USEPA REGION IX

TECHNICAL SUPPORT DOCUMENT

for

SJVUAPCD Rule 9510

ATTACHMENT 2SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 1 

## APPENDIX A

Responses to Comments on Proposed Rule 9510 (Indirect Source Review) and Rule 3180 (Administrative Fees for Indirect Source Review)

December 15, 2005SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 2 SUMMARY OF COMMENTS AND RESPONSES

ON THE RECEIVE AND FILE OF DRAFT RULE NOVEMBER 17, 2005

Public Comment Date November 5, 2005 Multiple Letters- Signed by Kaaren Page Betty Sanderson Theresa Stump Stephen Page J Wesley Sanderson Bill Moffit Warren A. Minna Georgette Theotig Deb See Nancy Faisselman Isabel Stierle Rosmarie Grabski Nany Bacon Li?? Wa??? Monte Harper Emid Harper

As a resident of the San Joaquin Valley, I am very well aware that the Valley is rated as

ë extreme non-attainment í when it comes to meeting federal air quality standards. We must take bold steps to clean up our air while allowing reasonable housing growth.

The best way to reach this goal is through your proposed Indirect Source Rule Package (Rules 9510 and 3180) that the District is sponsoring. This is accomplished two ways: allowing housing and commercial developments to be designed to reduce air pollution and to charge a fee for that air pollution that cannot be eliminated, with the fees being used to fund other projects that reduce air pollution.

1. COMMENT: I support a strong version of the rule that offers a real chance to improve the air in the valley and at the same time allow developers to use innovative design features to reduce our dependency on automobile transportation.

Our lungs, our health, and our children deserve no less.

RESPONSE: Comment Noted

California State Department of Housing and Community Development : Date: November 29, 2005

Thank you for the continued opportunity to comment on the San Joaquin Valley Air Pollution Control Districtís (District) proposed Draft Rules 9510 and 3180 (Rules). The Department has reviewed the draft Rules as revised November 17, 2005 and the Districtís ìResponse to Commentsî found in Appendix A of the draft Rules. The Department appreciates the District addressing some of the issues raised in theSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 3 comment letters of July 25, 2005 and September 15, 2005. However, as discussed below, the Department continues to have a number of concerns with the revised draft of

the Rules.

Proposed Rule 9510 does not comply with the ìclarity,î ìconsistency,î and ìnonduplicationî requirements set forth in Health and Safety Code Section 40727, and an adequate nexus has not been established to support these rules. In addition,

2. COMMENT: The proposed inclusion, followed by the deletion of, an exemption for housing directly assisted by federal, State, or local government is of particular concern. The Districtís response to comment #92 indicated the government supported housing exemption (affordable housing) was removed ìbased on the Districtís internal analysis of applicability and impactsÖ.î. Although affordable housing qualifies as a mitigation measure, it is unclear how the URBEMIS model assesses and credits affordable housing. Affordable housing is often a catalyst for the type of transit-oriented development that is encouraged by the Districtís policy recommendations as described in

Districtís Air Quality Guidelines for General Plans . According to the Air Resources Boardís study, The Land Use – Air Quality Linkage , densities found in affordable housing developments are generally high enough to provide the ridership needed to support transit service (page 15).

RESPONSE: As stated in the November 17 th Staff Report (p. 11) and in the September 1, 2005 Response to Comments, the methodology for emission

reduction is detailed in the URBEMIS Userís Guide ( http://www.aqmd.gov/ceqa/urbemis.html ). Basically, the trip reduction benefit of below-market-rate housing will be credited to a development that includes this feature. In addition, Appendix D- Recommended Changes to URBEMIS details the research supporting the emission reduction and the methodology for the reduction on pages D-38 through 39 and includes the following statement:

... Thus, the total reduction is as follows:

Trip reduction = % units that are BMR * 0.04

A development with 20% BMR units would thus gain a 0.8% reduction. A development with 100% BMR units would gain a 4% reduction.

3. COMMENT: There is also insufficient information in the draft Rule analyses to discern whether and to what extent affordable housing developments, despite qualifying for some mitigation credits, might be subject to fees for off-site emissions reductions. This has the potential to render projected affordability levels or the projects themselves, infeasible as proposed. Affordable housing development proposals, are already subject to significant development constraints despite their acknowledged benefit potential relative to air quality.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 4 Applying Rule 9510 to these projects would subject them to an additional and ambiguous permit requirement. This effect would be inconsistent with State laws which require affirmative actions to promote affordable housing opportunities. Accordingly, the Department urges the District to reinstate the exemption forhousing projects in which at least 49 percent of the units are reserved for lowerincome households and which are directly assisted by federal, State, or local government

.

RESPONSE: The staff report and socio-economic impact analysis recognize that any fee would increase costs, but that market forces so far outweigh the effect of the fee that they render it insignificant. The District disagrees that the rule is contrary to state law promoting affordable housing. Rule 9510 is being adopted to reduce the air quality impacts of new development, including housing projects serving all market segments. Since the rule contains provisions to reduce potential fees for developments that contain affordable housing, it encourages affordable housing to be included in more projects.

4. COMMENT: Having deleted the exemption, the District must now amend those documents that were based on the exemption being part of the project. This includes the CEQA initial study which describes the project as exempting some sources including ìcertain low-income housing projectsî (page 4). By removing the exemption, the District has redefined the project.

RESPONSE: The District does not concur that removing the low-income housing exemption substantially changes the project analyzed in the CEQA initial study. First, the socioeconomic impact analysis that is the basis of the initialstudy discussion on impacts on housing and population indicated that lowincome households were already unable to afford new homes and rental units affected by the rule. The revised socioeconomic impact analysis was based on the latest rule version and arrived at the same conclusions regarding impacts with and without the exemption. Therefore, the impacts examined in the initialstudy are also the same. Second, by removing the exemption for "certain lowincome housing projects", the language of the Rule would result in a slight reduction in air quality impacts, as some additional housing projects would now be subject to the Rule. The change in language does not substantively affect the analysis of environmental impacts. On the contrary, the language change would

result in an environmental benefit.

5. COMMENT: Although the District does have the authority to implement regulations to accomplish the reduction or mitigation of emission from indirect sources, it does not have the authority to operate a permitting system for the operation or construction of these sources and has failed to show the required nexus. The proposed Rules would impose an (off-site) feeSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 5 on development projects which are unable to incorporate on-site measures adequate to reduce indirect emissions to a specified level. The fee is determined via an application (Air Impact Assessment Application (AIA)) which is required to be approved by the District before a final discretionary permit is issued for the construction of the development project. Unless the AIA application is submitted, the project cannot go forward without the developer incurring civil penalties. In such circumstances, contrary to the assertions of the staff analyses, a fee is being imposed as a condition of approval of a development project. A 1993 Attorney General Opinion explained that ìthe Legislature has recognized indirect sources as essentially different from other sources of pollution and consequently has made them exempt from ordinary permitting requirementsî (Ops. Cal. Atty. Gen. 92-519). The opinion goes on to clarify that ìpermits may not be required of indirect sources under either the general permitting authority (Government Code Section 42300) or the special permitting authority provision relating to the attainment of State ambient air quality standards (Government Code Sections 40910-40926). Further, the imposition of fees as a condition of permit approval is subject to the nexus requirements of Government Code Section 66000 et. seq. and the District has failed to show the ìreasonable relationshipî nexus as required.

RESPONSE: The author is mistaken about the nature of the ISR program and how the rule is designed to be implemented. The rule is consistent with the Attorney General opinion cited in that it does not require permits. Under the commenters theory, any fee is a de facto permit. Developers are subject to civil penalties if they fail to follow any District regulation. For example, failure to comply with Regulation VIII ñ Fugitive Dust Rules during construction or Rule 4901 ñ Residential Wood Combustion fireplace installation limitations may result in civil penalties. Similarly, failure to comply with the mitigation requirements of Rule 9510 may result in civil penalties, but cannot stop a development from being constructed. The District will not be implementing a permitting system for the operation or construction of projects. The ISR program will not be a permitting system, have discretionary actions, or have any land-use authority.

The author states:

The fee is determined via an application (Air Impact Assessment Application (AIA)) which is required to be approved by the District before a final discretionary permit is issued for the construction of the development project.

However, this is not the case. The application is required, but is not tied to the

issuance of a discretionary permit. The purpose of the application is to provide information necessary to determine if a fee must be paid and the amount of the payment if one is required. The application must be submitted concurrent with

the application to the local land use authority for a final discretionary permit. This timing is to allow the applicant to take credit for reducing project air impacts during the local agencies approval process. The District does not require completion prior to issuance of a permit by the local agency, nor does the DistrictSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 6 have the authority to stop the project from being issued a final discretionary permit by the local agency.

The Districtís action is ministerial, and does not involve conditions of approval. All projects are subject to the same requirements, and must fulfill therequirements. The District does have the authority to enact penalties for noncompliance; however, this does not make the actions of the District discretionary or make the program a permitting program. Further, the fee is only enacted if a project is, ìunable to incorporate on-site measures adequate to reduce indirect emissions to a specified levelî. The required emission reduction applies to all applicable projects equally, and must be satisfied. The project applicant has the option to reduce the fee through on-site measures. There is no discretion on the part of the District. The authorís statements on applicability of laws regulating permitting actions do not apply to the ISR program, as it is not a permitting

program.

The District continues to assert that Rule 9510 is not subject to Government Code Section 66000 et. Seq. Regarding the reasonable relationship requirement, the District has clearly made this demonstration. The air quality impacts of construction, area source and indirect source emissions from development projects and the methods used to quantify these impacts are clearly identified in the staff report and are undeniably contributing to the air basinís serious air quality problems. The emission reduction projects that will be utilized to mitigate a portion of these impacts are also clearly identified. Sufficient checks and balances are in place in the rule through an elected Governing Board and EPA oversight of this state implementation commitment to ensure that the mitigation funds will be used effectively on the impacts created by the development projects.

6. COMMENT: The consistency analysis (Appendix G) fails to include analysis and findings relative to other State laws and regulations, including directly related provisions of the California Environmental Quality Act (CEQA). The District already has existing procedures for permit review pursuant to CEQA, which are put forth in its ìGuide for Assessing and Mitigating Air Quality Impactsî. Proposed Rule 9510 should be subjected to a rule consistency analysis with this guide, as well as requirements for air quality analysis and mitigation pursuant to CEQA which is undertaken in the permitting process of local governments. The Department remains concerned about the duplication of assessment and potential duplication of mitigations pursuant to CEQA and the proposed Rule 9510. The Districtís decision to modify its CEQA handbook after the adoption of the proposed rules (G-2) is inconsistent with the requirement of Health and Safety Code 40727.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 7 RESPONSE: The Guide for Assessing and Mitigating Air Quality Impacts (GAMAQI) identified by the author is a voluntary guidance document for use by lead agencies addressing air quality in CEQA documents and is in no way regulatory. Under CEQA, for most development projects the District is a commenting agency. As a commenting agency the District provides comments to the Lead Agency to the following aspects: the potential significance of air quality impacts of a project; applicable District Rules; potential mitigation measures; and if an analysis is provided to the District, the adequacy and accuracy of that analysis. Requesting comments from the District is voluntary by the Lead Agency, and comments and mitigation measures suggested by the District are non-binding. CEQA requires disclosure of environmental effects for discretionary actions by a public agency, and requires reasonable and feasible mitigation of effects that are determined to be significant. Nowhere within CEQA can the District require a reduction in emissions from a development project. Voluntary CEQA commenting is not parallel to an ISR program. Mitigation required by CEQA is not the same in intent, requirements, or in practice with the emission reduction requirements of the ISR program. ISR is not duplicative of any mitigation required by the lead agency since the rule provides for credit for all measures and features included in the project that reduce emissions when project emissions are calculated. The District disagrees that modifying the Districtís GAMAQI after adoption is inconsistent with the California Health and Safety Code (CH&SC) Section 40272 for all the reasons stated above.

CH&SC Section 40272(b)(4) states: "Consistency" means that the regulation is in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or state or federal regulations.

CH&SC Section 40272(b)(5) states:
"Nonduplication" means that a regulation does not impose the same requirements as an existing state or federal regulation unless a district finds that the requirements are necessary or proper to execute the powers and duties granted to, and imposed upon, a district.

CH&SC Section 40727.2(a) states:

... the district shall identify all existing federal air pollution control requirements, including, but not limited to, emission control standards constituting best available control technology for new or modified equipment, that apply to the same equipment or source type as the rule or regulation proposed for adoption or modification by the district...

And

... The analysis shall also identify any of that district's existing or proposed rules and regulations that apply to the same equipment or source type, and all air pollution control requirements and guidelines that apply to the sameSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 8 equipment or source type and of which the district has been informed pursuant to subdivision (b)

CH&SC Section 40727.2(h) states: Nothing in this section limits the existing authority of districts to determine the form, content, and stringency of their rules and regulations. In implementing this section, it is the intent of the Legislature that the districts retain their existing authority and flexibility to tailor their air pollution emission control requirements to local circumstances.

The District has performed the analysis required by CH&SC 40727 et. seq, in Appendix G: Rule Consistency Analysis. First, no person has identified any existing federal or state requirement or guideline that applies to the same type of source that the District is proposing to regulate per CH&SC Section 40272(b). Second, the District identified few District rules for consistency analysis, and no US EPA rules or guidelines that apply to development projects in terms of New Source Performance Standards, Control Technique Guidelines, Maximum Achievable Control Technology or National Emission Standards for Hazardous

Pollutants.

The District has found that the proposed ISR program is consistent with existing District rules, and has determined that there is no conflict or duplication with existing state law and CEQA.

7. COMMENT: The direct and indirect costs imposed by the Rules on the residential development process will result in increased housing costs. The preparation of the AIA (which not only calls for a detailed Urban Emissions analysis (URBEMIS)), but also for ongoing monitoring of selected mitigation measures), is likely to result in increased costs. In some instances, despite the assessment of the socio-economic analysis, the mitigation fees could have a detrimental impact on the economic feasibility of developers of market-rate mixed-use and workforce housing. These types of developments are already financially burdened since they typically have a more difficult time obtaining financing and quickly bringing a project into the market place.

RESPONSE: The cost of the preparation of a typical AIA is included in the application-filing feeó $400 for residential projects and $600 for non-residential projects, regardless of number of units. Worst case for a 50 unit residential subdivision would be $80 per housing unit. The modeling required for an AIA will be done by the District if not provided by the applicant. Monitoring of mitigation measures selected will only occur for measures that are not already required by another public agency, and the costs will be born out of the administrative fees from the rule (assessed at 4% of the off-site fee amount). Therefore, there are no costs additional to those discussed in the Socioeconomic Analysis.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 9 8. COMMENT: By proposing to control emissions through fees that will be used to fund other projects, the District would be treating housing developments as direct sources when they are in fact indirect sources . The CEQA initial study for the proposed rules describes the projectís purpose as being to ìreduce emissions of NOx and PM 10 from new development projectsî (page 4). If the fees collected under the Rules are a mechanism to controlemissions from new development projects, then the District is adopting a marketbased incentive program and is subject to the Economic Incentive Program (EIP) requirements, as was asserted by the Environmental Protection Agency (EPA) in their comments. Market-based programs may only be used for direct sources. ìAn EIP is a regulatory program that achieves an air quality objective by providing market-based incentives or information to emission sources (emphasis in original). By providing information or flexibility in how sources meet an emission reduction target, an EIP empowers sources to find the means that are most suitable and most cost-effective for their particular circumstances. By setting a price on pollution and pollution reductions through a fee-based approach or a trading program, some sources can realize an economic reductions for less than the cost imposed by a fee ( Improving Air Quality with EIP, EPA-452/R-01-001, January 2001 at 23) . The proposed Rules allow a developer to either use the on-site emissions controls or to pay a fee and thus ìrealize an economic gain or avoid additional costs by making the reductions for less than the cost imposed by a fee.î The District has failed to show the proposed Rules are consistent with EPAís EIP guidance and is treating new developments as direct sources.

RESPONSE: The District disagrees that EIP guidance applies. Although there are similar elements in EIPs, Rule 9510 contains both voluntary elements (onsite mitigation) and mandatory elements (mitigation fees) that preclude the use of the EIP guidance in its entirety. Still, the rule meets the SIP submittal criteria that apply to all rules of being surplus, enforceable, quantifiable, and permanent for the time required in the SIP and meets the fundamental EIP principles of integrity, equity, and environmental benefit.

9. COMMENT: It is impractical, and an excessive and unnecessary burden for applicants to be required to include justification of mitigation measures not selected, as is proposed by Section. 5.3.2. The on-site checklist contains a number of emission reduction measures, which will often be inapplicable. As a result, Section 5.3.2 should be deleted. As proposed, the provision implies, for example, that all 18 of the on-site measures listed in Appendix C for residential projects (or 39 if the ìon-site enhancing measuresî also required justification) could be applicable for all projects. Measures which would not be routinely feasible or applicable, include but are not limited to:SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 10 ● An on-site bike lane would not likely be warranted or feasible on the site of a 50-unit apartment building (R-7) nor would an apartment building involve the design of street patterns (R-10).

● ìReduce Wood Fireplaces and/or Woodstove above that required by District Rule 4901î would not be applicable to most new apartment buildings (R-14).

● All new subdivisions cannot be sited within half a mile of an existing transit stop, and it is beyond the ability of applicants to have a transit stop added within a half a mile of a new subdivision (R-2), independent of where the project is located.

RESPONSE: The District does not agree with the authorís statement that it is impractical, excessive and/or an unnecessary burden to include justification. The purpose of the justification is to encourage developers to examine the potential measures more closely and not immediately reject a measure without considering its feasibility. Onsite measures have permanent air quality benefits and typically create value and provide other benefits to the development. Measures included as mitigation measures in the lead agencies CEQA document, as most are expected to be, will not require District long term monitoring. If a measure is impractical or not applicable to a project, the applicant needs only to state that in the justification. The District does not see how this is an undue burden. Finally, onsite measures are implemented voluntarily by the developer and are not required by Rule 9510.

10. COMMENT: As a result of these concerns, the Department respectfully requests that the District not adopt the Draft Rules as proposed and continue to work with all interested parties on needed revisions. Thank you for your consideration of these concerns. For further discussion or to set-up a meeting, please contact Linda Wheaton, Assistant Deputy Director, at (916) 327-2642.

RESPONSE: Comment Noted.

City of Porterville Date: November 29, 2005

11. COMMENT: The City of Porterville appreciates and encourages the District's efforts to improve air quality in our Valley, however, the District staff report does not clearly define how the additional fees acquired through adoption of the DESIGN program would result in a quantifiable improvement to air quality in the San Joaquin Valley air basin beyond the measures already in place. Further, neither rule dictates a funding source to compensate local jurisdictions for theSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 11 additional efforts resulting from approval. Please provide clarification of these points in the final rules. Thank you for the opportunity to comment.

RESPONSE: First, Appendix B ñ Emission Reduction Analysis, Attachments 2 and 3 show the tonnage of offsite reductions that are estimated to occur as a result of the adoption of the ISR rules. By 2010, it is estimated that the ISR will achieve 5.4 tons per day (tpd) reduction of NOx, and 5.8 tpd reduction of PM10 from growth. The amount of off-site reductions (from the fees) are 4.7 tpd and 4 tpd of NOx and PM10, respectively. These estimates are based on the amount of reduction required by the rule, and assume an amount of that reduction is achieved on-site. The off-site fees will be used to achieve this reduction, as specified in Appendix E: Cost Effectiveness Analysis, which states how much in off-site fees is expected and how that money will be spent to achieve quantifiable reductions. Specifically, Appendix E: Cost Effectiveness Analysis, Attachment 1 (p. E-13 through E-33) details potential projects, the amount of reduction achievable, the cost of those reductions and a potential spending plan.

