BOARD MEETING DATE: May 7, 2004
AGENDA NO. 23

Report of Home Rule Advisory Group Accomplishments in 2003 and Approve Goals & Objectives for 2004

SYNOPSIS:

This item is to present the Board with the Home Rule Advisory Group’s (HRAG’s) 2003 accomplishments and to recommend approval of 2004 Goals & Objectives.

COMMITTEE:

Stationary Source, February 27 and April 23, 2004, Reviewed

RECOMMENDED ACTION:

Receive and file the report of 2003 accomplishments and approve the 2004 Goals & Objectives.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Board has previously established several Advisory Groups to review issues and provide input to the Board and in March, 2004 approved the 2004 Goals and Objectives for all except the HRAG. The Stationary Source Committee has since reviewed and approved the HRAG component. Attachment A lists the calendar year 2003 accomplishments of the HRAG and its 2004 Goals & Objectives.

Proposal

Receive and file the 2003 report of accomplishments and approve 2004 Goals & Objectives.

Fiscal Impacts

None

Attachments

Attachment A – Home Rule Advisory Group Accomplishment for 2003 and Goals & Objectives for 2004
 

Attachment A

Home Rule Advisory Group (HRAG)

Advisory Group Accomplishments in 2003
 

1)	SIP Control Measure - This subcommittee was formed late in 2003 at the request of HRAG Chairman Wilson. Its primary purpose was to assist District staff in an effort to gain an additional near-term emissions reduction commitment from ARB in the 2003 Air Quality Management Plan. The subcommittee was the vehicle used to bring together the environmental community, the business community and local government to call for the additional reductions. The overall effort, lead by District staff, was very successful, resulting in ARB committing to an additional 93 tons per day of emissions reductions from sources under its control.
2)	NSR Issues - The NSR Subcommittee held ten meetings and accomplished the following:   a)   Developed an "Equivalency Determination Matrix," which was used in our meetings for comparison of the existing SCAQMD New Source Review program, per Regulation XIII, with the EPA NSR Reform rules. The Matrix was designed to facilitate discussion of how to determine equivalency of the SCAQMD New Source Review program with the new EPA rules.   b)   Developed a draft White Paper, "NSR Reforms for Modernization." The purpose of the paper can best be summarized by a quote from the draft paper: The probability of an irresolvable impasse [over the EPA NSR reform equivalency requirement] even before 2006 is real. Therefore the Subcommittee has undertaken the task of trying to identify improvements to the SCAQMD’s NSR program that will remove barriers to economic and energy modernization of facilities. The improvements we will recommend should: (1) improve the ability of businesses to understand and evaluate the emissions impacts of their proposed projects with regulators, so that it may become an integral part of the business planning cycle, (2) create a regulatory system that will encourage businesses to modernize and improve their operations, giving greater incentives for companies to employ the most effective emission reduction techniques voluntarily and giving greater flexibility when companies take these voluntary actions, (3) give businesses flexibility to comply with California requirements that (i) the stationary source emission reduction program in the SCAQMD achieves no net increase in emissions, and (ii) a new or modified source must apply the best available control technology appropriate for the new or modified facility consistent with California law. c)   Examined a number of case studies of facilities in the SCAQMD, where modernization may have been limited or even abandoned due to perceived or real barriers resulting from the existing SCAQMD New Source Review program in Regulation XIII.
3)	Credit Trading Programs and Compliance Flexibility - Completing the vast majority of its work in 2002, the subcommittee was relatively quiet during 2003. It focused its attention on working with District staff to resolve implementation issues with the mobile source credit generation rules. It also worked with EPA to gain final approval of the one rule outstanding in the original package of credit generation rules. The subcommittee plans to become more active during 2004 as it works with the agencies’ staffs and other stakeholders on new or expanded rules to generate offsets for use under New Source Review.
4)	Small Business Considerations - This charter of the subcommittee is to identify and address duplicative, conflicting and/or unusually burdensome requirements, and other compelling issues that are unique to the small businesses that are under AQMD’s jurisdiction. Members of the subcommittee – concerned about the presence of some particularly burdensome control measures in the proposed Environmental Justice Cumulative Impacts Program – engaged in extensive discussions with the Executive Officer, members of the staff, Governing Board members, and several COGs, in an effort to avert or avoid regulations that would be harmful to small businesses and the communities in which they reside. While the program was ultimately adopted, certain measures were modified or removed. Among these were: removing toxic air contaminants from Reg. 11 rules; removing any reference to O-BACT from the program document; agreeing to adopt a two-tier approach when addressing citizen’s complaints about harmful pollutants, which are alleged to emanate from some auto body shops. Staff will collect and analyze data prior to proceeding into rulemaking. Staff also tried to allay concerns by the subcommittee that the program, once implemented, would result in "red lining" of certain communities. The subcommittee will continue to monitor the program as it evolves in 2004.
5)	Environmental Justice - Monitored Cal/EPA Environmental Justice Advisory Committee Work on drafting EJ principles for the Cal/EPA Interagency Working Group and updated HRAG on developments. Worked with ARB EJ Stakeholders Group to seek consistency between ARB EJ program and SCAQMD EJ program; provided monthly updates on work ARB was doing regarding EJ issues. Monitored ongoing EJ activities at Federal, State, and SCAQMD levels for potential inconsistencies or jurisdictional issues.

