CA SB1391

Requires the State Air Resources Board to conduct a comprehensive review of market-based compliance mechanisms at least once every three years, beginning by January 30, 2023 or within 30 days of the scoping plan update, whichever is later.

Review must evaluate and address concerns related to allowance overallocation, offset credit eligibility requirements, whether future allowance supply needs automatic reduction based on offset credits issued or retired, and whether facility-specific or sector-specific emission limits would reduce pollution in disadvantaged communities.

Mandates the State Air Resources Board to consult with the Independent Emissions Market Advisory Committee and environmental justice advisory committee during the review process, which must follow Administrative Procedure Act requirements for public notice, hearing, and comment.

Requires the State Air Resources Board to develop and publish "allowance banking metrics" (methodology for determining total allowances in circulation and held by market participants) concurrently with the first review, with subsequent reviews based on outcomes derived from these metrics.