Proposal:

Set Public Hearing May 9, 1997 to Amend Regulation III - Fees

Synopsis:

Proposed amendments increase fees for certain types of equipment consistent with the 2.4% increase in the California Consumer Price Index applicable for the year 1996. Other amendments increase consistency within Regulation III rules (e.g., reducing Rule 306 plan fees 50% for small business, consistent with the small business discount in Rule 301); establish AQMD’s authority to collect fees for facility registration permits; establish a charge through system for recovering fees for analytical laboratory services performed by outside contractors; simplify and streamline fee tables; establish a technology advancement fee for technology advancement; and propose new fees for permit modifications under Title V, plan cancellations, certain types of toxics equipment not previously listed in Rule 301, change of operator, and reinstating expired permits.

Ccommittee:

Stationary Source and Administrative, April 18, 1997, Scheduled for Review.

Recommended Action:

Set public hearing May 9, 1997 to amend Regulation III - Fees.

James M. Lents, Ph.D.
Executive Officer

Background

California Health and Safety Sections 40500, et seq., established AQMD’s authority to adopt rules and regulations, including fee schedules intended to cover the AQMD’s actual costs in cleaning the air which include issuance of variances and permits to stationary sources, compliance monitoring and testing, and review of emission control plans. The following eight rules are proposed for amendment:

Rule 301	-	Permit Fees
Rule 303	-	Hearing Board Fees
Rule 304	-	Equipment, Materials, and Ambient Air Analysis
Rule 304.1	-	Analyses Fees
Rule 306	-	Plan Fees
Rule 308	-	On-Road Motor Vehicle Mitigation Options
Rule 309	-	Fees for Regulation XVI Plans
Rule 311	-	Air Quality Investment Program (AQIP) Fees

California Health & Safety Code Sections 40510, 40510.5, and 40523 authorize AQMD to increase fees consistent with annual increases in the California Consumer Price Index (CPI). [ Larger increases are allowed for individual fees only if the Board finds that the increase is necessary and will
result in an equitable apportionment of fees, and if the increase is spread over two years.] The change in the California CPI applicable to the year 1996 is 2.4%. To maintain revenues required to support AQMD’s legally-mandated functions of achieving and maintaining health-based state and federal air quality standards, a broad-based fee increase for applicable Regulation III rules equal to the change in the California CPI is necessary. Because AQMD revenues are decreasing as significant progress towards air quality attainment is made, the aggregate effect of this proposed increase will not exceed the statutory fee cap on revenue generated.

Other changes have been proposed that more equitably align fees with the levels of effort required to perform the tasks with which they are associated, consistent with requirements of Health & Safety Code Sections 40510 and 40510.5 as amended pursuant to 1995’s SB 962 (Russell).

Proposed Amendments

Rules proposed for amendment include a 2.4% fee increase consistent with the California CPI applicable to the year 1996 as well as general administrative language clarifications.

Rule 301 - Permit Fees

Rule 301 continues to tie permit processing fees, annual operating permit fees, and annual emission-based fees to the complexity of compliance review required and the emission potential of the equipment/process to be permitted. Proposed changes to Rule 301:

