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<ns0:Id>20250AB__170498AMD</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-04</ns0:ActionDate>
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<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2026-03-02</ns0:ActionDate>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Mark González</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
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<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Mark González</ns0:Name>
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<ns0:Title>An act to amend Sections 38561.3 and 38561.6 of, and to add Section 38561.4 to, the Health and Safety Code, relating to greenhouse gases.</ns0:Title>
<ns0:RelatingClause>greenhouse gases</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Greenhouse gases: embodied carbon building materials.</ns0:Subject>
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<html:p>Existing law requires, by December 31, 2026, the State Air Resources Board, in consultation with relevant stakeholders, as provided, to develop a framework for measuring the average carbon intensity of the materials used in the construction of new buildings, including those for residential uses. Existing law requires, by December 31, 2028, the state board to develop a comprehensive strategy for the state’s building sector to achieve a 40% net reduction in greenhouse gas emissions of building materials, as specified, as soon as possible, but no later than December 31, 2035. Existing law authorizes the state board to establish an embodied carbon trading system, as defined, in compliance with these requirements, as provided.</html:p>
<html:p>This bill would require the state board
to determine whether the cost of building materials with lower embodied carbon have reached cost parity with conventional building materials before implementing the above-described provisions. If the state board determines that building materials with lower embodied carbon have not reached cost parity with conventional building materials, the bill would require the state board to delay or suspend, as applicable, implementation of those provisions for not less than 5 years. The bill would authorize the state board to continue to make that determination and delay or suspend those provisions for not less than 5 years until the state board determines that building materials with lower embodied carbon have reached cost parity with conventional building materials, at which time the bill would require the state board to implement those provisions. The bill also would make conforming changes.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 38561.3 of the
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is amended to read:
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<html:p>
(a)
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By December 31, 2026, the state board, in consultation with relevant stakeholders, including, but not limited to, the California Building Standards Commission, the Department of Housing and Community Development, and the State Energy Resources Conservation and Development Commission, shall develop a framework for measuring the average carbon intensity of the materials used in the construction of new buildings, including those for residential uses.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The state board shall also develop, by December 31, 2028, a comprehensive strategy for the state’s building sector to achieve a 40-percent net reduction in greenhouse gas emissions of building materials as soon as possible, but no later than December 31, 2035. The baseline for the 40-percent net reduction
shall be established based on an industry average of environmental product declarations reported for the 2026 calendar year, or the most relevant, up-to-date data that is available, as determined by the state board.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The framework developed pursuant to subdivision (a) shall include both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
A requirement for the submission by an entity undertaking the construction of a project with a minimum size of five new residential units or 10,000 square feet of nonresidential building space of a life-cycle assessment, as defined in the International Organization for Standardization (ISO) 14040 series of standards with a focus on the Product Stage phases (A1-A3), to determine the carbon intensity of the materials used in new residential and nonresidential buildings.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A requirement for the submission by
the manufacturer of a building material of an Environmental Product Declaration, Type III, as defined by the International Organization for Standardization (ISO) Standard 14025, or similarly robust material life-cycle assessment approaches that have uniform standards in data collection consistent with ISO Standard 14025, industry acceptance, and integrity for construction materials used for the building. The state board shall determine how to proceed in the event that insufficient material life-cycle assessments or Environmental Product Declarations exist, or in the event of significant supply chain issues.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The framework developed pursuant to subdivision (a) may include a tracking and reporting mechanism in order to facilitate the reporting of data to the state board on the carbon intensity of buildings, and that would also allow tracking of progress toward the carbon intensity reduction targets set forth in this section. Except for a fee
to reimburse the state board for any administrative costs incurred in administering the reporting mechanism, the state board shall not impose any other charges on the participants in the reporting mechanism authorized under this subdivision.
</html:p>
<html:p>
(e)
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Based on the information submitted by an entity undertaking the construction of a covered project pursuant to paragraph (2) of subdivision (i), as well as other relevant information as determined by the state board, the state board shall evaluate the cost impact and feasibility of implementation of the strategy developed pursuant to subdivision (b), for the purpose of developing recommendations for addressing known cost impact and feasibility issues in strategy implementation. This subdivision does not affect the project’s status as deemed to comply with the applicable target based on the finding made solely by the entity undertaking the construction of a project pursuant to paragraphs (1) and (2) of
subdivision (i).
