CALIFORNIA AIR RESOURCES BOARD

Lincoln Plaza
Auditorium, First Floor
400 "P" Street
Sacramento, CA

April 9, 1992
9:30 a.m.

AGENDA

Page

92-4-1 Public Hearing to Consider the Adoption of Permit 001
Fee Regulations for Nonvehicular Sources Pursuant
to the California Clean Air Act.

92-4-2 Public Hearing to Consider the Adoption of Fee 061
Regulations Pursuant to the Atmospheric Acidity
Protection Act.

92-4-3 Public Meeting to Consider Approval of a Report 146
Concerning the Nature, Types, and Extent of
Unfinished Fuels and Fuel Blending Components
Sold or Blended at Locations other than Refineries.

92-4-4 Public Meeting to Consider Revisions to the 203
Technical Guidance Document on Photochemical
Modeling.

92-4-5 Public Meeting to Consider an Informational Report 286
to the board on the Use of Risk Assessment Values
in risk Management Decisions.

92-4-6 Resolution Supporting the American Lung ---
Association's 20th Annual Clean Air Week.

ITEM NO.: 92-4-1

Public Hearing to Consider the Adoption of Permit Fee Regulations
for Nonvehicular Sources Pursuant to the California Clean Air
Act.

RECOMMENDATION

The staff recommends that the Board adopt the proposed
regulations for recovery of costs incurred by the Air Resources
Board (ARB) during fiscal year 1992-93 to implement those
provisions of the California Clean Air Act related to
nonvehicular sources.

DISCUSSION

The California Clean Air Act requires the ARB to develop new
programs and to expand existing programs to address the problem
to air pollution in California. To defray the additional costs
to the ARB of implementing programs and activities related to
nonvehicular sources pursuant to the Act, section 39612 of the
Health and Safety Code authorizes the ARB to require districts to
collect fees from the holders of permits for sources which are
located in nonattainment areas and which emit 500 tons or more
per year of any nonattainment pollutant or precursor. The
staff's proposal would implement section 39612 for the fourth
year of the program by requiring districts to collect the fees
authorized by the Act and to transmit the fees to the ARB for
deposit into the Air Pollution Control Fund. Districts would be
required to assess each qualifying facility a fee of
approximately $13,20 per ton of emissions of nonattainment
pollutants and precursors. The proposed fee rate and amounts to
be remitted may be revised at the time of the public hearing if
updated emission data are available at that time.

The staff has developed the proposed fee regulations in
consultation with affected districts. Also, the staff held a
public consultation meeting to which representatives of affected
facilities and districts as well as members of the public were
invited.

SUMMARY AND IMPACTS

Adoption of the proposed regulations is not expected to result in
any adverse health, safety or environmental impacts.

The cost to individual companies ranges from approximately $6,600
for the smallest facility subject to the regulations to
approximately $380,000 for a multi-facility business. No small
businesses have been identified that would be subject to the
fees.

ITEM NO.: 92-4-2

Public Hearing to Consider the Adoption of Regulations Pursuant
to the Atmospheric Acidity Protection Fees.

RECOMMENDATION

Staff is recommending adoption of emissions fee regulations for
fiscal year 1992-93.

DISCUSSION

The Legislature, in adopting the Atmospheric Acidity Protection
Act of 1988 (Stats. 1988, ch. 1518, Health and Safety Code
sections 39900-39911), made a finding that the deposition of
atmospheric acidity resulting from other than natural sources is
occurring in various regions of California. The Legislature also
found that the continued deposition of acidity, alone or in
combination with other man-made pollutants and naturally
occurring phenomena, could have potentially significant adverse
effects on public health, the environment and the economy.

