec. 391.051.  RULES FOR REPORTING AND VERIFICATION OF
GREENHOUSE GAS EMISSIONS. (a) Not later than January 1, 2009, the
commission by rule shall:
             (1)  require the reporting and verification of
statewide greenhouse gas emissions; and
             (2)  begin to monitor and enforce compliance with this
section.
       (b)  The commission shall adopt rules that:
             (1)  beginning with the greenhouse gas emission sources
that contribute the most to statewide emissions, require the owner
or operator of a greenhouse gas emission source to monitor and
annually report greenhouse gas emissions;
             (2)  account for greenhouse gas emissions from all
electricity consumed in the state, including:
                   (A)  electricity consumed by transmission and
distribution line losses of electricity generated inside the state
or generated outside the state; and
                   (B)  electricity generated by retail sellers of
electricity, including retail electric providers and municipally
owned utilities;
             (3)  ensure rigorous and consistent accounting of
emissions and provide reporting tools and formats to ensure
collection of necessary data;
             (4)  ensure that the owners or operators of greenhouse
gas emission sources maintain comprehensive records of all reported
greenhouse gas emissions; and
             (5)  include notification of any person subject to
rules under this section.
       Sec. 391.052.  REVIEW AND UPDATE OF REPORTING REQUIREMENTS.
The commission shall:
             (1)  as necessary, periodically review and update the
emissions reporting requirements described by this subchapter;
             (2)  review existing and proposed international,
federal, and state greenhouse gas emissions reporting programs and
make reasonable efforts to promote consistency among the programs
established under this subchapter and other programs; and
             (3)  streamline reporting requirements on greenhouse
gas emission sources.
[Sections 391.053-391.100 reserved for expansion]
SUBCHAPTER C. STATEWIDE GREENHOUSE GAS EMISSIONS LIMIT
       Sec. 391.101.  PROCEDURE FOR ESTABLISHING GREENHOUSE GAS
EMISSIONS LIMIT.  (a)  Not later than January 1, 2009, the
commission shall determine the amount of greenhouse gas emissions
in this state in 1990 and approve a statewide greenhouse gas
emissions limit that is equivalent to that amount.  The limit must
be achieved by 2021.
       (b)  The commission shall hold at least one public workshop
and provide an opportunity for all interested parties to comment on
the determinations made by the commission under Subsection (a).
The commission shall approve the statewide greenhouse gas emissions
limit at a public hearing. The commission shall provide public
notice of the public workshop and hearing.
       (c)  To ensure the most accurate determinations feasible
under Subsection (a), the commission shall evaluate the best
available scientific, technological, and economic information on
greenhouse gas emissions to determine the 1990 amount of greenhouse
gas emissions.
       Sec. 391.102.  USE OF STATEWIDE LIMIT.  The commission shall
use the statewide greenhouse gas emissions limit to maintain and
continue reductions in emissions of greenhouse gases after 2021.
       Sec. 391.103.  RECOMMENDATIONS. The commission shall
periodically make recommendations to the governor and the
legislature on how to continue reducing greenhouse gas emissions
after 2021.
[Sections 391.104-391.150 reserved for expansion]
SUBCHAPTER D. GREENHOUSE GAS EMISSIONS REDUCTIONS
       Sec. 391.151.  MAXIMUM GREENHOUSE GAS EMISSIONS REDUCTIONS.
Subject to the criteria and schedules established under this
subchapter, the commission in an open public process shall adopt
rules that facilitate achieving the maximum technologically
feasible and cost-effective reductions in greenhouse gas emissions
from sources.
       Sec. 391.152.  EARLY ACTIONS TO REDUCE GREENHOUSE GAS
EMISSIONS.  (a) Not later than June 30, 2008, the commission shall
publish and make available to the public a list of early actions
that can be implemented to reduce greenhouse gas emissions before
the measures and limits adopted under Section 391.154 are
implemented.
       (b)  Before January 1, 2011, the commission shall adopt rules
to implement the actions identified on the list under Subsection
(a).
