BOARD MEETING DATE: May 7, 2010
AGENDA NO. 30
PROPOSAL:
Amend Regulation III – Fees
SYNOPSIS:
Proposed amendments to Regulation III - Fees are mostly comprised of administrative amendments and clarifications with no cost impacts and a few minor realignments of some program revenues with costs with resultant minimal or no cost impacts. The proposed amendments would further allow any fee assessed to a major stationary source pursuant to Rule 317 – Clean Air Act Non-Attainment Fees to be credited towards that facility’s certain Regulation III obligations. Staff is also proposing a 2.1% across-the-board CPI increase for FY 2010-11. However, staff is recommending that the Board rebate the CPI increase for the annual operating permit and emission fees for FY 2010-11.
COMMITTEE:
Stationary Source, March 19, 2010 and Administrative, April 9, 2010
RECOMMENDED ACTIONS:
Adopt the attached resolution:
Certifying the Notice of Exemption for Proposed Amended Rules 301 – Permitting and Associated Fees, 303 - Hearing Board Fees, 304 - Equipment, Materials and Ambient Air Analyses, 304.1 - Analyses Fees, 306 – Plan Fees, 307.1 - Alternative Fees for Air Toxics Emissions Inventory, 308 – On-Road Motor Vehicle Mitigation Options Fees, 309 – Fees for Regulation XVI, 311 - Air Quality Investment Program (AQIP) Fees, 313 – Authority to Adjust Fees and Due Dates, 314 - Fees for Architectural Coatings and Proposed Rule 315 – Fees for Training Classes and License Renewal.
Amending Rules 301 – Permitting and Associated Fees, 303 - Hearing Board Fees, 304 - Equipment, Materials and Ambient Air Analyses, 304.1 - Analyses Fees, 306 – Plan Fees, 307.1 - Alternative Fees for Air Toxics Emissions Inventory, 308 – On-Road Motor Vehicle Mitigation Options Fees, 309 – Fees for Regulation XVI, 311 - Air Quality Investment Program (AQIP) Fees, 313 – Authority to Adjust Fees and Due Dates, 314 - Fees for Architectural Coatings and Proposed Rule 315 – Fees for Training Classes and License Renewal.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
Regulation III – Fees, establishes the fee rates and schedules associated with permitting, annual renewals, emissions and other activities that help fund most of AQMD's regulatory programs and services. Regulation III provides about 62% of all AQMD revenues.
California Health and Safety Code Section §§ 40500, et seq., established AQMD’s authority to adopt rules and regulations, including fee schedules intended to cover AQMD’s actual costs of cleaning the air. There are currently fifteen rules within Regulation III - Fees that set fees and procedures in three major categories:
Permitting processing fees;
Annual fees; including Annual Permit Renewal and Annual Operating Emission fees for facilities that have the potential to emit or have emitted toxic or criteria air contaminants; and
Other District services including variances from the Hearing Board, compliance monitoring and testing such as source testing, review of emission control plans, registration programs, Rule 2202 plans etc.
California Health and Safety Code sections relating to the fees of the AQMD allow staff to align fees with the costs of services. The current proposal is comprised of amendments providing for clarifications, corrections, with minimal or no fee cost impacts.
Proposal
Staff is proposing a 2.1% across-the-board fee rate increase commensurate with the change in the 2009 California Consumer Price Index (CPI). Recognizing the ongoing economic impacts of the current recession, staff is proposing that the CPI increase for annual operating and annual emissions fees be rebated for FY 2010-11. Other proposed amendments to Regulation III are clarifications and administrative in nature with negligible or no fiscal impacts. The following specific amendments are being proposed for FY2010-11 for the specific rules in Regulation III as indicated below (any changes to the staff proposal subsequent to the Set Hearing are indicated in double underline/italicized strikethrough format):
Fee Rule |
Description |
REG III
[Cost Recovery] |
Adjustment of Fees by 2009 CPI
Staff is proposing a 2.1% across-the-board CPI increase for FY 2010-11 in an amount equivalent to the change in the 2009 CPI as authorized by California Health and Safety Code Section 40510.5. The rate increase is determined by the ratio of the December 2009 to the December 2008 figures for the "Consumer Price Index (CPI) for U.S. and California - All Urban Consumers" table, in the "California" column, as published by the State of California Department of Finance and available on the departments website at: http://www.dof.ca.gov/HTML/FS_DATA/LatestEconData/FS_Price.htm (link 1). Such a fee increase is necessary and equitable to recover the increased cost of providing the covered services.
