CHAPTER 479
FILED WITH SECRETARY OF STATE SEPTEMBER 22, 2003
APPROVED BY GOVERNOR SEPTEMBER 22, 2003
PASSED THE SENATE SEPTEMBER 11, 2003
PASSED THE ASSEMBLY SEPTEMBER 10, 2003
AMENDED IN ASSEMBLY SEPTEMBER 9, 2003
AMENDED IN ASSEMBLY SEPTEMBER 4, 2003
AMENDED IN ASSEMBLY AUGUST 21, 2003
AMENDED IN ASSEMBLY JULY 14, 2003
AMENDED IN ASSEMBLY JULY 2, 2003
AMENDED IN ASSEMBLY JUNE 26, 2003
AMENDED IN SENATE MAY 13, 2003
AMENDED IN SENATE MAY 7, 2003
AMENDED IN SENATE APRIL 24, 2003

INTRODUCED BY Senators Florez and Sher

FEBRUARY 21, 2003

    An act to amend Section 42310 of, and to add Sections 39011.5, 39023.3, 40724, 40724.5, 40724.6, 40724.7, 40731, 42301.16, 42301.17, 42301.18, and 44559.9 to, the Health and Safety Code, relating to air quality.

LEGISLATIVE COUNSEL'S DIGEST

 SB 700, Florez.  Air quality:  emissions:  stationary sources:

agricultural operations.

   (1) Existing law authorizes the board of every air quality

management district and air pollution control district to establish a

permit system that requires any person that uses certain types of

equipment that may cause the emission of air contaminants to obtain a

permit.  Existing law exempts vehicles and certain types of

equipment from those permit requirements.

   This bill would eliminate that exemption for any equipment used in

agricultural operations in the growing of crops or the raising of

fowl or animals.  To the extent that the bill would increase the

number of permits that a district board, electing to establish a

permit system prior to January 1, 2004, would be required to issue,

the bill would impose a state-mandated local program.

   (2) Existing law defines various terms governing the construction

of air pollution control laws in the state, and authorizes the state

board to revise those definitions to conform with federal law.

   This bill would define the terms "agricultural source of air

pollution" and "fugitive emissions," and would prohibit,

notwithstanding the existing authority, the state board from revising

those definitions.

   (3) The existing federal Clean Air Act requires districts to adopt

local programs for issuing operating permits to major stationary

sources of air pollutants.  The existing act defines a stationary

source as any building, structure, facility, or installation that

emits or may emit any air pollutant.

   This bill would require each district that is designated a serious

federal nonattainment area for an applicable ambient air quality

standard for particulate matter as of January 1, 2004, to adopt,

implement, and submit for inclusion in the state implementation plan,

a rule or regulation requiring best available control measures

(BACM) and best available retrofit control technology (BARCT) for

agricultural practices at agricultural sources of air pollution to

reduce air pollutants from those sources for which that technology is

applicable for agricultural practices by the earliest feasible date,

but not later than January 1, 2006, and would require each district

subject to those requirements to comply with a schedule for public

hearing, adoption, and implementation of the final rule.

   The bill would require each district that is designated a moderate

federal nonattainment area or an applicable ambient air quality

standard for particulate matter as of January 1, 2004, to adopt and

implement control measures necessary to reduce emissions from

agricultural practices by the earliest feasible date, but no later

than January 1, 2007, unless the district determines that those

sources do not significantly cause or contribute to a violation of

state or federal standards.

   The bill would require, by January 1, 2005, the state board to

review all available scientific information and develop a definition

of a "large confined animal facility."

   The bill would require, by July 1, 2006, each district that is

designated as a federal nonattainment area for ozone as of January 1,

2004, to adopt, implement, and submit for inclusion in the state

implementation plan, a rule or regulation that requires the owner or

operator of a large confined animal facility as that term is defined

by the state board to obtain a permit to reduce, to the extent

feasible, emissions of air contaminants from the facility.  The bill

would require the district to perform an assessment of the impacts of

the rule or regulation prior to its adoption.  The bill would

authorize a permitholder to appeal any district determination or

decision related to that permit.

