BILL ANALYSIS Ó
SB 1387
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1387
(De León) - As Amended April 7, 2016
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|Policy |Natural Resources |Vote:|6 - 2 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill requires local air districts to submit Air Quality
Management Plans (also referred to as attainment plans), plan
revisions, and market-based incentive programs to the California
Air Resources Board (ARB) for review and approval, and
prescribes actions for ARB to take if it determines the plan,
revision or program does not comply with the law. This bill
also adds three members to the South Coast Air Quality
Management District (SCQMD). Specifically, this bill:
1)Requires any local air district's attainment plan or revision
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to achieve equivalent emission reductions and reduced cost and
job impacts compared to current command and control
regulations and future air quality measures that would
otherwise have been adopted.
2) Prohibits a local air district from implementing any
revisions to an adopted market-based incentive program,
unless ARB determines the plan or revision complies with the
above equivalency requirements.
3) Requires, if ARB determines a plan, revision, or district
rule, does not meet the specified requirements for a
market-based incentive program, that ARB:
a) Notify the local air district;
b) Revise the plan, revision, or district rule to make it
compliant; and
c) Approve the plan, revision, or district rule within 60
days.
4) Specifies that a plan, revision or district rule approved by
ARB shall take effect immediately and is binding on the local
air district.
5) Expands the SCAQMD governing board by three members to
increase the total to 16, with the Governor, the Senate
Committee on Rules, and the Speaker of the Assembly each
appointing one of the additional members.
6) Requires the above appointees to be representatives of bona
fide nonprofit environmental justice organizations who
advocate for clean air and pollution reduction in one or more
communities within the South Coast Air Basin.
FISCAL EFFECT:
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1)Increased ongoing annual costs of between $400,000 (2.5 PY)
and $900,000 (5.5 PY) for ARB to review, revise, and approve
plans, plan revisions, and rules for compliance with
applicable requirements (Air Pollution Control Fund).
This estimate is specific to the SCAQMD, the only local air
district with a market-based incentive program. For the
ongoing, plans and plan revisions (every 3 years) ARB
estimates requiring one new position. The other 1 to 4
estimated positions depend on the estimated the deficiency
rule, as well as frequency of the revisions.
2)Unknown, potentially significant ongoing increased costs if
other local air districts adopt market-based incentive
programs (Air Pollution Control Fund.)
COMMENTS:
1)Purpose. According to the author, in the past six months,
with its recent changes in governance, SCAQMD has voted to
dismiss its longstanding executive officer and weaken clean
air regulations over the recommendations of its expert staff.
This bill seeks to modernize the membership of the SCAQMD
governing board and ensure the ARB can conduct speedy
oversight of any amendments to the smoke stack regulations
made by the new board.
2)SCAQMD. Local air districts and their governing boards have
primary jurisdiction over air pollution from all sources in
their air basin, other than emissions from mobile sources. As
prescribed by state law, the SCAQMD board is made up of 13
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members: three appointed by the state (one each by the Senate
Rules Committee, the Speaker of the Assembly, and the
Governor) and 10 appointed by local governments, as prescribed
in statute.
Under the federal Clean Air Act, the United States
Environmental Protection Agency (US EPA) establishes National
Ambient Air Quality Standards for outdoor air throughout the
country. These federal standards exist for several air
pollutants due to their negative impact on public health when
the pollutants exceed specified concentrations. Pollutants
include ozone and particulate matter, among others.
Nonattainment areas are regions that do not meet the national
ambient air quality standard for at least one of those
pollutants.
The South Coast Air Basin has some of the worst air quality in
the nation, and is in serious nonattainment for particulate
matter and extreme nonattainment for ozone. As a result of
its nonattainment status, state law requires the district to
adopt an Air Quality Management Plan (AQMP) to achieve and
maintain the state and federal ambient air quality standards
and submit this plan to the ARB for inclusion into the state
implementation plan (SIP). The AQMP was originally adopted in
1982, and is formally reviewed every two years. The SCAQMD is
currently working on its 2016 AQMP.
3)RECLAIM. AB 1054 (Sher, Chapter 1160, Statutes of 1992)
authorizes local air districts to adopt a market-based
incentive program as a substitute for command and control
regulations and future air quality measures that would
otherwise have been adopted as part of the district's plan for
attainment. To date, only SCAQMD has adopted a market-based
incentive program, the Regional Clean Air Incentives Market
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(RECLAIM) in 1993.
RECLAIM was designed and adopted during an economic recession
in the region with widespread industry and electrical utility
support. The program replaced a series of existing command
and control rules and was intended to allow for the most
efficient emission reduction projects within the sector to
achieve the desired emissions reductions with the lowest
economic cost to industry.
Instead of permitting individual equipment and devices, the
program sets individual emissions limits on nitrogen oxide
(NOx) and sulfur oxide (SOx) for facilities as a whole.
Credits, (called RECLAIM Trading Credits, or RTCs) are
provided to a facility in an amount equivalent to their
emissions limit assigned under the program. RECLAIM source
facilities may choose to install emission control equipment to
enable them to operate within their allocation, or they may
exceed emissions allocations as long as they acquire
sufficient RTCs. In 2013, there were 275 facilities in the
program, including refineries, power plants, and other
industrial sources. RECLAIM has been criticized over the
years for an oversupply of credits, starting from the original
allocation of credits where the initial distribution of RTCs
in 1994 exceeded actual NOx emissions by 60%.
SCAQMD staff reports suggested specific changes necessary to
ensure RECLAIM was achieving the same emission reductions that
would have occurred under a command and control approach
pursuant to existing law. The SCAQMD governing board instead
adopted different standards suggested by industry
representatives at its December 2015 meeting.
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This bill ensures the ARB may act swiftly if the governing
board of any local air district approves market-based
incentive programs that do not meet the equivalency standards
in existing law.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081