BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 579|
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THIRD READING
Bill No: SB 579
Author: Lowenthal (D)
Amended: 9/1/09
Vote: 27 - Urgency
SENATE ENV. QUALITY COMMITTEE : 7-0, 8/26/09
AYES: Simitian, Runner, Ashburn, Corbett, Hancock,
Lowenthal, Pavley
SUBJECT : South Coast Air Quality Management District:
permits
SOURCE : South Coast Air Quality Management District
DIGEST : This bill allows the South Coast Air Quality
Management District (SCAQMD) to issue permits,
notwithstanding the Superior Court decision in Natural
Resources Defense Council v. South coast Air Quality
Management District . Sunset May 1, 2012.
ANALYSIS : The California Environmental Quality Act
(CEQA) requires a lead agency, as defined, to prepare, or
cause to be prepared, and certify the completion of, an
environmental impact report (EIR) on a project that it
proposes to carry out or approve that may have a
significant effect on the environment or to adopt a
negative declaration if it finds that the project will not
have that effect. CEQA also requires a lead agency to
prepare a mitigated negative declaration for a project that
may have a significant effect on the environment if
CONTINUED
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revisions in the project would avoid or mitigate that
effect and there is no substantial evidence that the
project, as revised, would have a significant effect on the
environment. CEQA exempts certain specified projects from
its requirements.
Under existing law, every air pollution control district or
air quality management district in a federal nonattainment
area for any national ambient air quality standard is
required to establish by regulation, a system by which all
reductions in emissions of air contaminants that are to be
used to offset certain future increases in the emission of
air contaminants are banked prior to use. The SCAQMD
promulgated various rules establishing offset exemptions,
providing Priority Reserve offset credits, and creating or
tracking credits used for offset exemption or Priority
Reserve projects. In Natural Resources Defense Council v.
South Coast Air Quality Management District (Super. Ct. Los
Angeles County, 2007, No. BS 110792), the superior court
found the promulgation of certain of these district rules
to be in violation of CEQA.
This bill provides that notwithstanding the decision of the
court in Natural Resources Defense Council v. South Coast
Air Quality Management District (Super. Ct. Los Angeles
County, 2007, No. BS 110792), the south coast district may
issue permits in reliance on, and in compliance with, south
coast district Rule 1304, as amended on June 14, 1996,
except for an electrical generation facility, and Rule
1309.1, as amended May 3, 2002, for essential public
services, as defined in subdivision (m) of Rule 1302, as
amended December 6, 2002.
Nothing in this bill affects the decision in the case
described above concerning the adoption, readoption, or
amendment, or environmental review, of south coast district
Rule 1315.
In implementing the above, the south coast district shall
rely on the emission reduction credit tracking system used
prior to the adoption of Rule 1315, until a new tracking
system is approved by the United States Environmental
Protection Agency and is in effect, at which point that new
system shall be used by the south coast district in
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implementing the above. The south coast district shall
make information concerning the credits, and the tracking
of these credits, available to the public.
This bill sunsets on May 1, 2012.
Comments
According to the author, "Under the Federal Clean Air Act,
air pollution agencies must adopt programs to require that
major new or modified sources of contaminants for which the
area has not attained the federal standards must provide
emissions offsets for their emissions increases. They must
also meet stringent emission limits requiring the best
available technology. Offsets are equivalent emission
reductions from other sources that go beyond legal
requirements, and are usually generated from equipment
shutdowns. Offsets can be either privately owned 'Emission
Reduction Credits', where the source shutting down or
overcontrolling applies to the SCAQMD for a credit.
Alternatively, if a source fails to apply for an ERC, the
SCAQMD claims the offsets as 'orphan shutdowns' and
deposits them in its internal bank."
The author notes that "The SCAQMD uses these offsets to
supply the needed offsets for essential public services and
for projects that are exempt from offsets under SCAQMD,
primarily small facilities, including small businesses, and
equipment replacements, relocations, and pollution control
projects, as well as emergency equipment. In addition, in
2006 SCAQMD amended its rules to allow power plants meeting
specified requirements, and paying significant mitigation
fees, to access the SCAQMD bank."
