BOARD MEETING DATE: March 1, 2002 AGENDA NO. 24

The Home Rule Advisory Group (Group) was chartered July 14, 1995 by the Board to develop approaches to simplify and streamline regulatory compliance as part of the AQMD’s Business Clean Air Partnership. Currently co-chaired by Chairman Norma Glover and Board Member Roy Wilson, the Group seeks consolidation of overlapping federal, state, and local regulations and provides proactive regional input on pending legislation and regulatory proposals. Group members are appointed by the Board for two-year terms, and include twenty-seven representatives from the EPA, CARB, SCAG, AQMD, environmental groups, business organizations, and community representatives (see attached table listing current members and their respective affiliations).

The Group’s goals and objectives for 2001 included: (1) responding to existing or proposed energy policies and programs which could have significantly impacted air quality programs in the AQMD; (2) pursuing emission credit trading program development and enhancement; (3) investigating continued improvements to New Source Review; (4) seeking and deliberating small business input in its review and undertaking of all AQMD programs; (5) partnering with other non-attainment areas within and outside California to find and establish a united front on programs and procedures mutually beneficial to the agencies; (6) continuing to bring formal recognition of variances in the federal regulatory system.

	(1)	Energy The subcommittee was tasked to work with AQMD staff to develop criteria to be used on a case by case basis, under which the AQMD would allow interbasin transfers. The subcommittee addressed the visibility requirements, which pertain to the siting of power plants when locating near a Class I wilderness area such as Joshua Tree, San Jacinto, and San Gorgonio. After an evaluation of these issues, the subcommittee recommended that energy issues be integrated into the activities of the other subcommittees, i.e., NSR, Credit Trading, etc. to more effectively address these issues.
	(2)	Emission Credit Trading Program & Compliance Flexibility The subcommittee efforts were instrumental in developing the pilot program to generate mobile source credits for the RECLAIM program. Five credit generation rules were adopted by the AQMD. This subcommittee provided substantive input to AQMD staff on the development of each of these rules. One of the most contentious and recurring issues which the subcommittee worked on was that of the surplus definition. Other key issues where the subcommittee provided assistance included SIP approvability and identification of additional source categories for credit rules.
	(3)	New Source Review At the beginning of the year, the NSR subcommittee submitted an issue paper to the Governing Board stressing five recommendations HRAG members believed should be highlighted to address the energy crisis: Adopt a policy of prudent, active management of the credit banks within the AQMD; Direct AQMD staff to forecast credit demands and credit production for each year of the planning horizon taking into account deadlines of major regulatory programs on the horizon; Review the emissions inventory to identify potential sources of PM10 reductions, given the significant predicted shortage of PM10 offsets; Adopt a policy to require projects outside of the AQMD seeking to transfer AQMD credits out of Basin to first perform a due diligence search for alternative sources of offsets; and, Implement some of the short-term solutions, e.g., extending the deadline for submitting an application to apply for shut down ERCs from the current 90 days. Further, the subcommittee looked at how the AQMD might approach emission reductions in the AQMP and whether the emission reductions are considered surplus and usable as credits. This subcommittee gave written comments to the AQMD staff to respond to the 90-day NSR review that was being conducted by EPA for the National Energy Policy. In August of last year, a representative of EPA Office of Air Quality Planning and Standards (OAQPS) presented an overview of the revised Economic Incentives Program guidance document adopted by EPA earlier in the year. The subcommittee provided feedback to EPA.
	(4)	Small Business Considerations During the year the subcommittee met with more than a dozen representatives of the small business community, discussed a wide range of issues and concerns, and prioritized those issues which represent some of the more pressing concerns of small businesses that are regulated by the District. During the same period, the subcommittee expanded its membership from two to four members, rotated Chairpersons; and changed the name of the subcommittee to more accurately reflect its purpose as part of the HRAG. Finally, the subcommittee completed its goals and objectives for Calendar year 2002.
	(5)	Strategic Outreach At the beginning of last year, this subcommittee reviewed the CAA Section 105 Grant process and state subvention process to identify enhanced funding opportunities for extreme non-attainment areas. Another issue was to continue working toward regulatory reforms.
	(6)	State & Local Variance Programs This subcommittee met several times with EPA and a broad range of stakeholders to reach consensus on rule language for proposed amended Rule 518.2 – Federal Alternative Operating Conditions. The major issue was the requirement to offset excess emissions from variances in exchange for EPA supporting a broadened rule that covers all situations traditionally covered by variances. With the substantial input of the subcommittee, this rule was adopted during the public hearing at the December 2001 Board meeting.

Members of the HRAG identified the need for a subcommittee to deal with EJ issues. This subcommittee, this year, established goals to monitor and seek to influence state and federal EJ programs and guidance documents with the intent of demonstrating that a programmatic approach offers equivalent protection and should be the basis for delegating to AQMD any federal and state mandates. One of the tools available to help inform EJ programs was shown to the HRAG. This was the EPA’s Environmental Justice Query Mapper (Enviro Justice Mapper), on the Internet. This public-access application is a broad based database of facilities within a neighborhood that have any federal reporting requirements. This resource also provides a hyperlink to health databases. Although some of the databases are still under development, having all the federal reporting and the federal data required of large facilities in one place is a major step in the right direction.

An informative presentation was given in November of last year by CARB on their Environmental Justice Guidelines, which were later approved, in December 2001.

The HRAG finalized its goals and objectives for the coming year at its November 2001 meeting (see attached).