Staff is proposing that, if adopted, the CPI increase for annual operating and annual emission fees be rebated back to the effected facilities for FY 2010-11. |
Rule 301(i) [Administrative; No Cost Impact] |
Major stationary source Rule 317 fee credit
In an effort to minimize the fiscal impact of Rule 317 – Clean Air Act Non-Attainment Fees, the proposed amendment will allow any fees assessed to a facility pursuant to Rule 317 to be credited towards that facility’s annual operating permit renewal fee and annual operating emission fee obligations.
(i) Clean Air Act Non-Attainment Fees
Any fees remitted to the District pursuant to Rule 317 – Clean Air Act Non-attainment Fees shall be held in escrow accounts unique to each source. Fees accrued in such escrow accounts may be used for either of the following at the discretion of the source’s owner or operator.
(1) Creditable up to the amount of fees due by the same source during the calendar year or subsequent calendar year(s) for annual emissions fees due pursuant to Rule 301(e)(2), (4), (6), (7) and (11) and annual operating permit renewal fees due pursuant to Rule 301(d)(1), (2) and (4). In no case shall the credit be greater than the fees paid; or
(2) use by the owner or operator for VOC and NOx reduction programs at their source that are surplus to the State Implementation Plan according to the following prioritization; or
(A) at the source;
(B) use in the community adjacent to the facility; or
(C) use within another facility under common ownership; or
(D) other uses to reduce emissions.
Up to five percent of funds can be used by the South Coast Air Quality Management District for administrative support for items in paragraph(i)(2). |
Rule 301(e)(16) [Administrative; No Cost Impact] |
Fee to recover cost of voluntary request to AQMD by source to review Greenhouse Gas (GHG) emissions report required to be filed with CARB
This proposal is strictly voluntary and is designed to recover the cost when a source requests that their GHG report be reviewed for completeness prior to filing with CARB as required.
Reporting Emissions and Paying Fees A facility that is subject to the California Air Resources Board (CARB)’s mandatory reporting of Greenhouse (GHG) emissions may request District staff to review and verify the facility’s GHG emissions. The fee for review and verification for each GHG emissions report shall consist of an initial submittal fee of $114.66 in addition to a verification fee assessed at $118.67 per hour or prorated portion thereof. |
Rule 301(w) [Administrative; No Cost Impact] |
Deletion of rescinded Rule 1309.2 provisions from Rule 301
Current Subdivision 301(w) text, referencing Rule 1309.2 – Offset Budget is proposed for deletion, since Rule 1309.2 was rescinded by Board action on January 8, 2010.
|
Rule 301(y)(3) [Clarification; No Cost Impact] |
Clarification that non-timely payment of equipment certification fees will result in certification revocation
Rule language is proposed to clarify that any additional fees (billed at an hourly time and materials rate) beyond the initial application fee for equipment certifications must be paid within 30 days. Failure to pay such fees within the 30 days will result in the revocation of the certification for each certified piece of equipment that was evaluated, for which the fee payment has not been received within 30 days. Certification of any equipment with a revoked certification shall require re-certification pursuant to the provisions of subdivision Rule 301(y), including the payment of all applicable fees.
