Bill Text: CA AB985 | 2023-2024 | Regular Session | Amended

---

Bill Title: San Joaquin Valley Unified Air Pollution Control District: emission reduction credit system.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed) 2023-09-13 - Motion to reconsider made by Assembly Member Arambula. [AB985 Detail]

Download: California-2023-AB985-Amended.html

---

Amended  IN  Senate  July 06, 2023

Amended  IN  Assembly  May 18, 2023

Amended  IN  Assembly  April 10, 2023

Amended  IN  Assembly  March 23, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 985

---

Introduced by Assembly Member Arambula
(Coauthor: Assembly Member Friedman)

February 15, 2023

---

An act to add Sections Section 40714 and 40714.2 to the Health and Safety Code, relating to air pollution.

LEGISLATIVE COUNSEL'S DIGEST

AB 985, as amended, Arambula. San Joaquin Valley Unified Air Pollution Control District: emission reduction credit system.

Existing law imposes various limitations on emissions of air contaminants for the control of air pollution from vehicular and nonvehicular sources. Existing law generally designates the State Air Resources Board as the state agency with the primary responsibility for the control of vehicular air pollution and air pollution control and air quality management districts with the primary responsibility for the control of air pollution from all sources other than vehicular sources.

Existing law requires the board of every air district to establish by regulation a system by which all reductions in the emission of air contaminants that are to be used to offset certain future increases in the emission of air contaminants be banked prior to use to offset future increases in emissions, except as specified. Existing law requires the state board to develop and adopt a methodology for use by air districts to calculate the value of credits issued for emission reductions from stationary, mobile, indirect, and areawide sources when those credits are used interchangeably, consistent with certain requirements. Existing law also requires the state board to periodically update the methodology as it applies to future transactions, if necessary.

Existing law provides for the establishment of the San Joaquin Valley Unified Air Pollution Control District vested with the authority to regulate air emissions from stationary sources located in the San Joaquin Valley Air Basin.

This bill would require the district to revise the regulation establishing its emission reduction credit system to specify a time period by which existing and future emission reduction credits will expire. The bill would provide that this revision of the emission reduction credit system is subject to disapproval by the state board within 60 days after adoption by the district.

This bill would require the state board, except as provided, to conduct an analysis of each credit identified in the San Joaquin Valley Unified Air Pollution Control District’s ledger of available emission reduction credit banks for certain pollutants credits to determine if any credits were issued in violation of state, local, or district laws, rules, regulations, or procedures in place at the time of original issuance, and to complete the analysis no later than January 1, 2027. As part of the analysis, the bill would require the state board to ensure that emission reduction credits are deemed invalid if they were issued in violation of state, local, or district laws, rules, regulations, or procedures in place at the time of original issuance. If the invalidation of those credits leads, or would have led, to the district’s program failing to meet applicable federal emission reduction requirements, the bill would require current and future credits to be valued at the time of use. The bill would also require the state board to conduct a stationary source analysis for all permits in the district that use a credit for oxides of nitrogen (NO_x), volatile organic compounds (VOCs), or a pollutant for which the invalidation of credits leads, or would have led, to the failure to meet federal requirements, as provided. The bill would require, upon completion of the analyses, analysis, the state board to submit a report to the Legislature that includes a summary of the results of the analyses. analysis.

By

This bill would require the district to aggregate and make publicly available on its internet website specified information regarding permits issued during a specified time period that require or required the use of one or more emission reduction credits. By adding to the duties of the district, this bill would impose a state-mandated local program.

This bill would make legislative findings and declarations as to the necessity of a special statute for the San Joaquin Valley Air Basin.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

---

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 The Legislature finds and declares all of the following:

(a) Poor air quality is intimately linked with negative health impacts, including respiratory illness and premature deaths, with recent studies estimating air pollution as the cause of over 100,000 premature deaths in the United States in 2011. However, the distribution of premature deaths is not equal.

(b) Rural communities, farmworker communities, disadvantaged communities, tribal nations, young people, and those living at or below the poverty level often live adjacent to transportation corridors or commercial and industrial facilities with highly localized and severe pollution levels and are at the highest risk of adverse health outcomes.

(c) The United States Environmental Protection Agency is responsible for establishing national ambient air quality standards for a number of criteria pollutants, including oxides of nitrogen (NOx), volatile organic compounds (VOCs), carbon monoxide (CO), oxides of sulfur (SOx), and particulate matter below 10 microns (PM10).

(d) When facilities voluntarily control emissions to levels beyond current or future regulatory requirements, they earn emission reduction credits that new sources of pollution purchase to offset the pollution resulting from their operations. Unused emission reduction credits are stored by the San Joaquin Valley Unified Air Pollution Control District in banks organized by pollutant.

