Bill Summary – FastDemocracy

WEST VIRGINIA LEGISLATURE
REGULAR SESSION
                 Engrossed Committee Substitute for Senate Bill 618
 BY SENATORS WOODRUM, DEEDS, RUCKER, AND TAYLOR
    [Originating in the Committee on Government Organization; reported February 21, 2024]
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  A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article,
         designated §22-37-1, §22-37-2, §22-37-3, §22-37-4, §22-37-5, §22-37-6, §22-37-7, and
         §22-37-8, all relating to authorizing Division of Forestry to administer Carbon Exchange
         Program; outlining scope of Carbon Exchange Program; and providing program
         requirements for Carbon Exchange Program.
     Be it enacted by the Legislature of West Virginia:
     ARTICLE 37. FOREST MANAGEMENT EXCHANGE PROGRAM.
     §22-37-1. Short title.
         This article shall be known and cited as the Forest Management Exchange Program.
     §22-37-2. Legislative findings.
         The Legislature finds that:
         (1) West Virginia, as a national energy leader, is positioned to create a voluntary market
  for the sale and purchase of carbon offset credits.
         (2) Increased use of pollution prevention strategies, more cost-effective options for
  compliance with environmental standards, and improvement of environmental performance can
  be achieved through the establishment of a Forest Management Exchange Program.
         (3) While West Virginia’s existing environmental laws play an important role in protecting
  the environment, environmental protection could be further enhanced by authorizing innovative
  advances in environmental regulatory methods and approaches.
        (4) A state regulated Forest Management Exchange Program will further West Virginia’s
 role as an energy leader, incentivize economic investment, encourage environmental protection,
 and protect West Virginia forest landowners, forest product businesses, and consumers.
     §22-37-3. Purpose.
         The purpose of this article is to authorize the Division of Forestry to administer a Forest
  Management Exchange Program, known as the Forest Management Exchange, to regulate the
  sale and purchase of carbon credits, and which shall serve as the exclusive contracting platform
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  for all carbon credit agreements encumbering or involving real property and standing timber
  located in West Virginia. The division shall develop scientific methodologies that calculate and
  include the long-term carbon captures from the production of forest products and a substitution
  factor (or product displacement factor) accounting for the use of forest products over products
  that would have a higher carbon emissions footprint.
     §22-37-4. Definitions.
          (a) "Carbon credit" means an emission reduction of one metric ton of carbon dioxide (or
  carbon dioxide equivalent) resulting from greenhouse gas emissions reductions.
          (b) "Carbon credit agreement" means any contract for the sale or purchase of West
  Virginia carbon credits.
          (c) "Carbon dioxide equivalent" means the number of tons of carbon dioxide emissions
  with the same global warming potential as one ton of another greenhouse gas.
          (d) "Country of Particular Concern" means a country that has been designated as such
  by the Department of State of the United States of America pursuant to 22 U.S.C. § 6448.
          (e) "Division" means the Division of Forestry.
         (f) "Director" means the Director of the Division of Forestry.
         (g) "Greenhouse gas" means carbon dioxide, methane, nitrous oxide, or fluorinated gases.
         (h) "West Virginia carbon credit" means a division-certified carbon credit that is generated
 in, or originates principally as a result of activity in, West Virginia.
     §22-37-5. Scope; eligibility.
          (a) The director shall, by July 1, 2025, establish the West Virginia Forest Management
  Exchange on which all West Virginia carbon credits shall be listed. No carbon credit originating
  from real property or standing timber in West Virginia may be sold other than through the West
  Virginia Forest Management Exchange.
          (b) The West Virginia Forest Management Exchange shall regulate all West Virginia
  carbon credits and carbon credit agreements.
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          (c) The West Virginia Forest Management Exchange shall be a public marketplace open
  to businesses and consumers alike: Provided, That all persons or businesses shall register with
  the division before participating in the West Virginia Forest Management Exchange.
         (d) West Virginia carbon credits that are created as a result of activities or restrictions on
 state property, including state forests and parks, are the property of the state, and may be sold
 as such.
         (e) Citizens of, or entities organized in or controlled by citizens or governments of, any
 country designated as a Country of Particular Concern by the Department of State of the United
 States of America are ineligible to register with the division for the West Virginia Forest
 Management Exchange.
         (f) The division shall consider the production of forest products and the displacement effect
 of those products as meeting the definition of “additionality” when certifying carbon credits.
     §22-37-6. Program administration.
          (a) The West Virginia Forest Management Exchange shall allow landowners and timber
  owners to publish West Virginia carbon credits on the exchange for the solicitation of carbon credit
  agreements.
          (b) The West Virginia Forest Management Exchange shall allow persons interested in
  purchasing West Virginia carbon credits to solicit offers for carbon credit agreements.
          (c) The division shall certify carbon credits before their publication on the West Virginia
  Forest Management Exchange.
          (d) Only West Virginia carbon credits are eligible for sale or purchase. The division shall
  maintain a public catalog of available West Virginia carbon credits along with a registry of all West
 Virginia lands encumbered by carbon agreements beginning upon the effective date of this article.
         (e) The West Virginia Forest Management Exchange shall review all carbon credit
 agreements for compliance with the requirements of this article and associated regulations,
 including but not limited to:
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        (1) Carbon credit certification criteria;
        (2) Price floors and ceilings; and
        (3) Contract term limits.
        (f) The division may propose rules, including emergency rules, pursuant to §29A-3-1 et
 seq. of this code to execute and implement the West Virginia Forest Management Exchange,
 including adopting a fee schedule to fund the administration of the exchange and setting
 standards for certification of carbon credits.
        (g) The division may contract for operational and administration support services from
 third-party providers as necessary to execute, implement, and administer the West Virginia Forest
 Management Exchange: Provided, That for purposes of this article, the division shall be exempt
 from the provisions of §5A-3-1 et seq. of this code.
     §22-37-7. Appeals.
         Any person or business adversely affected by a final order or decision of the division,
  including, but not limited to, a carbon credit certification decision or imposition of a condition on a
  carbon credit agreement, may pursue an appeal in accordance with the provisions of §29A-5-1 et
  seq. and §29A-6-1 et seq. of this code.
     §22-37-8. Cooperation with other state agencies; reports to Legislature.
         (a) The division shall cooperate with other state agencies to administer the West Virginia
  Forest Management Exchange in the best interest of the state.
         (1) The West Virginia Geological and Economic Survey shall be available to provide its
  expertise and assistance.
         (2) The West Virginia Department of Environmental Protection shall be available to provide
  its expertise and assistance.
         (b) The division shall submit an annual report on the impacts of the West Virginia Forest
  Management Exchange to the Governor, the Speaker of the House of Delegates, and the
  President of the Senate.
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Statutes affected: 
Introduced Version: 22-37-1, 22-37-2, 22-37-3, 22-37-4, 22-37-5, 22-37-6, 22-37-7, 22-37-8
Committee Substitute: 22-37-1, 22-37-2, 22-37-3, 22-37-4, 22-37-5, 22-37-6, 22-37-7, 22-37-8
Engrossed Committee Substitute: 22-37-1, 22-37-2, 22-37-3, 22-37-4, 22-37-5, 22-37-6, 22-37-7, 22-37-8