(y)(3) Failure to pay all certification fees shall result in the revocation of each certified piece of equipment that was evaluated for which the fee payment has not been received within 30 days after the due. |
Rule 301 Table IA [Clarification; No Cost Impact] |
Clarifying changes to equipment “Equipment/Process” descriptions
Descriptions of equipment/processes for equipment in Rule 301 Table 1A – Permit Fee Rates for Control Equipment are updated to better reflect current permitting practice as follows:
● Spray Booth(s) (1 to 5) with Afterburner/Oxidizer (Regenerative/Recuperative)
● Spray Booths (>5) with Afterburner/Oxidizer (Regenerative/Recuperative)
● Afterburner
● Afterburner/Oxidizer, Catalytic
|
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Rule 301 Table IA [Revenue Reduction] |
Control equipment associated with Arc Welding Equipment fee schedule change
In 2009 the fee schedule for "Plasma Arc Cutting", in Rule 301, Table IB, was amended from Schedule C to B1. This proposal extends the same schedule change to associated control equipment used in conjunction with plasma arc cutters by amending the fee schedule form C to B1. The change is necessary and equitable to reflect the correct amount of resources expended in processing applications for this type of equipment.
Control Systems, Venting Plasma Arc Cutters B1 |
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Rule 301 Table
Summary of Permit Fee Rates Change of Operator [Clarification; No Cost Impact] |
Clarifying fee caps for multiple change of operator applications
Clarifies that the established fee cap for multiple change of operator applications is only applicable to Non-RECLAIM sources as specified by facility type below.
SUMMARY OF PERMIT FEE RATES CHANGE OF OPERATORa
a The change of operator fee for Non-RECLAIM Title V |
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Rule 301 (ab) |
Temporary Rebate of CPI Adjustment
Rebates the CPI increase, if adopted, for Annual Operating and Annual Emissions Fees for FY 2010-11.
301 (ab) Temporary Rebate of CPI Adjustment
For FY 2010-11, owners or operators subject to and paying fees pursuant to the following paragraphs –
(d)(2) Annual Operating Fees
(e)(1) Annual Operating Emission Fee Applicability
(e)(4) Flat Annual Operating Emission Fee
(e)(7) Fee for Toxic Air contaminants or Ozone Depleters
shall be rebated the fee increase corresponding to the 2.1% CPI adjustment. |
Rule 306(b) [Clarification; No Cost Impact] |
Clarification that equipment certification source tests are plans subject to Rule 306
Clarifies that equipment certification source tests for equipment subject to Rules 1111, 1121 and 1146.2 as set forth in Rule 301 are subject to fee payment provisions, including penalty fees, of plans as set forth in Rule 306 – Plan Fees.
(b) Definitions
For the purpose of this rule, a plan is any data and/or test report (including equipment certification source tests) required by federal or state law, or District Rules and Regulations to be submitted to the District. A plan may be a description of a method to control or measure emissions of air contaminants required by the Rules and Regulations. Plans include, but are not limited to, the following: Demonstration Plan; Application Test Plan; Implementation Plan; Compliance Plan; Management Plan; Control Plan; CEQA Mitigation Monitoring Plan; Acid Rain Repowering Extension Plan and Compliance Plan; Acid Rain Continuous Emission Monitoring System Plan; Acid Rain Protocol/Report Evaluation; VOC Excavation Mitigation Plans (Site Specific and Various Locations); Reduction of Refrigerant Emissions from Stationary Refrigeration and Air Conditioning Systems Plan; Title V Exclusion Requests; Rule 109.1;Smoke Management Plans; Burn Management Plans; Emergency Burn Plans; Post Burn Evaluation Reports; Alternative Recordkeeping System Plan and Solid Waste Air Quality Assessment Test Reports (Health and Safety Code Section 41805.5); Compliance Assurance Monitoring Plan (40CFR64); Maximum Achievable Control Technology MACT Exemption Requests; Equipment Certification Source Test Reports; and MACT Case-by-Case Analysis. |
Rule 306(i)(1) [Clarification; No Cost Impact] |
Clarification that Rule 444 plan submittals do not require up front initial payment of plan evaluation fees
(i)(1) Payment of Fees Plan Filing or Submittal Fee
In addition to payment of the filing fee, the initial payment for plan evaluation fees shall be $393.05 paid at the time of filing. This fee shall not apply to plans pursuant to Rule 403 - Fugitive Dust, Rule 461(i),
|
Rule 306(r) [Administrative; No Cost Impact] |
Specific breakdown of fees for recovering the cost of a voluntary request to AQMD by a source to review (GHG) emissions report required to be filed with CARB
Regulation XXVII Fees
(1) Fees for Rule 2701 – SoCal Climate Solutions Exchange
(A) Entities submitting a plan will be assessed a filing fee of $114.66.