(e) In 2020, the State Air Resources Board discovered errors that invalidated some of the credits within the banks for oxides of nitrogen (NOx), and volatile organic compounds (VOCs). This caused the San Joaquin Valley Unified Air Pollution Control District to fail the equivalency demonstrations for these two banks and triggered the federal requirement that all credits in these two banks be valued at the time of use.

(f) It is likely that a similar analysis of the San Joaquin Valley Unified Air Pollution Control District’s other emission reduction credit banks and permits issued with those credits will reveal similar errors and should be reviewed.

SEC. 2.Section 40714 is added to the Health and Safety Code, to read:

40714.

(a)The district shall revise its regulation adopted pursuant to Section 40709 to specify a time period by which existing and future emission reduction credits in all banks will expire.

(b)The revision of the system made pursuant to subdivision (a) shall be subject to disapproval by the state board pursuant to Chapter 1 (commencing with Section 41500) of Part 4 within 60 days after adoption by the district.

(c)For purposes of this section, “district” means the San Joaquin Valley Unified Air Pollution Control District.

SEC. 3.Section 40714.2 is added to the Health and Safety Code, to read:

40714.2.

SEC. 2.

 Section 40714 is added to the Health and Safety Code, to read:

40714.

 (a) (1) Except as provided in subdivision (c), the The state board, building on the June 2020 report, board shall conduct an analysis of all of each credit identified in the district’s ledger of available emission reduction credit banks credits established pursuant to Section 40709, other than the banks for oxides of nitrogen (NO_x) and volatile organic compounds (VOCs), 40709 to determine if any credits for those pollutants were issued in violation of state, local, or district laws, rules, regulations, or procedures in place at the time of original issuance. The analysis shall be completed no later than January 1, 2027.

(2)For purposes of the analysis described in paragraph (1), the state board shall use the same statistical sampling methods used in the June 2020 report.

(b)As part of the analysis conducted pursuant to subdivision (a), the state board shall ensure all of the following:

(1)An emission reduction credit issued in violation of state, local, or district laws, rules, regulations, or procedures in place at the time of original issuance shall be deemed invalid.

(2)If an emission reduction credit is deemed invalid pursuant to paragraph (1), the credit shall be removed from the bank.

(3)If removal of credits from the banks for the pollutants analyzed pursuant to subdivision (a) leads, or would have led, to failing an equivalency demonstration for any of these banks, current and future credits in the bank or banks with the failed equivalency demonstration shall be valued at the time of use.

(c)The state board is not required to conduct the analysis described in subdivision (a) for a particular pollutant if the state board requires the district to value at the time of use all current and future emission reduction credits in the bank established pursuant to Section 40709 for that pollutant.

(d)(1)The state board shall conduct a stationary source analysis for all permits in the district that use a credit for oxides of nitrogen (NO_x), or volatile organic compounds (VOCs). The analysis shall include information on the permit issued, including, but not limited to, all of the following:

(2) Notwithstanding paragraph (1), the state board is not required to analyze any available emission reduction credit that was reviewed as part of the June 2020 report.

(b) For all permits in the district issued between January 1, 2004, and December 31, 2020, that require or required the use of one or more emission reduction credits, the district shall aggregate and make publicly available on its internet website information regarding those permits that includes, but is limited to, all of the following information:

(A)

(1) Permit applicant information. information, including information sufficient to identify the scope of the permitted project.

(B)

(2) Facility name and reduction site location information for all relevant credits. credits used in conjunction with the permitted project.

(C)

(3) Estimated permitted emissions by type and quantity.

(D)

(4) Any best available control technology, best available retrofit control technology, or other emissions control measures identified as a requirement of the permit.

(2)If removal of credits from the banks for the pollutants analyzed pursuant to subdivision (a) leads, or would have led, to failing an equivalency demonstration pursuant to paragraph (3) of subdivision (b), the state board shall conduct a stationary source analysis pursuant to paragraph (1) for all permits in the district that use a credit for the pollutant with the failed equivalency demonstration.

(e)

(c) (1) Upon completion of the analyses analysis pursuant to subdivision (a) and subdivision (d), (a), the state board shall submit a report to the Legislature summarizing the results of the analyses. analysis.

(2) The report to be submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code.

(f)

(d) For purposes of this section, the following definitions apply:

(1) “June 2020 report” means the report published by the state board on June 4, 2020, reviewing the district’s emission reduction credit system.

(2) “District” means the San Joaquin Valley Unified Air Pollution Control District.

SEC. 4.SEC. 3.

 The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique need to address air pollution and environmental injustices in the San Joaquin Valley Air Basin.

SEC. 5.SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.