H. B. 4578

(By Delegates Ashley, Martin,

Seacrist and Staton)

(Originating in the Committee on the Judiciary)

[March 5, l998]

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 generally to establishing a market-based air emission's banking and trading program; requiring the director of the division of environmental protection to propose legislative rules relating to emission's credits, agency program implementation and fees; and providing standards and guidelines 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, emission's
credits; director to promulgate rules.

(a) Within one hundred eighty days after the effective date of this section, the director shall propose for legislative promulgation, pursuant to article three, chapter twenty-nine-a of this code, and to the full extent allowed by federal and state law, one or more legislative 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) Upon meeting the requirements of this section and the legislative rules promulgated hereunder, any person reducing air emission from a source shall be entitled to an emission's credit. The director shall establish a system by rule for quantifying, verifying, using and registering all emission's reduction credits, which occur following the effective date of this Act, to the fullest extent permitted by the state implementation plan or federal law. Except for voluntary reductions of nitrogen oxides, ten percent of any emission's credits registered with the director shall be credited to an account for the benefit of state and retired from future use, if not used within ten years. All other emission's reduction credits registered shall remain in effect until used and debited or retired, if not used within ten years. The director is authorized to charge a transaction fee, to be proposed by legislative rule as provided herein, at the time any credits are registered, the fees to be deposited in the air pollution control fund.
(c) Emission's credits registered by a person in accordance with subsection (b) of this section may be used where authorized and creditable in accordance with rules established pursuant to this section 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's credits requires prior notification to the West Virginia office of air quality. 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 use of such credits shall remain subject to achieving and maintaining ambient air quality. 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 and in the air quality region where the source is located.
(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 and where similar degrees of hazard and qualitative impact are anticipated with respect to air quality. 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, where appropriate, if not inconsistent with federal law.