BILL ANALYSIS
SB 450
Page 1
SENATE THIRD READING
SB 450 (Alan Lowenthal)
As Amended September 12, 2009
Majority vote
SENATE VOTE :Vote not relevant
NATURAL RESOURCES 9-0 UTILITIES & COMMERCE
14-0
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|Ayes:|Skinner, Gilmore, | |Fuentes, Smyth, Tom |
| |Brownley, Chesbro, De | |Berryhill, Buchanan, |
| |Leon, Hill, Huffman, | |Carter, Fletcher, Fong, |
| |Knight, Logue | |Fuller, Furutani, |
| | | |Huffman, Krekorian, |
| | | |Skinner, Swanson, |
| | | |Villines |
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SUMMARY : Authorizes the South Coast Air Quality Management
District (SCAQMD), notwithstanding a superior court decision, to
issue emission reduction credits to "essential public services"
and exempt facilities or equipment, consistent with SCAQMD rules;
and, sunsets the bill on May 1, 2012. Specifically, this bill :
1)States legislative findings and declarations and the intent of
the Legislature that the SCAQMD process the permits of essential
public services first when issuing permits pursuant to this
bill.
2)Authorizes SCAQMD to issue permits in reliance on, and in
compliance with specified district rules for "essential public
services" (SCAQMD rules define essential public service to
include sewage treatment facilities, prisons, police facilities,
fire fighting facilities, schools, hospitals, construction and
operation of a landfill gas control or processing facility,
water delivery operations, and public transit) and exempt
facilities or equipment, 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).
3)Provides that nothing in the bill affects the decision in the
above case concerning the adoption, readoption, or amendment, or
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environmental review, of SCAQMD Rule 1315.
4)Requires SCAQMD to 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 SCAQMD. SCAQMD must make
information concerning the credits, and the tracking of these
credits, available to the public.
5)Sunsets the bill on May 1, 2012.
EXISTING FEDERAL LAW requires, under the federal Clean Air Act
(Act):
1)Each major new and modified source of air pollution to undergo
"new source review" to ensure that facilities install the best
available control equipment, obtain offsets for any new
emissions, and comply with any other requirement to ensure that
the new and modified sources do not adversely affect air
quality.
2)That, except as otherwise stated, the Act does not preclude a
state or any political subdivision from adopting standards or
requirements for the reduction of air pollution.
EXISTING STATE LAW authorizes:
1)Each air district to establish a permit system that requires,
except as specified, that before any person builds, erects,
alters, replaces, operates, or uses any article, machine,
equipment, or other contrivance that may cause the issuance of
air contaminants, the person obtain a permit from the air
pollution control officer of the district.
2)Air districts, among their general powers, to establish offset
systems, by which reductions in air pollution at one source may
be used to offset certain future increases in air pollution at
another source. The SCAQMD requires sources to obtain offsets
for increased emissions of nonattainment pollutants, including
SOx and PM10, in excess of 0.5 pounds per day. The SCAQMD has
adopted rules creating internal offset accounts, including a
"priority reserve" account to provide offsets for essential
public service facilities and other priority sources (SCAQMD
Rule 1309.1).
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FISCAL EFFECT : Non-fiscal
COMMENTS : Emission reduction credit banking is defined as "a
system? by which reductions in emissions may be banked or
otherwise credited to offset future increases?or a calculation
method which enables internal emission reductions to be credited
against increases" (Health and Safety Code Section 40709.5). Once
created, emission reduction credits may be banked with the
district for future use by the source that generated them, used
concurrently to offset new projects, or sold to other sources for
use as mitigation.
The most common method of creating emission reduction credits is
to control or curtail the emissions from an existing stationary
source. Control of emissions is generally from the application of
emission control technology beyond that which is required by any
regulation or rule. Curtailment could be from a change in
operating hours of a source, or through the shutdown of a source.
Credits must be generated pursuant to district rules and
regulations, and must be reviewed and certified by the district.
The SCAQMD has adopted a variety of rules to govern the use of
offsets in the district, including Rule 1309.1, which establishes
a "priority reserve" account for essential public service and
other facilities, Rule 1304, which exempts certain facilities and
equipment, and Rule 1315, which governs the tracking of offsets
used within the district.
In 2007, SCAQMD adopted changes to these rules to permit the
transfer of offsets to power plants in exchange for mitigation
fees at prices set in the rules. A group of environmental and
environmental justice groups (NRDC, et al) sued SCAQMD, alleging
violations of CEQA, including failure to analyze or mitigate the
significant environmental effects of the rules.
In NRDC v. SCAQMD, the court sided with the plaintiffs, finding
the SCAQMD's rule changes are subject to CEQA and enjoining the
distribution of offsets from the priority reserve account until
SCAQMD prepares the appropriate CEQA documentation.
On September 9, 2009, the court issued a further order allowing
SCAQMD to rely on Rule 1304 and Rule 1309.1, as they existed prior
to the lawsuit, to issue permits for the essential public service
and exempt facilities that are the subject of this bill. The
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September 9 order further prohibits the District from using Rule
1315 until lawful compliance with the California Environmental
Quality Act has been established.
Notwithstanding this court ruling, this bill authorizes the SCAQMD
to issue permits to essential public services, small businesses,
and other exempt facilities and equipment in compliance with Rules
1304 and 1309.1. This bill is nearly identical to SB 827
(Wright).
Analysis Prepared by : Lawrence Lingbloom / Nat. Res. / (916)
319-2092
FN: 0003233