The author also notes that certain environmental groups
"filed a lawsuit challenging the SCAQMD's rules under CEQA
. . . the court ruled that the SCAQMD's CEQA document was
inadequate . . . the court ordered the SCAQMD to stop
issuing permits relying on the internal bank, and to set
aside several permits already issued . . . [and]
Legislation is needed to correct the situation."
SCAQMD response to Court decision . SCAQMD responded to the
decision in three ways. First, SCAQMD appealed the case -
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although on June 9, 2009, parties stipulated to an
extension of the briefing schedule with an August 11, 2009,
deadline for the Appellant. Second, SCAQMD issued a notice
of preparation for a new environmental document on March
17, 2009, and a consulting firm is preparing the document -
although that document is not yet complete. Third, SCAQMD
sponsored SB 696 to abrogate the Court decision and exempt
the issuance and use of offsets from CEQA - thereby seeking
to avoid the Court's direction while also involving the
Legislature in pending litigation.
Federal court actions . The plaintiffs filed a complaint in
federal court on August 18, 2008, for Declaratory and
Injunctive Relief under the federal Clean Air Act, arguing
that the SCAQMD credits violate requirements that credits
be real, surplus, enforceable, quantifiable, and permanent
- and are therefore invalid. SCAQMD filed a Motion to
Dismiss this action on October 8, 2008, asserting that the
court did not have jurisdiction to hear the Complaint. The
parties made various appearances before the federal court
on the SCAQMD's motion.
Plaintiffs informed the Court on July 9, 2009, that they do
not intend to amend the complaint and would appeal a final
decision to dismiss the case for lack of jurisdiction, and
the Judge indicated it would take about 90 days to issue a
final decision on the matter. The Plaintiffs assert that
the decision does not mean the proposed Rule 1315 is legal
and does not mean SCAQMD has legal credits in its bank. A
status conference in the case is scheduled for August 31,
2009.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 9/2/09)
South Coast Air Quality Management District (source)
Adgraphics
Alston & Bird
Annex Group
Ameresco
Archetype Design
Arevalo Tortilleria Inc.
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Armorcast Products
Association of California Water Agencies
Azkel Nobel Coatings
Baker Furnace Inc.
Bay Valve Service & Engineering
Black Chamber of Commerce of Orange County
BlueScape Environmental
Boilermakers Local 92
Bricklayers Local 4
Buena Park Area Chamber of Commerce
Burbank Chamber of Commerce
C T Finishing Inc.
California Manufacturers and Technology Association
California State Association of Electrical Workers
California Auto Body Association (JK Sandoval Enterprises)
California Black Chamber of Commerce
California Chamber of Commerce
California Cleaners Association
California Construction & Industrial
California Contract Cities Association
California Council for Environmental & Economic Balance
California Dump Truck Owners Association
California Farm Bureau Federation
California Fence Contractors' Association
California Furniture
California Hispanic Chamber of Commerce
California Hospital Association
California Independent Oil Marketers Association
California Independent Petroleum Association
California League of Food Processors
California Manufacturers & Technology Association
California Metals Coalition
California-Nevada Conference of Operating Engineers
California Public Utilities Commission
California Retailers Association
California Small Business Alliance
California Small Business Association
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
California Steel Industries Inc.
CalPortland Company
Camino Cleaners
Career Partners
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Carson Black Chamber of Commerce
Carson Chamber of Commerce
Celebrity Cleaners
Cement Masons Local 600
CEMEX
Chemical Industry Council of California
Circle Dry Cleaners
Cities of Artesia, Azusa, Baldwin Park, Bellflower,
Bradbury, Calabasas, Carson, Cathedral City, Cerritos,
Chino, Claremont, Colton, Compton, Corona, Covina,
Diamond Bar, Downey, Duarte, El Monte,
El Segundo, Fontana, Glendale, Glendora, Huntington Beach,
Indio, Industry, Irwindale, La Mirada, La Puente, La
Quinta, Laguna Hills, Lakewood, Lomita, Long Beach,
Lynwood, Monrovia, Montebello, Monterey Park, Moreno
Valley, Murrieta, Newport Beach, Norco, Ontario,
Paramount, Pasadena, Pico Rivera, Pomona, Rancho
Cucamonga, Rancho Palos Verdes, Redlands, Rialto,
Riverside, Rosemead, San Juan Capistrano, Santa Clarita,
Santa Fe Springs, Sierra Madre Department of Public
Works, Signal Hill, South El Monte, South Gate, Temple
City, Tustin, Walnut, West Covina Public Works
Department, and Westminster
Coachella Valley Association of Governments
Coachella Valley Water District
Coalition of California Utility Employees
Conloo Inc.
