CA Health & Safety Code Section 40714.5


The Legislature hereby finds and declares all of the following:


Because of policy considerations, certain sources of air pollution are exempt from district permitting requirements or are not otherwise controlled by districts.


Emissions from some of these sources can be reduced through cost-effective measures, thereby creating additional emission reduction credits.


An increased supply of emission reduction credits is beneficial to local economies.


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.


(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 program.


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:


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 standards.


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.


The credits shall not, in any manner, result in double-counting of emission reductions.


The credits shall be permanent, enforceable, quantifiable, and surplus.


This subdivision applies statewide in any area not otherwise excluded under subdivision (d) of Section 40709.
Last Updated

Aug. 19, 2023

§ 40714.5’s source at ca​.gov