TITLE 17. CALIFORNIA AIR RESOURCES BOARD
NOTICE OF PUBLIC HEARING TO CONSIDER AMENDMENTS TO THE CALIFORNIA CLEAN AIR ACT NONVEHICULAR SOURCE FEE REGULATIONS
The Air Resources Board (the Board or ARB) will conduct a public hearing at the time and place noted below to consider
adoption of amendments to the California Clean Air Act Nonvehicular Source Fee Regulations. The amendments would
establish a process for assessing yearly fees on nonvehicular sources, consumer products manufacturers, and architectural
coatings manufacturers for the 2003-2004 and subsequent fiscal years.
DATE: | July 24, 2003 |
TIME: | 9:00 a.m. |
Location: | California Environmental Protection Agency Air Resources Board Auditorium, Second Floor 1001 "I" Street Sacramento, California 95814 |
This item will be considered at a two-day meeting of the Board which will commence at 9:00 a.m., July 24, 2003,
and may continue at 8:30 a.m.,
July 25, 2003. This item may not be considered until July 25, 2003. Please consult the agenda for the meeting,
which will be available at least 10 days before July 24, 2003, to determine the day on which this item will be
considered.
If you have special accommodation or language needs, please contact the ARB's Clerk of the Board at (916) 322-4011
or amalik@arb.ca.gov as soon as possible. TTY/TDD/Speech-to-Speech users
may dial 7-1-1 for the California Relay Service.
INFORMATIVE DIGEST OF PROPOSED ACTION/POLICY STATEMENT OVERVIEW
Sections Affected: Proposed adoption of new sections 90800.75, 90800.9 and 90804; and proposed amendments
to sections 90800.8, 90801, 90802, and 90803, title 17, California Code of Regulations (CCR).
Background
Health and Safety Code section 39612 was enacted by the Legislature as part of the California Clean Air Act of
1988. As originally enacted, section 39612 empowered the ARB to assess fees on nonvehicular sources that were authorized
by local air district permits to emit 500 tons or more per year of any nonattainment pollutant or its precursors.
The total amount of assessed fees was capped at $3,000,000, and the fees are to be used by the ARB only for the
purposes of recovering the costs of additional state programs related to nonvehicular sources.
Pursuant to Health and Safety Code section 39612, the Board approved the California Clean Air Act Nonvehicular
Source Fee Regulations in 1989. The original regulations included the fee rate and amounts to be remitted to the
ARB by the air pollution control and air quality management districts (districts) for the first year of the program,
fiscal year 1989-90. In each subsequent year between 1990 and 1996, the Board approved amendments to the fee regulations
identifying the amount of fees to be collected by each district for the following fiscal year. In 1998, the Board
adopted amendments which eliminated the need for annual rulemakings. The 1998 amendments established a process
under which the ARB Executive Officer identifies the fees to be assessed in each fiscal year and notifies the districts
and affected facilities. The process also insures that districts and affected facilities have the opportunity to
provide input on the amount of the assessments.
In 2003, the Legislature enacted AB 10X (Stats. 2003, Chapter 1X), which made a number of changes to existing law.
AB 10X amended Health and Safety Code section 39612 by: (1) increasing the cap on stationary source permit fees
from $3,000,000 to $13,000,000 for fiscal year 2003-2004, and allowing the fees to be adjusted annually thereafter
for inflation; (2) expanding the universe of stationary sources subject to the fees by specifying that the fees
are to be collected from nonvehicular sources authorized by local air district permits to emit 250 tons (instead
of the previous 500 tons) or more per year of any nonattainment pollutant or its precursors; and (3) authorizing
the ARB to collect the fees directly, instead of requiring the districts to first collect the fees and then transmit
them to the ARB.
