Proposal:

Status of Regulatory Reform Initiative - "Green Carpet" Priority Permitting Service

Synopsis:

On April 12, 1996, the Governing Board approved a twelve-month pilot project to study and report to the Board the benefits and challenges presented by a priority permitting service offered for selected construction projects. To date, the AQMD has received about 20 inquiries regarding the program. Staff has issued Permits to Construct to three companies and are processing applications from two others. It is difficult to render an adequate pilot project recommendation with this low level of program participation. Therefore, staff recommends the program be continued for another twelve months to allow more time for data collection and evaluation.

Committee:

Stationary Source, May 23, 1997, Recommended for Approval

Recommended Action:

Approve the proposal and direct the Executive Officer to report back to the Board upon completion of a second year of program operation with the results of the extended pilot study.

James M. Lents, Ph.D.
Executive Officer

Background

Over the last several years, the AQMD has successfully provided priority permitting for several large projects. This success was due to a high level of preliminary discussion between the applicant and staff, the involvement of very competent consultants, a thorough and complete submittal by the applicant of the necessary permitting and CEQA information, and the development of an agreed upon critical path schedule for the permitting of the project.

In April, 1995, the Governing Board adopted the Business Clean Air Partnership. Last year the Governing Board introduced Regulatory Reform Initiatives. Part of these plans call for AQMD to give priority permitting service to projects that bring significant benefit to the region. The "Green Carpet" program was developed to implement this objective.

The Green Carpet Program

In April 1996, the AQMD began providing a "Green Carpet" priority permitting service. Projects are eligible for this "Green Carpet" service if they meet any one of the following criteria:

1. A "Three Star" Project
These projects are any installation or modification of a source designed to meet or exceed the Year 2010 air emission standards.

2. A HELP Project
These projects are any installation or modification of a source that creates more than 500 jobs and produces half the emissions per employee allowed under the Year 2010 goal for that industry.

3. A Major Capital Project
These projects are any installation or modification of a source, where:

• Project capital cost is greater than $10 million; or,
• Project engineering and construction time exceeds one year each.

Projects must be single phase and should involve standard design with the
design criteria adequately specified for design engineering.

4. An Air Quality Technology Advancement Project
These projects shall comply with the requirements of Rule 441 - Research Operations which include:

• The purpose of the operation is to permit investigation, experimentation or research to advance the state of knowledge or the state of the art of air quality technology;

• The AQMD has given written prior approval which shall include a time limitation; and,

• The operation is conducted in a manner to minimize emissions into the atmosphere.

Implementation

To date, staff has received about 20 inquiries regarding the Green Carpet program. Forty-five applications were received from five companies. These five projects represent an $83.3 million commitment to new construction. In addition, 172 new jobs will be created. The applications may be characterized as follows:

• Three Star Projects: Two projects - A natural gas processing plant in Long Beach and a glass manufacturing plant in El Monte. The El Monte plant also qualifies under the major project category.

• HELP Projects: No projects have been submitted yet under this category.

• Major Capital Projects: Four projects - A reheat furnace in Fontana, a catalyst production facility in Long Beach, a pharmaceutical manufacturing plant in Los Angeles and, as mentioned above, a glass manufacturing facility in El Monte.

• Air Quality Technology Advancement Project: No projects have been submitted yet under this category.

To date, Permits to Construct have been issued for three of these projects.

Part of the initial interest in this program was to determine if a method could be established to reduce the permitting fees for projects that qualified for this service. Since none of the applications submitted have resulted in Permits to Operate, cost information is not complete. However, a very early comparison of the applicant’s fees with the costs incurred by the AQMD for Permit to Construct and CEQA evaluation shows that $47,620 has been collected in fees compared to $66,065 in AQMD processing costs.

Recommendations

Staff recommends that the Green Carpet Priority Permitting Service pilot program be continued for another twelve months to allow more time for data collection and evaluation. This is based on the following:

• AQMD has received several favorable responses from the companies that have taken advantage of the Green Carpet Priority Permitting Service.

• AQMD has not yet had any of the applications for this program submitted by those consultants and company environmental staff that have successfully completed the AQMD’s Certified Permitting Professional program. Applications prepared by these individuals may further reduce the time necessary for AQMD permit evaluation.

• Staff has insufficient data to complete cost comparison information due to rather low program participation in the initial year.

• Based on the increased rate of incoming applications, staff believes that the economy within AQMD’s area of responsibility is improving, and that program participation will increase allowing enhanced opportunity to assess program potential.

/ / /