Construction Industry Air Quality Coalition
Corona Chamber of Commerce
County of San Bernardino
Courtesy Cleaners
Crescenta Valley Water District
Crown Cleaners
Culver City Chamber of Commerce
DM Auto Body
Dallas Finer Cleaners
Davenport Engineering Inc.
Del Rey Sandblasting
Del Amo Cleaners
Desert Contractors Association
Diversified Printers Inc.
Downey Unified School District
Dress for Success Cleaners
Dulin and Boynton
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Eastern Municipal Water District
El Camino Cleaners
El Monte / South El Monte Chamber of Commerce
El Segundo Chamber of Commerce
Elsinore Valley Municipal Water district
EMBEE Inc.
Engineering Contractors' Association
Evergreen Cleaners
Fifth Avenue Cleaners Inc.
Flasher/Barricade Association
FuturePorts
Gallerie Cleaners
GEM Mobile Treatment Services
Granite Construction Company
Greater Corona Hispanic Chamber of Commerce
Greater Lakewood Chamber of Commerce
Greater Los Angeles African American Chamber of Commerce
Greater Riverside Chambers of Commerce
Gruma Corporation - Mission Foods
Happy Cleaners
Harvey Cleaners
Hawthorne Cleaners
Heat & Frost Insulators Local 5
Hillcrest Beverly Oil Corp.
Hilton Auto Collision Center
Holly Park Cleaners
Huntington Memorial Hospital
Hyde Park Cleaners
IBEW Local 441
Ironworkers Local 453
Independent Cities Association
Independent Energy Producers
Indio Chamber of Commerce
Industrial Environmental Association
Industry Compressor Co.
Inland Action
Inland Empire Utilities Agency
Irvine Ranch Water District
Irwindale Chamber of Commerce
IUEC Local 18
Joseph's Cleaners
Justice Brothers Inc.
Kaiser Permanente
Kern County Black Chamber of Commerce
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Korean Drycleaners-Laundry Association + 284 individual
members
KS 4000 Inc.
L to Z Enterprises Inc.
LA Works
Laborers Local 300
Laborers Local 802
Lake Arrowhead Communities Chamber of Commerce
Lake Hemet Municipal Water District
Las Virgenes Municipal Water District
League of California Cities (Inland Empire Div)
League of California Cities (Los Angeles Co. Div)
League of California Cities (Riverside Div)
Lindus West
Local 345 Pipefitters
Local Union 105 Sheet Metal Workers
Long Beach Area Chamber of Commerce
Los Angeles Area Chamber of Commerce
Los Angeles County Business Federation
Los Angeles County Sanitation District
Los Angeles County Sheriff's Department
Los Angeles Unified School District
Los Angeles/Orange Counties Building and Construction
Trades Council
Lucky Cleaners
Manhattan Beach Chamber of Commerce
Marin Builders' Association
Marty Village Cleaners
Maximum Technical Services
Modern Way Cleaners
Monrovia Chamber of Commerce
Nomura Dry Cleaners
Moreno Valley Chamber of Commerce
Norge Cleaners and Alterations
Norwalk-La Mirada Unified School District
Orange County Board of Supervisors
Orange County Business Council
Orange County Fire Authority
Orange County Sanitation District
Orange County Water District
Pacific Energy Resources Ltd.
Pacific Graphics
Pacific States Environmental Contractors Inc.
Palm Desert Chamber of Commerce
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Pass Area Legislative Council
Pemaco-Alhambra
Pemaco Metal Processing
Performance Mechanical
Plains All American Pipeline-L.P.
Plasterers Local 200
Plaza Cleaners
PRI Real Estate Services
Printing Industries Association of California
Processes Unlimited International Inc.
Redlands Chamber of Commerce
Redman Equipment and Manufacturing Co.
