SCAQMD Adopts Dramatic Increase in Fees, Offsetting Costs of AB 617 and Toxics Regulation

The South Coast Air Quality Management District adopted an amendment to its Rule 301 on June 7, aimed at collecting nearly ten times the amount of fees it has historically garnished under its toxics emissions fee program. The amendment will include a new Base Toxics Fee, a new Flat Rate Device Fee, and a new Cancer Potency-Weighted Fee, imposed on entities that emit toxics above certain thresholds. Implementation of amended Rule 301 starts with facilities reporting toxics emissions for 2019, with the increased fees due in 2020.

One of the most controversial aspects of the amendment is the application of significantly higher fees for emissions with higher cancer potency. District staff justified the increase in fees by pointing to the discrepancy in the SCAQMD’s workload and the amount of money it expends regulating toxics emissions ($20MM/yr), and the amount of fees actually collected in support of that effort ($0.5MM/yr). The new fees are estimated to net the District $4.9 million annually. Roughly $10 million, or half of the District’s work expenditures, was allocated to the implementation of AB 617, a 2017 State legislative measure aimed at reducing emissions in California’s most affected communities through enhanced monitoring, citizen efforts and commanding adoption of increased emissions controls. The SCAQMD has three communities out of the ten identified by the California Air Resources Board (CARB) as subject to AB 617’s “first-year community” requirements, including the creation of community steering committees to guide emissions monitoring efforts and emissions reduction programs. The State allocated millions to support these efforts through SB 856, and it appears that the SCAQMD plans to potentially outpace any future funding. 

Entities not currently subject to the SCAQMD’s reporting requirements should follow closely CARB’s development of its Criteria and Toxics Reporting regulation. Amendments proposed to this regulation are set to significantly expand the facilities that are required to report emissions (current estimates are that an additional 48,700 facilities would need to report) and may, therefore, expand the facilities that are required to pay under the District’s toxics fee program. Those already paying fees related to their toxics emissions should also be paying attention, because an expanded group of reporting entities may affect the District’s calculations on how much it needs to increase fees to offset program costs in the future.

Beveridge & Diamond’s Air and Climate Change practice group helps private and municipal clients navigate all aspects of compliance with Clean Air Act regulations for criteria pollutants, hazardous air pollutants, greenhouse gases, and permitting processes. For more information, please contact the authors.