In addition, AB10X authorizes the ARB for the first time to assess fees on manufacturers of consumer products and
architectural coatings. The fees may be assessed on those manufacturers whose total sales of consumer products
or architectural coatings will result in the emission in California of 250 tons per year or greater of volatile
organic compounds (VOCs). The fees on manufacturers are to be expended by the ARB solely to mitigate or reduce
air pollution in the state created by consumer products and architectural coatings.
Description of Proposed Regulatory Action
In this rulemaking, the staff is proposing amendments to the existing fee regulations to implement the provisions
of AB 10X. For stationary point sources (i.e., facilities) the amendments provide for the Executive Officer to
assess annual fees on facilities authorized by local air district permits to emit 250 or more tons per year of
any nonattainment pollutant or its precursors. Districts would no longer be required to collect the fee from facilities,
but each district would instead have the option to collect the fees if they choose to do so. The
ARB would collect the fees directly in all districts that do not choose this option. In other respects, the basic
fee assessment process for facilities is the same as the existing process.
The proposed amendments would also provide for the Executive Officer to assess annual fees on manufacturers of
consumer products and architectural coatings whose total sales will result in VOC emissions in California of 250
tons per year or greater. The fee assessment process for manufacturers is essentially the same as that for facilities,
except that ARB would collect these fees directly from manufacturers in all cases; districts would not have the
option of collecting the fees on behalf of the ARB.
Like the existing regulations, the proposed regulations would continue to provide for: (1) the collection of the
emission fees on a dollar-per-ton basis; (2) the recovery of administrative costs by the districts if they chose
to collect the fees from facilities; and (3) the imposition of additional fees on sources that do not pay in a
timely manner.
Finally, the proposed amendments establish an abbreviated fee assessment process for fiscal year 2003-2004, because
it is likely that only limited time will remain in this fiscal year by the date the amendments are approved by
the Office of Administrative Law and become legally operative. The fee determinations will be as of the July 24,
2003 hearing date, unless the Executive Officer makes a modification that is based on subsequently received information,
and the modification is explained in the final assessment notification. This approach will insure that by the time
of the Board hearing the districts, facilities, and manufacturers are aware of and have a chance to comment on
the anticipated amounts and basis for the fees.
The Governor's budget for fiscal year 2003-2004 proposes that the ARB collect a total of $13 million in fees from
stationary sources, consumer products manufacturers, and architectural coatings manufacturers. However, if the
Legislature approves a budget recommendation of the Legislative Analyst's Office to increase the fees by $4.4 million,
the ARB would be authorized to collect $17.4 million in fees from these sources for fiscal year 2003-2004.
There are no federal regulations that are comparable to the proposed fee regulations.
AVAILABILITY OF DOCUMENTS AND CONTACT PERSONS
The Board staff has prepared a Staff Report: Initial Statement of Reasons (ISOR) for the proposed action, which
includes a summary of the potential environmental and economic impacts, and environmental justice considerations
of the proposal.
Copies of the ISOR and the full text of the proposed regulatory language may be obtained from the Board's Public
Information Office, Air Resources Board, 1001 I Street, Visitors and Environmental Services Center, 1st Floor,
Sacramento, CA 95814, (916) 322-2990, at least 45 days prior to the scheduled hearing (July 24, 2003).
Upon its completion, the Final Statement of Reasons (FSOR) will be available and copies may be requested from the
agency contact persons identified in this notice, or may be accessed on the web site listed below.
Inquiries concerning the substance of the proposed regulatory action may be directed to the designated agency contact
persons:
1) For general questions on the proposed regulatory action:
Mr. Don Rake, Planning and Technical Support Division,
(916) 322-7304, e-mail drake@arb.ca.gov.
2) For questions on Nonvehicular Sources:
Mr. Don Rake, Planning and Technical Support Division,
(916) 322-7304, e-mail drake@arb.ca.gov;
3) For questions on Consumer Products:
Ms. Judy Yee, Stationary Source Division,
(916) 322-9148, e-mail jyee@arb.ca.gov; and
4) For questions on Architectural Coatings:
Mr. Jim Nyarady, Stationary Source Division,
(916) 322-8273, email jnyarady@arb.ca.gov.