Second, the rule does not dictate a funding source to compensate local jurisdictions because there are no requirements placed on local jurisdictions. The local jurisdiction is not required to review, assess or otherwise act on ISR projects. The District is committed to including local jurisdictions in the process through informing them of projects and project-specific information received by the District, and District actions on those projects just as it does now when it provides comments on local agency CEQA referrals. However, neither the ISR rules nor the administrative process require ëadditional effortsí from local agencies.

Visalia Unified School District Date: October 25, 2005

On behalf of the Visalia Unified School District (ìthe School Districtî), I respectfully submit the following comments and questions to Draft Rules 9510 and 3180 of the San Joaquin Valley Air Pollution Control District (ìthe Valley Air Districtî). I am unclear about several items in the Valley Air Districtís proposed fee and plan to decrease emissionsí impact from new development in the area. The School Districtís main concern is that the Draft Rules lack sufficient clarity to allow the School District to analyze what the potential impact of the new fees may be and whether the fees would actually be applicable to our projects. The School District is particularly concerned because any fees that must be paid as a result of the enactment of the Draft Rules will reduce the School Districtís financial ability to provide classrooms to students in these newly developed areas.

12. COMMENT: Applicability of Draft Rules to the School DistrictSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 12 It is unclear whether the Draft Rules apply to the School Districtís construction of new schools. Section 2.1 of Draft Rule 9510 states that the rule applies ìto any developer that seeks to gain a final discretionary approval for a development projectÖ of Ö 9,0000 square feet of educational space.î The Draft Rules define ìdeveloperî as any person or entity that undertakes a development project. Also, the definition of a ìdevelopment projectî includes any project that it ìsubject to a discretionary approval by a public agencyî where the discretionary approval ìrequires the exercise of judgment or deliberation.î

The school District takes the position that the Draft Rules do not apply to it because it does not operate as a ìdeveloperî and the School District school construction projects are not development projects since they are not ìsubject to the discretionary approval by a public agency.î However, according to the Draft Rules, if a developer is constructing a school facility on behalf of the School District, then due to the definitions in the Draft Rules, the fee may be applicable.

RESPONSE: If the approval to site and construct a new school is not subject to a discretionary permit, then the author is correct that the ISR rules would not apply. Otherwise, schools have many options available in onsite measures that would substantial reduce any potential fee.

13. COMMENT: Fee Calculation In addition to the question of the feeís applicability, the formula to be used in calculating the air impact mitigation fee is extremely confusing. A more straightforward formula from which the estimates of fees can be made would prove beneficial to those impacted by the Draft Rules. If these Draft Rules are intended to apply to the School Districtís development of new schools, a more concise formula would help us in the planning and estimating process.

RESPONSE: Although the fee formula is somewhat complex, it is the most accurate and equitable way to assess fees based on emissions to achieve the

emission reduction committed to in the Districtís SIP. The District has found that using an excel file to calculate fees is easy and accurate. The District will make a calculator with the formula built in available to the public prior to implementation. Prior to that, the District is willing help applicants and agencies create an excel file that calculates emission reductions required and fees required.

14. COMMENT: Requirement of Nexus The School District has reviewed comments to the Draft Rules submitted by other associations that are impacted by these rules. One major problem noted by many of the commentators related to the fact that the Draft Rules fail to comply with the nexus test required by AB 1600, enacted as Government CodeSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 13 Sections 66000 et seq, and as required by case law such as in Ehrlich v. City of Culver City (1996) 12 Cal4th 854.

Similarly, we would like to express our concerns that the fees proposed do not appear to demonstrate a reasonable relationship to the cost of implementing the air pollution mitigation program. It appears to us that there is a huge disparity between the cost of implementing the mitigation program and the fees to be collected. Further, the Draft Rules and supporting analyses are largely silent on the actual mitigation measures to be funded that will reduce emissionsí impact resulting from a given project. It would be helpful if the Valley Air District provided details of the actual measures and projects that will be undertaken to reduce emissionsí impact as well as the benefits accruing to the public as a

result of these measures.

RESPONSE: Please refer to the September 1, 2005 Response to Comment #125 about the analysis of nexus applicability that the District performed. The District disagrees that there is a disparity between the fees to be collected, estimated as up to $103 million between 2006 and 2008, and the cost of achieving off-site reductions. In Appendix E: Cost Effectiveness Analysis, Attachment 1 (p. E-13 through E-33) details potential projects, the amount of reduction achievable, the cost of those reductions and a potential spending plan.

15. COMMENT: Notice to Those Impacted by Draft Rules Although the School District is within the San Joaquin Valley Air Basin and is subject to the jurisdiction of the Valley Air District, we feel we were not provided with adequate notice of the Draft Rules. If the Draft Rules are held to apply to the School District, the fees imposed will greatly impact our ability to plan for the development of new classrooms and educational facilities. Therefore, in the future, we request written notice of proposed rules and regulations that are intended to apply to the School District.

RESPONSE: The District regrets that the School District did not receive notice of the proposed rules; however, this rule was noticed in accordance with all legal requirements. The District will add the School District to the ISR mailing list. In addition, the District suggests that the School District visit the District website at http://www.valleyair.org/lists/list.htm . The School District can receive District news, workshop notices, and other important information for this or other plansvia e-mail by subscribing to one of the Districtís e-mail notification lists. The email notification lists are setup and maintained by the end user and not by District staff. Individuals may add or delete their names from these lists at anytime.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 14 California League of Food Processors (CLFP) Date: November 22, 2005

16. COMMENT: First, CLFP supports the amendments proposed by the District that would exempt canning and food processing from Rule 9510. Most of the primary activities performed by food processors are already regulated by the District and are subject to Rule 2201 (New and Modified Stationary Source Review Rule) and Rule 2010 (Permit Rule), so the proposed exemption will avoid redundant or confusing new regulations.

RESPONSE: Comment Noted

17. COMMENT: Second, CLFP and other organizations have expressed concern to the District regarding the cumulative cost of complying with the various new air pollution control requirements imposed on manufacturers in recent years. The food processing industry is one of the major sources of employment in the San Joaquin Valley and the firms operate in a very competitive economic environment. The financial resources available for complying with new regulations are very limited. CLFP appreciates that the District has responded to industry concerns by recognizing the cumulative impact of air regulations and the major investments made in stationary source emission controls.

RESPONSE: Comment Noted

California Building Industry Association Date: November 29, 2005

On behalf of the California Building Industry Association (CBIA) and its Affiliate Associations located in the San Joaquin Valley, I am entering into the formal record comments on the proposed Draft Rules 9510 and 3180 (the ìISRî). CBIA member companies provide housing that is the cornerstone of quality of life in the San Joaquin Valley.

18. COMMENT: The Federal Clean Air Act, 42 U.S.C. Section 7410 (a)(2)(F), requires that approvable control measures provide quantifiable, surplus, enforceable, permanent, and adequately supported reductions in air emissions. The proposed Draft ISR does not provide sufficient analysis or findings to establish that the proposed Indirect Source Mitigation Program meets these criteria. Indeed, the document barely addresses these fundamental topics. Because these criteria have not been met, the Indirect Source Mitigation Program does not meet the Federal Clean Air Act test for full approval and inclusion in the State Implementation Plan (ìSIPî).SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 15 Indirect Source programs, on the scale proposed by the San Joaquin Valley Air District, have not been adopted or implemented successfully anywhere in the United States. We note that USEPA has never approved a proposed indirect

source rule for emission reduction credit

.

RESPONSE: The District has complied with the cited Clean Air Act section. EPA has recognized that areas with a long history of air regulation must pursue new and innovative ways to reach emission reduction requirements since the stationary sources in many cases are already in their second or third retrofit requirement with rapidly diminishing air quality returns. This had led EPA to produce guidance on voluntary and emerging measures and for taking SIP credit for mobile source incentive programs. Although Rule 9510 is unique, it still meets all control measure approvability criteria. See also the Districtís response to EPAís comment letter on the September 1, 2005 draft.

19. COMMENT: The expected emissions benefits are not properly quantified

. The URBEMIS model-based approach proposed to calculate project travel and emission impacts is inconsistent with the SIP inventory methodology. The SIP emissions inventory used the California Air Resources Boardís EMFAC-2002 model to establish the NOX and PM10 emission reductions targeted by the ISR rules. One of the key components of EMFAC is a regional travel demand model (ìTDMî). The TDM is used to calculate regional travel impacts such as vehicle miles traveled (ìVMTsî) and trips within the SIP inventory. The SIP calculations that identify further emission reductions needed for the San Joaquin Valley to attain federal ambient air quality standards are, in turn, based on vehicle travel activity forecasts from TDMs.

New project impacts determined under the ISR rules should be calculated in a manner consistent with the SIP targets to ensure no over- or under-compliance. There is an inconsistency between the way URBEMIS and TDMs calculate new or net added vehicle miles traveled (VMT) and vehicle trips. The fundamental difference between TDMs and URBEMIS is that TDMs robustly account for the interaction effects between multiple land uses, while URBEMIS does not.

Interaction effects refer to the fact that when considered together, each individual land use (or project) ìcompetesî with others for vehicle trips. Where these land uses are located within a metropolitan area or county and how well the regional roadway network provides access to each land use affects the number of trips taken and their length (and thus VMT). For example, locating a new shopping center near an existing residential area would likely shorten the length of existing shopping trips taken from the residential area (and thus reduce VMT). It may also increase the number of shopping trips from the residential area due to its proximity compared to the location of existing shopping centers.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 16 The Draft ISR relies primarily on URBEMIS to calculate project level impacts, even though the Districtís own modeling consultant has stated that this model was designed to be a ìsketch planningî tool, and was never intended to provide a detailed numerical analysis of project level air quality impacts. If the travel activity (VMT and trips) of all the URBEMIS-based individual ISR project analyses were added together, they would overstate the net travel impacts determined when jointly simulating the same new projects using a TDM. This conclusion is based on a side-by-side comparison of impacts of a hypothetical but typical new residential project performed by Sierra/Dowling using URBEMIS and the Fresno County TDM. Correcting the existing biases in the URBEMIS default assumptions does not change this result because URBEMIS treats each new project and its interaction with existing land uses and other new projects separately.

The District has attempted to account for this fundamental difference between TDMs and URBEMIS by applying a 50% discount factor in the NOx and PM10 fee formulas to require mitigation of only half or one direction of two way trips between a new project and existing land uses. While in concept this approach could eliminate the double counting problem, simply slicing URBEMIS impacts in

half does not demonstrate SIP consistency.

On top of this fundamental discrepancy with the SIP methodology, URBEMIS overstates residential project emissions by over 70% as a result of multiple technical shortcomings. On this basis alone, URBEMIS cannot be considered a reliable and accurate gauge of project emissions. URBEMISí technical problems

as an emission estimation tool are documented in detail in Sierra Researchís comment letter of July 22, 2005.

RESPONSE: The author states that the ìemission reduction benefits are not properly quantifiedî. The District assumes the author is discussing the emission reduction benefits from implementation of the rule, which were properly quantified in Appendix B: Emission Reduction Analysis, using the known growth data (provided to the state by the COGs), and applying a standard rule penetration, estimated on-site emission reduction achievement, and applying the emission reduction requirements to the growth emissions. This analysis is considered ëtop-downí and is standard practice. The analysis did not rely on URBEMIS, a project-level model or ëbottom-upí analysis, for valley-wide emissions estimates from valley-wide growth.

The District has repeatedly addressed the ì70%î overestimation cited by the author as a distortion of fact. The District has stated that project-specific data is acceptable when available and has committed to addressing the few issues that have been raised concerning URBEMIS default values, and will provide guidance on those items prior to ISR implementation.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 17 The District could not find any reference in the Clean Air Act or in EPA guidance that prescribes implementation to use the same methodology as the SIP. Indeed, the District did not find any reference prescribing a model or methodology to assess mobile and area emissions from development projects. The authorís assertion that the methodology itself must be the same for the SIP and implementation is not based on any statute, guidance, or on historical methods of rule implementation. What is important is that the rule achieves the amount of reduction committed to in the SIP, and that the model produce consistent and repeatable results and be based on widely accepted inputs and methods, all of which apply to URBEMIS.

The author mischaracterizes the fee formulaís use of a 50 percent baseline as a discount factor used to correct a deficiency in URBEMIS. URBEMIS correctly uses ITE trip generation rates to show the impact of all trips associated with a development project including those generated and those attracted to the site. The purpose of the 50% of the baseline in the fee formula is to meet the nexus requirements and to meet the intent of Health and Safety Code 40717.5(a)(1) for Districts toÖ ìmake reasonable and feasible efforts to assign responsibility for existing and new vehicle trips in a manner that equitably distributes responsibility among indirect sources.î By basing the fee on half the emissions, the District is ensuring that only trips from the project site are assigned responsibility. Furthermore, URBEMIS has the capability to account for reductions for passby trips where someone stops on their way to their primary destination and diverted linked trips where the trip length is shortened to account for trips that although not directly on the route to the primary destination, still result in a shorter trip length than would occur if someone went there directly. Finally, URBEMIS can accept project specific trip generation information based on market studies and local traffic studies when a proposed project may produce different results than would be expected using default trip information. We believe this a reasonable and feasible effort to meet the Health and Safety Code requirements.

The District believes the best model should be used based on the needs and parameters of the project. For SIP inventory purposes, regional TDMs are the most appropriate model for estimating emissions. However, as admitted by Sierra Research (letter November 29, 2005, Comment #29 below), TDMs are regional models that are inappropriate for project-level analysis and TDMs contain their own flaws. These flaws are ignored in the authorís ëURBEMIS vs. TDMí discussion. For instance, TDMs do not account for some trips on arterial and collector streets. TDMs require a large amount of data input, are not easily used, were not developed to estimate land-use impacts, and are not available to the public. Simply, TDMs are too broad of tools to accurately estimate the emissions from individual projects. A side-by-side comparison of a project-level analysis using URBEMIS and a TDM would be misleading, as a regional TDM was never meant to be, nor should be, used to estimate and individual projectís

emissions.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 18 URBEMIS uses emissions factors derived from EMFAC2002, the same model used in the SIP. Several issues raised with URBEMIS (silt loading, fleet mix) will be remedied prior to implementation. URBEMIS is maintained by a statewide working group of technical experts and air districts. URBEMIS is used in CEQA analysis across the state, and is commonly used for Environmental Impact Reports (EIRs) to assess project-specific air quality impacts. URBEMIS has been used by the District and applicants in assessing air emissions for Mitigation Agreements, as well as other agencies to assess air impacts for mitigation settlements. The District has more than adequately shown URBEMIS to be the best model for the job.

The ëfundamental flawí raised by the author simply does not exist. It has been well demonstrated that URBEMIS is the best program for ISRís needs, and it is widely recognized across the state by other air districts, local land use agencies, and other agencies as an appropriate tool for assessing specific project-level air impacts. It is the Districtís assessment that the author compares TDMs to URBEMIS in raising ëSIP methodology consistencyí as a ëfundamental flawí to discredit URBEMIS; and, since TDMís are inappropriate for project-level analysis, leave the District with no available model to use.

20. COMMENT: There is no discussion of whether the emissions are surplus

. New development is already controlled by existing and proposed District rules, some of which overlap the ISR proposal. Dozens of cities and counties with the San Joaquin Air Basin have adopted ordnances creating local traffic mitigation and congestion relief programs, funded by fees on new development and, in the case of several counties, increased sales taxes. In addition, large scale developments, such as planned communities, are increasingly entering into air quality mitigation agreements within the context of the environmental review process mandated by the California Environmental Quality Act (îCEQAî). All of these measures address the same concerns as the Draft ISR, improved traffic flow and reduction of tail pipe emissions.

The failure of the Draft ISR and the supporting documentation to discuss or quantify the emissions reductions attributable to these other programs undercut the ability of the measure to provide surplus and quantifiable emission reductions as required by statute.

RESPONSE: The emissions growth estimates used to develop the rule are from the Districtís emission inventory that includes the benefit of all adopted local, state, and federal regulations and so are surplus to adopted control programs and regulations. Local regulations that have been adopted as transportation control measures currently have no emission reductions claimed in the Districtís SIP. Congestion relief measures and other transportation impact fees areSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 19 required just to keep emissions from exceeding emission budgets and do not provide additional SIP creditable reductions. Local programs and ordinances that do provide a surplus benefit will now be able to provide credit to their communities through the onsite mitigation component of the rule and will reduce the fees paid by developments contributing to those programs. In addition, reductions obtained through CEQA measures and Development Mitigation Agreements will be credited toward the emission reduction requirements of the

rule.

There are no existing or proposed District rules that overlap the proposed ISR program. Appendix G: Rule Consistency Analysis describes other District rules and analyzes potential for inconsistencyónone were found.

21. COMMENT: The proposed Indirect Source Mitigation Program does not

contain an enforceable commitment. The permitting process in the Draft ISR operates independently of any other relevant regulatory process. Numerous parties have commented that the air quality impacts attributable to new development are also subject to CEQA. Early attempts by the Air District to reconcile or streamline the ISR with the normal environmental review process have been abandoned for the time being, replaced with a statement that the Air District will revise its existing Air Quality CEQA Guidelines at some future date to minimize conflicts between the two processes. By separating the Air District permit process from CEQA, the Air District has removed any responsibility for enforcement from local agencies with the land use authority necessary to enforce on-site mitigation measures.

RESPONSE: First, the ISR program is not a permitting program. Second, the ISR program is enforceable, the same as all other District Rules, and does not need to rely on ëother relevant regulatory processí and does not conflict with other regulatory processes. This enforcement authority comes from state law. In fact, most of the Districtís rules ìoperate independently of any other relevant regulatory processî as they are stand-alone rules not dependant on other regulations. Please see District Rule 1040 (Enforcement).

The District does not need to revise the Guide for Assessing and Mitigating Air Quality Impacts (GAMAQI) in order to make the rule enforceable. The District will be revising the GAMAQI in order to clarify for those undergoing the CEQA process how ISR will affect their projects. This is no different than how the GAMAQI currently addresses other applicable rules. For instance, Regulation VIII (Fugitive PM10 Prohibitions) is discussed in the text of the GAMAQI. However, the GAMAQI discussion does create the enforcement of Regulation VIII, but acts to inform lead agencies, consultants, project applicants, and the public.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 20 22. COMMENT: In addition, no legal nexus between the proposed mitigation program and the fees imposed on individual development projects has been established. The cost and ultimate success of the mitigation measures arespeculative. The Air Districtís proposed mitigation program, based upon afterthe-fact grant applications and the funding of primarily off-site mitigation, has not worked well in other situations, such as the South Coast Air Quality Management Districtís Mobile Source Reduction Commitment program. Until nexus can be demonstrated, no enforceable commitment is possible. The language of SB 709 did not repeal the independent, Constitutionally-based requirement that that ìrough proportionalityî between the impact created and the cost of its mitigation be established. This comment has been made several times, both in writing and testimony, and the Air District has never fully responded to this issue.

The Air District cites the USEPA approved PM10 and Ozone Attainment Plans along with SB 709 as authority that it must impose ISR. In doing so, the District is arguing backward from a conclusion, sidestepping the fundamental issue of whether an enforceable commitment exists. Such backstops are not a substitute for establishing whether an enforceable commitment exists for purposes of the

Federal Clean Air Act.