Advisory Group Goals & Objectives in 2004

1. SIP Control Measure – The Home Rule Advisory Group will provide assistance to help coordinate and facilitate strategies necessary to fulfill the SIP commitment. The recently approved AQMP commits the Air Resources Board to achieve as a short-term measure an additional 120 tons per day of emission reductions from sources under its jurisdiction. All stakeholders recognize that ARB faces significant challenges to identify, develop, and successfully implement new strategies to meet this emission reduction target. At the same time, the AQMP requires AQMD to continue to aggressively gain additional emission reductions. Even if both agencies are successful in achieving these reductions, AQMD will continue to face a shortfall of emission reductions (the so-called "Black Box") it needs to achieve the 2010 attainment deadline as set in the federal Clean Air Act.
   
   It is a goal of the Home Rule Advisory Group to work with the environmental community and the staffs of the SCAQMD, ARB and EPA to help coordinate and facilitate the strategies necessary to fulfill these emission reduction measures. The Group is uniquely qualified to provide a forum to better understand the mobile source measures undertaken by ARB and to work through many of the issues that will develop as it becomes increasingly difficult to achieve additional emission reductions.
    
2. New Source Review – The Home Rule Advisory Group will continue to seek improvements to new source review and believes that there are opportunities to streamline and improve the New Source Review (NSR) process that are essential to balancing clean air goals and economic vitality. There have been many developments in NSR, including the finalization of five new NSR rules by the USEPA. These changes have been controversial causing several states, and the SCAQMD, to sue USEPA. Additionally the California Legislature passed significant new requirements that must be met before any changes to NSR programs can be adopted by local air districts. However, despite the controversy, all states are still required by USEPA to either revise their NSR program to conform to the new changes, or to prove their programs are at least as stringent, by January 2006. The Home Rule Advisory Group will continue to work with the three agencies as this debate continues, to determine if there are ways that the SCAQMD NSR program can improve the ability of facilities to modernize, and still comply with the traditional themes of the SCAQMD NSR program: (1) no net increase in emissions, (2) use of the cleanest control technology appropriate to the application, and (3) full offset of any emission increases.
    
3. Emission Credit Trading Program Development and Enhancement - The Home Rule Advisory Group will continue to seek ways to enhance the viability and use of emission credits as a means to further air quality objectives, advance new technologies, provide compliance flexibility, and to assure a healthy supply of credits for sustained economic growth. It will pursue recommendations and help to develop rulemaking deemed appropriate to increase the generation and overall availability of credits. For 2004, work in this area will be limited, but will focus on the development of new rules to generate emission credits for use as offsets under New Source Review, expand existing rules to allow credits to be used for additional pollutants and for NSR and to continue to work with agency staffs as implementation issues arise, including a review of the sunset provisions with the existing credit rules.
    
4. Small Business Considerations - The Home Rule Advisory Group resolves to actively seek small business input in the review and undertaking of all programs and in making recommendations to the Stationary Source Committee such that a balanced view of large and small business can be presented to and considered by that Committee. In addition, the Group will seek to identify and address duplicative, conflicting and/or unusually burdensome requirements, and other compelling issues that are unique to small businesses in this District.
    
5. Strategic Outreach - The Home Rule Advisory Group will seek to dialogue and partner with AQMD staff, air regulatory agencies and other entities in non-attainment areas to find and/or develop synergies to increase flexibility under EPA policies and guidance documents. The Group will seek to promote more equal treatment among the EPA regions, increase federal and state funding for local programs, streamline administrative procedures and make other recommendations to EPA and other federal agencies or states on a united front. The Group will also monitor progress and suggest strategies as appropriate to assure that the appropriate regulatory agencies carry their fair share of the AQMP emissions burden, in a timely manner, in support of and consistent with the activities of the SIP Control Measure Subcommittee.
    
6. Environmental Justice - The Home Rule Advisory Group will continue to monitor and report on the development and implementation of Environmental Justice programs by federal, state, and local agencies for consistency with federal law, state law, and SCAQMD polices. The Group will review proposed procedures for the analysis of the cumulative impact of air pollution sources on communities, and will consider options to resolve issues raised by both the communities and project proponents in a timely manner. The HRAG will also investigate ways to promote a programmatic approach to resolving environmental impact inequities, as preferable to a case by case approach. The HRAG will also seek ways to resolve environmental impact inequities prospectively, rather than after the fact.

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