BILL ANALYSIS
SB 507
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: SB 507
AUTHOR: Cox
AMENDED: As Introduced
FISCAL: Yes HEARING DATE: May 20, 2009
URGENCY: Yes CONSULTANT: Randy Pestor
SUBJECT : GASOLINE VAPOR RECOVERY SYSTEMS
SUMMARY :
Existing law :
1) Provides the California Air Resources Board (ARB) with
primary responsibility for control of mobile source air
pollution, including adoption of rules for reducing vehicle
emissions and the specification of vehicular fuel
composition. (Health and Safety Code 39000 et seq. and
39500 et seq.). ARB must coordinate efforts to attain and
maintain ambient air quality standards. (39003).
2) Provides that air pollution control districts (APCDs) and
air quality management districts (AQMDs) have primary
responsibility for controlling air pollution from all
sources, other than emissions from mobile sources. (40000
et seq.).
3) 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, with
performance standards to achieve or maintain any applicable
ambient air quality standard. ARB must also adopt
standards to ensure that gasoline vapor control systems do
not cause excessive gasoline liquid spillage and excessive
evaporative emissions under certain conditions. (41954).
4) Prohibits ARB from requiring a gasoline dispensing facility
(GDF) to undergo an Enhanced Vapor Recovery (EVR) Phase II
upgrade until April 1, 2011, under certain conditions
SB 507
Page 2
(e.g., annual gasoline throughput of 240,000 gallons or
less; operates in a county with a population less than
100,000; operates in a basin not classified as
nonattainment for ozone). (41964).
This bill :
1) Revises the EVR provision (#4 above) to prohibit ARB from
requiring a GDF that does not meet all the requirements of
that provision from undergoing an EVR Phase II upgrade
until April 1, 2010.
2) Contains an urgency clause.
COMMENTS :
1) Purpose of Bill . According to the author, "The April 1,
2009 deadline for compliance with the [ARB EVR] Phase II
retrofits of [GDFs] has come and gone. Gas stations all
over California are closing because they cannot find
financing for these retrofits, which could cost up to
$80,000, depending on the size of the gas station. Or they
cannot afford to stay in business and be fined by the local
[APCDs], who are charged with enforcing the deadline. This
causes unemployment, increases gas prices, and increased
travel by vehicles in search of fuel, leading to more air
pollution."
2) Background on EVR . Current law provides that a vapor
recovery system "consists of a vapor gathering system
capable of collecting hydrocarbon vapors and gases
discharged and a vapor disposal system capable of
processing such hydrocarbon vapors and gases so as to
prevent their emission into the atmosphere . . ."
According to the ARB in February 2000, vapor recovery
systems have been used in California to control emissions
for over twenty years, and "feasibility of the first vapor
recovery systems was studied at the district level,
particularly in the San Diego and Bay Area districts, in
the early 1970s." The ARB has been required since 1975 to
adopt procedures for determining compliance of a system
with performance standards to achieve or maintain any
SB 507
Page 3
applicable ambient air quality standard (#3 above).
Since each gasoline transfer leads to displaced vapors, vapor
recovery is used throughout the gasoline marketing chain.
Phase I vapor recovery includes filling of the cargo tank
at the loading rack of a refinery terminal or bulk plant,
as well as transfer from the cargo tank to the GDF. Phase
II vapor recovery controls emissions from gasoline transfer
at the GDF to vehicles.
ARB adopted EVR regulations in March 2000 for about 11,000
GDFs to reduce gasoline vapor emissions with upgraded
equipment by April 1, 2009. ARB certified the first
acceptable system to meet the requirements April 1, 2005.
Two additional systems were certified after that: one in
November 2007 and another in October 2008. According to
ARB all three systems are in the same equipment and
installation cost range for service stations, and the
typical cost for equipment and installation is about
$50,000.
Those areas of the state with additional time to apply
include: a) GDFs located in counties that are in air
districts currently in attainment for the state ozone
standard where EVR is not required (Del Norte, Humboldt,
Lake, Mendocino, and Trinity counties) (17 Cal. Code Regs.
94011); b) GDFs located in air basins not designated
nonattainment for ozone with lower gasoline throughput in
counties with a population less than 100,000 with an April
1, 2011, EVR deadline (Alpine, Lassen, Modoc, Plumas, and
Sierra counties) (Health and Safety Code 41964); and c)
GDFs located in air districts designated nonattainment for
ozone effective 2007 with an EVR July 1, 2011, deadline
(Northern Sonoma, San Luis Obispo, and Siskiyou counties)
(17 Cal. Code Regs. 94011).
According to ARB, the EVR regulations, when fully implemented,
will result in the removal of 25 tons of smog-forming and
toxic emissions statewide - which is equivalent to removing
1,000,000 cars from the road. In the South Coast AQMD,
about 16.7 tons of smog-forming volatile organic compounds
(VOCs) are released into the air each day from gasoline
SB 507
Page 4
dispensing - more than three times the amount from all
seven major refineries in the South Coast region.
3) Procedures for GDFs not meeting April 1, 2009, deadline .
ARB issued a March 2009 special advisory for GDFs that do
not meet the April 1, 2009, Phase II deadline. The
advisory outlines procedures allowing those GDFs to remain
in operation past the deadline while working towards
compliance. In cases where a GDF does not comply with the
deadline, despite a good faith effort, the ARB and CAPCOA
recommend that APCDs use either a "stipulated order of
abatement" or "enforcement or compliance agreements."
