Executive Committee
Filed: 3/19/2009
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1 | AMENDMENT TO HOUSE BILL 3668
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2 | AMENDMENT NO. ______. Amend House Bill 3668 by replacing | ||||||
3 | everything after the enacting clause with the following:
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4 | "Section 1. Short title. This Act may be cited as the | ||||||
5 | Climate Action and Clean Energy Investment Act of 2009. | ||||||
6 | Section 5. Legislative findings. | ||||||
7 | (a) The General Assembly finds that: | ||||||
8 | (1) The Intergovernmental Panel on Climate Change has | ||||||
9 | concluded that it is "unequivocal" that the Earth's climate | ||||||
10 | is already warming and that most of the warming is due to | ||||||
11 | the burning of fossil fuels and other human activities. | ||||||
12 | (2) Warning signs of global warming are being | ||||||
13 | discovered and reported throughout the world. Melting | ||||||
14 | glaciers, severe storms, prolonged drought, reduced | ||||||
15 | mountain snow-pack, and dying coral reefs are among the | ||||||
16 | signs that global warming is underway. |
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1 | (3) Decisive action at the international, national, | ||||||
2 | state, and local levels to address the threat of global | ||||||
3 | warming is necessary to meet the challenge posed by global | ||||||
4 | warming. | ||||||
5 | (4) Illinois businesses and industry will benefit from | ||||||
6 | proactive policies that make the State competitive as the | ||||||
7 | world's economy shifts from high-carbon to low-carbon | ||||||
8 | energy technologies. | ||||||
9 | (5) By exercising a global leadership role, Illinois | ||||||
10 | will position its economy, technology centers, and | ||||||
11 | financial institutions to benefit from the new low-carbon | ||||||
12 | economy, with millions of "green jobs" expected to be | ||||||
13 | created from the next generation of industries that produce | ||||||
14 | and sell alternative fuels, export renewable energy, | ||||||
15 | design high-tech energy efficiency solutions, and sell | ||||||
16 | carbon emission reduction credits. | ||||||
17 | (6) Many of the clean energy policies that reduce | ||||||
18 | global warming pollution also provide economic and quality | ||||||
19 | of life benefits such as reduced energy bills, green space | ||||||
20 | preservation, air quality improvements, reduced traffic | ||||||
21 | congestion, improved transportation choices, and economic | ||||||
22 | development and job creation through the application of | ||||||
23 | energy conservation and new energy technologies. | ||||||
24 | (7) In the absence of a federal policy, states and | ||||||
25 | cities are establishing their own plans to reduce carbon | ||||||
26 | dioxide emissions. For example, 8 northeastern states |
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1 | began a regional cap and trade program this year to reduce | ||||||
2 | greenhouse gas emissions from their electric power | ||||||
3 | industry. Ten western states have adopted a regional cap | ||||||
4 | and trade plan to reduce GHG emissions from power plants, | ||||||
5 | transportation fuels, building energy use, and industrial | ||||||
6 | sources. Thirteen states have adopted automobile standards | ||||||
7 | to address global warming. | ||||||
8 | (8) The mayors of more than 376 U.S. cities, including | ||||||
9 | Richard M. Daley of Chicago, Ross Ferraro of Carol Stream, | ||||||
10 | Michael Belsky of Highland Park, Al Larson of Schaumburg, | ||||||
11 | and Richard Hyde of Waukegan have signed the U.S. Mayors | ||||||
12 | Climate Protection Agreement, pledging, among other | ||||||
13 | things, to meet the Kyoto Protocol goal of reducing | ||||||
14 | greenhouse emissions in those cities to 1990 levels by | ||||||
15 | 2012. | ||||||
16 | (9) A market-based cap and invest program holds great | ||||||
17 | promise to help Illinois reduce greenhouse gas emissions in | ||||||
18 | a cost-effective manner. The cap and invest program is best | ||||||
19 | pursued in cooperation with other states, particularly | ||||||
20 | Midwestern states. The interests of the public are best | ||||||
21 | served by a cap and invest program that is as broad, | ||||||
22 | simple, predictable, equitable, and transparent as | ||||||
23 | possible. | ||||||
24 | (10) The right to emit greenhouse gases should be | ||||||
25 | auctioned rather than given away. An auction of emissions | ||||||
26 | allowances would generate hundreds of millions of dollars |
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1 | annually, and the proceeds of each auction should be used | ||||||
2 | to create green jobs, develop clean energy sources, and | ||||||
3 | help consumers manage and reduce their energy costs. | ||||||
4 | (11) The Illinois Environmental Protection Agency | ||||||