(1)	Increase fees 2.4%, equivalent to the change in the California CPI for 1996;
(1)	Impose a $25 service charge on persons submitting checks to AQMD on insufficient funds, consistent with standard California business practice;
(2)	Add new definitions for: • Continuous Emissions Monitoring Systems (CEMS) - clearly identifies analyzers, monitors, components, systems, or equipment used to determine continuous pollutant concentrations or mass emissions; • Facility - includes sources under common ownership or operation that are also located on physically contiguous property. The definition extends to include production and storage of crude oil and gas in Southern California or outer-continental shelf (OCS) waters, and specifically excludes noncontiguous properties joined by land carrying only a pipeline; and • Facility Registration - grants AQMD discretion to combine existing equipment permits and all new equipment into a single permit for any facility not subject to RECLAIM or Title V. Amendments also align the permit processing fee for registration permits with lower Schedule A small business fees, and establish fees for requesting duplicate and reissued facility registrations;
(3)	Delete special fee exemption for furniture strippers that emit less than eight tons per year (TPY) of methylene chloride (exemption expired June 30, 1996);
(4)	Delete diesel fuel dispensing nozzles from Equipment/Process Schedules for Annual Operating Permit Renewal Fee, pursuant to recent Rule 219 amendments;
(5)	Correct the due date for payment of semi-annual emissions installment fee from July to January;
(6)	Modify basis of change of operator fee for additional equipment listed on RECLAIM and other facility permits to correct inequity between change of operator fees for additional equipment for facility vs. equipment permits;
(7)	Clarify applicability of fee for reinstating expired applications or permits to RECLAIM facilities;
(8)	Under RECLAIM pollutant emission fees, delete references to specific years and create generic billing cycles (e.g., July 1 - June 30), and add language requiring emitters greater than 10 TPY to pay fees in semi-annual installments;
(9)	Create new fee to cover the cost of evaluating increases to annual RECLAIM allocations that are greater than starting allocation plus non-tradable credits (as required by Rule 2005 - New Source Review);
(10)	Create new permit modification fee for all new and modified permit units at a facility required to obtain a Title V permit for a modification pursuant to Rule 3001 (c)(2);
(11)	For issuance of duplicate or reissued permits, reduce fees for additional pages to $1;
(12)	Add language clarifying that asbestos and lead abatement notification fees are charged per notification and that multiple fees may apply;
(13)	Affirm $100 certification fee for issuance/reissuance of Clean Air Solvent certificate for products meeting established Clean Air Solvent criteria; republish fees listed in Rule 304.1 - Analyses Fees, for laboratory analyses required to determine that the VOC content of products submitted for certification meets Clean Air Solvent criteria; establish expiration date of Clean Air Solvent certificates five years from the last date of product certification/recertification; and provide for recertification of products determined by subsequent laboratory analysis to continue to meet established Clean Air Solvent criteria.
(14)	Create a new stationary source technology advancement fee applicable to sources emitting greater than 10 TPY of air contaminants listed in Table V - ANNUAL CLEAN FUELS AND STATIONARY SOURCE ADVANCED TECHNOLOGY FEES to fund research and development projects for VOC, NOx, SOx, and PM emission reduction. This fee will sunset on December 31, 2009;
(15)	Modify Summary Permit Fee Rates tables and rule to provide applicants with substantially clearer guidance on determination of change of operator fees for single vs. multiple permits;
(16)	Reduce annual permit renewal fees for cadmium plating line tanks, consistent with a previous modification in fee schedule for nickel plating tanks, to more closely align the amount of annual renewal fees with the cost of compliance and reduce the burden on small businesses;
(17)	Establish new fees for the following air toxics control equipment: Mesh pads, for toxics gas stream Schedule C; Mesh pads, for other acid mists Schedule B; Scrubber, NOx multistage Schedule D; and Scrubber, NOx single stage Schedule C;
(18)	Establish new fees for the following air toxics-emitting equipment: Anodizing (sulfuric, phosphoric) Schedule B; Brake shoes (...,deriveter) Schedule B; and Evaporator, toxics Schedule C;
(19)	Modify CEMS evaluation fees to better reflect actual evaluation time required and to capture post-certification CEMS data. Modify Special Processing Fees tables and rule language to provide applicants with substantially clearer guidance on determination of fees for CEMS and Fuel Sulfur Monitoring System (FSMS) review;
(20)	Delete "Unspecified Equip/Process" for Schedules A through I from Permit Fee Rates tables to clarify existing provisions for assessment of fees for new equipment not previously listed;
(21)	Delete Table VI - SUMMARY FACILITY PERMIT FEES, and list fees for facility permits exclusively in subdivisions (c) and (i) of Rule 301; and
(22)	Add, delete, renumber, or otherwise modify rule language to improve clarity and consistency of existing provisions.

Rule 303 - Hearing Board Fees

Proposed amendments will:

(1)	Increase fees 2.4%, equivalent to the change in the California CPI for 1996;
(1)	Impose a $25 service charge on persons submitting checks to AQMD on insufficient funds, consistent with standard California business practice; and
(2)	Clarify the existing requirement that sources remit minimum excess emission fees for a variance granted from a rule or rules limiting the discharge of air contaminants.

Rule 304 - Equipment, Materials, and Ambient Air Analyses

Proposed amendments will:

(1)	Increase fees 2.4%, equivalent to the change in the California CPI for 1996; and
(1)	Impose a $25 service charge on persons submitting checks to AQMD on insufficient funds, consistent with standard California business practice.

Rule 304.1 - Analyses Fees

Proposed amendments will:

(1)	Increase fees 2.4%, equivalent to the change in the California CPI for 1996;
(1)	Impose a $25 service charge on persons submitting checks to AQMD on insufficient funds, consistent with standard California business practice;
(2)	Establish new fees for laboratory analyses of VOC in pipe cements and in adhesives containing cyanoacrylates;
(3)	Change the fee assessment for microscopic identification from a per sample to a per hour rate to better recover costs for analysis of more complex samples;
(4)	Distinguish fees for particle size determination by microscopy ($78.60/hour) from fees for particle size determination by sieve ($78.60/sample);
(5)	Modify determination of fee rates for polarized light microscope (PLM), point counting, and x-ray diffraction from per sample to per subsample/and or layer; and
(6)	Establish a charge pass through system for outside analysis of certain laboratory samples to ensure reimbursement to AQMD for actual costs incurred.

Rule 306 - Plan Fees

Proposed amendments will:

(1)	Increase fees 2.4%, equivalent to the change in the California CPI for 1996;
(1)	Impose a $25 service charge on persons submitting checks to AQMD on insufficient funds, consistent with standard California business practice;
(2)	Discount plan filing and evaluation fees for small businesses, consistent with other fee rules;
(3)	Establish a plan application cancellation fee, similar to cancellation fees for other types of applications under other fee rules;
(4)	Establish an upper limit for protocol/report evaluation fees that extends the existing cap for evaluation time to recover costs for more complex protocol/report evaluations involving toxics or other special projects; and
(5)	Include renumbering and other minor language modifications to improve clarity and consistency of existing provisions.