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
As used in this section the following terms have the following meanings:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Feasibility,” in regard to the use of a material, means all of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The material is capable of being installed in a successful manner within a reasonable period of time, taking into account economic, environmental, legal, social, and technological factors.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The material does not harm the health or safety of those who install the materials or occupy the building.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The building using the material can be designed to provide an equivalent function and, at a minimum, the same useful life, performance, and durability as the building made with baseline materials.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
The material is commercially available to the region of the project.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
The material has not been involved in a claim for a construction or design defect, breach of express or implied warranty, fraud, or misrepresentation.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
The material provides an equivalent function and at least the same useful life, performance, and durability as the baseline material.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
“Cost impact” means a significant overall material or operational cost increase or schedule delay resulting from incorporating the lower carbon material.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
As used in subparagraph (A), “significant” means an increase of 5 percent or more in the operational or overall material cost at the location of
the project or time schedule delay that is attributable to incorporating a lower carbon material compared to the baseline material for which it is a substitute in the project. For purposes of this paragraph, the baseline material shall be the material that would have been used by the entity undertaking the construction of the project if this section did not apply to the project at the time the application for the building permit is submitted for a model home or project, as applicable.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
The state board shall allow the entity undertaking the construction of a project to use the same persons as those responsible for the Certificate of Installation pursuant to paragraph (3) of subdivision (a) of Section 10-103 of Title 24 of the California Code of Regulations in submitting, reporting, notifying, tracking, or otherwise conveying information to the state board.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The targets established by this section shall begin to apply no sooner than January 1, 2027, and two years after the baseline is established. The applicable target for each residential unit built within a project shall be the target that applied at the time the application was submitted for a building permit of the first model home in the project. For projects that do not use model homes, the applicable target shall be the target in effect at the time of submission of the application for the building
permit.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Notwithstanding paragraph (1), the state board shall delay or suspend the implementation of this subdivision and the targets established by this section shall not apply until the state board makes the determination required pursuant to Section 38561.4.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
For buildings covered by this section, the incorporation of lower carbon materials shall be limited or excluded to the extent that it has a cost impact or is unfeasible.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
An entity undertaking the construction of a project may seek to achieve the applicable target through the use of materials or methods pursuant to this section and, if an embodied carbon trading system is established or other alternative compliance
method, pursuant to Section 38561.6, separately or in combination, as determined by the available compliance methods. If the entity undertaking the construction of a project uses materials or methods described in this section, Section 38561.6, or both, subject to the feasibility criteria and up to the cost impact limit, and the entity finds that it is still unable to achieve the applicable target due to unfeasibility or cost impact, then the project shall be deemed to comply with the applicable target. In that case, the entity undertaking the construction of a project shall provide the state board with documentation that shall be specified in the reporting and recordkeeping regulations that will be established by the state board.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The state board shall consult experts, including, but not limited to, building product manufacturers, builders, and design professionals, to advise the state board on methods to reduce the carbon intensity of
building materials and covered projects, while maintaining the avoidance of cost impact and their feasibility.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The state board shall not have the authority to approve, deny, or delay the planning, use, development, design, or construction of a project.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Manufacturers of building materials shall be required to report data to the state board to ensure that their products comply with applicable reduction targets in accordance with reporting and compliance requirements that will be established by the state board.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
This section does not apply to appliances.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
For purposes of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code), no adverse environmental impact associated with the
manufacture of building materials may be attributed, directly or indirectly, to the project incorporating the building material. This subdivision does not relieve the entity undertaking the construction of a covered project from complying with any other provision within this section.
</html:p>
<html:p>
(
<html:i>l</html:i>
)
<html:span class="EnSpace"/>
In developing the strategy pursuant to subdivision (b), the state board shall do all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Research and prioritize actions and provisions that leverage state and federal incentives, where applicable, to reduce costs of implementing greenhouse gas emissions reduction technologies, processes, and materials used in construction-related projects for the construction industry, homeowners, and developers, and to increase economic value for the state.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Evaluate measures to support market demand and financial
incentives to encourage the production and use of materials used in construction-related projects with low greenhouse gas intensity, including, but not limited to, consideration of the following measures:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Measures to expedite the adoption for use in projects undertaken by state agencies, including the Department of Transportation and the Department of General Services.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Measures to provide financial support and incentives for research, development, and demonstration of technologies to mitigate emissions of greenhouse gases from the manufacture of materials used in construction-related projects, with the objective of accelerating commercial availability of those technologies.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Measures to provide consumer access to building material embodied carbon data reported to the state board.