5 | shall propose and the Illinois Pollution Control Board | ||||||
6 | shall adopt a market-based cap and invest program that | ||||||
7 | achieves the greenhouse gas reduction targets specified in | ||||||
8 | this Act. The program shall be developed and implemented in | ||||||
9 | consultation with State agencies and stakeholders, | ||||||
10 | including the environmental justice community, industry | ||||||
11 | sectors, business groups, academic institutions, | ||||||
12 | environmental organizations, and others, in a manner that | ||||||
13 | minimizes costs and maximizes benefits for the economy in | ||||||
14 | Illinois, improves and modernizes energy infrastructure in | ||||||
15 | Illinois, maintains electric system reliability, maximizes | ||||||
16 | additional environmental and economic co-benefits for | ||||||
17 | Illinois, and complements the State's efforts to improve | ||||||
18 | air quality.
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19 | Section 10. Definitions. | ||||||
20 | "Agency" means the Illinois Environmental Protection | ||||||
21 | Agency. | ||||||
22 | "Allowance" means an authorization from the Agency to emit, | ||||||
23 | during a specified year, up to one ton of carbon dioxide or an | ||||||
24 | equivalent amount of other greenhouse gases, as determined by | ||||||
25 | the Agency. |
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1 | "Board" means the Illinois Pollution Control Board. | ||||||
2 | "Cost-effective" or "cost-effectiveness" means the cost | ||||||
3 | per unit of reduced emissions of carbon dioxide or an | ||||||
4 | equivalent amount of other greenhouse gases, as determined by | ||||||
5 | the Agency. | ||||||
6 | "Direct emissions" means greenhouse gas emissions made by a | ||||||
7 | greenhouse gas emission source at that source. | ||||||
8 | "Emissions offset" means an action that (i) is undertaken | ||||||
9 | by a greenhouse gas emission source not subject to the | ||||||
10 | emissions cap, (ii) achieves the equivalent reduction of | ||||||
11 | greenhouse gas emissions over the same time period as a direct | ||||||
12 | emission reduction, and (iii) is approved by the Agency. | ||||||
13 | "First deliverer of electricity" means: (i) for | ||||||
14 | electricity generated within Illinois or other participating | ||||||
15 | states, the generator of that electricity; (ii) for electricity | ||||||
16 | generated outside Illinois, the entity that first delivers the | ||||||
17 | electricity to Illinois customers for consumption in Illinois. | ||||||
18 | "Greenhouse gas" (GHG) or "greenhouse gases" includes all | ||||||
19 | of the following gases: carbon dioxide, methane, nitrous oxide, | ||||||
20 | hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. | ||||||
21 | "Greenhouse gas emission source" or "source" means any | ||||||
22 | source or category of sources that emits greenhouse gases at a | ||||||
23 | level that, in the opinion of the Agency, necessitates | ||||||
24 | participation by the source or category of sources in the cap | ||||||
25 | and invest program in order for the State to effectively reduce | ||||||
26 | greenhouse gas emissions and monitor compliance with the |
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1 | Statewide greenhouse gas emissions limit. | ||||||
2 | "Leakage" means a reduction in emissions of greenhouse | ||||||
3 | gases within Illinois or other participating states that is | ||||||
4 | offset by an increase in emissions of greenhouse gases in | ||||||
5 | non-participating states. | ||||||
6 | "Market-based cap and invest program" means a program | ||||||
7 | established under this Act and corresponding regulations that | ||||||
8 | creates a "cap" on the sum of all GHG emissions from all | ||||||
9 | covered sources; reduces the cap over time; creates tradable | ||||||
10 | emissions "allowances" equivalent to a specified amount of GHG | ||||||
11 | emissions, with the total amount of allowances equal to the | ||||||
12 | emissions cap; requires covered sources to submit allowances | ||||||
13 | equivalent to the level of emissions for which they are | ||||||
14 | responsible at the end of each of compliance period; authorizes | ||||||
15 | covered sources to choose the best mix of reducing emissions or | ||||||
16 | buying allowances for their situation; provides for the | ||||||
17 | auctioning of emissions allowances by the Agency and the | ||||||
18 | investment of those proceeds in technologies and projects to | ||||||
19 | help Illinois meet the Act's GHG reduction goals; mitigates | ||||||
20 | potential transition costs; and promotes adaptation to climate | ||||||
21 | change impacts. | ||||||
22 | Participating state" means a state of the United States | ||||||
23 | that has adopted a similar market-based program to reduce GHG | ||||||
24 | emissions and that has signed a Memorandum of Understanding | ||||||
25 | with the Agency to allow interstate trading of allowances and | ||||||
26 | emissions offsets.
