Friday, 10 July 2009 12:07

Bill to Rescind SCAQMD Moratorium on Emission Reduction Credits

Since late 2008, Southern California body shops have been prevented from installing new spray booths or been able to modify their existing spray booth from its existing permit condition, including moving an existing booth to a new location, or adding an air make-up system for waterborne paint.

The reason is due to a moratorium on such actions imposed by the South Coast Air Quality Management District (SCAQMD). The moratorium started in late 2008 and affected parties were officially notified in January, 2009. See letter here.
Attempting to aid affected shops this month is SB 696, sponsored by California Senator Rod Wright. SB 696 was heard June 17 by the Senate Energy, Utilities and Communications committee in Sacramento and is specifically designed to end the moratorium on issuing permits in the SCAQMD.


The bill was narrowly passed by a vote of 6-3, with 2 abstentions. Those voting “aye” were Senators John Benoit, Ron Calderon, Dave Cox, Alex Padilla, Tony Strickland, and Rod Wright. Those voting “no”, were Senators Corbett, Kehoe, Lowenthal and Simitian. Senators Ellen Corbett and Pat Wiggins were absent, abstaining, or not voting.
The bill will next be heard in the Environmental Quality Committee.
At the time of the moratorium SCAQMD explained that a court decision required it to make significant changes to its permitting program. This change prevented SCAQMD from issuing permits for new construction, modification, replacement and relocation of equipment that increases air pollution, unless the applicant provides its own Emission Reduction Credits (ERCs).  
The court decision caused SQAQMD to suspend operation of its internal bank of offset credits which SCAQMD had used instead of requiring applicants to provide their own ERCs.“
Under current law, the California Environmental Quality Act (CEQA), an environmental impact report shall be prepared on a project that may have a significant effect on the environment.
Every air quality management district in a federal non-attainment area (e.g. the greater Los Angeles area) is  required to establish a system by which major new and modified  sources of air pollutants are required to obtain permits, meet emission standards that constitute the lowest achievable emission rates, and obtain equivalent emission reductions, or offsets, from other sources. The South Coast Air Quality Management District (SCAQMD) promulgated various rules. Under its rules, the SCAQMD has accumulated emission reduction credits in an internal bank which it makes available to specified entities for specified purposes.
In Los Angeles Superior Court, certain of the district's rules were found to violate CEQA, including the rule under which the SCAQMD accumulated the emission reduction credits in its internal bank. The court decision referred to is the Natural Resources Defense Council v. South Coast Air Quality Management District (Super. Ct. Los Angeles County, 2007, No. BS 110792), the superior court found the promulgation of certain of these district rules to be in violation of CEQA.
This bill abolishes the Court's decision, establishes the amount of emission reduction credits in the SCAQMD's bank and authorizes the use of those credits for essential public services, other exempt purposes as defined by the SCAQMD, and powerplants under specified conditions. This bill exempts the use of the credits in the SCAQMD's bank from CEQA.

CAA Testifies in Support

The California Autobody Association (CAA) has been in support of this bill. CAA’s Executive Director, David McClune said, “SB696 is urgently needed to allow essential projects that are stalled or can on longer obtain a permit based on the recent lawsuit against the district. The delay in resolving this issue has already had a major impact and if allowed to continue, will destroy thousands of jobs and affect thousands of businesses. California cannot afford to let this continue to damage our economy.”
This bill deals with trying to resolve the issue concerning the court ruling in the SCAQMD that suspended operation of its internal bank of emission reduction credits (ERC’s), also known as offset credits. Any business, regardless of size, including all auto body shops intending to rely on any of the offset exemptions for permits, have been affected. The result of this court decision has stopped the sale of spray booths and the permitting of booths in the district.
In addition to the CAA, other industry associations testified including the California Small Business Alliance, which CAA is a member. These other associations reinforced the “emergency” situation that thousands of small businesses face in the SCAQMD.
The CAA says it will will continue to work with this coalition of businesses in the SCAQMD to get this bill passed.

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