   The bill would require a district that is designated as being in

attainment for the federal ambient air quality standard for ozone as

of January 1, 2004, to adopt the same rule or regulation required of

nonattainment districts, by July 1, 2006, unless the district board

makes a determination that large confined animal facilities will not

contribute to a violation of any state or federal ambient air quality

standard.  The bill would provide the rule or regulation is not

required to be submitted for inclusion into the state implementation

plan.

   The bill would require the California Air Pollution Control

Officers Association, in consultation with the state board and other

interested parties, by January 1, 2005, to develop a clearinghouse of

available control measures and strategies for agricultural sources

of air pollution and emissions of air contaminants from agriculture

operations.

   The additional duties for districts under the bill would impose a

state-mandated local program.

   (4) Existing law establishes the Capital Access Loan Program for

Small Businesses, administered by the California Pollution Control

Financing Authority, which provides loans through participating

financial institutions to entities authorized to conduct business in

the state and whose primary business location is in the state.

   This bill would require the authority to expand the program to

include outreach to financial institutions that service agricultural

interests in the state for the purposes of funding air pollution

control measures.

   (5) Under existing law, any person who violates a rule,

regulation, permit, or order of a district is guilty of a

misdemeanor.  Because this bill would increase the number of people

who are subject to that provision, it would expand the scope of a

crime, thereby imposing a state-mandated local program.

   (6) 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 specified reasons.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  (a) The Legislature finds and declares all of the

following:

   (1) Agricultural operations necessary for growing crops or raising

animals are a significant source of directly emitted particulates,

and precursors of ozone and fine particulate matter.  These emissions

have a significant adverse effect on the ability of areas of the

state, including, but not limited to, the San Joaquin Valley, to

achieve health-based state and federal ambient air quality standards.

   (2) Since 1999, the agriculture industry has reduced emissions of

oxides of nitrogen (NOx) by more than 2000 tons per year, emissions

of particulate matter of 10 microns in diameter (PM 10) by more than

500 tons per year, and emissions of volatile organic compounds (VOCs)

from agricultural chemicals by more than 20 percent.  According to

the state board, however, agricultural sources of air pollution still

contribute twenty-six percent of the smog-forming emissions in the

San Joaquin Valley.

   (3) In the San Joaquin Valley, a large portion of the sources of

particulate emissions are areawide sources whose emissions are

directly related to growth in population and the resulting vehicle

miles traveled.  According to the State Air Resources Board, however,

agricultural sources of air pollution account for over fifty percent

of the directly emitted particulate air pollution generated in the

valley during the fall, amounting to over 170 tons per day of

emissions.

   (4) All parties living or operating a business in an area that has

been classified as being a nonattainment area with respect to the

attainment of federal or state ambient air quality standards share

the responsibility of reducing emissions from  air pollutants.

   (5) The federal Clean Air Act (42 U.S.C. Sec. 7401 et seq.)

prohibits the state from adopting emission standards or limitations

less stringent than those established under the federal act,

including limitations on emissions from agricultural sources.

   (6) Division 26 (commencing with Section 39000) of the Health and

Safety Code establishes numerous policies and programs to reduce air

pollutants for the protection of public health.

   (7) The purpose of the act adding this section is to establish a

new set of programs at the state and regional levels to reduce air

emissions from agricultural sources in order to protect public health

and the environment.

   (b) It is therefore the intent of the Legislature to require the

State Air Resources Board and air quality management districts and

air pollution control districts in the state to regulate stationary,

mobile, and area sources of agricultural air pollution.

  SEC. 2.  Section 39011.5 is added to the Health and Safety Code, to

read:

   39011.5.  (a) "Agricultural source of air pollution" or

"agricultural source" means a source of air pollution or a group of

sources used in the production of crops, or the raising of fowl or

animals located on contiguous property under common ownership or

control that meets any of the following criteria:

   (1) Is a confined animal facility, including, but not limited to,

any structure, building, installation, barn, corral, coop, feed

storage area, milking parlor, or system for the collection, storage,

treatment, and distribution of liquid and solid manure, if

domesticated animals, including, but not limited to, cattle, calves,

horses, sheep, goats, swine, rabbits, chickens, turkeys, or ducks are

corralled, penned, or otherwise  caused to remain in restricted

areas for commercial agricultural purposes and feeding is by means

other than grazing.