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1 | Section 15. Market-Based Cap and Invest Program. | ||||||
2 | (a)
Pursuant to the Illinois Administrative Procedure Act, | ||||||
3 | the Agency shall propose and the Board shall adopt by October | ||||||
4 | 1, 2010, rules necessary to establish and implement a | ||||||
5 | market-based cap and invest program effective January 1, 2012, | ||||||
6 | to limit the emissions of greenhouse gases, subject to the | ||||||
7 | provisions of this Act. The rules shall be designed to | ||||||
8 | facilitate the State's participation in the emerging | ||||||
9 | midwestern greenhouse gas cap and trade system. The rules shall | ||||||
10 | require aggregate greenhouse gas emission reductions from | ||||||
11 | covered sources of at least 25 percent below 2005 levels by | ||||||
12 | 2020, 45 percent below 2005 levels by 2030, and 80 percent | ||||||
13 | below 2005 levels by 2050. | ||||||
14 | (b) In developing and adopting these rules, the Agency and | ||||||
15 | Board shall do all of the following: | ||||||
16 | (1) design the rules in a manner that is equitable, | ||||||
17 | seeks to minimize costs and maximize the total benefits to | ||||||
18 | Illinois, and encourages early action to reduce greenhouse | ||||||
19 | gas emissions; | ||||||
20 | (2) ensure that activities undertaken to comply with | ||||||
21 | the rules do not disproportionately impact low-income | ||||||
22 | communities; | ||||||
23 | (3)
ensure that entities that have voluntarily reduced | ||||||
24 | their greenhouse gas emissions prior to the implementation | ||||||
25 | of this Section receive appropriate credit for early |
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1 | voluntary reductions; | ||||||
2 | (4) ensure that activities undertaken under the rules | ||||||
3 | complement and do not interfere with efforts to achieve and | ||||||
4 | maintain federal and State ambient air quality standards | ||||||
5 | and to reduce toxic air contaminant emissions; | ||||||
6 | (5) consider the cost-effectiveness of the rules; | ||||||
7 | (6) consider overall societal benefits, including | ||||||
8 | reductions in other air pollutants, diversification of | ||||||
9 | energy sources, and the provision of other benefits to the | ||||||
10 | economy, environment, and public health. | ||||||
11 | (7) minimize the administrative burden of implementing | ||||||
12 | and complying with these rules; | ||||||
13 | (8) minimize leakage. | ||||||
14 | (9) consider the significance of the contribution of | ||||||
15 | each source or category of sources to statewide emissions | ||||||
16 | of greenhouse gases; | ||||||
17 | (10) ensure that greenhouse gas emission reductions | ||||||
18 | achieved are real, permanent, quantifiable, verifiable, | ||||||
19 | and enforceable by the Agency; and | ||||||
20 | (11) ensure that greenhouse gas emission reductions | ||||||
21 | are in addition to any greenhouse gas emission reductions | ||||||
22 | otherwise required by law or regulation, and any other | ||||||
23 | greenhouse gas emission reductions that otherwise would | ||||||
24 | occur in Illinois or a participating state. | ||||||
25 | The Agency shall consult with the Illinois Commerce | ||||||
26 | Commission and the Illinois Power Agency in the development of |
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1 | the rules as they affect electricity and natural gas providers | ||||||
2 | in order to minimize duplicative or inconsistent regulatory | ||||||
3 | requirements. | ||||||
4 | After January 1, 2012, the Agency may revise rules adopted | ||||||
5 | under this Section and adopt additional rules to further the | ||||||
6 | provisions of this Act. | ||||||
