BILL ANALYSIS AB 1384 Page 1 Date of Hearing: April 27, 2009 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Nancy Skinner, Chair AB 1384 (Miller) - As Amended: April 13, 2009 SUBJECT : Gasoline: vapor recovery systems SUMMARY : Extends the deadline for compliance with enhanced vapor recovery (EVR) regulations adopted by the Air Resources Board (ARB) for one year (until April 1, 2010) for gasoline service stations owned or operated by a local government. EXISTING LAW requires ARB to adopt procedures for determining the compliance of any system designed for the control of gasoline vapor emissions during gasoline marketing operations, including storage and transfer operations, and additional performance standards to ensure that systems for the control of gasoline vapors from motor vehicle fueling operations do not cause excessive spillage and emissions. Under ARB regulations, the deadline for installing EVR Phase II upgrades is April 1, 2009. FISCAL EFFECT : Unknown COMMENTS : 1)Background. The EVR program requires gasoline dispensing facilities (GDFs) to upgrade equipment to meet several technology-forcing standards. The EVR regulations were adopted in March 2000 and are identified as a required measure in the 1999 settlement of a lawsuit challenging implementation of the 1994 State Implementation Plan (SIP). Emission reductions from EVR vapor recovery systems will total 372 tons/day of reactive organic gases (ROG) statewide once fully implemented. The EVR requirements are being phased in from 2001 to 2010. Two major equipment upgrades occurred in 2005 and 2006. The latest EVR upgrade for Phase II vapor recovery affecting approximately 12,000 GDFs was to be completed by April 1, 2009. The emission reductions credited to EVR Phase II are 7.2 tons/day, which is broken down as follows: AB 1384 Page 2 3.1 tons/day due to reduced fugitive emissions from underground storage tank, vapor piping, and dispenser equipment. 3.9 tons/day due to reduced spillage (includes "dripless nozzle" standard) 0.2 tons/day due to reduced liquid retention (evaporation from liquid gasoline in nozzle that is open to atmosphere during idle periods). The EVR Phase II upgrade requires different gasoline dispenser equipment and installation of a pressure management device. The estimated equipment and installation costs for EVR Phase II are: 2 dispenser system: $17,240 4 dispenser system: $24,925 6 dispenser system: $32,765 12 dispenser system: $56,285 According to the California Air Pollution Control Officers Association (CAPCOA), over 92% of the service stations throughout California have either received or applied for air district permits for the installation of the equipment. About 65%, over 6,500 stations, have completed installation of EVR. 2)Enforcement issues are being addressed already by ARB and air districts. Local air districts enforce the ARB regulations. ARB recently issued an advisory urging the districts to exercise their enforcement authority with "discretion and restraint." According to CAPCOA: Local air districts have established mechanisms for non-compliant facilities to be able to remain in operation pending their timely procurement and installation of compliant equipment. In many air districts, the process entails a voluntary settlement agreement between the facility and the local air district. Case-by-case circumstances are considered by the local air district at facility request. In order to provide equity for the majority of operators who were diligent in their efforts to comply AB 1384 Page 3 and invested considerable time and money to meet the deadline, there may be penalties assessed for the stations that failed to meet the deadline. The exact amount of each penalty will vary from situation to situation depending on several factors, but only the most recalcitrant operators who absolutely refuse to comply could be subject to significant penalties. Where there are facts presented that mitigate culpability, penalties could be very low or waived completely. Stations will not be tagged out of service if they show diligence in their efforts to achieve compliance. Diligence is demonstrated by actions including: making timely application for appropriate permits, entering into enforceable compliance agreements with air districts or district Hearing Boards, and making arrangements with appropriate contractors to install the required equipment. The tag-out enforcement option will only be applied to recalcitrant operators who refuse to make efforts to comply, and CAPCOA expects such circumstances to be extremely rare. 3)Bill doesn't seem to meet its own objective. This bill is intended to create a one year compliance extension for local government gas stations that haven't met the April 1, 2009 deadline. However, the bill wouldn't take effect until January 1, 2010, eight months past the compliance deadline, and would only apply for four months. However, the author intends to add an urgency clause so the bill would take effect immediately upon passage and signature by the Governor. AB 1384 Page 4 REGISTERED SUPPORT / OPPOSITION : Support League of California Cities Opposition American Lung Association Breathe California California League of Conservation Voters Clean Power Campaign Coalition for Clean Air Friends of the Earth National Parks Conservation Association Natural Resources Defense Council Residents of Pico Rivera for Environmental Justice Sierra Club California Union of Concerned Scientists Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916) 319-2092