       (c)  The rules adopted by the commission under this section
must make it possible to achieve the maximum technologically
feasible and cost-effective reductions in greenhouse gas emissions
from sources in furtherance of achieving the statewide greenhouse
gas emissions limit established under Section 391.101.
       (d)  Not later than January 1, 2011, the commission shall
begin enforcing the rules adopted under this section.
       Sec. 391.153.  COMPREHENSIVE PLAN.  (a) Not later than
January 1, 2010, the commission shall prepare and approve a
comprehensive plan for achieving the maximum technologically
feasible and cost-effective reductions in greenhouse gas emissions
from sources by 2021.
       (b)  The commission shall consult with each state agency
having jurisdiction over sources, including the Public Utility
Commission of Texas, on all elements of the comprehensive plan that
pertain to energy-related matters, including electrical
generation, alternative pollution standards or requirements, the
provision of reliable and affordable electrical service, petroleum
refining, and statewide fuel supplies, to ensure that the
greenhouse gas emissions reduction activities to be adopted and
implemented by the commission are complementary, nonduplicative,
and capable of being implemented in an efficient and cost-effective
manner.
       (c)  The comprehensive plan must identify and make
recommendations on direct emission reduction measures, alternative
compliance mechanisms, market-based compliance mechanisms, and
potential monetary and nonmonetary incentives for 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 2021.
       (d)  In making the determinations required by Subsection
(c), the commission shall consider all relevant information
pertaining to greenhouse gas emissions reduction programs in other
states, localities, and nations, including the northeastern states
of the United States, Canada, and the European Union.
       (e)  The commission shall evaluate the total potential costs
and total potential economic and noneconomic benefits of the
comprehensive 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.
       (f)  In developing the comprehensive plan, the commission
shall:
             (1)  take into account the relative contribution of
each source or source category to statewide greenhouse gas
emissions and the potential for adverse effects on small
businesses;
             (2)  recommend a de minimis threshold of greenhouse gas
emissions below which emissions reduction requirements will not
apply; and
             (3)  identify opportunities for emissions reduction
measures from all verifiable and enforceable voluntary actions,
including carbon sequestration projects that capture and store or
reuse carbon from emissions and best management practices.
       (g)  The commission shall conduct a series of public
workshops to give interested parties an opportunity to comment on
the comprehensive plan. The commission shall conduct some of the
workshops in regions of the state that have the most significant
exposure to air pollutants, including communities with large
minority and low-income populations.
       (h)  At least once every five years, the commission shall
update the comprehensive plan in order to achieve the maximum
technologically feasible and cost-effective reductions of
greenhouse gas emissions.
       Sec. 391.154.  SOURCE GREENHOUSE GAS EMISSIONS LIMITS AND
EMISSIONS REDUCTION MEASURES.  (a) Not later than January 1, 2012,
the commission by rule shall adopt greenhouse gas emissions limits
and emissions reduction measures for sources or categories of
sources to achieve the maximum technologically feasible and
cost-effective reductions in greenhouse gas emissions in
furtherance of achieving the statewide greenhouse gas emissions
limit established under Section 391.101.
       (b)  To the extent feasible, in adopting rules under this
section and Subchapter E, the commission shall:
             (1)  design the rules, including rules concerning the
distribution of emissions allowances where appropriate, in a manner
that is equitable, seeks to minimize costs and maximize the total
benefits to this state, and encourages early action to reduce
greenhouse gas emissions;
             (2)  ensure that activities undertaken to comply with
the rules do not disproportionately impact low-income communities
in a negative manner;
             (3)  ensure that an entity that has voluntarily reduced
its greenhouse gas emissions before the implementation of rules
adopted under this section receives appropriate credit for early
voluntary reductions;
             (4)  ensure that activities undertaken pursuant to the
rules complement and do not interfere with efforts to achieve and
maintain federal and state ambient air quality standards and to
reduce toxic air contaminant emissions;
             (5)  consider the cost-effectiveness of the rules;
             (6)  consider overall societal benefits, including
reductions in other air pollutants, diversification of energy
sources, and other benefits to the economy, environment, and public
health;
             (7)  minimize the administrative burden of
implementing and complying with the rules;
             (8)  minimize reductions in emissions of greenhouse
gases in this state that are offset by increases in emissions of
greenhouse gases outside this state; and
             (9)  consider the significance of the contribution of
each source to statewide emissions of greenhouse gases.
