Proposal:
Amend Rule 2202 - On-Road Motor Vehicle Mitigation Options
Synopsis:
The proposed amendments will modify existing Rule 2202 to be consistent with Health & Safety Code Sections 40458 and 44243.5 which become effective January 1, 1997. The law directs the AQMD to modify current exemption levels and to initiate a program that could lead to the phase-out of Rule 2202 through voluntary rideshare or other means.
Committee:
Mobile Source, September 27, 1996
Recommended Action:
1. Amend Rule 2202 - On-Road Motor Vehicle Mitigation Options;2. Adopt adjustments to Rule 2202 related to program evaluation fees, including prorated refunds for the Air Quality Investment Program fees;
3. Certify the attached Notice of Exemption prepared for Proposed Amended Rule 2202 - On-Road Motor Vehicle Mitigation Options, in accordance with the attached Resolution;
4. Reaffirm the adopted exemption of school districts that meet their emission reduction targets through student busing programs, as defined by Agenda Item No. 44 for the March 8, 1996 Governing Board Meeting..
James M. Lents, Ph.D.
Executive Officer
On April 14, 1995, the Board adopted Rules 1501 - Work Trip Reduction Plans and 1501.1 - Alternatives to Work Trip Reduction Plans to comply with federal and state requirements for extreme nonattainment areas. Subsequently, on December 8, 1995, in response to state legislation prohibiting the mandatory submittal of trip reduction plans, the Board adopted Rule 2202 as a replacement rule that did not mandate trip reduction plan submittals, yet allowed the AQMD to remain in compliance with Federal and State Clean Air Act requirements.
Rule 2202 provides members of the regulated community with a menu of flexible and cost-effective emission reduction strategies from which they can choose to implement and meet the emission reduction target for their site. Compliance strategies made available to employers include old-vehicle scrapping, credits from clean on-road vehicles and off-road equipment, the use of remote sensing to identify and subsequently repair gross polluting vehicles, and emission reduction credits from stationary sources. In addition, employers earn credits for the use of alternative fuel vehicles, the reduction of vehicle miles traveled, and other trip reduction activities. An Air Quality Investment Program (AQIP) is also provided to employers, as a compliance alternative, with options for a one year or three year compliance. Furthermore, as an alternative to meeting an emission reduction target, Rule 2202 allows companies that elect to continue implementing traditional rideshare plans to be deemed in compliance with the Rule. Rule 2202, in its current form, applies to all employers with 100 or more employees per worksite.
Since the implementation of Rule 2202, the AQMD has received positive feedback and employer support for the options and the flexibility that the rule allows. In fact, Rule 2202 has been successfully implemented with more than 1,000 employer sites switching to the emission reduction based strategies and the AQIP options within the first nine months of the program.
Nonetheless, Health & Safety Code Sections 40458 and 44243.5 [ SB 836 (Lewis) passed by the State Legislature on August 28, 1996 and signed by the Governor on September 27, 1996 (Chapter #96-993)] which will become effective on January 1, 1997 could lead to a phase-out of Rule 2202 pending its comparable emission reduction effectiveness with voluntary ridesharing or other replacement measures.
Proposal
Amend Rule 2202 to be consistent with the new law which calls for the phase-out of Rule 2202 in three steps, provided that voluntary ridesharing and/or other replacement measures can achieve equivalent emission reductions to those achievable under Rule 2202. The new law is summarized as follows:
Phase I: January 1, 1997 - June 1, 1998
Effective January 1, 1997, Rule 2202 compliance threshold shall increase to 250. Thus employer worksites with 100-249 employees would fall out of the Rule. From January 1, 1997 through January 1, 1998, the success or failure of voluntary ridesharing efforts in reducing emissions equivalent to what those employers would have achieved under Rule 2202 would be monitored. On January 1, 1998, the emissions reductions of the voluntary effort would be reported to the ARB by the AQMD and SCAG. If the emission reductions were not attained, the threshold would return to 100 and those employer worksites would again be subject to Rule 2202 by June 1, 1998. If the emission reductions were attained, the compliance threshold of Rule 2202 would increase to 500 by June 1, 1998, and the rule implementation would proceed to Phase II.
Phase II: June 1, 1998 - January 1, 2000
Effective June 1, 1998, Rule 2202 compliance threshold would increase to 500. Emission reductions from the voluntary rideshare efforts during Phase II would be monitored through June 1, 1999 and the findings reported to the ARB by the AQMD and SCAG. If emission reductions equivalent to Rule 2202 were not attained, the threshold would return to 250 or to 100 by January 1, 2000. If the emission reductions were attained, Rule 2202 would be suspended, the remaining employer worksites (with more than 500 employees) would be phased out by January 1, 2000, and rule implementation would proceed to Phase III.
Phase III: January 1, 2000 - January 1, 2001
If voluntary rideshare efforts are successful during Phase III in producing equivalent emission reductions to those that would have been achieved by the exempted worksites, Rule 2202 would be repealed and adopted as a backstop rule by June 1, 2001. Beginning January 1, 2002, and each year thereafter, SCAG must report to the AQMD on the effectiveness of the voluntary rideshare efforts. If the monitoring results show that voluntary rideshare efforts are not successful, and insufficient emission reductions have occurred, the appropriate employee threshold would be restored to replace emission reductions lost.
Policy Issues
In order to facilitate a smooth transition from the current applicability threshold (employer sites with 100 or more employees) to the new one (employer sites with 250 or more employees) that will be effective January 1, 1997, staff is proposing several policy recommendations included in Attachment A.