RESPONSE: Although the District believes it has adequately responded to each comment regarding nexus ërough proportionalityí, here is a synopsis of how the

District makes this demonstration:

The District developed an estimate of growth in mobile source emissions from new development by using the SIP emission inventory growth-only projections. This allows us to estimate the amount future emissions will increase only accounting for growth. This information was used as the

basis for the ISR control measure in the 2003 PM10 Plan. Construction and area source emissions are entirely the responsibility of the development project. The emissions attributable to growth were then reduced to account for projects that will be exempt from the rule. The mitigation requirements were then applied to the emissions subject to the rule to determine the potential emission reductions. The emission reductions are cumulative since each year additional mitigation is accomplished and the benefits from prior years continue to provide a benefit. This information is provided in Appendix B of the staff report.

Once the overall emission reduction target for the ISR control measure was identified, the next step was to determine the method to calculate the fair share of the emissions attributable to individual projects. As has been thoroughly discussed elsewhere, it is not appropriate to use the SIP inventory method to calculate emissions from individual projects. URBEMIS was identified as the best tool for conducting project level estimates. See Appendix D of the staff report.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 21 With the emission estimation tool selected, the District then used URBEMIS to estimate emissions from a variety of different land use projects using basic default inputs. The basic factors used to estimate project mobile emissions are the number of vehicle trips, the length of the trips, and the average vehicle fleet emission rates. Based on comments received on early drafts, the District replaced default values for PM10 silt loading values, and activated the commercial passby trips component. The purpose of this analysis was to estimate the potential emissions and fees from an individual development. The results were then used in socioeconomic impact analysis to determine the potential impacts of

worst-case fee amounts.

The next step in determining rough proportionality is to verify that the individual project impact is roughly proportional to the mitigation achieved with the fees that are collected. This is accomplished by using an

emission based fee formula to determine the amount of funds collected and a fixed cost of reductions for the emission reductions to be purchased by the District. The cost of reductions was developed for future years based on recent cost-effectiveness history with District grant programs, a determination that the reductions will be continue to surplus to any adopted regulations, the emission inventory for the sources, and the technical and economic feasibility of the projects. This analysis is adequate to confirm that the District will be able to maintain rough proportionality between the emissions generated and the emissions reduced through the fees.

The District has several options for corrective actions should the average cost of reductions achieved by the ISR Program be significantly higher or lower than predicted. Since staff will be continuously monitoring the projects funded, we will be able to identify early if costs are on target. If costs of reductions are coming in high, the first option would be to focus the project mix on more cost-effective projects until the average approaches the target amount. If insufficient low cost off-site projects are available, the cost of reductions could be increased by amending the rule.If costs of reductions are coming in low and it appears that the lowerthan-expected cost-effectiveness can be sustained, the fee amount may be lowered. The District may also modify the incentive amounts offered to attract preferred, highly cost-effective projects where potential applicants may be reluctant to participate when the incentive amount offered may be inadequate to cover costs of implementing the project. Modified incentive amounts could also be used if the District has difficulty attracting sufficient projects.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 22 The comparison to mobile source emission reduction credit programs is not valid. The reason those programs have not been highly successful is because stationary sources needing ERCs have been able to obtain those reductions at lower costs using traditional banked ERCs than could be achieved by mobile source reductions. Grant programs throughout the state have been extremely successful in obtaining emission reductions from a wide variety of sources. Since ISR reductions can be obtained from any source of surplus, quantifiable, and enforceable reductions, it can be expected to do even better than the existing grant programs in attracting projects.

23. COMMENT: There is no finding that the benefits of the proposed measures will be permanent. The Draft ISR assumes that the measures will be in effect for ten years. Because of the passive nature of many of the on-site mitigation measures, there is no guarantee that purchasers of newly developed property will leave those mitigation measures in place. Likewise, there is no documentation that the emission reductions associated with the proposed control measures will persist throughout the life of the SIP. As discussed previously, the benefits are speculative, have not been quantified and documented, and as a result the longevity of the benefits are equally speculative.

RESPONSE: The ISR program differentiates between onsite and off-site measures when demonstrating the permanence of the reductions for SIP purposes. The onsite measures are most closely related to measures covered by EPAís Voluntary and Emerging Measures Policy. This policy recognizes that land use measures are highly desirable, but more difficult to quantify than traditional measures. Once the project is constructed with the onsite features in place, the benefits continue indefinitely into the future. Measures like density, mix of uses, and pedestrian infrastructure are not likely to be eliminated after development. All on-site measures that are not required by the lead agency will be enforced by the District to ensure that the emission reduction benefits will occur for the full duration of ten years. Offsite projects funded with mitigation fees only take credit for SIP reductions during the life of the project. This is accounted for in the emission reduction spreadsheet in Appendix B. Offsite projects meet EPA SIP criteria for permanence. Applicants are under contract to utilize the cleaner equipment through the term of the contract. When the new equipment, device, or paved road reaches the end of its useful life, the new purchase must comply with regulations in place at that time and will use cleaner technology in many cases.

As the District has repeatedly demonstrated, the benefits are not speculative, have been quantified and documented. Please refer to the entire Staff Report, Appendix B: Emission Reduction Analysis, Appendix D: Recommended Changes to URBEMIS, and Appendix E: Cost Effectiveness Analysis.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 23 24. COMMENT: The proposed Indirect Source Mitigation Program is not adequately supported. The Air Districtís socio-economic analysis focused on the narrowest viewpoint available, the impact on residential builders, and did not even attempt to analyze the larger impacts on other business sectors, employment, public services, etc. The proposed rulemaking provides no information on the commitments from other agencies that are necessary to implement the various measures. Finally, there is no indication that the proposed requirements have been integrated into local development plans.

RESPONSE: First, there are no ìcommitments from other agencies that are necessaryî to implement ISR. Therefore, the District did not include ìcommitments from other agenciesî as there are none.

The author mistakenly states that the socioeconomic analysis, ìfocused on the narrowest viewpoint available.î The author is posing that the District did not thoroughly or adequately address the socioeconomic impacts of the ISR program, which is untrue. The socioeconomic analysis included analysis on the impacts to homebuilders, homebuyers, renters, low-income housing and housing affordability. In addition it analyzed the impacts to commercial, office and industrial builders, buyers and renters, and small businesses. The mitigation fees are spent on projects in the San Joaquin Valley that provide benefits to the Valleyís economy as described in the revised socioeconomic impacts report.

ISR has been designed to work synergistically with the local development approval process. Developers may use mitigation measures and local requirements of the local development process to reduce their Rule 9510 fees, but are not required to do so. The proposed requirements of ISR, a prescribed amount of emission reduction for particular development projects, do not need to be integrated into local development plans, but may be used to demonstrate that air quality impacts of the project have been reduced. Developers wanting to use Rule 9510 as support for their air quality impact study for the local development approval process can time their application to the District such that it will fit seamlessly with the normal CEQA timelines. For the ëmitigation programí, there are no up-front requirements for all projects. Applicants that voluntarily commit to certain measures that are not already requirements by other agencies must enter into an agreement with the District that details the schedule of monitoring and reporting for the District to enforce implementation of those measures. The ëmitigation programí requirements are to implement those measures the applicant has voluntarily committed to. The only possible conflict with local development plans is if a measure is not allowed by the local agency: in that instance, the District would remove that measure from the ISR project, and reassess emissions. Thereby avoiding conflicts with the local agency.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 24 25. COMMENT: In summary, for the reasons stated above, the Draft ISR continues to be fundamentally flawed, and is unlikely to satisfy the requirements of the Federal Clean Air Act. As a result, the Air District will have a difficult time convincing USEPA that the ISR control measure will contribute to the emission reduction goals set forth in the SIP and the District should look to other

measures to obtain PM10 and NOx reductions.

RESPONSE: As stated in Response to Comment #18, the EPA is supportive of the rule, and has not raised the ëflawsí that the author claims are present. The emission reduction goals in the SIP will primarily be achieved through grant and incentive programs that have been in operation for over a decade and that meet all SIP submittal criteria. Credit for new grant and incentive programs will follow the same SIP criteria and will comply with the same standards for quantification and verification as the existing programs. Each new program will go through a public review process and be approved by the Districtís Governing Board. The voluntary onsite measures will only be credited to the extent that they meet the criteria of EPAís Voluntary and Emerging Measures Policy.

Sierra Research – On Behalf of CBIA Date: November 29, 2005 On behalf of the California Building Industry Association (CBIA), Sierra Research (Sierra) is pleased to submit the following comments on the revised draft Indirect Source Rules (ISR) 9510 and 3180 released by the San Joaquin Valley Unified Air Pollution Control District (District) earlier in November.

Our comments in this letter rebut District responses to earlier comments submitted by Sierra in September. As directed by CBIA, our comments focus on technical and modeling issues related to the use of the URBEMIS model under the proposed rules based on our independent review of the model and its underlying assumptions. In this review we were assisted by Dowling Associates, Inc. (Dowling), a transportation planning firm with extensive travel demand modeling experience supporting a number of the San Joaquin Valley Transportation Planning Agencies (TPAs).

Our rebuttal covers the following two issues:

1. URBEMIS modeling assumptions substantially overestimate residential project emissions. A combination of unresolved technical problems result in overstating both residential PM10 and NOx project emissions, and therefore ISR fees, by over 70%.

2. Rule 9510 consistency with SIP emissions inventory has not been demonstrated. The SIP travel model projects a different amount of travel (and therefore emissions and fees) from each project than URBEMIS calculates. Our Fresno County test case shows that URBEMIS produces higher project emissions than does the SIP methodology.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 25 A detailed discussion of each of these unresolved issues is provided in Attachment A.

26. COMMENT: Summary The following table summarizes each of the technical modeling issues identified by Sierra/Dowling during the ISR rulemaking process, their impacts, and the Districtís response to each issue.

Although the District has indicated a willingness to address some of the modeling issues we have identified, we believe the responses to our earlier comments on URBEMIS model issues are incomplete (in that corrections will not be made until after ISR adoption) or mildly dismissive (e.g., not willing to consider how revised residential age distribution impacts will be addressed). Some of the unresolved issues are fundamental and still need to be addressed before these rules can go

forward

Furthermore, the District has not proven that the URBEMIS-based ISR approach will result in emission reductions that match SIP targets. From a policy standpoint, we believe this burden-of-proof lies with the District and that SIP consistency cannot simply be asserted.

These technical problems result in major discrepancies in estimating emissions and corresponding fees under Rule 9510. Thus, we respectfully recommend that the District delay its scheduled December 15 hearing on ISR adoption until these issues are fully resolved.

If you have any questions about the information presented above or in Attachment A, please feel free to contact Bob Dulla or me at (916) 444-6666.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 26 RESPONSE: The District has determined that all items that the author raises have been adequately addressed. See the following Comments and Response to Comments #27 through #29.



### ATTACHMENT A

UNRESOLVED RULE 9510 TECHNICAL ISSUES

THAT RESULT IN OVERSTATED EMISSIONS

27. COMMENT: URBEMIS Modeling Assumptions Substantially Overestimate Residential Project Emissions - In responses to our comments, the District acknowledged that many of the default modeling assumptions in the URBEMIS model do not accurately represent conditions in the San Joaquin Valley when applied to residential projects. These incorrect model defaults identified by Sierra and Dowling substantially overestimate residential project emissions by a minimum of 70% for both pollutants targeted under the ISR rules, oxides of nitrogen (NOx) and ìfineî particulate matter (PM10).

The Districtís response to these URBEMIS model default issues is incomplete. In acknowledging these problems, the District responds only that these faulty model assumptions will be corrected in a future version of URBEMIS that will be released (presumably without opportunity for public review) after the ISR rules are adopted.

Although the District has indicated that a small part of these model corrections will be made prior to rule implementation, no timetable has been provided for revising URBEMIS, nor has it been made clear that these revisions will be publicly reviewed. The District has been aware of these modeling issues since July, yet no further action has been taken. The Districtís approach does not guarantee the release of a revised and fully reviewed model before implementation.

RESPONSE: The District does not ìacknowledge that many (emphasis added) of the defaultsÖ do not accurately represent conditions in the San Joaquin Valleyî. The District does acknowledge that a there are a few items that need refinement, specifically the on-road silt loading factor (easily adjusted by a known amount) and the fleet mix (less easily adjusted). The District had already hired a consultant to analyze and recommend a revised fleet mix, and results are expected prior to rule implementation. The authorís assertion that ìno further action has been takenî is misinformed and false. In addition to researching the fleet mix, the District is participating in the URBEMIS statewide working group (see paragraph below for more information). The model defaults do not overestimate residential project emissions ìby a minimum of 70% for both pollutantsî. This claim is false, and the District has repeatedly addressed this

claim.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 27 The author is incorrect in his assertion that the District will make changes to URBEMIS ìwithout opportunity for public reviewî and therefore without any review or safeguards. Changes to URBEMIS are made through a statewide working group that includes other air districts, model experts, technical experts and other public agencies such as CalTrans. As consultants such as Sierra Research use URBEMIS, they often find areas for improvement and correction. Any proposed changes impacting the statewide use of the model must be vetted through this group. The District cannot, nor does it propose to, make ëclosed doorí, questionable changes to the URBEMIS model. If an applicant or a consultant can find better input data or another model that more accurately characterizes the emissions from their project, the District will consider them. If they apply broadly, the District is committed to make those changes available to all users. Sierra should recognize that all modeling is based on incremental improvement. The District will use the best information currently available and commits to continuous improvement in its emission estimating techniques and

models.

The author states that a ìsmall partî of issues will be addressed. The District finds only three items raised that are legitimate and only two that are substantial, one of which (silt loading) has been resolved, and the other (fleet mix) is currently being researched. As for a ìguaranteed releaseî of a revised program prior to implementation, these two issues can be addressed through guidance. A revised program is not necessary to account for the refined default changes. As stated above, the District is participating in the URBEMIS statewide working group, which is currently expecting to release a revised program in more than one year. The District is committed to making URBEMIS as accurate as possible, and is working towards that goal. Any change that can be made through District guidance will be implemented quickly.

In addition, the silt loading factor issue was raised by Sierra Research, which proposed a new factor, and the District agreed that the proposed factor was more accurate. This revised factor has been publicly discussed, and has been

included in ISR documentation.

28. COMMENT: In addition, the District did not act on the evidence presented by Sierra/Dowling based on U.S. Census and Caltrans Travel Survey dataóthat new residential developments exhibit newer vehicle fleet age distributions (and therefore have lower average emissions). The Districtís response indicates a need for further survey data to warrant revising the URBEMIS default vehicle age distribution when applied to new residential projects.

Would data from a third-party survey that gathered information on vehicles per household and age from a random sample of ìnewî residential households in theSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 28 San Joaquin Valley be sufficient to warrant a revision if it showed a similar shift toward newer vehicles in the existing Sierra/Dowling analysis? And if so, how will this be accomplished? The District suggests the possibility of an age correction factor to address the fact that the EMFAC model emission factors used by URBEMIS cannot easily be modified to account for a revised age distribution. Who would develop this age correction factor and how would it be developed?

RESPONSE: The District did not act on the survey data because we are not yet convinced that it is more accurate than the information currently used in URBEMIS, which is an age distribution from EMFAC2002 (See September 1, 2005 Response to Comments #121 through #153). As pointed out in your previous comment letter, providing a project-specific fleet-mix age for each land use type would not be easy and would not be possible to automate in the current models used to quantify project emissions. We are not sure if the survey data described is adequate for this purpose. Since Sierra previously stated that it wants any changes vetted through a public process, the District will first pass this information to the URBEMIS Working Group for assessment. If consensus is reached that a major overhaul to URBEMIS is needed to account for fleet age differences, then the District will work to raise the necessary resources to develop the model. The new model would need to be submitted to EPA for approval. The fleet age distribution currently in use is adequate for the ISR program until such a time as a model capable of using this information becomes

available.

29. COMMENT: Rule 9510 Consistency with SIP Emissions Inventory Has Not

Been Demonstrated We continue to disagree with the Districtís assertion that the URBEMIS model-based approach proposed to calculate project travel and emission impacts is consistent with the Statewide Implementation Plan (SIP) inventory methodology. This SIP emissions inventory and its underlying methodology were used to establish the NOx and PM10 emission reductions targeted by the ISR rules. Thus, it is critically important to ensure that new project impacts determined under the ISR rules are calculated in a manner consistent with the SIP targets to ensure no over- or under-compliance.

Our disagreement centers on the inconsistency between URBEMIS and regional travel demand models (TDMs) in calculating new or net added vehicle miles traveled (VMT) and vehicle trips. The TDM models are used to calculate regional travel impacts (i.e., VMT and trips) within the SIP inventory. The fundamental difference between TDMs and URBEMIS is that TDMs robustly account for the

interaction effects 1 between multiple land uses; URBEMIS does not.

1 Interaction effects refer to the fact that when considered together, each individual land use (or project) “competes” with others for vehicle trips. Where these land uses are located within a metropolitan area or county and how well the regional roadway network provides access to each land use affects the number of trips taken and their length (and thus VMT). For example, locating a new shopping center near an existingSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 29 If travel activity (VMT and trips) were totaled across all the URBEMIS-based individual ISR project applications, we believe they would overstate the net travel impacts determined when jointly simulating the same new projects using a TDM. This conclusion is based on a side-by-side comparison of impacts of a hypothetical but typical new residential project performed by Sierra/Dowling using URBEMIS and the Fresno County TDM. Further, we believe this conclusion remains valid even after correcting existing bias in URBEMIS default assumptions. This is because URBEMIS treats each new project and its interaction with existing land uses and other new projects separately.

We understand and agree with the District that it is not practical to make developers run TDM simulations under each ISR application, and readily acknowledge that TDMs are not without flaws of their own. However, calculations performed within the SIP that identify further emission reductions needed for the San Joaquin Valley to attain federal ambient air quality standards (a portion of which are targeted by the ISR rules) are based on vehicle travel activity forecasts

from TDMs.

The District suggests that this fundamental difference between TDMs and URBEMIS is accounted for by applying a 50% discount factor in the NOx and PM10 fee formulas to require mitigation of only half or one direction of two-way trips between a new project and existing land uses. We understand the concept in principle, but strongly believe that by simply slicing URBEMIS impacts in half, SIP consistency has not been demonstrated. We believe the acid test of SIP consistency consists of an analysis that compares summed URBEMIS vs. TDM simulated travel impacts for a package of specific projects that have been developed in recent years. We are not aware that this type of URBEMIS analysis has ever been done and is likely one of the key reasons why ISR rules have never been successfully adopted and implemented on this scale.

RESPONSE: Please see Response to Comment #19 above. The District agrees that the model used for the ISR program should be carefully chosen as to not over- or under-comply with the SIP reduction targets. However, the District maintains that the methodology for implementation does not need to be identical to the SIP methodology to achieve this. The author states that for the Valley, if URBEMIS is compared side by side to a TDM, URBEMIS over-estimates net travel impacts. However, a regional TDM was never meant to be, nor should it be, used to estimate emissions from an individual project. To take a project-level model and try to compare it ëside-by-sideí to a regional model is inappropriate and misleading.

residential area would likely shorten the length of existing shopping trips taken from the residential area (and thus reduce VMT). It may also increase the number of shopping trips from the residential area due to

its proximity compared to the location of existing shopping centers.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 30 Stop the Air Board Tax We’ll All Pay! Date: November 16, 2005 Signed by City of Clovis ñ Mayor Nathan Magsig San Joaquin Busniess Council ñ President Ron Addington Visalia Chamber of Commerce ñ President and CEO Mike Cully Kern County Taxpayers Association ñ Executive Director Michael Turnipseed

Greater Merced Chamber of Commerce ñ CEO Will Lee

30. COMMENT: A broad-based coalition of local chambers of commerce, local government officials, homebuilders, taxpayer organizations, agricultural groups, ethnic and community groups are formally opposing Rules 9510 and 3180 proposed by the San Joaquin Valley Air Pollution Control District (the District). These Rules will collect hundreds of million of dollars by imposing fees on every new home, small and large business, public facilities and other new construction projects within the Central Valley, with questionable air quality benefit.