   (2) Is an internal combustion engine used in the production of

crops or the raising of fowl or animals, including, but not limited

to, an engine subject to Article 1.5 (commencing with Section 41750)

of Chapter 3 of Part 4 except an engine that is used to propel

implements of husbandry, as that term is defined in Section 36000 of

the Vehicle Code, as that section existed on January 1, 2003.

Notwithstanding subdivision (b) of Section 39601, the state board may

not revise this definition for the purposes of this section.

   (3) Is a Title V source, as that term is defined in Section

39053.5, or is a source that is otherwise subject to regulation by a

district pursuant to this division or the federal Clean Air Act (42

U.S.C. Sec. 7401 et seq.).

   (b) Any district rule or regulation affecting stationary sources

on agricultural operations adopted on or before January 1, 2004, is

applicable to an agriculture source.

   (c) Nothing in this section limits the authority of a district to

regulate a source, including, but not limited to, a stationary source

that is an agricultural source, over which it otherwise has

jurisdiction pursuant to this division, or pursuant to the federal

Clean Air Act (42 U.S.C. Sec. 7401 et seq.) or any rules or

regulations adopted pursuant to that act that were in effect on or

before January 1, 2003, or to exempt an agricultural source from any

requirement otherwise applicable under Sections 40724 or 42301.16,

based upon a finding by the district in a public  hearing that the

aggregate emissions from that source do not exceed a de minimus level

of more than one ton of particulate matter, nitrogen oxides or

volatile organic compounds per year.

  SEC. 3.  Section 39023.3 is added to the Health and Safety Code, to

read:

   39023.3.  "Fugitive emissions" mean those emissions that cannot

reasonably pass through a stack, chimney, vent, or other functionally

equivalent opening.  Notwithstanding subdivision (b) of Section

39601, the state board may not revise this definition for the

purposes of this section.

  SEC. 4.  Section 40724 is added to the Health and Safety Code, to

read:

   40724.  (a) Each district that is designated as a serious federal

nonattainment area for an applicable ambient air quality standard for

particulate matter as of January 1, 2004, shall adopt, implement,

and submit for inclusion in the state implementation plan, a rule or

regulation requiring best available control measures (BACM) for

sources for which those measures are applicable and best available

retrofit control technology (BARCT)  to reduce air pollutants from

sources for which that technology is applicable for agricultural

practices, including, but not limited to, tilling, discing,

cultivation, and raising of animals, and for fugitive emissions from

those agricultural practices a manner similar to other source

categories by the earliest feasible date, but not later than January

1, 2006.  The rule or regulation shall also include BACM and BARCT to

reduce precursor emissions in a manner commensurate to other source

categories that the district show cause or contribute to a violation

of an ambient air quality standard.  Each district that is subject to

this subdivision shall comply with the following schedule with

respect to the rule or regulation imposing BACM and BARCT:

   (1) On or before September 1, 2004, notice and hold at least one

public workshop for the purpose of accepting public testimony on the

proposed rule or regulation.

   (2) On or before July 1, 2005, adopt the final rule or regulation

at a noticed public hearing.

   (3) On or before January 1, 2006, commence implementation of the

rule or regulation.

   (b) Nothing in this section shall delay or otherwise affect any

action taken by a district to reduce emissions of air contaminants

from agricultural sources, or any other requirements imposed on a

district or a source of air pollution pursuant to the federal Clean

Air Act (42 U.S.C. Sec. 7401 et seq.).

   (c) In adopting a rule or regulation pursuant to this section, a

district shall do all of the following:

   (1) Ensure the size and duration of use of an internal combustion

engine subject to BARCT pursuant to this section is commensurate to

the size and duration of use of internal combustion engines subject

to regulation by a district or the state board regulated at other

stationary sources.

   (2) Ensure that BARCT established pursuant to this section for an

internal combustion engine is similar to BARCT for other stationary

source engines subject to regulation by a district or the state

board.

   (3) Ensure that the cost-effectiveness of BARCT for an internal

combustion engine subject to this section is similar to the

cost-effectiveness of BARCT for other internal combustion engines

subject to regulation by a district or the state board.

   (4) Compare the cost-effectiveness of BARCT for an internal

combustion engine subject to this section to the list of available

and proposed control measures prepared pursuant to Section 40922.