Rule 308 - On-Road Motor Vehicle Mitigation Options Fees

Proposed amendments will:

(1)	Increase fees 2.4%, equivalent to the change in the California CPI for 1996;
(1)	Impose a $25 service charge on persons submitting checks to AQMD on insufficient funds, consistent with standard California business practice;
(2)	Repeal the exemption of school districts submitting Employee Commute Reduction Program plans from payment of program submission fees;
(3)	Distinguish Employee Commute Reduction Program provisions from those of Rule 2202 - On-Road Motor Vehicle Mitigation Options; and
(4)	Include renumbering and other minor language modifications to improve clarity and consistency of existing provisions.

Rule 309 - Fees for Regulation XVI Plans

Proposed amendments will:

(1)	Increase fees 2.4%, equivalent to the change in the California CPI for 1996; and
(1)	Impose a $25 service charge on persons submitting checks to AQMD on insufficient funds, consistent with standard California business practice.

Rule 311 - Air Quality Investment Program (AQIP) Fees

Proposed amendments will:

(1)	Increase Registration fees 2.4%, equivalent to the change in the California CPI for 1996; and
(1)	Impose a $25 service charge on persons submitting checks to AQMD on insufficient funds, consistent with standard California business practice.

CEQA & Socioeconomic Analysis

Proposed rule amendments seek to increase AQMD fees for various services by 2.4 %, consistent with the California CPI applicable for the year 1996. These amendments are categorically exempt pursuant to State CEQA Guidelines. For this reason, proposed rule amendments have been determined to be exempt from CEQA requirements.

A socioeconomic assessment of the impact of the proposed amended rules on industry is being performed and will be included as Appendix A of the Final Staff Report.

A Notice of Exemption is being prepared for the project pursuant to state CEQA Guidelines Section 15273 - Rates, Tolls, Fares and Charges, and will be included as Appendix B of the Final Staff Report. The Notice of Exemption shall be filed with the county clerks immediately following the adoption of the proposed amendments.

Attachments
Summary
Proposed Amended Rules 301, 303, 304, 304.1, 306, 308, 309, and 311
Draft Staff Report

/ / /

Attachment A

Summary of Proposed Regulation III Amendments

General Amendments

Increase in Regulation fees equal to the 2.4% change in the California CPI for 1996

Impose a $25 service charge on persons submitting checks to AQMD on insufficient funds, consistent with standard California business practice.

Rule 301 - Permit Fees

Establish a new definition and fee schedule for "Facility Registration" which grants AQMD discretion to combine existing equipment permits and all new equipment into a single permit for any facility not subject to RECLAIM or Title V.

Affirm $100 per product certification/recertification fee, republish laboratory analyses fees for determining that products meet Clean Air Solvent certificate criteria, and establish protocol for recertification of products deemed to meet Clean Air Solvent criteria five years from the date of initial certification.

Delete special exemption from Table IV - TOXIC AIR CONTAMINANTS AND OZONE DEPLETERS fees for furniture strippers that emit less than eight (8) tons per year of methylene chloride (exemption expired June 30, 1996).

Modify change of operator fee for additional equipment listed on RECLAIM and other facility permits to correct inequity between change of operator fees for additional equipment for facility vs. equipment permits [ This proposed fee increase shall be phased in over a two-year period, consistent with the requirements of § 40510.5(b) of the California Health and Safety Code.] .

Create new evaluation fee ($78.60/hr) to increase annual RECLAIM allocation to level greater than starting allocation plus non-tradable credits.

Create new permit modification fee for Title V facilities of $768.10 plus the sum of all applicable fees under Rule 301 (c) and (i) for all new and modified permit units at a facility required to obtain a Title V permit for a modification pursuant to Rule 3001 (c)(2) [Ibid.] .

For issuance of duplicate or reissued permits, reduce fees for additional pages to $1.

Create new fees in Table IA - PERMIT FEE RATES FOR CONTROL EQUIPMENT

Create new fees in Table IB - PERMIT FEE RATES FOR BASIC EQUIPMENT

Create a new stationary source technology advancement fee applicable to sources emitting from 10 to 250 TPY of air contaminants.

Rule 304.1 - Analyses Fees

Establish a charge pass through system for outside analysis of certain laboratory samples.

Change the fee rate for microscopic identification from $78.60/sample to $78.60/hour [ Ibid] .

Distinguish fees for particle size determination by microscopy ($78.60/hour) from fees for particle size determination by sieve ($78.60/sample) [ Ibid.] .

Establish new fees for laboratory analyses of VOC in pipe cements, and in adhesives containing cyanoacrylates.

Rule 306 - Plan Fees

Establish a plan application cancellation fee.

Establish an upper limit for protocol/report evaluation fees to 38 hours [ Ibid.] .

Rule 308 - On-Road Motor Vehicle Mitigation Options Fees

Repeal the exemption of school districts submitting Employee Commute Reduction Program plans.