(B) The fee for review and verification of Certified Greenhouse Gas Emission Reductions by SCAQMD staff shall be assessed at $118.67 per hour or prorated portion thereof.
(2) Fees for Rule 2702 – Greenhouse Gas Reduction Program
(A) Upon submitting a completed Greenhouse Gas Reduction Program Request to the Executive Officer for certified emission reductions an entity shall pay a fee of $114.66.
(B) Private citizens wishing to participate are exempt from the plan fees for reductions used to offset personal, household or event GHG emissions. |
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Rule 308(g)(3) [Cost Recovery; Negligible Cost Impact] |
Cost recovery for re-issuance of replacement Rule 2202 ETC certificate
A fee of $100 per transaction is proposed to adequately recover the cost of re-issuing replacement Rule 2202 Employee Transportation Coordinator (ETC) training certificates. This fee is equitable and necessary for the resources expended in providing this optional service. A total processing time of approximately 1 hour and 10 minutes inclusive of time from various staff at the FY 2009-10 burdened (salaries, employee benefits, District General and allocatable overhead) rates is required, as shown in the table below:
Historically, there have typically been about 12 requests per year for a replacement certificate. At FY 2009-10 rates the cost impact of this proposal would be approximately $1,200 annually. (g)(3) A fee in the amount of $100.00 shall be assessed to cover the cost of staff time to process each replacement Employee Transportation Coordinator (ETC) Certificate of training. |
Rule 308(l) [Administrative; Negligible Cost Impact] |
Aligning the MSERC certificate issuance fee
Currently, the Rule 308 – On Road Motor Vehicle Mitigation Option Fees, Mobile Source Emission Reduction Credit (MSERC) certificate issuance fee is $72.20 per transaction. The same identical transaction has an associated fee of $73.20 in Rule 309(c)(5) – Fees for Regulation XVI, due to certain independent fee adjustments in prior years to the two different rules. The proposed amendment would set the fee at $73.20 in Rule 308 aligning the two fees to better and more correctly recover the costs for this same service provided.
(l) Transfer of Emission Reduction Credits
Any person requesting a transfer of emission reduction credits shall pay a fee of |
Rule 309 [Administrative; No Cost Impact] |
Amending Rule 309 applicability to include Regulation XXV plans
Currently, Regulation XVI - Mobile Source Offset Programs, Mobile Source Emission Reduction Credit (MSERC) credit generation plans are assessed fees pursuant to Rule 309 - Fees For Regulation XVI. This proposal would extend the applicability of Rule 309 to include very similar plans required to be filed under proposed Regulation XXV – Intercredit Trading. This extension of Rule 309 applicability is necessary and equitable, since Regulation XXV plan requirements and staff resources will very closely mirror those of current Regulation XVI plans for services to be provided.
(a) Applicability
Provisions of this rule shall apply to fees assessed for plans required by Regulation XVI and Regulation XXV, and for the transfer and acquisition of Mobile Source Emission Reduction Credits (MSERCs) generated pursuant to Regulation XVI and Regulation XXV rules. Fees shall be paid for:
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Rule 315 [Administrative; No Cost Impact] |
Proposed new Rule 315 consolidating training class and license renewal fees
The District conducts several training classes for industries and fees are charged for some of the classes to recover the cost. The District also administers the Certified Permitting Professional (CPP) program and certifies individuals as CPP, after successfully passing the CPP exam conducted by the District. Currently, the District charges $150 for the annual renewal of the license. However, these fees are not listed in the fee rules. A new Rule 315 – Fees for Training Classes and License Renewal is proposed to identify and publish the fees associated with the training classes. Some of the current fees may be increased to better recover costs. These fees are necessary and equitable in order to recover the cost of staff resources expended in providing this service.