7 | (c) All allowances issued by the State shall be auctioned, | ||||||
8 | and the proceeds of each auction must be used to benefit the | ||||||
9 | public under Sections 20 and 25. Auctions shall be implemented | ||||||
10 | quarterly by the Agency. Two pre-compliance auctions shall be | ||||||
11 | held between January 1, 2011, and December 31, 2011, to | ||||||
12 | facilitate market price discovery and compliance planning by | ||||||
13 | capped sources. | ||||||
14 | Each source shall own and provide to the Director at the | ||||||
15 | close of the applicable compliance period allowances equal to | ||||||
16 | its direct emissions during that period; such allowances may be | ||||||
17 | issued by other participating states with which the Agency has | ||||||
18 | established a trading relationship. A source may acquire | ||||||
19 | emissions offsets from other sources in lieu of reductions at | ||||||
20 | its facilities. However, offsets should be limited to 1% of | ||||||
21 | total emissions or 10% of required emissions reductions for | ||||||
22 | that compliance period, whichever is less. Emissions offsets | ||||||
23 | should be generated by projects implemented within the | ||||||
24 | participating states to capture the economic benefits of these | ||||||
25 | projects and to protect public health by reducing conventional | ||||||
26 | smog-forming and toxic air pollutants. |
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1 | Rules adopted under this Section shall, at a minimum, cap | ||||||
2 | emissions from the following sources: sources that are the | ||||||
3 | first deliverer of electricity in the State, including | ||||||
4 | electricity generated outside the State; large industrial | ||||||
5 | stationary sources; large manufacturers and distributors of | ||||||
6 | transportation fuels, including, but not limited to, oil | ||||||
7 | refineries, oil storage facilities, and wholesale and retail | ||||||
8 | distributors; manufacturers and distributors of natural gas | ||||||
9 | and oil used to heat and power buildings, including, but not | ||||||
10 | limited to, oil refineries, oil storage facilities, and | ||||||
11 | wholesale and retail distributors of natural gas; and any other | ||||||
12 | sources or categories of sources that the Agency determines may | ||||||
13 | be included under the cap without undue administrative | ||||||
14 | difficulty and from which emissions can be reliably quantified | ||||||
15 | and monitoredy.
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16 | Section 20. Global Warming Action Fund. The Global Warming | ||||||
17 | Action Fund is established as a special fund in the State | ||||||
18 | treasury to receive revenues from the auction of allowances | ||||||
19 | under subsection (b) of Section 15. Revenues generated by the | ||||||
20 | auctioning of allowances shall be used to support programs and | ||||||
21 | projects that contribute to the emission reduction goals of | ||||||
22 | this Act, including, but not limited to, those that (i) | ||||||
23 | increase utilization of renewable energy, energy efficiency, | ||||||
24 | low-emitting modes of transportation, geologic carbon | ||||||
25 | sequestration, and terrestrial sequestration (such as programs |
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1 | that enhance the stewardship and restoration of the State's | ||||||
2 | forests and wetlands) (ii) address transition costs, including | ||||||
3 | job training or transition programs that help industries adapt | ||||||
4 | to clean technology and production, and (iii) provide | ||||||
5 | assistance to utility consumers.
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6 | Section 25. Analysis of Investment and Expenditure | ||||||
7 | Options.
