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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. On July 14, 1997, the Board approved a twelve-month extension of this pilot project. To date, the AQMD has received about 30 inquiries regarding the program. Staff has issued Permits to Construct to eight companies and is processing applications from four others. Staff recommends the program be continued for another twelve months to allow more time for data collection and evaluation.

COMMITTEE:

Stationary Source, March 20, 1998 and May 22, 1998, Recommended for Approval

RECOMMENDED ACTION:

Approve the proposal to extend the Green Carpet Priority Permitting Service pilot program for another twelve months to allow more time for data collection and evaluation, and direct the Acting Executive Officer to report back to the Board upon completion of a third year of program operation with the results of the extended pilot study.

Barry R. Wallerstein, D.Env.
Acting Executive Officer

Background

Over the last several years, the AQMD has successfully provided priority permitting for several large projects. This success was due to preliminary discussions among the applicants, AQMD staff, and consultants, timely submittal of necessary permitting and CEQA information, and the development of an agreed-upon critical schedule for the permitting of the project.

In April 1995, the Governing Board adopted the Business Clean Air Partnership. One year later, the Governing Board introduced Regulatory Reform Initiatives. Part of these plans called for AQMD to give priority permitting services 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. In order to gather additional data, this priority permitting service was extended twelve months on June 13, 1997. 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 30 inquiries regarding the Green Carpet program.

One hundred six applications were received from twelve companies. These twelve projects represent a $586.9 million commitment to new construction. In addition, 261 new jobs would 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: Ten projects - A reheat furnace and galvanizing furnace in Fontana, a catalyst production facility in Long Beach, a pharmaceutical manufacturing plant in Los Angeles, and a chemical plant in Carson. Also included are refinery modifications in Los Angeles, Long Beach, San Pedro, Carson, and, as previously stated, a glass manufacturing facility in El Monte.

• Air Quality Technology Advancement Project: One project – an experimental tank cleaning process in Carson.

To date, Permits to Construct have been issued for eight 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, an initial comparison of applicants’ fees with costs incurred by the AQMD for Permit to Construct and CEQA evaluation shows that AQMD processing costs exceed fees collected by almost 40 percent.

Proposal

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 favorable responses from the companies that have taken advantage of the Green Carpet Priority Permitting Service.

• No applications for this program have been 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.

• The economy within AQMD’s area of responsibility is improving, and, as a result, program participation will increase allowing enhanced opportunity to assess program potential.

Resource Impacts

No additional resource impacts are expected.

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