California Health and Safety Code Section 40714.5
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California Laws > Health and Safety Code > California Health and Safety Code Section 40714.5
40714.5. (a) The Legislature hereby finds and declares all of the
(1) Because of policy considerations, certain sources of air
pollution are exempt from district permitting requirements or are not
otherwise controlled by districts.
(2) Emissions from some of these sources can be reduced through
cost-effective measures, thereby creating additional emission
(3) An increased supply of emission reduction credits is
beneficial to local economies.
(4) The purpose of this section is to provide an incentive to
generate additional and fully valued emission reduction credits by
encouraging emission reductions from these sources without subjecting
them to a district permitting process.
(b) (1) With respect to any emission reduction that occurs on or
after January 1, 1991, at a source that was and remains exempt from
district rules and regulations, the district shall grant emission
reduction credits or marketable trading credits without any discount
or reduction in the quantity of the emissions reduced at the source
unless otherwise provided by law. Emission reduction credits or
marketable trading credits issued by the district for those exempt
sources may be reduced only when applied to the permitting of other
stationary sources as a result of new source review, or in accordance
with any applicable requirement of a marketable trading credit
(2) Any credits issued by a district pursuant to this subdivision
shall meet all of the requirements of state and federal law,
including, but not limited to, all of the following requirements:
(A) The credits shall not result in the crediting of air emissions
which are already contemporaneously required by an emission control
measure in a plan necessary to achieve state and federal ambient air
(B) The credits shall not provide for an additional discount of
credits solely as a result of emission reduction credits trading if a
district has already discounted the credit as part of its process of
identifying and granting those credits to sources.
(C) The credits shall not, in any manner, result in
double-counting of emission reductions.
(D) The credits shall be permanent, enforceable, quantifiable, and
(3) This subdivision applies statewide in any area not otherwise
excluded under subdivision (d) of Section 40709.
Last modified: February 22, 2013