AQMP and Legal Mandates
The State and Federal Clean Air Acts require the AQMD to develop and implement employer-based emission reduction programs. The proposed amendment will allow the AQMD to obtain equivalent emission reductions as those currently achieved through Rule 2202.
The baseline for the 1994 AQMP and the SIP includes emission reductions from Rule 2202 and its predecessors, Rules 1501 and 1501.1. The proposed amendments will fulfill the AQMP and SIP emission reduction commitments, since the amendments are designed to achieve equivalent emission reductions. In addition, the proposed amendments were developed to implement the requirements of the new law and meet the requirements of Section 182(d)(1)(B) of the Federal Clean Air Act.
CEQA & Socioeconomic Analysis
AQMD staff reviewed the proposed amendments to Rule 2202, and determined with certainty that the proposed project is exempt from the requirements of CEQA. The proposed project is exempt pursuant to state CEQA Guidelines Section 15268 - Ministerial Projects. The Notice of Exemption will be filed with the county clerks immediately following the adoption of the proposed amendments (see Attachment G).
This rule amendment is required by state law (SB 836, Lewis). The Board has determined that Rule 2202 does not significantly affect air quality or emissions limitations and therefore no socioeconomic report is required.
Implementation Plan
In order to inform the public about the new law and the proposed amendments to Rule 2202, approximately 9,500 letters were sent out to employers in the Basin along with an information sheet entitled "Rule 2202 Policy Issues Related to SB 836." A public workshop and an informational workshop on the proposed rule changes were held in the morning and afternoon of October 9, 1996, respectively. A list of organizations that attended the public workshop can be found in Attachment E, and a summary of comments received during the public comment period and AQMD responses to those comments are included in Attachment C.
The new law requires the AQMD and SCAG to report to the ARB on the effectiveness of voluntary rideshare and/or other replacement measures on January 1, 1998, June 1, 1999 and January 1, 2001. Prior to moving to the next phase of applicability adjustment, the ARB must determine that during the previous phase, voluntary rideshare and/or other replacement measures have resulted in emission reductions equivalent to those that would have been achieved by exempted employer worksites. Therefore, monitoring and tracking the effectiveness of voluntary rideshare and other replacement measures relative to Rule 2202 is of paramount importance for the successful implementation of the new law. The importance of demonstrating that emission reductions obtained from voluntary rideshare programs are real, quantifiable, and surplus also has been reiterated by the United States EPA in their letter to Board Chairman Mikels dated June 14, 1996.
The AQMD is currently working with SCAG, ARB, EPA and the Regional Transportation Agencies Coalition (RTAC) to expeditiously develop a methodology that will be used to track and quantify the emissions reduced by voluntary rideshare efforts.
Emission Impacts
The number of worksites currently subject to Rule 2202 is estimated at 4,300 sites. There are approximately 1,060,000 employees that report to these sites during the a.m. peak window. Rule 2202 currently eliminates 93.8 tons of pollutants per day. This consists of 6.7 tons per day of VOCs, 7.5 tons per day of NOx, and 79.6 tons per day of CO. Table 1 and Chart 1 of Attachment B summarize the employer categories that will be affected by the three phases, as well as other relevant statistics, such as the number of worksites, the number of employees, and the corresponding emission reduction contributions in each category.
Resource and Fiscal Impacts
The new law requires the AQMD to annually appropriate $1.5 million to the Regional Transportation Agencies Coalition for marketing and client services related to voluntary rideshare. This will mean an annual loss of $1.5 million from the AQMD’s small business loan guarantee program between January 1, 1997 and January 1, 1999. The existing fund has a balance of $4.6 million, of which $1.1 million is encumbered with actual loan guarantees. The AQMD can spend $3.0 million from this account without jeopardizing existing loans. However, the AQMD’s ability to guarantee future loans might be constrained. After January 1, 1999, the AQMD must determine how continuing appropriation will be funded. Penalty revenues ($1.0 million per year) are now spent on small business assistance and outreach programs. The AQMD’s share of funds received under the AB 2766 (Sher) Motor Vehicle Registration Fee program ($12 million per year), covers the vehicle-weighted costs of basic air quality programs, including, but not limited to, emissions inventory, modeling, ambient monitoring, and planning.
The exemption of employer worksites with less than 250 employees will result in an annual loss of approximately $1.0 million in reduced employer fees starting January 1, 1997. Rule 2202 currently generates $2.3 million per year by way of employer fee revenue. This amount is augmented by the AQMD with $300,000 for a total program expenditure of $2.6 million.
In order to smooth the transition to the 250 employee threshold, staff is proposing to allow employers with less than 250 employees to submit AVR survey results in lieu of their Employer Commute Reduction Programs (ECRP) due through December 31, 1996. Waiving the ECRP and Annual Analysis filing fees for those employers during the same period is also part of staff’s recommendations. The revenue loss due to the waiving of the filing fees during the transition period is estimated at $400,000.
In lieu of submitting AVR survey results, staff is also proposing to allow employers with fewer than 250 employees and with due dates through December 31, 1996, to participate in the AQIP or other emission reduction options of Rule 2202. Employers would pay the applicable evaluation/registration fee in full and a prorated fraction of the $60 per employee annual AQIP fee to meet their emission reduction target that corresponds to the time period between their due date and December 31, 1996. Since AQMD staff time will be required to monitor and track the AQIP fees as well as the purchase and surrender of emission reduction credits, staff is not proposing to waive the fees related to these submittals.
A. Policy Recommendations
B. Rule 2202 Emission Reductions/Population Distributions
C. Public Comments and Responses
D. Rule Development Flow Chart
E. Key Contacts List
F. Resolution
G. Notice of Exemption
H. Rule Language