BILL ANALYSIS
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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 : Author
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
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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)
Ameresco Inc.
DLW:mw 9/3/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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