</html:p>
<html:p>
(m)
<html:span class="EnSpace"/>
The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to reporting regulations and reporting standards promulgated pursuant to this section. Prior to adopting those reporting standards and regulations pursuant to this section, the proposed rulemaking shall be made available to the public and stakeholders for comment and workshopping. The state board, the California Building Standards Commission, the Department of Housing and Community Development, and the State Energy Resources Conservation and Development Commission shall exchange technical information with each other as part of this process prior to the adoption of any reporting standard or regulation pursuant to this section. All other regulations adopted pursuant to this section are subject to the Administrative Procedure Act.
</html:p>
<html:p>
(n)
<html:span class="EnSpace"/>
Division 13 (commencing with Section 21000) of the Public Resources Code does not apply to the state board’s development and approval of the framework and comprehensive strategy developed pursuant to this section.
</html:p>
<html:p>
(o)
<html:span class="EnSpace"/>
Paragraphs (1) and (2) of subdivision (i) apply when the state board adopts any mechanism, standard, requirement, regulation, rule, protocol, framework, strategy, credit, target, or establishes an embodied carbon trading system, or alternative incentives or compliance programs, whichever occurs first.
</html:p>
<html:p>
(p)
<html:span class="EnSpace"/>
Penalties relating to the use or failure to use low-carbon building materials, or the failure to achieve the applicable target, may not be applied to an entity undertaking the construction of a project that is deemed to comply pursuant to paragraphs (1) and (2) of subdivision (i).
</html:p>
<html:p>
(q)
<html:span class="EnSpace"/>
Except as otherwise provided in subdivision (p), penalties for a violation of this section are limited to the penalties described in subdivisions (a) and (d) of Section 42402, unless the violation shows a disregard for the regulations under this section, extreme negligence, or acts of deceit, in which case the penalties set forth in subdivision (b) of Section 42402 apply.
</html:p>
<html:p>
(r)
<html:span class="EnSpace"/>
Notwithstanding any other law, the penalties described in subdivision (q) are the exclusive enforcement mechanism against regulated entities for a violation of this section and Section 38561.6.
</html:p>
<html:p>
(s)
<html:span class="EnSpace"/>
As used in this section, “entity undertaking the construction of a project” means a person or entity who owns the real property that is the subject of a development agreement.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 38561.4 is added to the
<ns0:DocName>Health and Safety Code</ns0:DocName>
, to read:
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<ns0:Num>38561.4.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
The state board shall determine that building materials with lower embodied carbon have reached cost parity with conventional building materials before implementing paragraph (1) of subdivision (h) of Section 38561.3 and subparagraph (A) of paragraph (4) of subdivision (c) of, or paragraph (1) of subdivision (d) of, Section 38561.6.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
If the state board determines that building materials with lower embodied carbon have not reached cost parity with conventional building materials, the state board shall delay or suspend, as applicable, implementation of Sections 38561.3 and 38561.6 for not less than five years. At the end of the period of delay or suspension, the state board may determine whether building materials with lower embodied
carbon have reached cost parity with conventional building materials. If the state board determines that building materials with lower embodied carbon have not reached cost parity with conventional building materials, the state board shall again delay or suspend the implementation of those sections for not less than five years. The state board may continue to make that determination and delay or suspend those provisions in accordance with this subdivision until subdivision (a) applies and, at that time, the state board shall implement Sections 38561.3 and 38561.6.
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<ns0:Num>SEC. 3.</ns0:Num>
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Section 38561.6 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:Num>38561.6.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
For purposes of this section, the following definitions apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Carbon intensity” means the quantity of life-cycle greenhouse gas emissions per unit of building material, and specifically the ratio between the net upstream carbon dioxide impact (emissions minus storage) of a material and the weight of the material.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Embodied carbon trading system” means a market-based credit trading platform of greenhouse gas emissions exchanges, banking, credits, and other transactions, governed by rules and protocols established by the state board, that result in the same greenhouse gas emission reduction, over the same time period, as direct compliance with a greenhouse gas emission limit or
emission reduction measure adopted by the state board pursuant to this division.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Low-carbon building standard” means a framework created pursuant to Section 38561.3 to reduce by 40 percent the carbon intensity of the materials used in newly constructed buildings identified in paragraph (1) of subdivision (c) of Section 38561.3 and within the embodied carbon trading system, to facilitate a credit trading platform for building materials along with other requirements as specified.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
“Material life-cycle” means the aggregate of greenhouse gas emissions associated with material production, as defined in the International Organization for Standardization (ISO) 14040 series of standards with a focus on the Product Stage phases (A1-A3).