   (5) Adopt control measures pursuant to this section in order of

their cost-effectiveness, unless a district determines that a

different order of adoption is necessary due to the enforceability,

public acceptability, or technological feasibility of a given control

measure, or to expeditiously attain or maintain a national or state

ambient air quality standard.

   (6) Except as otherwise provided under this section, ensure that

any rule or regulation adopted pursuant to this section complies with

all applicable requirements of this division, including, but not

limited to, any applicable requirements established pursuant to

Sections 40703, 40727, 40728.5, and 40920.6.

   (7) Hold at least one public meeting that is conducted at a time

and location that the district determines is convenient to the public

at which the district reviews the comparison prepared pursuant to

paragraph (4).

   (d) Nothing in this section limits the authority of a district to

regulate a source including, but not limited to, a stationary source

that is an agricultural source over which it otherwise has

jurisdiction pursuant to this division or the federal Clean Air Act

(42 U.S.C. Sec. 7401 et seq.) or any rules or regulations adopted

pursuant to that act.  Nothing in this section shall delay or

otherwise affect any action taken by a district to reduce emissions

of air contaminants from agricultural sources, or any other

requirements imposed upon a district or a source of air pollution

pursuant to the federal Clean Air Act.  This section may not be

interpreted to delay or otherwise affect the adoption,

implementation, or enforcement of any measure that was adopted, or

included in a rulemaking calendar or air quality implementation plan

that was adopted, by the district prior to January 1, 2004.

  SEC. 5.  Section 40724.5 is added to the Health and Safety Code, to

read:

   40724.5.  (a) By the earliest feasible date, but no later than

January 1, 2007, each district that is designated a moderate federal

nonattainment area for an applicable ambient air quality standard for

particulate matter as of January 1, 2004, and that is not subject to

the requirements of Section 40724, shall adopt and implement control

measures necessary to reduce emissions from agricultural practices,

including, but not limited to, tilling, discing, cultivation, and

raising of animals, and from fugitive emissions in a manner similar

to other source categories from those activities by the earliest

feasible date.  Control measures adopted and implemented pursuant to

this section shall also be implemented by the district to reduce

precursor emissions in a manner commensurate to other source

categories that the district show cause or contribute to a violation

of an ambient air quality standard.

   (b) A district is not required to adopt and implement control

measures pursuant to this section if it determines in a public

hearing that agricultural practices do not significantly cause or

contribute to a violation of state or federal standards.

   (c) In adopting a rule or regulation pursuant to this section, a

district shall do all of the following:

   (1) Ensure the size and duration of use of an internal combustion

engine subject to BARCT pursuant to this section is commensurate to

the size and duration of use of internal combustion engines subject

to regulation by a district or the state board regulated at other

stationary sources.

   (2) Ensure that BARCT established pursuant to this section for an

internal combustion engine is similar to BARCT for other stationary

source engines subject to regulation by a district or the state

board.

   (3) Ensure that the cost-effectiveness of BARCT for an internal

combustion engine subject to this section is similar to the

cost-effectiveness of BARCT for other internal combustion engines

subject to regulation by a district or the state board.

   (4) Compare the cost-effectiveness of BARCT for an internal

combustion engine subject to this section to the list of available

and proposed control measures prepared pursuant to Section 40922.

   (5) Adopt control measures pursuant to this section in order of

their cost-effectiveness, unless a district determines that a

different order of adoption is necessary due to the enforceability,

public acceptability, or technological feasibility of a given control

measure, or to expeditiously attain or maintain a national or state

ambient air quality standard.

   (6) Except as otherwise provided under this section, ensure that

any rule or regulation adopted pursuant to this section complies with

all applicable requirements of this division, including, but not

limited to, any applicable requirements established pursuant to

Sections 40703, 40727, 40728.5, and 40920.6.

   (7) Hold at least one public meeting that is conducted at a time

and location that the district determines is convenient to the public

at which the district reviews the comparison prepared pursuant to

paragraph (4).

