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Senator Saunders moved the following amendment:

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     Senate Amendment (with directory and title amendments)

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     Delete line(s) 3324-3385

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and insert:

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403.44 Florida Climate Protection Act.--

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(1) The Legislature finds it is in the best interest of this

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state to document, to the greatest extent practicable, greenhouse

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gas (GHG) emissions and to pursue a market-based emissions

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abatement program, such as cap-and-trade, to address GHG

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emissions reductions.

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(2) As used in this section, the term:

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(a) "Allowance" means a credit issued by the department through

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allotments or auction which represents an authorization to emit

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specific amounts of greenhouse gases, as further defined in

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department rule.

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(b) "Cap-and-trade" or "emissions trading" means an

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administrative approach used to control pollution by providing a

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limit on total allowable emissions, providing for allowances to

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emit pollutants, and providing for the transfer of the allowances

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among pollutant sources as a means of compliance with emission

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limits.

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(c) "Greenhouse gas" means carbon dioxide, methane, nitrous

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oxide, and fluorinated gases such as hydrofluorocarbons,

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perfluorocarbons, and sulfur hexafluoride.

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(d) "Leakage" means the offset of emission abatement that is

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achieved in one location subject to emission control regulation

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by increased emissions in unregulated locations.

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(e) "Major emitter" means an electric utility regulated under

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this chapter.

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(3) A major emitter must use The Climate Registry for purposes of

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emission registration and reporting.

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(4) The Department of Environmental Protection shall establish

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the methodologies, reporting periods, and reporting systems that

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must be used when major emitters report to The Climate Registry.

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The department may require the use of quality assured data from

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continuous emissions-monitoring systems.

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(5) The department may adopt rules for a cap-and-trade regulatory

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program to reduce greenhouse gas emissions from major emitters.

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When developing the rules, the department shall consult with the

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Florida Energy and Climate Commission and the Public Service

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Commission, and may consult with the Governor's Action Team for

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Energy and Climate Change. The department shall not adopt rules

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until after January 1, 2010. The rules shall not become effective

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until ratified by the Legislature.

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6) The rules of the cap-and-trade regulatory program shall

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include, but are not limited to:

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(a) A statewide limit or cap on the amount of GHG emissions

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emitted by major emitters.

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(b) Methods, requirements, and conditions for allocating the cap

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among major emitters.

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(c) Methods, requirements, and conditions for emissions

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allowances and the process for issuing emissions allowances.

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(d) The relationship between allowances and the specific amounts

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of greenhouse gases they represent.

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(e) The length of allowance periods and the time over which

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entities must account for emissions and surrender allowances

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equal to emissions.

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(f) The time path of allowances from the initiation of the

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program through to 2050.

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(g) A process for the trade of allowances between major emitters,

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including a registry, tracking, or accounting system for such

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trades.

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(h) Cost containment mechanisms to reduce price and cost risks

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associated with the electric generation market in this state.

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Cost containment mechanisms to be considered for inclusion in the

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rule include, but are not limited to:

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1. Allowing major emitters to borrow allowances from

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future time periods to meet their emission limit.

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2. Allowing major emitters to bank emission reductions in the

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current year to be used to meet emission limits in future years.

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3. Allowing major emitters to purchase emissions offsets from

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other entities who produce verifiable reductions in unregulated

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greenhouse gas emissions or who produce verifiable reductions in

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greenhouse gases through voluntary practices that capture and

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store greenhouse gases that otherwise would be released into the

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atmosphere. In considering this cost containment mechanism, the

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department shall identify sectors and activities outside of the

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capped sectors, including other state or international

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activities, and the conditions under which reductions there can

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be credited against emissions of capped entities in place of

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allowances issued by the department. The department shall also

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consider potential methods, and their effectiveness, to avoid

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double-incentivizing such activities.

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4. Providing a safety valve mechanism to ensure that the market

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prices for allowances or offsets do not surpass a predetermined

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level compatible with the affordability of electric utility rates

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and the well being of the state's economy. In considering this

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cost containment mechanism, the department shall evaluate

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different price levels for the safety valve and methods to change

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the price level over time to reflect changing state, federal and

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international markets, regulatory environments, and technological

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advancements.

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In considering cost containment mechanisms for inclusion in the

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rule, the department shall evaluate the anticipated overall

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effect of each mechanism on the abatement of greenhouse gas

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emissions, electricity rate payers, and the benefits and costs of

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each to the state's economy, and shall also consider the

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interrelationships between the mechanisms under consideration.