Indeed, as Rules 9510 and 3180 are currently proposed, the District is proposing to collect more than $670 million in fees over the next five years- taken right out of the regional economy.

RESPONSE: First, the proposed rule does not apply to all new development nor does it impose fees on all new development. For instance, the following projects are exempt from the rule or the fees:

• Projects below the applicable size thresholds in the rule (e.g., 50 residential homes)

• Projects at stationary source businesses already regulated by the District

• New projects and expansions that do not require a new discretionary approval by the local land-use agency

• Projects that employ enough control features to reduce emissions to less than 2 tons per year

The Districtís most up to date estimate of the offsite mitigation fees is $103 million over the next 3 years. The authorsí estimate of $670 million in five years

is erroneous. The authorsí estimate is based on incorrect use of the fee formulas and emissions estimates and record setting development rates. The District believes that it is not prudent to base revenue estimates on record development rates that would result in SIP commitments that fall short if not realized. Although the authorsí estimates are overstated, it should be recognized that solving the Valleyís air pollution problems is very costly as can confirmed by industrial sources that have invested billions of dollars on pollution control in the last three decades. The funds will not be taken out of the regional economy. All offsite mitigation fees will be used to purchase emission reductions here and willSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 31 result in the funds being reinvested in the Valley. The cost of administering the program is assessed at only four percent of the offsite emission fees.

Finally, the District has thoroughly documented, described and demonstrated that the proposed rules will have a real and substantial beneficial impact on air quality. For more information on the emission reduction analysis or spending plan, please see Staff Report Appendix B: Emissions Reduction Analysis (which used a standard, accepted emission reduction methodology) and Appendix E: Cost Effectiveness Analysis (which thoroughly demonstrates the availability of off-site reductions and a plan for off-site fee use).

31. COMMENT: As you are probably aware, the Air District recently released a revised version of these Rules and accompanying documents. In our opinion, the changes have failed to address some of the fundamental concerns of our coalition. Namely, the Rules continue to unfairly target new homeowners and businesses to disproportionately fund air emissions cleanup; the methodology and science remain flawed and they still significantly overestimate emissions and result in inflated fees; the fees still seek to impose enormous and unjustified new costs on businesses, new homeowners, public entities and ultimately all Valley consumers and our economy; and the rules still fail to provide for full accountability.

We all support the goal of cleaner air, but there are better and more effective ways to reduce air pollution in a manner that is balanced and less costly for residents and our economy.

As representatives of the coalition, we feel compelled to share the following key reasons we are respectfully urging you and other Governing Board members to oppose Rules 9510 and 3180 when they come up for a vote on December 15,

2005.

RESPONSE: Please see Response to Comments #32 through #42 below.

32. COMMENT: ISSUE #1 ñ LACK OF FAIRNESS, EFFECTIVENESS OR

EFFICIENCY Indirect source rules place a disproportionate burden on new housing, new businesses and new public facilities to pay for a regional problem that is the responsibility of ALL residents. Indirect source rules are just that ñ indirect,

unproven and inefficient ways to go about calculating and mitigating air quality emissions. For this reason, no other air district in the nation has adopted this type of indirect source rule. The District should be pursuing more balanced solutions that equally apply to all residents and rules that more directly go afterSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 32 the true source of emission ñ namely tail pipe emissions and the dirtiest pollution

sources like diesel.

RESPONSE: The authors claim that new homeowners and businesses are being singled out unfairly for controls by this rule. This rule would be only one of many measures that the District has implemented and proposes to implement to control emissions from nearly every possible source category. The District has produced two comprehensive plans, one for ozone and one for PM10, that analyze current and future emissions, and lay out a strategy for emission reductions by a variety of controls and actions. For example, the ISR program is

one of more than 20 rules identified in the 2004 Extreme Ozone Attainment

Demonstration Plan.

The authors indicate that the ISR program attempts to ëburdení new development to pay for a regional problem. The ISR program only assesses and places requirements on the fair share of the emissions from new development to solve regional ozone and PM10 problems. Each project that would go through the ISR program would be responsible only for their own emissions.

In addition, the District has successfully and aggressively regulated existing sources of air pollution. Existing homeowners have contributed in the form of DMV surcharges to the tune $7 per year per vehicle, compliance with fireplace regulations, low-VOC architectural coatings, and smog check programs. New stationary sources must employ Best Available Control Technology and mitigate

their new emissions with offsets.

33. COMMENT: ISSUE #2 ñ THE COST OF THE PROPOSED RULES Two years into the rule-making process, the District still has failed to provide the public with a comprehensive estimate of the cost of the proposed Rules. Specifically, the socioeconomic analysis fails to address the cumulative impact on housing costs, on business costs, and on economic growth and job creating. The analysis discusses impact on only select segments of the business community, ignoring the full economic impacts of the rule. Our coalition has reviewed what information is available in the Districtís socioeconomic analysis and we were able to determine that the District will collect as much as $670 million in fees over the next five years.

RESPONSE: Concerning the adequacy of the Districtís analysis of economic impacts, please refer to Response to Comment #24 above. Concerning the ë$670 millioní in purported fees, please refer to Response to Comments #30 and

#34.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 33 34. COMMENT: Housing: The Districtís analysis shows the fees will average more than $1,700 on every home by 2008. Cumulatively, we estimated that the cost on all new housing projects in the eight county region will exceed $225 million over the next 5 years, assuming the current pace of housing permits. Thatís why the State Department of Housing and Community Development warned that these Rules will negatively impact housing affordability in our region.

RESPONSE: The author has misstated the facts provided in the Districtís analysis and in the Socioeconomic Analysis. The fee estimates of $1,700 per home and the various numbers sited for industrial and commercial projects represent maximum worst-case fees that may apply if the developers choose to employ no on-site controls. Even so, this amount was found to not have a significant impact on the housing market in the socioeconomic impact analysis. If the high rates of development continue, the air impacts from housing will also be greater than predicted, and so those funds will be needed to offset some of that increase. The District believes that nearly all projects will be able to reduce their fees with on-site-measures since local land use agencies currently require some of the measures and many developers incorporate them as standard practice. The District has published an extensive list of control measures that would reduce the applicable fees. The authorsí estimate assumes that all homes and industrial and projects will be built with no control features and is not realistic. In addition, the authors apply the worst-case fee to a higher, possibly unsustainable, rate of housing construction. The author then used this inflated fee amount and based the $670 million on a rough assumption of the ratio between housing and commercial/industrial development. The District finds this methodology of fee estimation to be inappropriate and inflated.

The District hired an independent consultant to perform a comprehensive socioeconomic analysis that assesses the economic impact of the proposed rule including any significant impact on housing affordability. This report concluded that rule would have a negligible impact on housing affordability.

35. COMMENT: New Business Developments: The Districtís own assessment estimates the level of likely fees on selected properties to be significant. By 2008 it will cost $397,483 in new fees to build a local community shopping center and $131,000 in new fees to build a neighborhood shopping center. These developments are typically home to mom and pop businesses, restaurants and small retail shops and these fees will be directly passed along to these small business owners (and ultimately their consumers and employees). The District also reports that as much as 2/3 of the total fees they plan to collect will come from non-residential projects. Since the Districtís figures show that the total fees on housing may exceed $225 million, itSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 34 is conceivable that the cost to businesses and non-residential developments will exceed $400 million.

RESPONSE: The fees are based on emissions generated by each project. If a commercial development generated emissions that resulted in a fee of $397,483, it would be a very large development or one composed of many small retail establishments. If it were comprised of many small businesses, each one would be responsible for a fair share of the impact and the fee.

The author falsely states that, ìthe Districtís figures show Öfees on housing may exceed $225 million.î The Districtís figures do not show that housing fees will be that high. See Response to Comment #34 above, which illustrates how the authors distorted facts to generate an inflated number. In fact, the Districtís analysis shows that the District may receive up to $103 million from all types of development subject to the rule between 2006 and 2008. The 2/3 ratio cited by the author was provided by the District as a rough estimate arrived at by subtracting residential development emissions from all development related emissions. The District used the emission reduction analysis (Appendix B) for fee income analysis since the emissions growth data from the state is well accepted for this purpose. See also Response to Comment #30 and #34.

36. COMMENT: Public Facilities: The Rules also apply to public and government facilities such as new schools, transit projects, government office buildings, fire houses, police stations and more ñ driving up the cost of public works projects and ultimately further burdening taxpayers with higher costs. The Districtís analysis is silent on these costs and their impact on local finances and fees.

RESPONSE: The District has drafted the rule to fairly allocate emissions among all indirect sources. Public uses are a substantial part of the growth in emissions that if not addressed here, would need to be addressed through other means. We agree that the cost of achieving air quality mandates could increase the cost of these facilities; however, we would expect most transit projects, fire houses, and police stations to be exempt since they would produce emissions below the two ton per year level. In addition, schools and government offices are well suited in many cases to incorporate features that enhance walking, bicycling and transit use and use low emission vehicles and equipment that could reduce the fees, possibly to zero.

37. COMMENT: ISSUE #3 – FLAWED SCIENCE Members of our coalition and others have repeatedly demonstrated that the methodology and modeling that the District staff is using to calculate indirect sources of emissions ñ and resulting fees and mitigations ñ are fundamentallySAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 35 flawed. These flaws result in grossly inflated fees and mitigation requirements. For instance, the URBEMIS model being used by the District (a computer program used to estimated emissions associated with land development projects), overstates vehicle emissions by over 70% (see public comments filed Sierra Research, July 22, 2005). No other air district in the nation uses URBEMIS to determine fees for vehicle emissions because, as the Districtís modeling consultant said, itís a ìsketch planningî tool, not an accurate gauge of the specific emissions resulting from an individual project.

RESPONSE: In context, the term sketch-planning tool did not imply that it is not an accurate gauge of specific emissions resulting from an individual project. In fact, URBEMIS is a proven statewide model used by other air districts, including South Coast and Sacramento Metro Air Districts, in assessing emissions from project-level developments. URBEMIS is commonly used for CEQA analysis, and is also used by other air districts to determine off-site mitigation fees. In addition, the Development Agreements entered into by the District and applicants relied on URBEMIS for emissions estimates. See Staff Report pages 19 through 22 for a detailed discussion on why URBEMIS is the best model for the purposes of the rule. See also Response to Comment #19 above.

The CBIA and its consultant, Sierra Research, have provided comments (See September 1, 2005 Comments #123 through #162 and above comments #18 through #29) about the adequacy or implied lack thereof of the URBEMIS model. However, the District has shown that the ëflawsí stated by the author are not

valid.

For example, the authors assert that the model overstates vehicle emissions by over 70%. The comments received by the District compared the URBEMIS model, which counts both ends of trips, to a regional impact model (admittedly inappropriate for project-level analysis- See Comment #19 above) that only accounts for one end of trips. The URBEMIS program does not overstate emissions, as asserted by the author, but accounts for emissions differently than a regional model. It should also be understood how the fee formulas work. Please see Figure 3 and 4 in Appendix B- Emission Reduction Analysis, which clearly show that half of the estimated baseline emissions are not assessed fees.

URBEMIS reflects the state of art in quantifying emissions from development projects. In fact, developers and local land use agencies routinely use URBEMIS to quantify project impacts during the CEQA process. The proposed rule allows for the use of other models that can better quantify emissions from various types of projects. The accuracy of URBEMIS will be further refined through the use of project-specific information in lieu of the otherwise applicable defaults. The authorsí claim may have merit if the District rule only allowed for the use of URBEMIS defaults and disallowed the use of project-specific information such as proper traffic counts and vehicle mix. This is not case.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 36 The District is part of a statewide working group that will continually work on refining and enhancing the accuracy of the URBEMIS model.

38. COMMENT: ISSUE #4 – DISTRICT’S OWN DOCUMENTS DEMONSTRATE

THAT FEES CANNOT BE AVOIDED THROUGH ON-SITE MITIGATION. District staff has continually and erroneously stated that if sponsors of new development satisfy the Districtís list of on-site mitigation measures, they wonít have to pay any fees. According to the Air Districtís own documents and comments by their own staff, this is simply not true.

Even the Districtís newly revised staff report demonstrates that new homebuilders and businesses likely cannot completely mitigate indirect source emissions on-site (see Draft staff report page 15, 11/17/05). Perhaps this is why, at a recent meeting before the Bakersfield Chamber of Commerce, District Deputy Executive Officer Seyed Sadredin admitted most projects will not be able to mitigate their estimated air impact on site and will likely have to pay all or most

of the fees.

Neither the text of the Rules nor the staff report provide useful guidance on how doing one or all of the proposed on-site mitigations will score against the proposed fees and it has provided no detail about the air quality benefits of each of the proposed mitigation measures. Accordingly, applicants have no way of determining how much on-site mitigation will reduce emissions or how it will reduce the fee theyíre obligated to pay.

Second, the Districtís proposed on-site mitigation checklist relies heavily on the existence of mass transit and other forms of transportation that donít exist to achieve emission reductions. Further, since there is no plan or realistic prospect of these necessary transportation projects being built in the near future, it is impossible for sponsors of development to comply with these types of on-site mitigations to avoid fees.

RESPONSE: The authorsí comments are incorrect. The District has not stated that simply enacting the measures on the on-site list would result in no fees. The District has stated, and has conducted internal analysis that verifies, that it is possible to incorporate enough measures to result in no fees. The page referenced to from Staff Report does not assert or state that homebuilders and businesses cannot completely mitigate emissions on-site. The Staff Report does demonstrate how a certain percentage of on-site reduction achieves a larger percentage of fee reduction. District staff is unsure how the author misinterpreted the Staff Report, as the text states, ìÖ the ìbigger bang for the buckî is achieved with as much on-site mitigation as possibleÖ..See Table 1 for examples (emphasis added) of on-site emission reductions and the associated

off-site fee reductionî.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 37 Concerning guidance on how the measures ìscoreî against the fees, and the air quality benefit associated with the measures, the authors should read page 11 of the Staff Report, which states, The measures listed in the checklist have a known quantification methodology in URBEMIS 8.7. The methodologies can be found in the URBEMIS User’s Guide, available at South Coast AQMD’s website http://www.aqmd.gov/ceqa/urbemis.html

. URBEMIS is a free, easy to use program that can be downloaded and used by the public, project applicants, public agency staff, and anyone else. See also September 1, 2005 Response to Comments #7 and #9. Applicants can easily see on their own how incorporation of measures reduces emissions through using the model (most simple projects take less than 1⁄2 hour), and can see how that reduces the fees by running the numbers through the fee formulas.

Finally, the checklist does not ërelyí on mass transit and other transportation for emission reductions, but provides a venue to credit emission reductions from those items. Project applicants are not required to ëcomplyí with the list, but fill in which measures apply to their project, and which measures do not.

The fees can be reduced significantly by employing the reasonable number of measures suggested by the District. We agree that it will be difficult to total eliminate the fees initially with the type of development that has historically occurred in the Valley.

On how to ëscoreí the emission reduction from the measures suggested by the District, all measures in the on-site lists have a quantification methodology in the URBEMIS model. These methodologies may be read in the URBEMIS Userís Guide. The measures do not have a straight ìcreditî associated with implementation, but a calculated reduction based on various parameters, which may include interaction with other selected measures, amount input, and other parameters. The District will provide a great deal of assistance to the applicants to properly quantify the emissions and the applicable credits for measures employed.

ISSUE 5 – DISTRICT HAS FAILED TO ADDRESS SOME BASIC – BUT IMPORTANT

– POLICY QUESTIONS RAISED THROUGHOUT THIS PROCESS The following represent just a few of the many very important policy concerns that the Air District has failed to address or respond to, despites these questions being raised for many months. Governing Board members should take great pause before voting on Rules without getting answers to these very serious questions and concerns.

39. COMMENT: District has not quantified fees for the full 5-year rule period: The socio-economic and cost/effectiveness analyses provide an incompleteSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 38 accounting of fees that the District expects to assess over the 5-year rule period. No information has been provided in either appendix on the cost to public facilities including schools, parks, and roads. No information has been provided in any appendix on the overall economic impact to the Central Valley.

RESPONSE: The fee schedule holds fees past 2008 at the 2008 level. The socioeconomic impact analysis and cost-effectiveness analysis only assess 2006-2008 because those are the amounts being proposed in the rule. If the rule is amended to change the fee amounts by a significant amount, it would result in the preparation of new analyses. If fees are held to the 2008 level, socio impacts would be the same as the 2008 level. For cost effectiveness, the District is confident that targets are feasible through 2008, but past 2008 would be too speculative.

The District disagrees that overall impact on the economy in the Central Valley is not adequately addressed. Since the impact on the development industry was not significant and fees will be recirculated into the regional economy, it is logical to conclude that the rule would not have a significant adverse impact on the regional economy. See also Response to Comment #24 above.

See Response to Comment #36 regarding public facilities.

40. COMMENT: Incomplete Spending Plan: Although Appendix E offers a spending program for the fees collected by Rule 9510, it falls short of what is acceptable. First, it covers only three of the five years of the rule period. Second, the revenue projects cover roughly one-sixth of the Ruleís potential revenue: $102 million vs. the potential $670 million in total fees that could be

collected.

RESPONSE: As stated above, the first three years have enough information to be adequately assessed.. Second, the $670 million stated by the authors is based on incorrect information and misinterpretations of rule requirements (see above Response to Comments #30 and #34). District analysis, using factual data, shows that the District may receive up to $103 million between 2005 and 2008 based on the availability of the fee deferral option and historic development

rates. The cost of reductions is more uncertain farther into the future. The District will reassess the cost of reductions prior to 2009 so that changes in regulations and the availability of new technologies can be taken into account.

The District has proposed a detailed plan in the staff report that will be considered by the Board at the December hearing. Additionally, as a part of the Districtís annual budget process, the plan will be reviewed and amended as necessary. The District will also provide routine reports on the quantity fees collected, projects funded, and emission reductions achieved per Rule 9510

Section 10.4.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 39 41. COMMENT: Unresolved fee estimation issues: As noted above, the URBEMIS model overstates project emissions by over 70%. The District has not committed to fix URBEMIS prior to Rule adoption and implementation. Unless resolved, Governing Board adoption will result in projects paying fees that are exaggerated by as much or more than 70% due to improper default values that do not reflect actual conditions in the Central Valley.

RESPONSE: As stated previously (Response to Comment #19), the ì70%î overestimation is simply not valid. Previous comments have pointed out refinements that should occur to some URBEMIS default values, such as the silt loading factor, and the District has committed to providing guidance prior to implementation and to update URBEMIS as soon as possible with the revised factors (see Response to Comments #19-22, #27-29, #37, and Staff Report pages 21-22). However, the statement that the model grossly overstates vehicle

emissions is not valid.