   (d) Nothing in this section limits the authority of a district to

regulate a source including, but not limited to, a stationary source

that is an agricultural source over which it otherwise has

jurisdiction pursuant to this division or the federal Clean Air Act

(42 U.S.C. Sec. 7401 et seq.) or any rules or regulations adopted

pursuant to that act.  Nothing in this section shall delay or

otherwise affect any action taken by a district to reduce emissions

of air contaminants from agricultural sources, or any other

requirements imposed upon a district or a source of air pollution

pursuant to the federal Clean Air Act.  This section may not be

interpreted to delay or otherwise affect the adoption,

implementation, or enforcement of any measure that was adopted, or

included in a rulemaking calendar or air quality implementation plan

that was adopted, by the district prior to January 1, 2004.

   (e) Nothing in this section shall delay or otherwise affect any

action taken by a district to reduce emissions of air contaminants

from agricultural sources, or any requirements imposed on a district

or a source of air pollution pursuant to the federal Clean Air Act

(42 U.S.C. Sec. 7401 et seq.).

  SEC. 6.  Section 40724.6 is added to the Health and Safety Code, to

read:

   40724.6.  (a) On or before July 1, 2005, the state board shall

review all available scientific information, including, but not

limited to, emissions factors for confined animal facilities, and the

effect of those facilities on air quality in the basin and other

relevant scientific information, and develop a definition for the

source category of a "large confined animal facility" for the

purposes of this section.  In developing that definition, the state

board shall consider the emissions of  air contaminants from those

sources as they may affect the attainment and maintenance of ambient

air quality standards.

   (b) Not later than  July 1, 2006, each district that is designated

as a federal nonattainment area for ozone as of January 1, 2004,

shall adopt, implement, and submit for inclusion in the state

implementation plan, a rule or regulation that requires the owner or

operator of a large confined animal facility, as defined by the state

board pursuant to subdivision (a), to obtain a permit from the

district to reduce, to the extent feasible, emissions of air

contaminants from the facility.

   (c) A district may require a permit for a large confined animal

facility with actual emissions that are less than one-half of any

applicable emissions threshold for a major source in the district for

any air contaminant, including, but not limited to, fugitive

emissions in a manner similar to other source categories, if prior to

imposing that requirement the district makes both of the following

determinations in a public hearing:

   (1) A permit is necessary to impose or enforce reductions in

emissions of air pollutants that the district show cause or

contribute to a violation of a state or federal ambient air quality

standard.

   (2) The requirement for a source or category of sources to obtain

a permit would not impose a burden on those sources that is

significantly more burdensome than permits required for other similar

sources of air pollution.

   (d) The rule or regulation adopted pursuant to subdivision (b)

shall do all of the following:

   (1) Require the owner or operator of each large confined animal

facility to submit an application for a permit within six months from

the date the rule or regulation is adopted by the district that

includes both of the following:

   (A) The information that the district determines is necessary to

prepare an emissions inventory of all regulated air pollutants

emitted from the operation, including, but not limited to, precursor

and fugitive emissions, using emission factors approved by the state

board in a public hearing.

   (B) An emissions mitigation plan that demonstrates that the

facility will use reasonably available control technology in moderate

and serious nonattainment areas, and best available retrofit control

technology in severe and extreme nonattainment areas, to reduce

emissions of pollutants that contribute to the nonattainment of any

ambient air quality standard, and that are within the district's

regulatory authority.

   (2) Require the district to act upon an application for permit

submitted pursuant to paragraph (1) within six months of a completed

application, as determined by the district.

   (3) Require the owner or operator to implement the plan contained

in the permit approved by the district, and shall establish a

reasonable period, of not more than three years, after which each

permit shall be reviewed by the district and updated to reflect

changes in the operation or the feasibility of mitigation measures.

The updates required by this paragraph are not required to be

submitted for inclusion into the state implementation plan.

   (4) Establish a reasonable compliance schedule for facilities to

implement control measures within one year of the date on which the

permit is approved by the district, and shall provide for 30 days

public notice and comment on any draft permit.

   (d) Prior to adopting a rule or regulation pursuant to subdivision

(b), a district shall, to the extent data are available, perform an

assessment of the impacts of the rule or regulation.  The district

shall consider the impacts of the rule or regulation in a public

hearing, and make a good faith effort to minimize any adverse

impacts.  The assessment shall include all of the following:

   (1) The category of sources affected, including, but not limited

to, the approximate number of affected sources, and the size of those

sources.