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(i) A process to allow the department to exercise its authority

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to discourage leakage of GHG emissions to neighboring states

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attributable to the implementation of this program.

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(j) Provisions for a trial period on the trading of allowances

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before full implementation of a trading system.

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(7) In recommending and evaluating proposed features of the cap

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and trade system, the following factors shall be considered:

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(a) The overall cost-effectiveness of the cap and trade system in

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combination with other policies and measures in meeting statewide

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targets.

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(b) Minimizing the administrative burden to the state of

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implementing, monitoring and enforcing the program.

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(c) Minimizing the administrative burden on entities covered

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under the cap.

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(d) The impacts on electricity prices for consumers.

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(e) The specific benefits to Florida's economy for early adoption

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of a cap-and-trade system for greenhouse gases in the context of

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a federal climate change legislation and the development of

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international compacts.

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(f) The specific benefits to Florida's economy associated with

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the creation and sale of emissions offsets from economic sectors

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outside of the emissions cap.

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(g) The potential effects of leakage if economic activity

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relocates out of the state.

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(h) The effectiveness of the combination of measures in meeting

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identified targets.

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(i) The implications for near-term periods of long run targets

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specified in the overall policy.

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(j) The overall costs and benefits of a cap-and-trade system to

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the economy of this state.

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(k) How to moderate impacts on low income consumers that result

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from energy price increases.

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(l) Consistency of the program with other state and possible

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Federal efforts.

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(m) The feasibility and const-effectiveness of extending the

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program scope as broadly as possible among emitting activities

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and sinks in Florida.

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(n) Evaluation of the conditions under which Florida should

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consider linking its trading system to other states' or other

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countries' systems, and how that might be affected by the

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potential inclusion in the rule of safety valve.

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(8) Recognizing that the international, national, neighboring

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state policies and the science of climate change will evolve,

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prior to submitting the proposed rules to the Legislature for its

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consideration, the department shall submit the proposed rules to

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the Florida Energy and Climate Commission, which shall review the

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proposed rule and submit a report to the Governor, the President

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of the Florida Senate, the Speaker of the Florida House of

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Representatives, and the department. The report shall address:

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(a) The overall cost-effectiveness of the proposed cap and trade

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system in combination with other policies and measures in meeting

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statewide targets.

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(b) The administrative burden to the state of implementing,

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monitoring and enforcing the program.

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(c) The administrative burden on entities covered under the cap.

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(d) The impacts on electricity prices for consumers.

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(e) The specific benefits to Florida's economy for early adoption

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of a cap-and-trade system for greenhouse gases in the context of

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federal climate change legislation and development of new

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international compacts.

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(f) The specific benefits to Florida's economy associated with

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the creation and sale of emissions offsets from economic sectors

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outside the emissions cap.

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(g) The potential effects on leakage if economic activity

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relocates out of the state.

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(h) The effectiveness of the combination of measures in meeting

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identified targets.

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(i) The economic implications for near-term periods of short-term

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and long-term targets specified in the overall policy.

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(j) The overall costs and benefits of a cap-and-trade system to

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the economy of this state.

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(k) The impacts on low income consumers that result from energy

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price increases.

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(l) The consistency of the program with other states and possible

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Federal efforts.

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(m) The evaluation of the conditions under which Florida should

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consider linking its trading system to other states' or other

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countries' systems, and how that might be affected by the

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potential inclusion in the rule of a safety valve.

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(n) The timing and changes in the external environment, such as

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proposals by other states or implementation of a Federal program

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that would spur reevaluation of the Florida program.

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(o) The conditions and options for eliminating the Florida

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program if a Federal program were to supplant it.

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(p) The need for a regular re-evaluation of the progress of other

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emitting regions of the country and of the world, and whether

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other regions are abating emissions in a commensurate manner.

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(o) The desirability of and possibilities of broadening the scope

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of Florida's cap and trade system at a later date to include more

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emitting activities as well as sinks in Florida, and the

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conditions that would need to be met to do so, as well as how the

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program would encourage these conditions to be met such as

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developing monitoring and measuring techniques for land use

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emissions and sinks, regulating sources up stream, and other

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considerations.

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4/15/2008  8:16:00 PM     EP.37.07746