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
“Entity undertaking the construction of a project” means a person or entity
who owns the real property that is the subject of a development agreement.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The state board may establish an embodied carbon trading system in compliance with the requirements set forth in Section 38561.3 and this section that meets both of the following requirements:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
If the state board opts to establish an embodied carbon trading system, the system shall be designed to be used by entities undertaking a construction project and building material manufacturers.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The embodied carbon trading system unit of measurement shall be Global Warming Potential (GWP) per gross square foot (kg CO
<html:sup>2</html:sup>
e/sq. ft.
<html:sup>2</html:sup>
).
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The state board shall have the flexibility to design the embodied carbon trading system and may do all of the following with
respect to the embodied carbon trading system:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Adopt rules and regulations for the credit allocation approach, the anticipated carbon price in the scheme, and trading periods.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
In developing the rules and regulations for the credit allocation approach, including those governing any tradeable compliance instrument, make efforts to avoid an overabundance of compliance credits in the market, and, to this end, may consider setting an upper limit on amount of credits that can be generated per unit of material.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Consider using the credits generated through the use of the embodied carbon trading system to help promote innovation and investment in building construction materials that reduce emissions of greenhouse gases.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Consider all relevant information pertaining to low-carbon building materials reduction programs in other states, localities, and nations, including other states, Canada, and the European Union, and, in doing so, review existing and proposed international, federal, and state greenhouse gas emission reporting programs, make reasonable efforts to promote consistency among the programs established pursuant to this division and other programs, and streamline reporting requirements on greenhouse gas emission sources.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Except as provided in subparagraph (B), integrate the embodied carbon trading system with the framework described in Section 38561.3 on or before December 31, 2026, and shall implement that
system on and after January 1, 2029.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The state board shall delay or suspend the implementation of this paragraph and the targets established by this section shall not apply until the state board makes the determination required pursuant to Section 38561.4.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Consult with the California Building Standards Commission, the Department of Housing and Community Development, and the State Energy Resources Conservation and Development Commission in the development of building regulations, in order to minimize duplicate or inconsistent regulatory requirements.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Except as provided in paragraph (2), the state board shall have the discretion to adopt further greenhouse gas emission reduction targets within the scope of Section 38561.3 prior to December 31, 2035, or provide early reduction credit considering market adoption, if appropriate.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The state board shall delay or suspend the implementation of this subdivision and the targets established by this section shall not apply until the state board makes the determination required pursuant to Section 38561.4.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
In developing its plan, the state board shall identify opportunities for emission reduction measures from all verifiable and enforceable actions, and best management practices.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
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The state board may adopt rules and regulations to monitor, verify, and enforce reductions in embodied carbon in building materials pursuant to this section and Section 38561.3, consistent with the requirements of Section 38561.4.
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(2)
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The state board shall minimize the administrative burden of implementing and complying with these regulations when possible.
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(3)
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The state board shall design any rules and regulations to encourage manufacturers of building materials to produce low-carbon materials for sale in California to ensure that entities that undertake construction of projects identified in paragraph (1) of subdivision (c) of Section 38561.3 have an adequate supply of low-carbon materials that meet all of the feasibility and cost impact requirements of subdivision (f) of Section 38561.3 to meet the greenhouse gas reduction targets established in Section 38561.3.
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(g)
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The state board may consider the use of third parties, such as verifiers, for purposes of implementing the requirements of this section.
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(h)
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Compliance mechanisms, reporting requirements, and penalties for noncompliance with any compliance standards or an embodied carbon trading system established pursuant to this section or Section 38561.3 will be determined by the administrative process. The carbon trading system established pursuant to this section alone or in combination with Section 38561.3 shall not cause a project to have a cost impact or not comply with the term feasibility
as those terms are defined in subdivision (f) of Section 38561.3.
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(i)
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The state board shall periodically review and update its emission reporting and compliance standard requirements, as necessary.
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(j)
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This section does not limit the state board’s ability to establish alternative incentives or compliance programs aside from or in addition to an embodied carbon trading system.
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(k)
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This section provides guidance only. This section does not limit or expand the authority of the state board.
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(
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)
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This section does not authorize the creation of a revenue-generating program or any other program that would result in moneys being paid to the state, other than penalties imposed for a violation of this section.
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(m)
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Notwithstanding any other law, the penalties described in subdivision (q) of Section 38561.3 are the exclusive enforcement mechanism against regulated entities for a violation of this section.
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