Further, the agency representative and designated back-up contact persons to whom non-substantive inquiries concerning
the proposed administrative action may be directed are Artavia Edwards, Manager, Board Administration & Regulatory
Coordination Unit, (916) 322-6070, or Alexa Malik, Regulations Coordinator, (916) 322-4011. The Board staff has
compiled a record for this rulemaking action, which includes all information upon which the proposal is based.
This material is available for inspection upon request to the contact persons.
If you are a person with a disability and desire to obtain this document in an alternative format, please contact
the Air Resources Board ADA Coordinator at (916) 323-4916, or TDD (916) 324-9531, or (800) 700-8326 for TDD calls
from outside the Sacramento area.
This notice, the ISOR, and all subsequent regulatory documents, including the FSOR, when completed, are available
on the ARB Internet site for this rulemaking at www.arb.ca.gov/regact/feereg03/feereg03.htm
COSTS TO PUBLIC AGENCIES, BUSINESSES, AND PERSONS AFFECTED
The determinations of the Board's Executive Officer concerning the costs or savings necessarily incurred by public
agencies and private persons and businesses in reasonable compliance with the proposed regulations are presented
below.
The Board's Executive Officer has determined that the regulations will not create costs or savings, as defined
in Government Code sections 11346.5(a)(5) and 11346.5(a)(6), to any state agency or in federal funding to the state,
costs or mandate to any local agency or school district whether or not reimbursable by the state pursuant to Part
7 (commencing with section 17500), division 4, title 2 of the Government Code, except as discussed below, or other
non-discretionary savings to state or local agencies.
The proposed regulatory action will impose a mandate upon and create costs to some local agencies. For fiscal year
2003-2004, facilities operated by three local agencies have been identified as being subject to the fees. The aggregate
cost to these three local agencies will be approximately $141,000 to $188,000 for this fiscal year. These costs,
as well as any permit fees that may be paid in subsequent fiscal years by any local agency, are not reimbursable
state mandated costs pursuant to Part 7 (commencing with section 17500), Division 4, Title 2 of the Government
Code, because the fee regulations apply generally to all facilities in the State which emit 250 tons or more per
year of nonattainment pollutants or their precursors and, therefore, do not impose unique requirements on local
government agencies.
The Board's Executive Officer has also determined that individual local air pollution control and air quality management
districts (districts) may incur some administrative costs as a result of the proposed regulatory action if a district
chooses to collect fees from facilities instead of the ARB. However, districts are not mandated by the proposed
regulations to collect the fees; a district would incur no administrative costs unless it chooses to collect the
fees itself. In addition, any administrative costs incurred by a district are not reimbursable state mandated costs
because of the districts' authority to recover the costs through fee assessments; Health and Safety Code section
39612(e) and (f)(1), and proposed section 90800.9(e), title 17, CCR, authorize districts to recover these administrative
costs from facilities subject to the fees.
In developing this regulatory proposal, the ARB staff evaluated the potential economic impact on private persons
and businesses. The Executive Officer has initially determined that there will be a potential cost impact on private
persons or businesses directly affected as a result of the proposed regulatory action, but this impact is not expected
to be significant.
The Executive Officer has made an initial determination that the proposed regulatory action will not have a significant
statewide adverse economic impact directly affecting businesses, including the ability of California businesses
to compete with businesses in other States, or on representative private persons. In fiscal year 2003-2004, approximately
104 facilities in the state are expected to be assessed permit fees under the proposed regulations. Among the operators
of these facilities are major oil and gas producers, utilities, and major manufacturing enterprises. The proposed
regulatory action could result in an increased cost to individual facilities of $14,000 to $500,000. Approximately
24 companies involved in the manufacturer of architectural coatings that are sold in the State would be subject
to the fees. This could result in an increased cost to individual architectural coatings manufacturers of approximately
$14,000 to $342,000 per year, depending on the amount of emissions generated by the manufacturer. Approximately
54 manufacturers of consumer products would be subject to the fees. This could result in an increased cost to individual
consumer products manufacturers of approximately $14,000 to $404,000 per year.