   (2) The nature and quantity of emissions from the category, and

the significance of those emissions in adversely affecting public

health and the environment and in causing or contributing to the

violation of a state or federal ambient air quality standard.

   (3) The emission reduction potential.

   (4) The impact on employment in, and the economy of, the region

affected.

   (5) The range of probable costs to affected sources and

businesses.

   (6) The availability and cost-effectiveness of alternatives.

   (7) The technical and practical feasibility.

   (8) Any additional information on impacts that is submitted to the

district board for consideration.

   (e) Nothing in this section shall delay or otherwise affect any

action taken by a district to reduce emissions of air contaminants

from agricultural sources, or any other requirements imposed on a

district or a source of air pollution pursuant to the federal Clean

Air Act (42 U.S.C. Sec. 7401 et seq.).

   (f) In adopting a rule or regulation pursuant to this section, a

district shall comply with all applicable requirements of this

division, including, but not limited to, the requirements established

pursuant to Section 40703, 40727, and 40728.5.

   (g) A permitholder may appeal any district determination or

decision required by this section pursuant to Section 42302.1, in

addition to any other applicable remedy provided by law.

   (h) Nothing in this section authorizes a district to adopt a rule

or regulation that is duplicative of a rule or regulation adopted

pursuant to Sections 40724 and 40724.5.

   (i) Nothing in this section limits the authority of a district to

regulate a source including, but not limited to, a stationary source

that is an agricultural source over which it otherwise has

jurisdiction pursuant to this division or the federal Clean Air Act

(42 U.S.C. Sec. 7401 et seq.) or any rules or regulations adopted

pursuant to that act.  Nothing in this section shall delay or

otherwise affect any action taken by a district to reduce emissions

of air contaminants from agricultural sources, or any other

requirements imposed upon a district or a source of air pollution

pursuant to the federal Clean Air Act.  This section may not be

interpreted to delay or otherwise affect adoption, implementation, or

enforcement of any measure that was adopted, or included in a

rulemaking calendar or air quality implementation plan that was

adopted, by the district prior to January 1, 2004.

  SEC. 7.  Section 40724.7 is added to the Health and Safety Code, to

read:

   40724.7.  (a) A district that is designated as being in attainment

for the federal ambient air standard for ozone shall adopt a rule or

regulation as described in Section 40724.6 shall fulfill both of the

following conditions:

   (1) The regulation shall be adopted not later than July 1, 2006,

unless a district board makes a determination in a public hearing,

based on substantial scientific evidence in the record, that large

confined animal facilities will not contribute to a violation of any

state or federal ambient air quality standard.

   (2) The regulation may not be submitted for inclusion in the state

implementation plan.

   (b) Nothing in this section shall delay or otherwise affect any

action taken by a district to reduce emissions of air contaminants

from agricultural sources, or any other requirements imposed on a

district or a source of air pollution pursuant to the federal Clean

Air Act (42 U.S.C. Sec. 7401 et seq.).

   (c) In adopting a rule or regulation pursuant to this section, a

district shall comply with all applicable requirements of this

division, including, but not limited to, the requirements established

pursuant to Section 40703, 40727, and 40728.5.

   (d) Nothing in this section authorizes a district to adopt a rule

or regulation that is duplicative of a rule or regulation adopted

pursuant to Section 40724.

   (e) The rule or regulation adopted by a district pursuant to this

section is not required to be submitted for inclusion into the state

implementation plan.

  SEC. 8.  Section 40731 is added to the Health and Safety Code, to

read:

   40731.  In order to assist in the development of the BACM, RACM,

and BARCT measures specified in Sections 40724, 40724.5, and 40724.6,

and to reduce or eliminate emissions of regulated air pollutants and

their precursors, the California Air Pollution Control Officers

Association, in consultation with the state board and other

interested parties, shall, not later than January 1, 2005, develop a

clearinghouse of available control measures and strategies for

agricultural sources of air pollution and emissions from agricultural

operations, including, but not limited to, the following sources:

   (a) Operations that create fugitive dust emissions, including, but

not limited to, discing, tilling, material handling and storage, and

travel on unpaved roads.

   (b) Confined animal facilities, including, but not limited to, any

structure, building, installation, barn, corral, coop, feed storage

area, or milkin