42. COMMENT: Unresolved CEQA conflicts: CEQA already requires mitigation of air quality impacts associated with new development, yet the District states that Rule 9510 is not duplicative and is completely independent of the CEQA process. However, the Districtís response to EPA concerns is that it is counting on local agency CEQA requirements to make on-site mitigation measures enforceable. The District has not explained how its Rule will interact with local agency CEQA actions to achieve this result.

RESPONSE: Currently, for measures that are required by a local agency, that agency includes them in CEQA documentation and is required to enforce those measures. The District recognizes this enforcement mechanism through CEQA for those measures that are required by the local agency. Therefore, although the project applicant is taking credit for emission reductions from measures required by lead agencies, the District will not have to enforce those measures independently. For measures that are not required by the local agency, the District will be responsible for enforcement. There are no new requirements on local agencies, and no additional ëinteractioní is required by the rules.

43. COMMENT: In closing, members of our coalition agree that improving the regionís air quality is an important goal and one that demands that everyone in the Central Valley play a role. Accordingly, the District has a duty to convince the public of the value of its new policy and to win their trust in carrying it out. Regrettably, the District has failed to demonstrate the value or benefit of the proposed Rules.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 40 Members of our coalition stand ready to work with the District on an alternative to proposed Rules 9510 and 3180 and towards achieving a more equitable, efficient and cost effective plan to reduce emissions.

In the meantime, we urge you to reject Rules 9510 and 3180 when theyíre brought before a vote of the Governing Board on December 15, 2005.

RESPONSE: Comment Noted.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 41 SUMMARY OF COMMENTS AND RESPONSES

ON THE SEPTEMBER DRAFT RULE SEPTEMBER 1, 2005

EPA : Date: September 20, 2005

1. COMMENT: We are providing comments based on our preliminary review of the draft rule identified above. In general, we are very supportive of the District's effort to reduce emissions from new development projects and we recognize that this effort raises unique challenges. Please direct any questions about our comments to me at (415) 947-4115 or to Lily Wong at (415) 947-4114.

RESPONSE: Comment Noted.

2. COMMENT: 1. Program Evaluations and the EIP This rule relies on market-based strategies to reduce emissions and, as a result, is subject to national guidance entitled, "Improving Air Quality with Economic Incentive Programs" (EIP), EPA-452/R-01-001, January 2001. Specifically, the DESIGN program has elements similar to Clean Air Investment Funds as described in chapter 9 of the guidance. As a result, the District's staff report should demonstrate that the program is consistent with the EIP guidance including, for example, provisions regarding environmental benefit, consistency with attainment/progress plans and automatic suspensions. Generally, we do not believe these demonstrations will be difficult to make. However, we believe the District should expand the scope of the annual program evaluation requirement (rule provision 10.4) to address elements identified in the EIP (sections 5.3(b) and (c)), including evaluation of the overall effects of the program, whether the Air Impact Mitigation Fees are appropriate based on the cost of reductions, and whether the program is achieving the projected emission reductions. The rule should also describe the procedures and criteria for the evaluations. Lastly, since the District will be responsible for obtaining emission reductions for off-site mitigation projects, the SIP submittal should include the District's commitment to rectify in a timely manner any shortfall in emission

reductions.

RESPONSE: The District disagrees that the rule is a market based strategy subject to EIP guidance. Indirect sources are not seeking to use incentive funding as a substitute for controlling emissions directly. Although it is not an EIP, the District intends to demonstrate that the program will provide environmental benefit and is consistent with all plans and rules. The appropriateSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 42 mechanism to ensure program performance is with annual reporting and corrective action to make up any shortfall. This can be accomplished by focusing funding on more cost-effective projects and would not require any special rule provision to accomplish. In the event that the rule did not achieve a milestone and altering the project mix was not successful, contingency measures are in place in the SIP to make up the shortfall while revisions to the rule are made or new rule(s) are adopted to correct the situation.

3. COMMENT: 2. Mitigation The District should ensure that on-site mitigation of emissions and off-site

emission reductions are enforceable.

RESPONSE: The on-site measures are voluntarily chosen by the developer and, when included as a mitigation measure in the local agency environmental document, are enforceable under the California Environmental Quality Act (CEQA). These types of measures have a relatively large amount of uncertainty, but are highly desirable due to their ability to permanently change trip generation and miles traveled. Therefore the District proposes to account for emission reductions accomplished onsite under Voluntary and Emerging Measures guidance. Projects funded with off-site fees will be under contract with the

District enforceable under contract law.

4. COMMENT: 3. Director's Discretion The rule (provisions 3.2, 3.5, 5.3) allows the use of an "APCO-approved model" to calculate emissions and emission reductions from development projects. To avoid inappropriate director's discretion, the rule should identify, by name and version, all models that may be used under this rule, or require that the model or model revisions be approved by the District and EPA.

RESPONSE: The rule has been revised to reflect that the District and EPA will approve models and model revisions used under the rule. Since all emission reduction calculations are accomplished using emission factors approved by the ARB and EPA and are consistent with the emission inventory factors, this should allow for quick implementation of model improvements that will be developed

over time.

5. COMMENT: 4. Surplus The rule should include provisions and mechanisms to ensure that emission reductions from on-site and off-site mitigation projects will be surplus to the requirements of the plan (e.g., reductions required by Rule 8061), and are not otherwise relied upon in the plan (e.g., part of the planning or growth assumptions in the plan). At a minimum, the rule should define "surplus" to include consideration of rule requirements and planning assumptions, and include provisions to prevent the double counting of emission reductions. We note, for example, that the May 19, 2005 PM-10 Plan (p. 4-45) lists a few specificSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 43 activities expected to provide emission reductions for this rule. However, the URBEMIS model allows credit for on-site mitigation measures not included onthis list such as fewer wood burning stoves, energy efficiency projects and offroad maintenance equipment. While the Plan may include assumptions regarding these emissions, the District should ensure that the rule achieves the emissions reductions that the Plan predicts for the rule and that mitigation measures do not result in double counting of emission reductions assumed elsewhere in the plan.

RESPONSE: The District will demonstrate that all offsite emission reduction projects submitted for credit are surplus in the documentation for each program developed to utilize the off-site funds. The Districtís Heavy Duty Engine Incentive Program is the prototype for how it will manage funding received from Rule 9510. This program has stringent criteria for determining if reductions remain surplus for the wide variety of projects. The District works closely with ARB in developing guidelines such as those adopted for the Carl Moyer Program. These guidelines pay particular attention to the issue of surplus reductions. New project types will undergo a similar rigorous process.

ARB : No comment received.

California State Department of Transportation : Date: September 8, 2005

6. COMMENT: The purpose of this letter is to comment on the proposed San Joaquin Valley Unified Air Pollution Control District (District) Rule 9510 (Decreasing Emissionsí Significant Impact from Growth and New Development) and the associated fees as stated in proposed rule 3180 (Administrative Fees for Air Impact Assessment Applications). When applied to the California Department of Transportationís (Department) construction sites, these rules attempt to regulate vehicular (mobile) emissions regardless of the Districtís lack of specific authority to regulate these emissions.

Both statutory and case law clearly establishes that ìlocal and regional authorities have the primary responsibility for control of air pollution other than vehicular sources.î (See California Health and Safety Code sections 39002, 40000, 43000 and 43013). The responsibility for regulating vehicle emissions belongs to the California Air Resources Board. The proposed District rules attempt to regulate mobile emissions from vehicles without statutory authority and therefore, it is our position that the proposed rules do not apply to vehicular emissions on Caltrans projects.

RESPONSE: Rule 9510 does not attempt to regulate emissions from vehicles. The rule would regulate the emissions resulting from the act of construction andSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 44 the emissions resulting from the act of operation. The distinction lies in the following:

• The rule does not set emission reduction requirements for individual engines or pieces of equipment

• The rule does not require retrofits, the use or purchase of certain pieces of equipment or prescribe any specific use of emission reduction technology

• The rule does not limit emissions through hours of operation or prescribe

certain activities that reduce emissions

• The rule does not require emission reductions to be achieved through the equipment or engines used.

Simply, an amount of reduction is required by the rule, which can be achieved through any on-site or off-site means that are quantifiable and meet the requirements of the rule. The rule does not set a fleet average, regulate engines or vehicles or otherwise delve into the realm of mobile emissions, which the District does not have authority to regulate. The District does, however, have the authority to regulate indirect sources per Health and Safety Code, Section

40716:

“(a) district may adopt and implement regulations to ... reduce or mitigate emissions from indirect and areawide sources of air pollution.”

The District has the authority to control indirect sources, defined in the Clean Air Act (CAA ß110(a)(5)(C)) as, ìÖ a facility, building, structure, installation, real property, road , or highway which attracts, or may attract, mobile sources of pollutionî(emphasis added). This authority comes from the CAA ß110(a)(5)(A)(i):

Any State may include in a State implementation plan ... any indirect source review program.

The Indirect Source Review Program that the District is proposing would review the emissions from that indirect source (the facility, building , installation, real property, road , etc.) that occur from the installation of that source (i.e. construction) and the operation of that source (i.e. area and mobile). For transportation projects, essentially road construction, the District would review only the construction emissions associated with that indirect source.

It is the Districtís position that the proposed rule is within the authority granted to the District by the federal Clean Air Act and the California Health and Safety

Code.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 45 California State Department of Housing and Community Development Date: September 15, 2005

The Department of Housing and Community Development (Department) has reviewed the Draft Rules as revised September 1, 2005 and continues to have significant concerns about their impact on housing development and costs in the San Joaquin Valley. Many of the concerns expressed in the Departmentís July 25, 2005 letter have not been addressed by subsequent revisions or by the Districtís responses to our comments, and are reiterated below.

7. COMMENT: 1. The on-site mitigation measures for residential development proposed by the Draft Rule 9510 duplicate the type of mitigation measures already required by the environmental review and mitigation process pursuant to CEQA or the local land-use permitting process. For example, requirements for transit measures, tree canopies, bike trails, etc., are already imposed by local governments during the existing local permitting process. This duplication is of particular concern if the projects cannot receive credit for such measures already incorporated in the project, or if the duplication were to result in most projects being charged fees for off-site mitigation programs. It is not evident that imposing the same type of mitigation requirements as those already imposed by State law (or sometimes federal as well) is necessary for the District to execute its powers as required by Health and Safety Code Section 70727 (b)(5).

Recommendation: Clarify that projects will receive mitigation credits for on-site mitigation measures approved or required by the local government’s permitting

process.

RESPONSE: It is the Districtís intent that all quantifiable on-site measures that reduce a projectís emissions be given credit in the ISR program. The District does not require the applicant to implement any of the measure listed, but requires the applicant to identify which measures will and wonít be implemented. The applicant is required to identify measures that are a requirement of another agency so that the District can identify which selected measures will need District enforcement, and which measures will be enforced by another public agency. The measures listed in Appendix C have a known quantification within the URBEMIS model. Measures selected will be credited to the project. The District will amend the rule language and staff report to reflect this.

8. COMMENT: 2. Draft Rule 9510 will lengthen and complicate permit-processing times for new homes in a manner inconsistent with the Permit Streamlining Act, which is applicable to all public agencies ( Chapter 4.5 of the Government Code, commencing with Section 65920) . Draft Rule 9510 does not meet the consistency standard of Health and Safety Code Section 40727 (b)(4)).SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 46 • Section 8.1 of Draft Rule 9510 has been revised to require the District to determine the completeness of Air Impact Assessment (AIA) applications in ten days instead of thirty. It is unclear whether this changes will result in a practical benefit, however, as the Draft Rule does not include a mechanism for facilitating concurrent review between the District and local planning agencies. Sections 5.0 and 8.2 suggest the District is cognizant of the need to coordinate with local agencies, but does not specify the timing and nature of the coordination. Without concurrent review, developers who are required to, or elect to, alter a project may be required to resubmit plans to the local planning agency for additional discretionary review. Such outcomes would have additional and redundant cost implications for permit processing. Further, projects which would otherwise be subject to ministerial permit processing only, should not be subjected to discretionary review because of

the Draft Rules.

• Draft rule 9510, Section 8.8, proposes the District should have 90 days to take final action on an AIA application. Consequently, absent a concurrent review, process time could now take an additional 90 days. In some cases, Draft Rule 9510 thus has the potential to double existing processing times.

Recommendation: Revise draft Rule to include a mechanism or process for concurrent review by the District and local planning agencies to avoid impacts on local government. The Rule should not directly, or indirectly, prompt local governments to assess yet additional fees for responsibilities which may fall on them in implementing the District’s Rule.

RESPONSE : Draft Rule language will be revised to make application submittal for ISR concurrent with local agency processes. Specifically, applications must not be submitted after application for a final discretionary permit in the San Joaquin Valley Air Basin, and may be submitted prior to that time. The rule will not place requirements upon the public agency for review or implementation of the ISR process. The public agency review (ß 8.2) has been revised to a voluntary review. The District will be coordinating review with the public agency through: 1. Making the ISR process concurrent with or prior to the public agency process; 2. Forwarding a copy of the AIA application (upon determination of completeness), a copy of the AIA approval package (upon approval), and a letter of Final Compliance to the public agency for voluntary review and commenting; 3. Communicating with the public agency when necessary during the application review process; and 4. Providing a letter of project status to the public agency upon request.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 47 It should be noted that this rule will not apply to ministerial projects, nor will it prompt ministerial projects into becoming discretionary projects. That determination is made by the local land use authority.

9. COMMENT: 3. There is insufficient information or clarity in the Draft Rules regarding not only permit processing coordination, but also quantification and cost of mitigation measures. According to Health and Safety Code Section 40727 (b)(3), a rule or regulation adopted by a District board should be ìÖeasily understood by the persons directly affected by it.î Neither the Draft Rules, the Appendices, nor the Draft Staff Report describes the methodology the District will use to determine the number or value of mitigation credits to be associated with the various mitigation measures. Other aspects of the Draft Rules warranting clarification include, but are not limited to: Ö. (District - see Comments 10 through 13 below)

Recommendation: Revise Draft Rule 9510 to include a detailed description and analysis of the methodology the District will use to determine the number or value of mitigation credits to be associated with various mitigation measures. Clarify the items noted above in Draft Rules 9510 and 3180.

RESPONSE : The District will clarify the staff report to address how emission reductions from measures will be assessed. All measures within Appendix C have a quantification methodology in the URBEMIS model. These methodologies may be read in the URBEMIS Userís Guide, available at South Coast Air Quality Management Districtís website http://www.aqmd.gov/ceqa/urbemis.html , and will be made available at the Districtís website. The measures do not have a straight ìcreditî associated with implementation, but a calculated reduction based on various parameters, which may include interaction with other selected measures, amount input, and other parameters.

10. COMMENT: Draft Rule 9510, Section 5.5 ñ Mitigation and Monitoring Report Program: The Draft Rule should specify if the applicant or the District is responsible for preparing this document.

RESPONSE: The rule language will be revised to reflect the following: The applicant is responsible for preparing a proposed document. The District will provide the format and recommended keys for the document. The District will then work with the applicant to finalize the document prior to approval. It should be noted that this will only apply to measures selected by the applicant that do not have another enforcement mechanism, such as being a requirement by another public agency.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 48 11. COMMENT: Draft Rule 9510, Section 8.5 ñ Air Impact Mitigation Fee Estimate Acceptance: What amount of time does the developer have to respond to the estimate provided by the District?

RESPONSE: The draft Rule will be revised to reflect the following Unless the applicant has proposed a Fee Deferral Schedule (FDS) prior to AIA approval, the applicant must pay the fee within 60 days, or may propose a FDS within 15 days of receiving the fee invoice. If the applicant proposes a FDS within the allowed timeframe, the District then has up to 15 days to finalize the FDS with the applicant.

12. COMMENT: Draft Rule 9510, Section 10.2.3 ñ Administration of the Mitigation Funds: what, if any, limits are there on the duration of the contract between the developer and the District?

RESPONSE: A distinction must be drawn between the ISR applicant, and an applicant for the funds. Section 10.2.3 discusses the process between the District and the applicant for funds. The duration of the contract will vary depending on the project. Some contracts will be completed upon installation, while others may require reporting for 5 years. For example, a road-paving project would have a contract that is completed upon installation, whereas an engine contract typically contains a 5-year reporting requirement. The staff report will be amended to include this information.

13. COMMENT: Draft Rule 3180, Section 4.2 ñ Application Processing Time Log: How long does the District have to respond to a developerís request for a copy of the Log?

RESPONSE: The District uses an automated Labor Information System (LIS) to track project time by all staff working on a project. This allows the District to easily prepare the time log within a short timeframe. The District standard for this type of request is 10 days. The District will amend Draft Rule 3180, Section 4.2 to state the District has up to 10 days to provide the information.

14. COMMENT: 4. The direct and indirect costs imposed by the Draft Rule on the residential development process will result increased housing costs. The rationale for these increased costs as required by the Health and Safety Code Section 40728.5 are not adequately identified nor justified by the complete analysis.

The Department commends the Districtís decision to reinstate the exemption for housing projects directly assisted by federal, State, or local housing funds. Assisted projects, however, only account for a small percentage of the San Joaquin Valleyís workforce housing stock. The majority of new lower- and moderate-income residents will occupy market-rate units. Increases inSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 49 construction costs resulting from the Draft Rules will ultimately be passed on to these residents in the form of higher rents and home prices.

Yet, as indicated below, the Executive Summary of the socioeconomic assessment the District prepared pursuant to the Health and Safety Code Section 40728.5 concludes that increases in the construction and housing costs are irrelevant because lower-income residents are already overpaying for housing and are thus dependent on public subsidies:

The analysis demonstrates that, even before the imposition of an air quality fee(s), most low-income (and) households in the Central Valley are priced out of newly constructed multifamily unit market, the rents for which need to be at levels that account for the price of land, development cost, developer fees, and an adequate level of profit, among other things. The analysis discusses how public subsidies can assist in enhancing the financial feasibility of a real estate project in which a certain portion of units are set-aside as below-market rental

units (San Joaquin Valley Unified Air Pollution Control District. Socioeconomic Analysis Proposed Indirect Source Rule: Draft Rules 9510 and 3180. 24 August 2005.p.1.)

The demand for assisted housing far exceeds available resources of all levels of government. The District should not assume that higher rents and home prices can be solely addressed by government subsidies. Furthermore, higher housing prices are problematic because the affordability gap widens, forcing more San Joaquin Valley residents to overpay for housing and/or live in overcrowded conditions. Additional regulatory barriers that increase the cost of housing supply must be restructured and their benefit should exceed their cost impacts.

The Department also notes that the socioeconomic assessment does not address the impact of the Draft Rules on small business or analyze the availability or cost-effectiveness of alternatives, as required by Health and Safety Code Section 40728.5(b)(1), (b)(3), and (b)(4). For example, Part 6 (p. 26-32) includes generic information about impacts on single-family and multifamily homebuilders, but does not specify impacts on small homebuilders.

Recommendation: Revise the socioeconomic assessment to include: 1) a more thorough analysis of the impact of the Draft Rules on the economy of the San Joaquin Valley, including the number of consumers who will be overpaying for housing; 2) the impact of the Draft Rules on small residential developers; and 3)

alternatives to the Draft Rules.

