Senate Bill No. 407

(By Senator Dittmar)


[Introduced February 5, 1998; referred to the Committee
on Natural Resources; and then to the Committee on Finance.]

A BILL to amend article five, chapter twenty-two of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new section, designated section eighteen, relating to requiring the director of the division of environmental protection to propose legislative rules; establishing a market-based air emission banking and trading program; and providing for emission's credits.

Be it enacted by the Legislature of West Virginia:
That article five, chapter twenty-two of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new section, designated section eighteen, to read as follows:

§22-5-18. Market-based banking and trading programs, emissions
credits; director to promulgate rules.

(a) Within ninety days after the effective date of this section, the director shall propose, to the full extent allowed by federal and state law, one or more rules establishing a voluntary emissions trading and banking program on a statewide basis that provides incentives to make progress toward the attainment or maintenance of the national ambient air quality standards, the reduction or prevention of hazardous air contaminants, or the protection of human health, welfare and the environment from air pollution.
(b) Any person reducing air emission from a source to a greater extent than otherwise required by state or federal law shall be entitled to an emission's credit in the amount of the excess emission reduction. The director shall establish a system by rule for quantifying, verifying and registering all emission's reduction credits, which are eligible for banking and trading if achieved since the first day of January, one thousand nine hundred ninety-one. Credits shall be available for permanent shutdowns as well as reductions. Ten percent of any emission credits registered with the director shall be credited to an account for the benefit of state and retired from future use. All other emission's reduction credits registered may not be retired and shall remain in effect until used and debited. The director is authorized to charge a transaction fee of two dollars per ton or part thereof at the time any credits are registered, the fees to be deposited in the air pollution control fund.
(c) Emission credits registered by a person in accordance with subsection (b) of this section may be used by that person to satisfy emission reduction requirements that would otherwise be required under state or federal law or the credits may be used for the same purpose at another source, by the person who registered the credit or by another person to whom the credit was transferred. Same source use of banked emission credits requires prior notification to the West Virginia office of air quality control. The rules may not prohibit the transfer of credits among persons, but shall establish procedures by which transfers are identified, tracked and accounted for in the program. The division may establish the emissions trading program as a state, multistate or regional program as long as the program contributes to the goal of improving the air quality in West Virginia.
(d) The director may develop rules establishing classes of volatile organic compounds, and shall allow banking and trading of different volatile organic compounds within the same class. In lieu thereof, trading shall be allowed among all volatile organic compounds where not inconsistent with federal law. For any emissions banking and trading program used for the purpose of making progress toward attaining or maintaining the national ambient air quality standard for ozone, the director may allow reductions of volatile organic compounds to be substituted for required reductions of oxides of nitrogen, or reductions of oxides of nitrogen to be substituted for required reductions of volatile organic compounds if not inconsistent with federal law.

NOTE: The purpose of this bill is to add provisions to the air pollution control law to require the establishment of an air emission's credits banking and trading program to assist sources in meeting regulatory requirements and to allow for continued economic growth consistent with helping to achieve and maintain air quality standards. The bill also required the proposal of rules.

This section is new; therefore, strike-throughs and underscoring have been omitted.