Regional Black Chamber of Southern California
Regional Chamber of Commerce of San Gabriel Valley
Regional Hispanic Chamber of Commerce
Rio Hondo Community College
Riverside County Board of Supervisors
Rix Business Sales
Robertson's
Roofers Local 36
Rosemead Chamber of Commerce
Sacramento Black Chamber of Commerce
Saint John's Health Center
San Bernardino Area Chamber of Commerce
San Bernardino Associated Governments
San Bernardino County Board of Supervisors
San Gabriel Valley Coalition of Chambers
San Gabriel Valley Council of Governments
San Gabriel Valley Economic Partnership
San Pedro Cleaners
San Pedro Chamber of Commerce
Sanitation Districts of Los Angeles County
Santa Clarita Valley Chamber of Commerce
Santa Monica Chamber of Commerce
Satin Enterprises/Norge Cleaners
Sea Shield Marine Products Inc.
Sempra Energy
Silicon Valley Black Chamber of Commerce
Solar Turbines Inc.
South Bay Association of Chambers of Commerce
South Bay Cities Council of Governments
South Orange County Chambers of Commerce
South Orange County Wastewater Authority
South Pasadena Chamber of Commerce
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Southern California Alliance of POTWs
Southern California Association of Governments
Southern California Edison
Southern California Valve
Southwest California Legislative Council
SunWest Engineering
Sprinkler Fitters UA Local 709
Teamsters Joint Council 42
Teamsters Local 986
Techmer PM
Three Valleys Municipal Water District
Thyssenkrupp Safeway Inc.
Tile Marble & Terrazzo Local 18
Torrance Area Chamber of Commerce
Tracey's Cleaners
Turf Cleaners
Tustin Unified School District
UA Plumbers Local Union 78
United Association
United Union of Roofers
Water Proofers & Allied Workers Local 220
Upland Chamber of Commerce
Valley Industry and Commerce Association
Valley Sanitary District
View Cleaners
Villa Dry Cleaners
Village Dry Cleaners
Vulcan Materials Company
West Covina Chamber of Commerce
West San Gabriel Valley Consortium (Career Partners)
Western Electrical Contractors Association
Western Municipal Water District
Western Riverside Council of Governments
Western States Council of Sheet Metal Workers
Western States Petroleum Association
Willow Cleaners
Wilmington Chamber of Commerce
Woodwest Concepts Inc.
Wright Graphics
Wyatt-Bennett Equipment Co. Inc.
OPPOSITION : (Verified 9/2/09)
Asian Pacific Environmental Network
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Breathe California
California Communities Against Toxics
California Environmental Rights Alliance
California League of Conservation Voters
California Safe Schools
Center for Race, Poverty and the Environment
City of Commerce
Clean Power Campaign
Coalition for a Safe Environment
Coalition for Clean Air
Comite Del Amo
Communities for a Better Environment
County of Los Angeles
Desert Citizens Against Pollution
Desert Communities Against Pollution
Environmental Health Coalition
Just Transition Alliance
LA Community Legal Center and Educational Inc.
Los Angeles County Board of Supervisors
Natural Resources Defense Council
Pacific Environment
Pacoima Beautiful
People Organized to Demand Environmental and Economic
Rights
Physicians for Social Responsibility-Los Angeles
Planning and Conservation League
Sierra Club California
Union of Concerned Scientists
Urban Assessment Planners
Urban Semillas
ARGUMENTS IN SUPPORT : According to the SCAQMD, "Unless
SB 696 is passed, many upgrade projects at aging facilities
will be stopped. That means many of these facilities won't
be able to replace older equipment with cleaner and more
energy efficient equipment and modern pollution control
equipment. Consequently, neither the air quality goals of
the State Implementation Plan (SIP) nor the greenhouse gas
emission reductions planned for in the AB 32 Scoping Plan
can be implemented."
ARGUMENTS IN OPPOSITION : According to opponents, based
on the prior version of the bill: "Because of the
District's failure to ensure that its pollution credit
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system complies with federal law, there is a shortfall of
credits in its banks. We are actively trying to solve this
problem, but SB 696 does not provide a viable path forward.
Instead, it increases air pollution in
the most polluted area of the country by allowing the
construction of fossil-fueled power plants."
DLW:mw 9/2/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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