October 13, 1995

South Coast Air Quality

Management District Board

District Rule 301 - Permit Fees establishes all fees associated with permits included in permit processing fees, annual permit renewal fees, and emission fees. All permit holders are required to pay permit processing fees for new permits, and annual renewal fees; while facilities whose actual emissions exceed four tons per year pay emission fees.

HELP Program

Item IV of the Business Clean Air Partnership Plan (BCAP) establishes a "High Employment, Low Pollution" (HELP) program with incentives to attract new high employment, low pollution manufacturers to the South Coast Air Basin (Basin). As part of the implementation of Item IV, the South Coast Air Quality Management District (AQMD) has committed to waive annual operating permit renewal fees for two years for new manufacturing facilities which create 500 or more jobs and produce half the emissions per employee for that industry projected for the year 2010 by the Air Quality Management Plan.

Accordingly, staff proposes an amendment to Rule 301 to initiate BCAP, Item IV, implementation. Subdivision (m), Fee Waiver, is being proposed for addition to Rule 301 to waive annual operating permit renewal fees for qualified high employment, low pollution manufacturers for two years.

California Health and Safety Code Section 40500 et seq. establishes AQMD's authority to adopt rules and regulations, including fee schedules to cover the actual cost of air quality programs designed to attain and maintain clean air. This amendment provides incentives to attract new "super clean" manufacturers to the Basin and lowers the annual fees for new facilities generating low levels of air pollution. As the actual cost of regulating these "super-clean" facilities will generally be less due to their lower levels of emissions, AQMD will be able to direct its resources towards reducing emissions at facilities with higher levels of emissions. As the region progresses towards clean air, it is appropriate to adjust fees to reflect significant advances in reducing emissions.

Rule 1136 Compliance Incentive

At the August 11, 1995 Board meeting, your Board directed staff to return with proposals to provide incentives for facilities to use waterborne coatings in compliance with Rule 1136 - Wood Products Coatings. Accordingly, staff proposes an additional amendment to Rule 301 that will reduce the annual operating fees by 25 percent for one year for equipment that achieves early compliance with the final Volatile Organic Compound coating limits of Rule 1136. These limits become effective July 1, 1996. The amendment recognizes that the cost of enforcing Rule 1136 is less for facilities that certify that they are in compliance, and that AQMD may appropriately devote fewer resources to such facilities. The amendment will still provide adequate revenues to support the AQMD.

California Environmental Quality Act

As part of its preliminary review, AQMD, as lead agency in accordance with the California Environmental Quality Act (CEQA), has reviewed proposed amended Rule 301 pursuant to CEQA Guidelines Section 15061 - Review for Exemption. AQMD staff has concluded from the review for exemption process that proposed amended Rule 301 is statutorily exempt from CEQA pursuant to CEQA Guidelines Section 15273 - Rates, Tolls, Fares and Charges. The Notice of Exemption for the proposed project has been prepared in accordance with CEQA Guidelines Section 15062 - Notice of Exemption. The Notice of Exemption will be filed with the county clerks of Los Angeles, Orange, Riverside, and San Bernardino counties immediately following approval of the project.

Conclusions

Due to the administrative nature of these amendments and the certainty that these changes will not significantly affect air quality or emission limitations, no public workshops have been conducted. In addition, no socioeconomic assessment is required pursuant to Health & Safety Code Section 40440.8 because the proposed amendment will not significantly affect air quality or emissions limitations. Further this board letter will serve as the staff report.

After adoption of these amendments, staff will conduct an outreach program to inform potentially eligible facilities about the fee waiver. General circulation publications and targeted mailings will be used to advertise these waivers.

THEREFORE IT IS RECOMMENDED THAT YOUR BOARD

-- Certify the Notice of Exemption for Proposed Amended Rule 301 - Permit Fees, in accordance with the attached Resolution; and

-- Amend Rule 301 - Permit Fees, as set forth in the attached documents.

Respectfully,

James M. Lents, Ph.D.

Executive Officer

Attachments

PL:ELP:WJ:RRP:MLK(i:\stream\301\301bl3.doc)