The Legislature directed the Board to adopt and implement the
Atmospheric Acidity Protection Program to determine the nature
and extent of potential damage to public health and the State's
ecosystems which may be expected to result from atmospheric
acidity. The Legislature also directed the Board to develop
measures that may be needed for the protection of public health
and sensitive ecosystems within the state. To enable the board
to carry out these activities, the Act authorized the Board to
require the districts, beginning July 1, 1988, to impose
additional variance and permit fees on nonvehicular sources
authorized by permit to emit 500 tons per year or more of either
sulfur oxides or nitrogen oxides. The total amount of funds
collected by additional fees, exclusive of district costs, shall
not exceed $1,500,000 for any fiscal year or the amount
appropriated from State funds by the Legislature for the
Atmospheric Acidity Protection Program, whichever is less. To
assure collection of $1,500,000, the fee rate is adjusted upward
by ten percent to avoid under collection for reasons such as
unanticipated closings of businesses.

Proposed adoption of a new section 90621.3, Title 17, California
code of Regulations, would specify fees applicable for Fiscal
Year 1992-93. The proposed regulations provide for the
collection of fees by the districts and forwarding of the fees to
the Air Resources Board. The regulations would specify that
compliance with the fee requirements shall be based on the
amounts emitting during calendar year 1990, as determined by the
Board's Executive Officer on February 7, 1992 and that fees shall
be collected from permitted sources identified after adoption of
the regulations, as having emitted 500 tons or more per year of
sulfur oxides or nitrogen oxides in 1990. The regulations would
also require the collection of fees from permitted sources
identified after February 7, 1992. As of the Public Hearing
Notice date, the proposed fee rate is approximately $8.00 per ton
emitted.

No significant adverse impacts are anticipated by the Board's
adoption of the proposed emissions fee regulations.

ITEM NO.: 92-4-3

Public Meeting to Consider the Adoption of a Staff Report on the
Nature, Types, and Extent of Unfinished Fuels and Fuel Blending
components Sold or Blended at Locations Other than Refineries.

RECOMMENDATION

Staff is recommending adoption of its staff report concerning the
nature, types, and extent of unfinished fuels and fuel blending
components sold or blended at locations other than refineries.

DISCUSSION

The Legislature, in passing Health and Safety Code, Section
43013.5, required that on or before May 1, 1992, the State Air
Resources Board shall report to the Legislature on the nature,
types, and extent of unfinished fuels and fuel blending
components sold or blended at locations other than refineries.
The report shall include recommendations concerning the need for
appropriate legislation.

The ARB staff report was prepared in response to the legislative
mandate cited above. A survey which the ARB conducted determined
that more than 157 million gallons of unfinished fuels and fuel
blending components were sold in 1991 and available for use
outside the refinery. The ARB believes that significant amounts
of these untaxed, often non-conforming products are being blended
by resellers with other fuel products for retail sale as finished
fuels which do not meet the legal specifications for such
products.

The sale of these unfinished fuels and fuel blending components
in nonconforming fuels has at least four negative results:

It increases air pollution, through the combustion of
nonconforming fuels;

It places legitimate, conforming distributors and retailers
at a serous economic disadvantage, since the untaxed fuels
may be sold for substantially less than conforming products;

It favors the growth of a criminal infrastructure based upon
noncompliance; and

It represents a substantial loss to State and Federal
revenues derived from taxes on fuels.

The economic benefit to be derived by unscrupulous distributors
and retailers from the sale of nonconforming fuels drives the
distribution system for such products. The economic incentives
provided by noncompliance with fuels regulations will become
greater in the future, as increasingly-strict fuel standards take
effect.

The ARB staff believes that the Board presently lacks and
authority to prohibit the sale of unfinished fuels and fuel
blending components for use outside refineries. It believes that
such statutory authority is important to protect public health,
the environment, Government revenues, and legitimate businesses
from the effects of the use of nonconforming fuels.

The ARB staff believes that the Board should have statutory
authority to regulate the sale, blending, and other use of non-vehicular
fuels, such as unfinished fuels, fuel blending stocks,
and transmix. It further believes that such statutory authority
should be broad enough to enable the ARB to modify those
regulations from