Certain criteria that may be used are provided in this
special advisory.
ARB believes "this policy provides for an orderly process to
achieve health protective clean air goals without
disruption of gasoline distribution or related commerce.
Furthermore, it provides a level playing field for the
thousands of stations that have already complied.
Therefore, ARB believes an extension to the April 1, 2009,
Phase II deadline is unnecessary."
According to the California Air Pollution Control Officers
Association (CAPCOA), "In order to provide equity for the
majority of operators who were diligent in their efforts to
comply and invested in 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."
Based on information provided by CAPCOA, 93.8% of GDFs have
either received or applied for air district permits for
installation of the equipment, and 72% have completed
installation of EVR (these percentages include exempt
facilities).
SB 507
Page 5
4) Support and opposition concerns . According to the
Responsible Clean Air Coalition, sponsor of SB 507, "We
won't use the phrase 'Nozzle Nazis,' but only because Nazis
exterminated people. The state and local gasoline
dispenser police merely will impoverish people with their
Draconian implementation of regulations to force gas
stations to install costly, nearly unavailable new nozzles
at the pump." According to the National Federation of
Independent Business, "Due to factors outside of the
control of many California small businesses that are
involved in the sale of gasoline, the equipment necessary
to meet the Enhanced Vapor Recovery (EVR) Phase II has been
unavailable or unaffordable. Given the economic
circumstances and delayed availability of mandated
equipment, it makes sense to provide this limited reprieve
from potentially ruinous penalties."
According to certain environmental organizations opposing SB
507, "California must not bend to pressure from a small
number of gasoline station owners who are using the current
economic situation as an excuse to undermine an important
control measure that has been on the books for almost a
decade. The EVR regulation was subject to a thorough
public process before its adoption in 2000, and is a key
component of [ARB's] statewide program to achieve
attainment of health-based state and federal air quality
standards." According to an owner of GDFs, "we cannot be
competitive in a penny business because our competitors
have decided to shirk the laws and operate non compliant
equipment that is cheaper to run than our compliant
equipment . . . Extending the deadline would cripple
companies like ours who have met the requirements and who
make the effort to meet the laws."
5) Related legislation . SB 155 (Cox) Chapter 702, Statutes of
2008, extended the deadline to April 1, 2011, for smaller
GDFs meeting certain requirements in a basin not classified
as nonattainment for ozone (this is the provision that SB
507 amends to extend the deadline to April 1, 2010, for
other GDFs).
AB 453 (Garrick) prohibits an APCD from imposing fines
SB 507
Page 6
exceeding $1,000 on a GDF for failure to meet the April 1,
2009, EVR Phase II upgrade if: a) the GDF completes the
upgrade before June 30, 2009; or b) the GDF has applied for
a permit from the APCD on or before April 1, 2009, to
complete the upgrade, and the GDF has entered into a
compliance agreement with the APCD on or before June 30,
2009. AB 453 includes other provisions relating to these
penalties and sunsets January 1, 2010. The Assembly
Natural Resources Committee approved AB 453 May 4, 2009
(5-1).
SCR 38 (Wright) requests an enforcement delay for the EVR
Phase II requirements until October 2010. SCR 38 was
referred to the Environmental Quality Committee May 13,
2009.
6) Legislative request . President Pro Tempore Steinberg and
Senator Negrete McLeod recently sent a letter to the ARB
regarding the EVR Phase II upgrade requesting commitments
to do the following on an administrative basis: a) limit
penalties to no more than $1,000 per GDF for owners failing
to comply with the April 1, 2009, EVR Phase II deadline but
who acted in good faith by applying or obtaining a permit
by that date and have or will obtain an enforcement
agreement or other binding obligation by June 30, 2009; b)
retain this limitation until December 31, 2009, or until
the date otherwise specified in an enforcement agreement;
c) rebate or refund fines or penalties collected to date
above $1,000, from GDFs; and d) work with the legislative
and executive branches on appropriate changes to law and
administrative practices, consistent with public health
protection and the State Implementation Plan, to help
prevent complications with similar rules in the future.
SB 507 therefore conflicts with this request for an
administrative response regarding the EVR Phase II upgrade.
Moreover, in a May 14, 2009, letter to the President Pro
Tempore and Senator Negrete McLeod, CAPCOA agreed with the
conditions in that letter. According to CAPCOA, "We hope
that this letter addresses the concerns of the California
Legislature regarding air district implementation of EVR;
and we trust that this written assurance will obviate the
SB 507
Page 7
need for legislation regarding penalties and EVR
implementation."
SOURCE : Responsible Clean Air Coalition
SUPPORT : California Service Station and Automotive
Repair Association, National Federation of
Independent Business, Responsible Clean Air
Coalition, 2 individuals
OPPOSITION : American Lung Association of California,
Breathe California, California Air Pollution
Control Officers Association, California League
of Conservation Voters, Center for Energy
Efficiency and Renewable Technologies, Clean
Power Campaign, Coalition for Clean Air,
Environmental Defense Fund, Friends of the
Earth, Nakash Enterprises LLC, National Parks
Conservation Association, Natural Resources
Defense Council, Residents of Pico Rivera for
Environmental Justice, Sierra Club California,
Rivera for Environmental Justice, Union of
Concerned Scientists,