       (c)  The commission by rule may establish a system of
market-based declining annual aggregate emissions limits for
greenhouse gas emission sources, applicable from January 1, 2013,
to December 31, 2021, that the commission determines will
aggregately achieve the maximum technologically feasible and
cost-effective reductions in greenhouse gas emissions from those
sources.  The initial adoption of rules under this subsection must
be completed on or before January 1, 2012.
       (d)  Any rule adopted under this subchapter or Subchapter E
must ensure that:
             (1)  the greenhouse gas emissions reductions achieved
are permanent, quantifiable, verifiable, and enforceable by the
commission;
             (2)  for rules adopted under Subchapter E, the
reduction is in addition to:
                   (A)  any greenhouse gas emissions reduction
otherwise required by law or regulation; and
                   (B)  any other greenhouse gas emissions reduction
that otherwise would occur; and
             (3)  if applicable, the greenhouse gas emissions
reduction occurs over the same period and is equivalent in amount to
any direct emission reduction required under this chapter.
       (e)  The commission shall rely upon the best available
economic and scientific information and the commission's
assessment of existing and projected technological capabilities
when adopting the rules required by this section.
       (f)  The commission shall consult with the Public Utility
Commission of Texas in the development of the rules as they affect
electricity and natural gas providers in order to minimize
duplicative or inconsistent regulatory requirements.
       (g)  After January 1, 2012, the commission may revise rules
adopted under this section and adopt additional rules to further
the provisions of this chapter.
       (h)  A rule adopted under this section on or before January
1, 2012, takes effect January 1, 2013.
       Sec. 391.155.  EARLY IMPLEMENTATION OF CHAPTER.  This
chapter does not restrict the commission from:
             (1)  adopting greenhouse gas emissions limits or
emissions reduction measures for sources or categories of sources
before January 1, 2012;
             (2)  enforcing those limits or measures before January
1, 2013; or
             (3)  providing early reduction credit where
appropriate.
       Sec. 391.156.  PUBLIC AND PRIVATE INVESTING. To the extent
feasible and applicable, the commission shall ensure that the
greenhouse gas emissions reduction rules, programs, mechanisms,
and incentives under its jurisdiction:
             (1)  direct public and private investment toward the
most disadvantaged communities in this state; and
             (2)  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.
[Sections 391.157-391.200 reserved for expansion]
SUBCHAPTER E. MARKET-BASED COMPLIANCE MECHANISMS
       Sec. 391.201.  OPTIONAL RULES FOR MARKET-BASED COMPLIANCE
MECHANISMS. (a) The commission may include the use of market-based
compliance mechanisms in the rules adopted under Section 391.154.
       (b)  Before including market-based compliance mechanisms in
the rules adopted under Section 391.154, to the extent feasible and
in furtherance of achieving the statewide greenhouse gas emissions
limit established under Section 391.101, the commission shall:
             (1)  consider the potential for direct, indirect, and
cumulative emission effects from these mechanisms, including
localized effects in communities that are already adversely
affected by air pollution;
             (2)  design any market-based compliance mechanism to
prevent an increase in the emissions of toxic air contaminants or
criteria air pollutants (ozone, carbon monoxide, particulate
matter, sulfur dioxide, lead, and nitrogen dioxide) for which the
United States Environmental Protection Agency sets standards; and
             (3)  maximize additional environmental and economic
benefits for this state, as appropriate.