RESPONSE: The Socioeconomic Analysis will be amended to include analysis on the ruleís impact on small businesses. In addition, the analysis does not discuss alternatives because there are no identified alternatives to adoption of

the ISR rules.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 50 Although the Socioeconomic Analysis does discuss the role of public subsidies, the Districtís conclusion is not that low-income housing impacts are irrelevant due to public subsidies. The Socioeconomic Analysis discusses public subsidies to show the options and availability of what subsidies exist. The conclusion of the Socioeconomic Analysis is that the impacts on housing costs (both to the developer and the buyer/renter) are less than significant. The Districtís conclusion is similar to how some pollutant thresholds of significance are set. For example, the District is in non-attainment for ozone and PM10. It could be argued that because the air is bad already, any increase is contributing to nonattainment and therefore is significant. However, the District finds it impractical and unwarranted to force every project that emits any amount of the applicable pollutants into the ësignificantí category. Therefore, the District determines significance for PM10 and ozone precursors against a threshold that aims to truly differentiate between less-than-significant and significant impacts. Similarly, the Socioeconomic Analysis states on page 37:

For the most part, rents that low-income households should pay are substantially below the rents that the typical new multi-family units construction in the region should command, even before the imposition of the air fee.

That is to say, the market is such that low-income households are already priced out of most new dwelling units. Any increase in housing costs, regardless of origin, will exacerbate this disparity. However, the analysis shows that the potential increase in mortgage is, ì a small fraction of the original household income required to finance a new home in the event no air quality fees were in place ,î and the potential increase in rents are, ì similarly small .î (p.1)

15. COMMENT: 5. Draft Rule 9510 would impose mitigation fees without adequately establishing a nexus. The Draft Staff Report and Summary of Comments and Responses from the June 30, 2005 public workshop do not adequately support the nexus between the expenditure of mitigation fees and the location of indirect sources. For example, while NOx occurs throughout the District, the impact of other pollutants, such as PM10, is more localized.

Recommendation: Clarify the nexus between PM10 and the expenditure of mitigation fees.

RESPONSE: The District has prepared documentation included in the staff report for the rule that provides the information necessary to demonstrate a nexus between project impacts and the off-site fee. See Response to Comment #125 for the findings of the Districtís legal counselís analysis of nexus requirements.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 51 16. COMMENT: In summary, the Draft Rules do not appear to comply with the ìclarityî, ìconsistency,î and ìnonduplicationî requirements set forth in Health and Safety Code Section 40727(b). Than you for the opportunity to submit additional comments. Given the magnitude of the concerns identified in this letter, the Department recommends that the District not adopt Draft Rules 9510 and 3180 as drafted and continue to work with all interested parties on needed revision.

RESPONSE: The District disagrees that Rule 9510 conflicts with H&S 40727(b). The District prepared a consistency analysis that is provided as Appendix G to the Staff Report. The rule is being revised to improve clarity of the requirements and will provide detailed rule implementation guidance prior to implementation and typically uses compliance assistance bulletins when issues arise after implementation. The rule does not duplicate other requirements on indirect and areawide sources. Emissions estimates used in the rule account for existing controls on vehicles and equipment. The rule requires a reduction of a portion of the remaining emissions after control. Because of the Valleyís rapid growth, a substantial portion of benefit of the controls is offset; hence the need for additional emission reductions to reach attainment by deadlines mandated for the Districtís PM10 and ozone plans.

Local Public Agencies :

City of Hanford Date: September 23, 2005

17. COMMENT: I applaud your efforts to continue to evaluate methods to improve the air quality in the valley. However, I would request that the San Joaquin Valley Unified Air Pollution Control District take the time to further study Draft

Rule 9510 and Draft Rule 3180.

RESPONSE: This rule has been under development for more than two years. The District has had three rounds of workshops, focus groups, stakeholder meetings and other outreach. We believe that the rule development process has been adequate.

18. COMMENT: On behalf of the City of Hanford, I would ask that you slow down the process and identify specific steps and programs that will be implemented to reduce air pollution; include additional input from representative agencies and clearly identify how the funds collected will actually improve air quality in the valley.

RESPONSE: See the Staff Report for more information on how the rule works to reduce emissions through on and off-site measures and how the District will use funds received as a result of Rule 9510 and Rule 3180. In addition,SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 52 Appendix E (Cost Effectiveness Analysis for Rule 9510) for details on the exercise that the District has completed to ensure that: 1. The emission reduction projects exist in a quantity to provide the reductions necessary, and 2. Those projects exist at a cost-effectiveness that can achieve the schedule

listed in the rule in Section 7.2.1 and 7.2.2.

19. COMMENT: The incompatibility of the proposed regulations regarding the CEQA requirements poses additional concerns.

RESPONSE: The District believes that Rule 9510 is fully compatible with CEQA requirements. The rule provides a new opportunity to provide consistent air quality analysis and emission reductions on a Valley-wide basis. See Response to Comments #8.

20. COMMENT: Restraint must be used in determining actions that would have a significant impact on our residents, the business community and our local governments. Specifically, there must be a nexus for the feeís charged and the specific identification on how the generated funds would be used to remedy the problem which exists.

RESPONSE: The District has designed the rule to address only a fair share of the impacts caused by new development. We are confident that the rule will mitigate emissions in direct proportion to the impact caused by the project in keeping with nexus standards. The key to meeting the nexus is that impact will

be estimated with best available tools and emission reductions obtained to offset the impact will be quantified with best available factors and methods. See also Response to Comment #125.

Council of Fresno County Governments (Fresno COG) Date: September 9, 2005

At the request of our Transportation Technical Committee (TTC), the Council of Fresno County Government (Fresno COG) is submitting this letter regarding the Air Districtís DESIGN (Decreasing Emissionsí Significant Impact from Growth and New development) program. The most recent draft of the DESIGN program was discussed by Fresno COG staff and TTC members at the September 7, 2005 meeting. Many of our member jurisdictions have significant concerns over the proposed rule and requested that we submit the following comments.

21. COMMENT: Inadequate Notice and Review Time In some cases, Fresno COG and our member agencies received only a one-day notice for the September 1, 2005 workshop. This late notice prevented several agencies from attending on that day. On several calls with the Air District last month, Fresno COG staff indicated the need for improved communication andSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 53 coordination. This continues to be a concern, as the current rule development schedule allows only two weeks to review and comment on the draft rule.

RESPONSE: The District has a list serve for the rule that enables all interested parties to receive immediate notice of workshops and document availability. The District accepts comments up to and including the Governing Board hearing, allowing for more than a month of additional review time should it be needed.

22. COMMENT: Transportation Projects Subject to the Rule The short review time is especially troubling given the recent addition of transportation projects (with construction emissions greater than 2 tons per year) as subject to the DESIGN rule. Fresno COG and our local agencies are unclear how this will impact the project approval process and need additional time and information to assess the impacts.

RESPONSE: The rule does not impact the project approval process since the District has no discretion over those projects. The rule just provides a mechanism to enable the agencies to reduce the impacts of project construction. See also the Staff report.

23 COMMENT: Demonstrate the Air Quality Benefits Fresno COG requests that the Air District clarify how this rule will improve air quality. Please provide additional analysis of the air quality improvements and examples of how the revenue will be used.

RESPONSE: The Staff Report contains analysis that quantifies the projected air quality benefits of the rule. Additional details regarding the potential projects funded by the rule are included in the revised Appendix E. See also Response to

Comment #18 on the use of off-site funds.

24. COMMENT: Improve Response to Comments As noted by several commenters at the September 1 st workshop and by our member agencies at our committee meeting, Fresno COG also requests that the District develop and adequate process to address comments received. The ìResponse to Commentsî distributed at the workshop was organized by category, rather than submitting agency; this made it time-consuming to locate and review specific Reponses. In several cases, our local jurisdictions indicated that comments were not addressed and needed to be given sufficient consideration by

Air District staff.

RESPONSE: The District has modified the Response to Comment format to

address this concern. The District feels that the current format will allow commenters to find their specific comments and the associated responses.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 54 25. COMMENT: Identify Rule Changes Please provide a document on the Air District website that identifies and tracks changes made from previous drafts of the rule. This has been the practice with other rule modifications and is essential to reviewing and commenting on this

document.

RESPONSE: The changes to the draft from this round of comments will be

made in strikeout/underline format.

Fresno County, Department of Public Works and Planning Date: September 15, 2005

26. COMMENT: We are concerned with the language of the rules as it relates to transportation projects. Should 2.2 say ìtwo (2.0) tonsî per year ìof NOx and PM10 combined.î, based on similar language in 2.3.4 and 4.2

However, looking more closely, these three are not identical in that:

• 2.2 says ìNOx and PM10 combinedî

• 2.3.3 says ìNOx and PM10î

• 4.2 says ìNOx and PM10 eachî

If there is a specific reason for the differences, can you explain?

RESPONSE: Since construction emissions occur during a specific period, the emissions are based on the total during the construction period. For example, if a project emits 3 tons of combined emissions during a six month construction period, that amount is subject to the 20% NOx and 45% PM10 emission reduction requirement. If a project emits the same 3 tons of emissions over two years, the calculation is also based on the entire construction project.

Section 2.2 refers to construction NOx and PM10, which is based off of 2 tons of NOx and PM10 total tons combined. The District will revise the rule language to clarify that construction pollutants are total tons combined, and operational pollutants are tons per year non-combined. Section 2.3.2 will be revised to state

ìNOx or PM10î and be specific to operational emissions.

27. COMMENT: Also, please look at 8.8. Under it you have 8.7.3, but should that actually be 8.8.4?

RESPONSE: The section will be renumbered as noted.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 55 Kern County Planning Department Date: July 22, 2005

The Kern County Planning Department appreciates the opportunity to comment on Draft Rule 9510 and Rule 3180 which are being implemented to assist the Districtís attainment goals for State and Federal standards for ozone and PM10. The stated purpose of Rule 9510 is to provide a mechanism for development to mitigate construction, direct and indirect emissions from their projects through design features, on-site and off-site measures. Rule 3180 will provide for payment of the Districtís staff cost to implement the new rule.

As our comments have consistently stated, the DESIGN Rule, while using the language of CEQA (Significant Impact) avoids all relationship to CEQA and simply defers any questions to a later time after Rule Development is complete. The following is a preliminary list of questions, comments and concerns regarding this matter.

28. COMMENT: What is the basis for the exemption of projects that have mitigated baseline below two tons per year for each pollutant from the Rule? Is this basis evidence that 10 projects in the same area producing less then two tons per year each are not cumulatively considerable under CEQA?

RESPONSE: The District has made changes to the project submittal timing in the rule to ensure that the air analysis conducted can also be used to support the CEQA process for the local agencies discretionary approval.

The rule is designed to reduce the impact of the project to the extent needed for

the District to reach attainment of ozone and PM10 standards. The District calculated the level of reduction needed on a per-project basis that would

achieve the emission reduction committed to in the PM10 and ozone attainment plans. The rule sets levels that are in compliance with state law regarding indirect source regulations and are feasible to achieve. Based on the Districtís analysis, projectís with emissions below two tons per year of operational NOx and PM10 were not required to reduce emissions to achieve the emission reduction required by the Districtís plans for attainment.

29. COMMENT: Why are only NOx and PM10 being addressed when CEQA requires all pollutants to be quantified and mitigated to the extent they exceed

thresholds?

RESPONSE: The ISR programís primary purpose is to meet attainment plan requirements not as a CEQA compliance method; however, we believe that reducing one precursor, NOx, will reduce the cumulative impact on ozone from new development to less than significant levels.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 56 It is not the Districtís intent to reduce the impacts of all pollutants in the valley through this rule. The rules are the result of the Districtís PM10 and Ozone Attainment Plans, as they identified the need to reduce directly emitted PM10

and NOx in order to reach the standards on schedule. Sufficient ROG was obtained from other control measures to enable the District to predict attainment without additional ROG control. Therefore, the rule was able to focus on those two pollutants and can make the case that ROG from predicted growth from new development will not impact the attainment strategy.

30. COMMENT: The District has an established threshold in the GAMAQI of 10 tons of ROG yet no provision for mitigation in the DESIGN rule. Why?

RESPONSE: See Response to Comment #29 above. The GAMAQI is the Districtís Guide for Assessing and Mitigating Air Quality Impacts, specifically written to help lead agencies, as identified in CEQA, address CEQA for air quality impacts and may be revised to reflect changes that are appropriate.

31. COMMENT: Section 6.2 requires mitigation of only apportion of the projectís emissions (1/3 of the projectís first-year area source and operational baseline NOx emissions over a period of ten years) and then states that it ìrepresents

cumulative emissionsÖî. The use of the term ìcumulativeî should be deleted and replaced by another term to explain the Districts intention. An interpretation of the phrase ìcumulative emissionsî in a CEQA document, under current case law interpretation, does not include such a reduction as proposed by the District. This disconnect will lead to confusion and legal challenges of CEQA documents.

RESPONSE: The District believes that the term ìcumulativeî best describes the emissions being reduced by the rule. The NOx emissions are declining over time, so a project that reduces emissions to the extent described by the fee formula will be mitigating its cumulative impact. See also Response to Comment

#28.

32. COMMENT: The District is the authority that provides guidance and direction for local government on air assessments for CEQA and has been recognized as such by the Courts. If the District has sufficient basis for establishment of this Rule with reductions in required emissions to be mitigated on ì the concept that annual NOx emission from motor vehicles declines 50% over ten years.î, then the District should include in this Rule making, clear direction from the Governing Board to amend the GAMAQI, through a Public Hearing process, to formally adopt this approach in Air Quality Assessment methodology for CEQA documents. This process, which would necessarily include the fact basis for the adoption of this standard, would provide clear direction for the connection of this Rule to CEQA and provide support of the Lead Agency in current challenges to Air Assessment methodology in CEQA documents.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 57 RESPONSE: The primary purpose of the rule is to help the District meet its attainment plan commitments. The rule provides for emission reductions in a framework that provides strong assurance that reductions will be real, surplus, quantifiable, and permanent and therefore should strengthen environmental documents that rely on reductions to reduce significant air impacts. The Districtís GAMAQI is formally adopted by the Governing Board at a public hearing. Any revisions will also go through a public review process with a workshop and Governing Board hearing. See also Response to Comment #28.

33. COMMENT: The staff report states on Page 11 that ìThe current concept is that Rule 9510 will mitigate the cumulative impacts of anticipated growth since the reductions attributed to this program was identified in two attainment plans as necessary to achieve the applicable standards.î Yet the next sentence weakly states that ìThe District may (emphasis added) revise the GAMAQI to define the exact role that Rule 9510 will have in the CEQA process, prior to adoption of this program.î Please clarify why the District is not committed to amending the GAMAQI to clearly provide relief for local government in CEQA litigation in a matter, air impacts, for which the District is the recognized expert.

RESPONSE: The District is committed to providing guidance through the GAMAQI that accurately reflects the impacts of all adopted District rules and regulations on air quality.See also Response to Comment #28 and #31.

September 1, 2005 Workshop – Verbal Comments

Bakersfield

Dr. Adrian Moore – Reason Foundation

34. COMMENT: There is a lack of a causal link between new uses and an increase in emissions from new trips. If it is automobiles that are causing the pollution that the rule is targeting, then the District should be going after automobiles.

RESPONSE: There are more than twenty years of CEQA documents that have consistently found that new development has a significant impact on air quality. New development is constructed to accommodate growth. Prior to development of green field areas there are no trips and no construction emissions at the project site. The argument that some trips are displaced from another existing use are not valid except in the short term. When people move to a new house, someone can be expected to move into the existing home and replace the trips the old homeowner was making. When commercial uses open in a new growth area, they may temporarily divert trips from existing commercial uses, but in a growing area the most important factor is an expanding market area. When the community adds enough residents to support another like commercial use, theSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 58 trips will be drawn from the area farthest from the existing use to the new use, and overall the number of trips is increasing.

35. COMMENT: The sources listed in the Districtís staff report are not published or peer-reviewed. Specifically, Dr. Holtzclawís study is not published.

RESPONSE: The Holtzclaw study provides analysis of VMT differences in areas with different levels of pedestrian and transit accessibility in California. The study has been available for all who wish to review it. In addition, the study has been referenced by other researches numerous times in peer-reviewed journals.

36. COMMENT: Additionally, the benefits from design identified in the staff report are likely the result of self-selection and not an actual shift in modal choices based on design. Therefore the reductions from the increase in the on-site measures implemented will not materialize from implementation of this rule.

RESPONSE: The authorís comment is based on a false assumption that there are no people in the San Joaquin Valley that would choose different development designs if they were available. The District maintains that trip making behavior would change if onsite design measures were widely implemented. The causal link between new development and vehicle emissionshas been well documented and is generally accepted. The issue of selfselection v. modal shift in development with ësmart growthí, ëtransit-orientedí or ëpedestrian-orientedí design has not been resolved. It is known that there is a real, verifiable correlation between land use design and vehicle use. Studies show that well-designed development that considers pedestrian, bicycling and transit generates less emissions than totally automobile oriented design.

The District recognizes that there is always uncertainty when predicting individual travel behavior. For this reason, the District proposes to submit reductions claimed for onsite measures as a voluntary and emerging measure that allows for this type of uncertainty in order to promote innovation.

37. COMMENT: If it is automobiles that are causing the pollution that the rule is targeting, then the District should be going after automobiles.

RESPONSE: State and federal controls on motor vehicles are not sufficient for the District to attain federal air quality standards within mandated timeframes. The District has authority to seek additional reduction from indirect and areawide sources to close the gap. Stationary sources must provide offsets to further reduce emissions beyond what is feasible onsite. Indirect source rules operate under a similar concept. See also Response to Comment #6.

38. COMMENT: Reducing trips doesnít create large reductions relative to increasingly clean vehicles, regardless of increasing VMTSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 59 RESPONSE: The heart of the problem is that although vehicles are increasingly clean, increases in travel and VMT are offsetting a substantial portion of the benefit, hence the need for an indirect source review rule.

39. COMMENT: The housing impact is not near accurate because the market could be in a bubble right now. The Socioeconomic Impact Analysis should use quintiles instead of an average; you would find a huge impact on low incomes with that methodology.

RESPONSE: First, the impact on housing stated in the Socioeconomic Analysis was based on the number of housing units used by the District, which were based on the state population forecasts. If the growth rate exceeds the projection, the impacts will be greater and so will the need for emission reductions. Also, a greater number of units subject to the rule would have no added impact on individual development projects. Second, the use of an average is appropriate because the impact of the fee filters out over time, so the effect, such as an increase in rent, isnít immediate. See also Response to

Comment #49.

Arthur Unger – Kern-Kaweah Chapter of the Sierra Club

40. COMMENT: The studies in the Districtís materials regarding differences in trip generation from different types of development are published.

RESPONSE: Comment Noted.

41. COMMENT: Concerning the information provided in the Socioeconomic Impact Report ñ the prices of housing in the Valley are a result of supply and demand, not necessarily resultant from fees that are assessed.

RESPONSE: The Socioeconomic Analysis supports the authorís comment. The report states, ìit is apparent that larger market forces are the primary culprit behind the increases in housing pricesÖî

Carla Waleka – Construction Industry Air Quality Coalition

42. COMMENT: The Construction Industry Air Quality Coalition would like to see the construction calculator and know the assumptions and inputs.

RESPONSE: The calculations used in the rule were done using URBEMIS construction module. The construction calculator used by SMAQMD is proposed as a model for development of a San Joaquin Valley version. We are now proposing to continue using URBEMIS with the option for developers to use a construction calculator if approved by the APCO.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 60 Renee Nelson – Clean Water and Air Matter, Bakersfield

43. COMMENT: The process laid out by the District does not comply with CEQA. The process will allow for negotiations with applicants behind closed doors with no option for public input, which is required under CEQA. In addition, CEQA states that mitigation canít be differed until later. The District also put forth a comment that CEQA timelines vary with jurisdiction, which is untrue.