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8 | (a) The Agency and the Department of Commerce and Economic | ||||||
9 | Opportunity shall conduct the analysis described in this | ||||||
10 | Section and present their findings and recommendations to the | ||||||
11 | General Assembly by January 1, 2010. The Agency and the | ||||||
12 | Department of Commerce and Economic Opportunity shall consult | ||||||
13 | with the Illinois Finance Authority, the Illinois Department of | ||||||
14 | Labor, the Illinois Commerce Commission, the Illinois Power | ||||||
15 | Agency, the Illinois Department of Natural Resources, the | ||||||
16 | Illinois Department of Agriculture, and other interested | ||||||
17 | stakeholders, including, but not limited to, the environmental | ||||||
18 | justice community, industry sectors, business groups, academic | ||||||
19 | institutions, and environmental organizations. The analysis | ||||||
20 | shall consider how the State can best use the revenues in the | ||||||
21 | Global Warming Action Fund to serve the State's overriding | ||||||
22 | interest in making the transition to an economy with low | ||||||
23 | greenhouse gas emissions in a way that maximizes public | ||||||
24 | benefits and minimizes public costs. | ||||||
25 | (b) The analysis shall make recommendations regarding the |
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1 | specific apportionment of allowance revenues among various | ||||||
2 | options that benefit the public, including, but not limited to, | ||||||
3 | those programs and projects discussed in Section 20. | ||||||
4 | (c) The analysis shall model and estimate the impact of | ||||||
5 | revenue apportionment on the State economy, its residents, and | ||||||
6 | its natural resources of the various options considered and | ||||||
7 | shall recommend the optimal mix of revenue uses. In determining | ||||||
8 | the optimal mix of revenue uses, the analysis shall recognize | ||||||
9 | the long-term nature of the transition and prioritize those | ||||||
10 | investments with a long-term yield. In identifying the optimal | ||||||
11 | uses of revenues, the analysis shall select uses that: | ||||||
12 | (1) produce the most cost-effective emission | ||||||
13 | reductions on a societal basis; | ||||||
14 | (2) maximize greenhouse gas emission reductions in | ||||||
15 | capped and non-capped sectors; | ||||||
16 | (3) minimize disruptive economic impacts on workers, | ||||||
17 | businesses, and low-income and other consumers; | ||||||
18 | (4) equitably distribute the costs and benefits of the | ||||||
19 | transition among State residents, communities and economic | ||||||
20 | sectors, with specific recommendations and strategies to | ||||||
21 | assist low-income residents in reducing their greenhouse | ||||||
22 | gas emissions; | ||||||
23 | (5) maximize sustainable economic development and job | ||||||
24 | growth; | ||||||
25 | (6) protect and enhance the public health, water | ||||||
26 | quality, air quality, habitat, and other natural |
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1 | resources; and | ||||||
2 | (7) avoid creating among revenue recipients a sense of | ||||||
3 | entitlement to a long-term stream of revenues which would | ||||||
4 | in turn create incentives to oppose emission reductions | ||||||
5 | that would reduce the size of the Fund. | ||||||
6 | When possible the analysis shall quantify the impact of | ||||||
7 | each revenue use on emissions, emission reduction costs, jobs, | ||||||
8 | and other benchmarks related to the goals stated in this | ||||||
9 | subsection.
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10 | Section 30. Transition to a federal program.
If the | ||||||
11 | federal government adopts a program that the Agency determines | ||||||
12 | to be comparable to the market-based cap and invest program | ||||||
13 | authorized in Section 15, the Agency shall immediately begin to | ||||||
14 | transition into the federal program in order to create one | ||||||
15 | national system of tradable greenhouse gas emissions.
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16 | Section 35. Enforcement.
The Agency shall monitor | ||||||
17 | compliance with and enforce any rule adopted by the Board under | ||||||
18 | this Act.
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19 | Section 80. The State Finance Act is amended by adding | ||||||
20 | Section 5.719 as follows: | ||||||
21 | (30 ILCS 105/5.719 new) | ||||||
22 | Sec. 5.719. The Global Warming Action Fund.
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1 | (415 ILCS 140/Act rep.)
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2 | Section 90. The Kyoto Protocol Act of 1998 is amended by | ||||||
3 | the repealing Act. | ||||||
4 | Section 99. Effective date. This Act takes effect upon | ||||||
5 | becoming law.".
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