       (c)  The commission shall adopt rules governing how
regulated entities subject to greenhouse gas emissions limits and
mandatory emissions reporting requirements may use market-based
compliance mechanisms to achieve compliance with greenhouse gas
emissions limits.
       Sec. 391.202.  ADOPTION OF METHODOLOGIES. (a) The
commission shall adopt:
             (1)  methodologies for the quantification of voluntary
greenhouse gas emissions reductions; and
             (2)  rules to verify any voluntary greenhouse gas
emissions reductions that are authorized by the commission for use
in complying with greenhouse gas emissions limits established by
the commission.
       (b)  Chapter 2001, Government Code, does not apply to the
adoption of the methodologies described by Subsection (a).
[Sections 391.203-391.250 reserved for expansion]
SUBCHAPTER F. ENFORCEMENT
       Sec. 391.251.  MONITORING AND ENFORCEMENT. The commission
shall monitor compliance with and enforce any rule, order,
emissions limitation, emissions reduction measure, or market-based
compliance mechanism adopted by the commission under this chapter.
[Sections 391.252-391.300 reserved for expansion]
SUBCHAPTER G. GREENHOUSE GAS EMISSIONS CONTROL ACCOUNT;  FEES
       Sec. 391.301.  GREENHOUSE GAS EMISSIONS CONTROL
ACCOUNT.  (a) The greenhouse gas emissions control account is a
separate account in the general revenue fund.
       (b)  The account consists of:
             (1)  transfers to the account;
             (2)  interest earned on the account;
             (3)  fees collected under this subchapter;
             (4)  penalties paid under this chapter; and
             (5)  grants and donations accepted for the account.
       (c)  Money in the account may be used only to administer
programs under this chapter.
       (d)  Any money in the account not used in a fiscal year
remains in the account. The account is exempt from the application
of Section 403.095, Government Code.
       Sec. 391.302.  FEES.  (a) Not later than June 30, 2009, the
commission shall impose on the owner of a greenhouse gas emission
source an annual fee.
       (b)  The commission by rule shall determine the amount of the
fee, which may not exceed the source's fair share of the annual cost
to implement programs under this chapter, including:
             (1)  the cost of monitoring compliance with rules under
this chapter; and
             (2)  the cost of enforcing those rules.
[Sections 391.303-391.350 reserved for expansion]
SUBCHAPTER H. ADVISORY COMMITTEES
       Sec. 391.351.  ENVIRONMENTAL JUSTICE ADVISORY COMMITTEE.
(a) Not later than January 1, 2008, the commission shall convene an
Environmental Justice Advisory Committee to advise the commission
in developing the comprehensive plan under Section 391.153 and in
implementing this chapter.
       (b)  The Environmental Justice Advisory Committee must
consist of at least three members who represent communities in the
state with the most significant exposure to air pollution caused by
the emission of greenhouse gases, including communities with large
minority or low-income populations.
       (c)  The commission shall appoint the Environmental Justice
Advisory Committee members from nominations received from
environmental justice organizations and community groups.
       (d)  The commission shall provide a reasonable per diem for
attendance at Environmental Justice Advisory Committee meetings by
advisory committee members from nonprofit organizations.
       Sec. 391.352.  ECONOMIC AND TECHNOLOGICAL ADVANCEMENT
ADVISORY COMMITTEE. (a) The commission shall appoint an Economic
and Technological Advancement Advisory Committee to advise the
commission on activities that will facilitate investment in and
implementation of technological research and development
opportunities for the purpose of assisting in the reduction of
greenhouse gas emissions, including:
             (1)  identifying new technologies, research,
demonstration projects, and funding opportunities;
             (2)  developing state, national, and international
partnerships and technology transfer opportunities; and
             (3)  identifying and assessing research and advanced
technology investment and incentive opportunities.
       (b)  The Economic and Technological Advancement Advisory
Committee may advise the commission on state, regional, national,
and international economic and technological developments related
to greenhouse gas emissions reductions.
       SECTION 2.  This Act takes effect September 1, 2007.