RESPONSE: The ISR program does not involve discretionary approval of development projects, and therefore is not subject to CEQA. We expect local agencies to use the air analysis accomplished for the rule and o-site emission reduction measures agreed to by the applicant and the local agency to reduce air impacts in their CEQA process. If a citizen has an issue with the approval of a project due to air quality impacts they will have the same options that are currently available to them to challenge the project and the validity of the analysis used to support the decision made by the local council or board. See also Response to Comments #8 and #28.

44. COMMENT: This program must be aligned with CEQA and should not allow changes to a project behind closed doors.

RESPONSE: The rule is being revised to change the application timeframe to be concurrent with the local agency CEQA process. District has no authority to require applicants to include on-site emission reduction measures. We have traditionally worked with applicants to help them identify changes to the project that would reduce air impacts as early in the development process as possible and will continue this effort. The rule requirement is for the applicant to fill out the on-site emission reduction checklist; however, it does not prescribe a

minimum or maximum number of measures that should be checked. The responses on the checklist are solely up to the applicant. The land-use decision making authority is with the local land use authority, not the District. The AIA information will be made available to the public. See also Response to

Comments #8 and #29.

45. COMMENT: Does the ISR program apply to agricultural projects?

RESPONSE: The District believes the applicability section and the definition of a development project effectively exclude agricultural projects.

46. COMMENT: Will the ISR apply to waste-hauling projects?SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 61 RESPONSE: Hauling projects are not specifically stated as a project in the rule. ISR projects are land-use based, triggered by a discretionary permit in combination with new construction or increased use that generates construction

and/or area and mobile emissions that exceed the ISR threshold. If a land use requires a discretionary permit, and meets or exceeds the applicability threshold, then the emissions from hauling would be subject to the rule. However, if the project is hauling operations alone then it would not be subject to the rule.

47. COMMENT: Where will mitigation funds be used in relation to the project

assessed the fees?

RESPONSE: The funds will be spent within an area based on the type of pollutant. NOx is a regional pollutant, but every attempt will be made to fund projects in the vicinity of the project site. PM10 is a more localized pollutant, and PM10 funds would be spent closer to the project assessed the fees.

Brian Todd, BIA and Business, Industry and Government (BIG)

48. COMMENT: The District needs to tell the public about how much more fees will

be in the Bakersfield area due to the need for additional PM10 reductions.

RESPONSE: The additional PM10 reductions cited by the commenter is the 1- ton per day by 2010 needed in the Bakersfield Metropolitan area. This rule does not address that reduction. ISR program fees are tonnage based and do not adjust by location. The 1-ton needed in Bakersfield is being addressed through a PM10 task force. Voluntary mitigation agreements in the area may be used to the extent that they mitigate beyond the requirements of Rule 9510.

49. COMMENT: The dynamic driving prices for housing in small and medium cities stated in the presentation is due to school fees. The ISR fees will exacerbate this problem. In addition, the housing market may be a bubble. Basing the fee on housing bubble numbers is a flawed methodology because the market is unstable, and the fee revenue depends on the number of houses.

RESPONSE: The District fees were not based on the number of housing units going in. The fees were based on the amount required to offset emissions, and is purely emission based. The expected fee revenue and future impacts are estimated from the forecasted population data from the state and the emissions from growth in residential and non-residential development.

It is important to note that the District will only be collecting fees to reduce as in there is development creating emissions to reduce. If the number of houses decrease (bubble burst), the District would have fewer emissions to reduce; therefore, the same fee brings the appropriate amount to reduce those emissions (less revenue). If the number of houses increases, the District wouldSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 62 have more emissions to reduce; therefore, the same fee brings the appropriate amount to reduce those emissions (more revenue).

Heather Ellison

50. COMMENT: What is the meaning of ërecreational spaceí and ëunidentified spaceí in the rule?

RESPONSE: Rule 9510 ß13.7 defines recreational space for recreational uses such as soccer fields. Unidentified is a catchall category to indicate that other land use categories not listed are still subject to the rule if they generate emissions and are not otherwise exempt.

Mike Kelly – Western State Petroleum, Vector Environmental

51. COMMENT: Previous comments to the District were not adequately addressed in the previous response to comments. The law states that the District can regulate the increase in emissions. There is a concern that the Rule will trigger review of those discretionary permits that donít result in an increase in vehicle traffic, such as certain Conditional Use Permits (CUPs).

RESPONSE: The District typically consolidates similar comments and provides a single response. The District will consider providing individualized responses on a case-by-case basis.

The Rule applies to the increase in emissions resulting from land-uses changes that require a discretionary permit. Therefore, if project requires a discretionary permit, but does not result in an increase in emissions that meet the applicability threshold, then it would not be subject to the Rule. However, if the CUP allows for an increase in indirect or area source emissions or new construction activity that generates emissions, it would be subject to the rule if not specifically exempt.

Fresno

Bob Keenan – BIA, BIG

52. COMMENT: Fee collection and use is governed by the Health and Safety Code, ß6600 subsection G. The rule does not meet those requirements.

RESPONSE: The author cites Government Code Section 66000 (The Mitigation Fee Act) as the impetus for promulgating a nexus document. The legislation clearly states that it is applicable to fees (ß66000(b)), ìin connection with approval of a development project.î Section 66000(a) defines a development project as including, ìa project involving the issuance of a permit for constructionSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 63 or reconstruction, but not a permit to operate.î In addition, Section 66001(a)

states:

In any action establishing, increasing, or imposing a fee as a condition of approval of a development project by a local agency on or after January 1, 1989, the local agency shall do all of the following: (Emphasis added)

Section 66005(a) also ties the legislation with ëcondition of approval of a development projectí.

1. The District will not approve or disapprove a development project , but will approve or disapprove the projectís analysis to determine the quantity of emission reductions required to comply with the rule . The authority to approve or disapprove the development itself is the local land-use agency,

not the District. 2. The District will not be issuing a permit, nor will the District give a discretionary approval of the project. 3. The Districtís ISR action is ministerial, and therefore will not include conditions of approval.

The District stands by its previous assessment. The Mitigation Fee Act does not apply to the ISR rules. However, the District has analyzed the applicability of nexus requirements to this rule. See Response to Comment #125 for the findings of the analysis.

53. COMMENT: Fees paid at the permit doubles to the buyer and prices people out

of the market.

RESPONSE: Fee prices may price some people out of a particular house, but not necessarily out of the entire market. Currently, market forces are increasing the price of housing to a much greater extent than the fee would. In addition, the difference between paying prior to building permit issuance and at certificate of occupancy canít possibly double the cost unless the loan was at an astronomical interest rate. If the fee were financed in a mortgage at 30 years it may double, but it also doubles the amount they are paying for anything.

54. COMMENT: The fees from the program will drive up the costs of existing housing.

RESPONSE: Existing housing is not subject to the rule. Although the District realizes that sellers of existing housing may take advantage of a potential increase in new housing prices by artificially inflating the price of existing housing, the District does not have control over existing housing prices.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 64 Increases in existing housing prices ëattributableí to the rule would be resultant of the seller, not of the District.

55. COMMENT: The impact of the fees resulting from implementation of the ISR program would ruin the Valleyís economy.

RESPONSE: The commenterís position that ISR fees would ruin the economy is not supported by factual evidence. The Socioeconomic Analysis found the worst-case scenario of fees to be within the margin that can be absorbed by the economy. This is not to say that there is no impact, but that the impact is less than significant. In addition, the residential scenario in 2008 resulted in a fee of about $1,800 per house. This scenario had no emission reduction measures included; it had a density of 3 unit per acre (increased density decreases emissions), no sidewalks, or any other measure that reduces emissions (and thus fees). See also response to comment #56 and #14. Finally, housing prices have steadily increased in over the last ten years. This increase is far more than $1,800 every year . The District does not state this to justify the potential fee, but to illustrate what has occurred in housing prices and that the Valleyís economy has not crashed as a result. It is illogical to suggest that a potential $800 per residential unit in 2006 to $1,800 in 2008 would ruin the Valleyís economy. As stated in Response to Comment #14, the fee amount listed in the Socioeconomic report is likely much more than will actually occur.

56. COMMENT: The cost of on-site mitigation is not included in the socioeconomic impact report. Therefore, the report does not accurately reflect the impact of the

rule.

RESPONSE: The Socioeconomic Analysis does not include the price of on-site emission reduction measures for a specific reason. That is, it is reasonable to expect that an applicant would not choose a more expensive option over a cheaper option. The ëworst-caseí, no on-site-measure fees are therefore the most that an applicant would pay. It is also important to note that on-site measures are entirely voluntary.

Also of note, many of the on-site measures that count towards reduced

emissions are already requirements by local land use agencies. For example, most agencies require some amount of sidewalks or bicycle improvements with development that is adjacent to a street. URBEMIS calculates an emission reduction from the amount of sidewalks and bicycle infrastructure built in the project. Therefore, crediting certain on-site measures are of no additional cost to an applicant because they had already incorporated the measures into the project as a result of the public agency requirements.

Mark Stout - Fresno Metro MinistriesSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 65 57. COMMENT: The proposed rule only mitigates a portion of the emissions. Why does the rule only reduce a portion of the emissions, and why the particular level- for example the 33% for operational NOx.

RESPONSE: The District calculated the level of reduction needed on a perproject basis that would achieve the emission reduction committed to in the PM10 and ozone attainment plans. The rule sets levels that are in compliance with state law regarding indirect source regulations and are feasible to achieve. The 33% is based on the area under the triangle that accounts for declining

mobile emissions over time ñ see the fee formula.

58. COMMENT: A slide of the presentation showed huge NOx emissions increase from 2006 to 2010 from development. The number listed for reduction attributable to the rule seems rather small in comparison.

RESPONSE: The slide incorrectly showed the reductions attributable to construction as cumulative instead of temporary during the construction phase of development.

59. COMMENT: The District would benefit from making the URBEMIS runs available to the community groups. The community groups should be able to review what developers are inputting, and verify the modeling.

RESPONSE: The runs will typically be used in the CEQA process and included with negative declarations and EIRs. The files will be available with a public information request. The District will make this information public. See also Response to Comment #8.

Colby Morrow – Southern California Gas Company

60. COMMENT: Appendix C should be amended. PUC Energy Efficiency programs can be administered by energy companies and municipalities.

RESPONSE: Appendix C, page C-5 will be amended.

Cathy Crosby, Fresno County Public Works, Transportation and Planning

61. COMMENT: The response to comment format from the previous workshop made it difficult to find oneís comments and the associated responses. The preferred format would be the EIR format, where the original comment letter is

retained.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 66 RESPONSE: The District has revised the response to comment format to address this issue. The format is a hybrid, retaining the original comment but not in the original letterform.

62. COMMENT: Several of the Fresno County July 22 nd comments werenít addressed in the response to comments. Specifically:

• Transportation projects should be re-written to include non-vehicle projects, such as pedestrian projects.

RESPONSE: The definition of Transportation projects does not include nonvehicle projects because of the definition of an indirect source. The Clean Air Act (CAA ß110(a)(5)(C)) defines and indirect source as, ìÖ a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollutionî. Pedestrian projects do not attract mobilesources of pollution, but pedestrians. It would be inappropriate to include nonindirect sources in with transportation projects to be subject to the requirements

of the rule.

63. COMMENT: ß7.2.2.2 of their letter describers the dissolution of community

service districts.

Previous Comment

7.2.2.2- Community Service Districts (as a means to insure perpetual funding for operational mitigation): The Air District may want to evaluate under what conditions a Community Service District that funds any mitigation activity not directly related to health & safety may, after formation, discontinue assessment or dissolve the Community Service District by vote of property owners making up

the District.

RESPONSE: All measures within the on-site checklist have an emission reduction benefit associated with their implementation. The District identified those on-site measures that reduce emissions from development projects, and help reduce the air impact of development projects. The goal of the rule is to reduce emissions from development project to achieve the emission reduction committed to by the PM10 and ozone attainment plans. Although each measure is indirectly associated with an air benefit (reduced emissions and attainment of the PM10 and ozone standards), the District considers the measures to behealth-related. Therefore, funding of these measures constitutes a healthrelated activity.

64. COMMENT: Maintenance concern. Where will the funds for County

enforcement of the rule come from?

RESPONSE: The County will not be required to enforce the rule. See Response

to Comment #8.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 67 Ray Leon – Latino Issues Forum

65. COMMENT: The District should clarify the PM2.5 and toxics issue. Suggests that the District break PM10 down further to strengthen the rule.

RESPONSE: This rule is a result of the PM10 and ozone attainment plan

commitments. The rule controls NOx and PM10. Some fraction of PM10 is PM2.5 and will be reduced as a result of the rule. NOx reduces ozone during the warm months and reduces ammonium nitrate, most of which is PM2.5, during the cold months of the year.

The District recognizes the issue of toxic emissions from diesel engines, and the particular hazards of PM2.5. However, toxics are addressed through the Districtís permitting program, state regulation, and through CEQA commenting. District thresholds of significance for these pollutants are contained in the Guide for Assessing and Mitigating Air Quality Impacts (GAMAQI). In addition, PM2.5

will be addressed in the federal PM2.5 Attainment Plan due in 2005.

Mike Sanchez – City of Fresno

66. COMMENT: The cityís July 22 nd comments need to be addressed; they werenít addressed in the previous response to comments. Previous Comments (paraphrased) Nexus and Proportionality

A. What is the Nexus determination for the project

B. ISR rules address emissions from existing development; so, placing requirements on new development to remedy problems from existing development would be inappropriate. Relationship of SJVAPCD and Rules 9510 and 3180 to CEQA and Planning

Law

C. Rule appears to defer or circumvent CEQA analysis because analysis and mitigation would be prepared after CEQA analysis. Also, it appears that the District would be issuing a construction permit, making the District a responsible or trustee agency.

D. There may be differences in interpretation of mitigation measures and the

reductions associated with them.

E. Because the District is the appropriate agency to make a detailed determination of air quality impacts and appropriate mitigations, the District should fulfill its CEQA responsibilities by providing analysis and recommendations to the local land use jurisdictions so that the CEQA analysis work can be completed with this information.

F. The District should not determine locations or patterns for development, this is the local jurisdictionís authority.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 68 G. ìAnalysis and conclusions regarding land use and its vehicular emissions

need to be rooted in dataÖ recommend objective criteriaî Applicability of the Rules 9510 and 3180

H. It is not addressed if the rule applies to general, regional, community or specific plan adoptions. At that level, project specific information may not be known, and analysis may not be accurate. Therefore, they should be exempted from the rule

. I. Each public agency defines ëdiscretionaryí and there is variability as to what each public agency considers discretionary. Therefore, the ISR rules will be applied inconsistently.

J. Language should be included in the rules to prevent piecemealing. Timing and Project Tracking

K. Request ISR review to be shortened from 30 to 10 days to , ìremain within

the statutory CEQA timelines for responding to initial study requestsî

because URBEMIS runs are quick. The District should send the ISR project information to the public agency for incorporation into CEQA documents.

L. How will timing of construction be controlled for mixed use projects, since commercial often lags behind residential development?

M. How will the District track projects, such as multi-phase tract maps or shell buildings, for review and analysis. Interagency Cooperation

N. ìThe ISR Rules propose that cities and counties withhold building permits pending satisfaction of SJVUAPCD requirements.î There should be an agreement between the public agencies and the District that includes indemnification of the city.

O. “ Local land use jurisdictions should be made a party to any mitigation agreements entered with the developerÖ(and) it would be ideal if such agreements were recorded as covenants running with the landÖfor which the Ö analysis was done.î Use of Mitigation Fees Collected Through ISR Rules

P. It appears that the ISR funds will be used to fund existing programs. New programs that expand mass transit and similar systems should be considered. ìÖ the majority of the funding generated through the ISR rule should address vehicular pollution through measures to reduce traffic volume and relieve traffic congestion in the vicinity of the land use projects paying

the ISR Rule-related fee.î

RESPONSE: A. See Response to Comment #125

B. ISR rules address emissions from growth , not from existing emissions. See Response to Comment #170. See also, Response to Comments #34 and

#39. C. Rule has been revised to be concurrent with CEQA analysis and Public Agency approval process. See Response to Comments #8 and #44. Also,SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 69 the District would not become a Responsible agency as a result of ISR implementation (See Response to Comment #52 and #187)

D. The measures listed in the On-Site Emission Reduction Checklists have a known quantification method associated with them. Applicants will identify

the specific implementation of each measure, so there will not be interpretation of the amount of reduction. See also Response to Comments

#7 and #9. E. Although the ISR rules were not written to address CEQA, the reductions committed to in the PM10 and ozone attainment plans from this rule and individual project compliance can be used in CEQA documents at the public agencyís discretion. See Response C above for timing of ISR implementation. See Response to Comment #8 for information on communications between the District and the land-use authority. F. The District will not be making land-use decisions, and recognizes that that is the authority of the local land use agency. The land-use design considerations discussed by the District are discussed because they are known to reduce air quality impacts. The District provides these types of measures to encourage applicants to design projects submitted for city/county approval in ways that improve air quality and reduce potential ISR fees. The District has no authority over implementing land-use changes. Please note, the District will not require a minimum selection for the on-site checklist, measures selected are voluntarily identified by the applicant and are likely already part of the project. See also Response to Comment #43

and #44. G. The measures listed on the on-site checklist have objective criteria, based on extensive research within URBEMIS. Please refer to Appendix D (Recommended Changes to URBEMIS for Rule 9510 and 3180) and the URBEMIS Userís Guide (available at URBEMIS Userís Guide, available at South Coast Air Quality Management Districtís website http://www.aqmd.gov/ceqa/urbemis.html ). See also Response to Comments

#7 and #9. H. The ISR rules are applied to the last discretionary approval of a development project per Rule 9510 Section 2.1. The adoption of a general plan or specific plan is not usually the last discretionary approval a project will go through. Residential development may be rezoned, and must get a subdivision or tract map. Conditional Use Permits and Site Plan Reviews often apply to commercial and office development. However, the District recognizes that some projects may not require additional discretionary approval after the zoning is approved. Specifically, industrial development may not require additional approval. Therefore, the last discretionary approval will vary depending on the project. The District will provide outreach to developers and the public to ensure awareness of the rule; however, it is the responsibility of the applicant to be aware of the need, or lack thereof, for additional discretionary approval by the local land-use agency, and to apply atSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 70 the appropriate time. Additionally, applicants are encouraged to apply prior to the application for last discretionary approval with the land-use agency. I. The District recognizes the variability of the application of ëdiscretioní in the Valley. As stated in H above, the last discretionary action is the trigger for the rule. This may cause inconsistency early in ISR implementation; however, J. Language has been included. See Rule 9510 Section 2.3 K. First, the ISR program is not a CEQA compliance program (See Comments above). Analysis of the AIA application involves more than opening and running URBEMIS. The District will be analyzing the documentation for projects, running modeling program, finalizing MRSís, finalizing FDSís, etc. See the Draft Staff Report for additional information. The District will be sending information to the public agency. See Response to Comment #8. L. The District does not have the authority to control construction timing. See Comments F, G and H above. M. The District will be tracking projects through a database, and will be tracking project location primarily through APN. Multi-phase projects will be entered as such, with the applicable expected build-out dates. The applicant is responsible for identifying the use and build out of the projects. Should the project change, the applicant is responsible for notifying the District. If the project changes such that there is an increase in air emission and the applicant does not notify the District, they will be in violation of the rule and subject to District enforcement action. The District will share project information with public agencies to coordinate project tracking. N. The District will not require or request that public agencies withhold building permits for ISR enforcement. However, the District may enter into an agreement with a public agency for information sharing that would facilitate

District enforcement of the rules. O. The District will be sending the public the on-site emission reduction checklist, as well as other information (see Response to Comment #8) during the review process. The District will consider the use of covenants for MRS compliance enforcement. P. The District will not be using the ISR funds solely for existing emission reduction programs. The District has conducted an analysis of emission reduction projects available, and the cost effectiveness associated with them. This analysis can be found in Appendix E. See Response to Comments #18 for the use of funds, and #47 and #188 on the location of funding projects.