(a) Fees for Rule Training Classes
(b) Certified Permitting Professional (CPP) License Fees
|
REG III |
Other minor proposals involving clarifications, and/or corrections, with no fee or negligible fee changes.
These include typographical corrections and administrative clarifications of existing language/practice with negligible or no fee impact. |
AQMP and Legal Mandates
The fee rules are not part of the AQMP. California Health and Safety Code §§ 40500 et seq. established the authority to “adopt fee schedules for the issuance of variances and permits to cover the reasonable cost of permitting, planning, enforcement, and monitoring related thereto,” and to assess fees for the approval of plans for the control of air contaminants and for regulatory programs affecting indirect and area sources (California Health and Safety Code §§ 40522 and 40522.5). California Health and Safety Code §§ 40500.1, 40510, 40510.5 and 40523 authorize AQMD to increase fees consistent with annual increases in the CPI. Federal regulations require AQMD to collect Title V fees sufficient to cover permit program costs [40 CFR § 70.9(a)].
CEQA
AQMD staff has reviewed the proposed amendments to Rules 301, 306, 308, 309, 313 and 315, and because the proposed project involves the modification and structuring of charges by public agencies for the purpose of meeting operating expenses and financial reserve requirements, it is statutorily exempt from CEQA, pursuant to state CEQA Guidelines § 15273 – Rates, Tolls, Fares, and Charges. A Notice of Exemption will be filed with the county clerks immediately following adoption of the proposed project.
Socioeconomic Assessment
AQMD staff prepared a socioeconomic analysis report assessing the economic impacts of these proposed amendments to Regulation III – Fees which was made available on April 6, 2010, 30 days prior to the Board hearing. Staff has revised the April 6, 2010 socioeconomic analysis to include the effects of the proposed rebate of the annual emissions flat fee and annual operating fees for permitted sources. This revised final Socioeconomic Report is included as Attachment G of this Board Letter.
Resource Impacts
No additional resource impacts are expected.
Comments and Response to Comments
Comment: During the public workshop on February 23, 2010 staff indicated they may be recommending adoption of an across the board fee rate increase. When will we find out specifically?
Response: Staff is proposing an across the board fee rate increase of 2.1% as an inflationary adjustment on most Regulation III fees. This inflationary factor represents the 2009 increase in the CPI and was made available to the public in February 2010 by the State of California Department of Finance and is available on the department’s website at: http://www.dof.ca.gov/HTML/FS_DATA/LatestEconData/FS_Price.htm. No other specific fee increase above this CPI rate is being proposed.
Comment: Is there a specific proposal to credit annual renewal fees against PAR 317 fees already paid by major stationary sources?
Response: Yes. Staff is proposing that individual escrow accounts be established for each paying entity and that any annual operating emissions and annual operating emissions (other than PAR 317) fees that come due would be paid from the proceeds deposited with the District. This would be in addition to any credits applied from section 172(e) type program funds, should such funds be made available to the District, and should CARB and U.S. EPA approve the creditability of such funds towards Rule 317 fee obligations.
Comment: Staff should not be raising fees by CPI in this economy.
Response: Staff appreciates the concern. There was no CPI increase in last year’s fees. Almost every fee has been unchanged for two years. Staff is proposing a modest increase consistent with the CPI for this fiscal year.
Attachments (EXE, 705k)
A. Summary of Proposals
B. Abstract of the FY 2009-10 Draft Budget and Work Program
C. Rule Development Process
D. Key Contacts
E. Resolution
F. Proposed Rule Language
G. Socioeconomic Assessment
H. Notice of Exemption
Attachment (DOC, 31k)
Errata sheet