In accordance with Government Code section 11346.3, the Executive Officer has initially determined that the proposed
regulatory action will have minimal or no impacts on the creation or elimination of jobs within the State of California,
minimal or no impacts on the creation of new businesses or the elimination of existing businesses within State
of California, and minimal or no impacts on the expansion of businesses currently doing business within State of
California. A detailed assessment of the economic impacts of the proposed regulatory action can be found in the
ISOR.
The Executive Officer has also determined, pursuant to title 1, CCR section 4, that the regulations will affect
small businesses. No facilities subject to the proposed regulations are considered to be small businesses. However,
some consumer products manufacturers and architectural coatings manufacturers subject to the proposed regulations
are considered to be small businesses.
Before taking final action on the proposed regulatory action, the ARB must determine that no reasonable alternative
considered by the agency or that has otherwise been identified and brought to the attention of the agency would
be more effective in carrying out the purpose for which the action is proposed or would be as effective and less
burdensome to affected private persons or businesses than the proposed action.
SUBMITTAL OF COMMENTS
The public may present comments relating to this matter orally or in writing at the hearing, and in writing or
by e-mail before the hearing. To be considered by the Board, written submissions not physically submitted at the
hearing must be received no later than 12:00 noon, July 23, 2003, and addressed to the following:
Postal mail is to be sent to:
Clerk of the Board
Air Resources Board
1001 I Street, 23rd Floor
Sacramento, California 95814
Electronic mail is to be sent to: feereg03@listserv.arb.ca.gov and
received at the ARB by no later than 12:00 noon, July 23, 2003.
Facsimile submissions are to be transmitted to the Clerk of the Board at
(916) 322-3928 and received at the ARB no later than 12:00 noon July 23, 2003.
The Board requests, but does not require, 30 copies of any written statement be submitted and that all written
statements be filed at least 10 days prior to the hearing so that ARB staff and Board Members have time to fully
consider each comment. The ARB encourages members of the public to bring any suggestions for modification of the
proposed regulatory action to the attention of staff in advance of the hearing.
STATUTORY AUTHORITY AND HEARING PROCEDURES
This regulatory action is proposed under that authority granted in sections 39600, 39601, 39612 and 39613 of the
Health and Safety Code. This action is proposed to implement, interpret, or make specific sections 39002, 39500,
39600, 39612, and 39613 of the Health and Safety Code; section 9600(a), Government Code; and Article 4, section
8(c)(1) of the California Constitution.
HEARING PROCEDURES
The public hearing to consider this matter will be conducted in accordance with the California Administrative Procedure
Act, Title 2, Division 3, Part 1, Chapter 3.5 (commencing with section 11340) of the Government Code.
Following the public hearing, the ARB may adopt the regulatory language as originally proposed or with nonsubstantial
or grammatical modifications. The ARB may also adopt the proposed regulatory language with other modifications
if the text as modified is sufficiently related to the originally proposed text that the public was adequately
placed on notice that the regulatory language as modified could result from the proposed regulatory action. In
the event that such modifications are made, the full regulatory text, with the modifications clearly indicated,
will be made available to the public for written comment at least 15 days before it is adopted.
The public may request a copy of the modified regulatory text from the ARB's Public Information Office, Air Resources
Board, 1001 I Street, Visitors and Environmental Services Center, 1st Floor, Sacramento, California 95814, (916)
322-2990.
CALIFORNIA AIR RESOURCES BOARD
Catherine Witherspoon
Executive Officer
Date: May 27, 2003
The energy challenge facing California is real. Every Californian needs to take immediate action to reduce energy
consumption. For a list of simple ways you can reduce demand and cut your energy costs, see our Web-site at www.arb.ca.gov.
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