Modesto

Sally Rodeman – CalTrans, District 10

67. COMMENT: District 10 did not receive the notice for the meeting.

RESPONSE: You will be added to the rule mailing list. Other Caltrans staff

received notice.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 71 CalTrans District 10 is on the Districtís mailing list as a street address, to which the District has been mailing notices. District staff looked into the issue, and

found that the CalTrans website lists a PO Box for District 10. The District will

work to resolve this issue.

68. COMMENT: Is CalTrans a developer as defined by the rule?

RESPONSE: CalTrans would be a developer in those instances where the project meets the applicability of the rule.

69. COMMENT: Can the District put that in writing in the rule?

RESPONSE: The District does not specify or write out who a rule applies to, but

write what a rule applies to. The rule is written so that all entities and individuals conducting activities subject to the rule must comply, so there is no need to list every possible agency or entity subject to the rule.

70. COMMENT: Does the Socioeconomic Impact Report account for impacts on the State of California, considering that the state is broke?

RESPONSE: The socioeconomic analysis provides the overall impact to the economy but does not specifically separate out impact to individual government agencies.

71. COMMENT: Does the District have a list of mitigation measures for

construction?

RESPONSE: The Staff Report contains a discussion of measures that reduce

emissions from construction activities.

Tom Carlson – Sierra Research

Thanks for addressing Sierra Researchís comments from the last draft of the rule. Particularly, for Sierra Researchís comments on silt loading, trip links and fleet mix.

72. COMMENT: How will the District be addressing the needed changes to the

URBEMIS model?

RESPONSE: Updated default values will be provided as rule guidance. This information may be contained in the next update to the GAMAQI. The next upgrade to URBEMIS, beginning next year will include many of the new defaults and an improved construction module. The upgrade may take as much as aSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 72 year to complete, so in the interim, the guidance documents will be provided as

needed.

73. COMMENT: What is the basis for the targets on PM and NOx reductions from

construction?

RESPONSE: The District researched what other air districts had set for reductions, and found that those targets are achieved in practice. The reductions (20% NOx and 45% PM10) are achievable with existing technology with a mix of newer equipment and retrofit devices, and will allow applicants applying moderate effort to pay no fee on construction.

74. COMMENT: What is the Districtís response to the vehicle age distribution by age of project that Sierra Research had provided? Is the information provided by Sierra Research not adequate or substantial enough to change the modeling?

RESPONSE: The District is not currently convinced that the data cited would be valid in all circumstances, but will consider projects that provide evidence supporting a reduction for fleet age. There may be other factors that offset the possible benefit from newer vehicles such as higher rates of vehicle ownership (more vehicles per household).

75. COMMENT: URBEMIS is a sketch planning tool. Sierra Research believes the

District should use a travel model. Sierra Research believes that a travel model is more accurate than URBEMIS, and found that URBEMIS estimates are 60% higher than the travel model estimates for the same project. In addition, as a sketch tool, URBEMIS is inconsistent with SIP methodology.

RESPONSE: The District believes that URBEMIS has been improved beyond its characterization as a sketch planning tool. Very few of the modules of the program are overly conservative. Most modules rely on statewide averages extracted from the emission inventory which should not be considered conservative estimates. The most important module is the mobile source

module that includes the same emission factors used to build the emission inventory. It does a good job of arriving at a composite emission rate needed for a project level analysis. Models can always be made more accurate by individualizing more and more input factors. The District believes that URBEMIS balances data requirements with reasonable output accuracy and ease of use. The travel demand models described by Sierra Research are extremely data intense and would be very costly to run for the approximately 1,000 projects that will be submitted to the District each year. It is uncertain whether the demand models are more accurate for project level analyses than URBEMIS with local

information

.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 73 Jan Ennenga – Manufacturing Council

76. COMMENT: There is a concern that the ISR program would apply to CEQA processes and permits for existing facilities that make modifications.

RESPONSE : ISR projects are land-use based, triggered by a discretionary permit in combination with new construction or increased use that generates

construction and/or area and mobile emissions that exceed the ISR threshold. If a land use requires a discretionary permit, and meets or exceeds the applicability threshold, then the emissions from hauling would be subject to the rule.

77. COMMENT: What exactly does ìprimary source of emissionsî mean for the exemptions section?

RESPONSE: The District had originally include an exemption for ìA development project, whose primary source of emissions are from stationary sourcesÖî However, the District is revising exemption to make specific land uses exempt. The District has completed a review of industries permitted by the District. This analysis details the amount of rules that apply to each industry and the amount of pollutants regulated by these rules. The intent is to remove the ambiguity of ìprimaryî emissions and detail which industries will be exempt from the rule. In addition, industries with stationary sources may petition the APCO for ISR exemption.

Bill Zelocci – BIA CC, PSSP, StanCo (Affordable Housing)

78. COMMENT: The bill targets housing only. The fees, at least the biggest fees are from housing. The Rule doesnít affect other land uses that produce vehicle trips.

RESPONSE: The rule targets new development that results in area and/or mobile emissions. The rule contains an applicability section and an exemptions

section. The rule does not target housing exclusively or charge higher fees for residential development. Housing constitutes about 1/3 of the development related emissions and therefore 1/3 of the potential for fees under the rule. Other land uses such as commercial office and retail generate more emissions and potential fees. Housing is used extensively in discussing socio-economic impacts because that is what concerns most people. Fees are emission based, not land-use specific. Fees apply to the broad categories of land uses specified in the rule. Certain land uses are exempted from the rule because their emissions are primarily from stationary sources, and they have been subject to extensive controls and requirements already. The sector targeted by the rule are those land uses without the majority of emissions from controlled stationary sources, which havenít been subject to rules or emission controls.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 74 All fees are tonnage based , and the required reduction formula applies equally to all applicable projects. This means that a particular project only pays the off-site emission reduction fee for the required reductions that are not achieved on-site.

The Socioeconomic Analysis discusses the potential impacts to housing more extensively than the impacts to commercial or industrial, because the impact on housing affordability is of a greater concern to the affected industries and the general public than the impacts on commercial or industrial.

Certain land uses are exempted from the rule because their emissions are primarily from permitted stationary sources (the rule only covers area and mobile emissions), and they are and have been subject to extensive controls and requirements.

79. COMMENT: The rule should also address existing housing.

RESPONSE: The goal of the rule is to achieve an emission reduction from growth that was identified in the PM10 and ozone plans. Although VMT is increasing valley wide, the majority of new emissions are attributable to new development. It would be inequitable to assess fees on existing uses with the purpose of mitigating emissions from growth.

80. COMMENT: Part of the presentation used small, unreadable font. Please use a reasonably large font for presentations, so that people may be able to read what

is on the screens.

RESPONSE: Comment Noted. The District apologizes for the illegible font-size, and will attempt to make future presentations clear and readable.

Randy Hatch – Planning Director, City of Ceres

81. COMMENT: There is a concern that the ISR program will cause changes to a project after a local agency has granted approval to the project.

RESPONSE: The rule has been changed to make the process concurrent or prior to the approval process by the public agency. The District defers land-use choices to the public agency and the applicant. See Response to Comment #8

for more information.

The District does not place requirements for land-use measures on the project. The on-site emission reduction checklist must be filled out by the applicant, but the District does not have a minimum or maximum requirement for the number or type of measures to be selected. Inclusion of measures is voluntary by the applicant (see Response to Comments #56). The District will not engage in negotiations to include on-site measures (See Response to Comment#44).SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 75 Therefore, the District will not be imposing measures that conflict with the local land use agency. It is the applicantís responsibility to make sure that those measures they have voluntarily selected are consistent and approvable by the local land use agency. In the instance that the identified measure is not acceptable by the local land use agency, the applicant is responsible for notifying the District and the on-site emission reduction checklist and emissions modeling will be revised to reflect the project at that time.

In addition, the rule and staff report will be revised to provide more interaction with the public agency and the District. See Response to Comment #8 for more

information.

82. COMMENT: How do public agencies determine compliance with the rule, especially if the Districtís approval can occur after the approval by the public agency?

RESPONSE: The District will revise the ISR process to be concurrent with or prior to the approval process at the public agency. See Response to Comment #8 for more information. Specifically, the District will provide letters notifying the public agency of the Determination of Completeness, AIA Approval and Final Compliance, as well as providing a letter of compliance status to the public agency upon request.

83. COMMENT: What exactly is meant by ëparksí in the applicability section?

RESPONSE: Active recreation parks ñ parks that attract motor vehicles. It is not the intent of the rule to assess passive recreation parks. Parks will be assessed based on emissions the same as other land uses,

84. COMMENT: The City of Ceres suggests the District alter the application process to make it prior to the final public agency approval, perhaps by tying it to the application to the public agency. In addition, the City suggests the District include a predevelopment process. The City of Ceres has a predevelopment process that aids in the application process.

RESPONSE: The District will amend the rule language and the staff report to make the application to the ISR program concurrent with or prior to the final discretionary approval application to the public agency See Response to Comment #8 for more information. The District does not currently have a plan for formal pre-application consultations. However, the District will be available for consultations any time prior to actual application and encourages applicants to meet with District staff to clarify issues when needed.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 76 Fresno Kathryn Phillips – Environmental Defense

85. COMMENT: Concerning the view that land use does not have an impact on air quality (see comment #34) ñ that is a minority view. Most have realized that land use does have an impact on air quality.

RESPONSE: Comment Noted.

86. COMMENT: Concerning the issue of self-selection (see comment #36), the choice of good design should be available.

RESPONSE: Comment Noted.

87. COMMENT: The URBEMIS model is imperfect, but it is appropriate for this rule.

RESPONSE: The District concurs. The District is aware that there is not a ëperfectí model available, nor is there likely to be one in the future. However, the URBEMIS model is best available method for quantifying project emissions and

benefits from on-site measures.

88. COMMENT: Rule 9510 section 2.1.8 has one threshold for recreation, but the definition includes movies. ëMovie theatersí are more commercial in nature, and should be moved to commercial. In addition, ëparksí should be defined.

RESPONSE: Comment Noted. ëMovie theatersí will be removed from recreation

to commercial.

89. COMMENT: A 2-ton exclusion level (Rule 9510 section 4.2) is too generous.

This level should be reduced.

RESPONSE: See Response to Comment #180.

90. COMMENT: Rule 9510 section 2.2 discusses transportation projects that have two tons or more of NOx and PM10 combined. How large of a project would fit this description? How large would a project be to be subject to the rule ñ a pothole or an interstate exchange?

RESPONSE: Small maintenance projects would not exceed the threshold. Construction of a one-half mile arterial road segment would exceed the threshold. The road project must also be subject to a discretionary approval to be brought into the ISR process.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 77 91. COMMENT: Rule 9510 section 3.5 defines ëBaseline Emissionsí. This section should be clarified. Where exactly is the baseline?

RESPONSE: The definition will be changed to the following: Baseline Emissions: the unmitigated estimated NOx and PM10 emissions, output calculated by the APCO-approved model, in the units of tons per year.

In addition, the following will be added to the definition section of the rule to clarify the issue of baseline: Construction Baseline: the sum of unmitigated NOx or exhaust PM10 for the duration of construction activities for a project or any phase thereof.

Operational Baseline: the entirety of NOx or PM10 emissions, including area source and mobile emissions, calculated by the APCO-approved model, for the first year of buildout for that project, or any phase thereof.

A development would have two construction baselines (one NOx, one PM10) and two operational baselines (one NOx and one PM10), if it does not have phase. For the purposes of this discussion, the four baselines will be referred to as a ëbaseline setí. For projects with phases, each phase will have one baseline set. According to the off-site fee formulas, the equations are used for each

baseline set.

As and example, one project has three phases. The rule contains four fee formulas: an operational NOx, an operational PM10, a construction NOx, and a construction PM10. Each of the four calculations are performed three times, once for each phase or ëbaseline setí.

The operational baseline is calculated at the date of expected buildout, the construction baseline is calculated at the date(s) of expected construction.

92. COMMENT: Rule 9510 section 4.1.5 needs clarification of what federal, state and local funds for low income housing are applicable.

RESPONSE: Based on the Districtís internal analysis of applicability and impacts, the exemption for low-income housing has been removed. It has been determined that the Rule should apply to all new residential development that meets the applicability section of the Rule.

93. COMMENT: Rule 9510 section 5.3.2 discusses the application for the AIA. The District should list out what information will be in the application.

RESPONSE: The District will expand that section to include more specific information of what will, at a minimum, be included in the AIA application.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 78 94. COMMENT: Environmental Defense recommends including ROG in the rule for

emissions reductions.

RESPONSE: See Response to Comment #57 and #65.

95. COMMENT: Rule 9510 section 6.1.1.1 and 6.1.1.2 discusses the reductions required from construction emissions. The 45% reduction requirement for PM10 is too low. Applicants can get much higher results with existing technology. The 20% NOx reduction requirement may similarly be too low. In addition, Environmental Defense recommends requiring emission reductions by vehicle and suggests that the District talk to CARB about their in-use construction equipment regulations.

RESPONSE: See Response to Comment #57 and #65.

96. COMMENT: Rule 9510 section 10.2 (APCO administration of funds) does not contain the term ëpermanentí. The District should aim for permanent reductions.

RESPONSE: Many of the projects funded by the District will meet the strict interpretation of permanent reductions. In some cases, the projects are expected to be permanent but the user of the clean equipment is only obligated to operate it during the contract period. After the contract period ends, it is highly likely that any replacement equipment will be as clean or cleaner than that funded by the District due to lower emission standards and improving technology over time for nearly all source categories.

97. COMMENT: The funding of projects with fees received from this rule is implied to be application-based. The rule should state if it is application based.

RESPONSE: Although current District programs are primarily open application based for as long as funding is available, for some source categories it may be more appropriate to have requests for proposals with deadlines and project ranking. Therefore, the rule language should remain the same.

98. COMMENT: The economic analysis and other supporting documents donít include health impacts and those costs. This information should be included to keep the purpose and goals of these actions in perspective.

RESPONSE: It is not feasible to assign a dollar amount to the health effects that will be avoided or lessened by the implementation of this rule. However, the District will include health-impacts information from the PM10 and ozone attainment plans in the staff report.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 79 Kristine Foster – Asthma Coalition, Respiratory Therapist, Asthma Educator and

CAC member.

99. COMMENT: Land use planning is important and the District needs to include education for the public.

RESPONSE: The District concurs with both of the commenterís points. The District currently believes that Rule 9510 will provide incentives for development that creates fewer impacts and will bring greater awareness of this issue to the public.

Bakersfield

Mike Kelley – Vector Environmental

100. COMMENT: Does the rule apply to the fraction of PM greater than 10 microns?

RESPONSE: No. The rule applies to PM10, the fraction of PM 10 microns or

less in diameter.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 80 

### Chambers of Commerce – Public/Private Organizations

The Greater Merced Chamber of Commerce Date: September 14, 2005

101. COMMENT: The Greater Merced Chamber of Commerce urges the district to reevaluate the impacts of rules 9510 and 3180 will cause to the Central Valley. The District has no organized plan for the fees that will be charged and when asked, the district indicates grant money for clean air vehicles and other measures to reduce the pollution. Before these rules should be brought to the board for approval, a complete plan should be developed.

RESPONSE: The District has a history of funding more than $100 million in emission reduction projects. These existing programs are underway and the system is in place for processing projects funded by Rule 9510. The District has provided additional information on the types of projects available for the program in Appendix E. The District has identified more than $400 million in projects available at a cost-effectiveness that will allow the District to achieve plan commitments. As technology advances, even more opportunities for retrofit and replacement programs are expected.

102. COMMENT: These rules will make the housing costs rise to a level that will make housing in Merced more unaffordable and will hamper industrial and commercial development in the greater Merced area. A comprehensive study needs to be completed on the effect the rules will have on economic development and jobs in the valley. The valley leads the nation in unemployment figures and the need for jobs through out the Valley is extremely important. These rules ill affect new job creation.

The costs of these new rules will slow down growth that will be coming to the Valley. Without a clear economic study, these rules should not be approved. Growth will happen and proper planning is needed to make sure the growth is well-planned and well-implemented. These rules will create more problems than they will solve.

The Greater Merced Chamber requests more studies and a better economic plan be developed before the rules go forward to the board for approval. Thank you for your consideration of our concerns.

RESPONSE: According the Merced County Association of Realtors, the median home price in Merced County is $330,000. The proposed fee amounts not considering the potential for reductions due to project design are between $800 and $1800 per unit in the first 3 years of program operation. In percentage terms this ranges from .24% to .54% added cost to the median home. The fundsSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 81 collected from the developers are used for air pollution projects in the area that will benefit the local economy.

Stanislaus Economic Development and Workforce Alliance (Alliance) Date: September 13, 2005

I am the CEO of the Stanislaus Economic Development and Workforce Alliance. The Alliance is a public private organization comprised of representatives of Stanislaus County, all cities in the county and dozens of private business investors. It is the designated agency for all economic development and workforce activities in the county.

I attended the video conference of an APCD staff presentation at a public \meeting on September 1 in Modesto. I am very concerned about several aspects of that presentation and therefore the consequences of Rule 9510 and Rule 3180 proposed for implementation by the APCD.

My concerns are as follows:

103. COMMENT: Regarding the exemption for projects whose primary source of emissions that come from stationary sources, how is primary determined?

RESPONSE: The District has completed a review of industries permitted by the District. This analysis details the amount of rules that apply to each industry and the amount of pollutants regulated by these rules. The intent is to remove the ambiguity of ìprimaryî emissions and detail which industries will be exempt from the rule. In addition, industries with stationary sources may petition the APCO for ISR exemption.

104. COMMENT: Regarding the submittal of applications no later than 30 days after last discretionary approval, what kinds of delays to projects will be experienced while APCD reviews the mitigation plans and does their calculations and assessments. My experience tells me the current workload precludes timely processing or even a return of phone calls regarding ATC requests and other permitting. Staffing is either insufficient or incompetent or both. What steps are contemplated to alleviate the existing gridlock and avoid additional bottlenecks in

the future?

RESPONSE: See Response to Comment #8 for the ISR application changes. It should be noted that the ISR process is not a permit, nor is it a discretionary action (See Response to Comment #187). The District is working on producing a streamlined approval process that has clear information requirements and timelines (as listed in the rule). The Planning Department will be responsible for ISR project review and approval. The Planning Department, as well as all affected departments (Compliance, Emission Reduction Incentive Program ñ ERIP, and Administration), has produced a staffing analysis for implementationSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 82 of the ISR program. The Planning Department identified the steps in review and approval, the time associated with those steps, and in this process identified steps that could be merged or simplified. The staffing requests are listed in the Board Memo, and the District will provide a more detailed staffing request before the Board adoption hearing. However, the staffing analysis is for ISR adoption only, and does not address staffing for existing programs.

105. COMMENT: The APCD has not yet created an emissions calculator.

RESPONSE: URBEMIS will be used for Operations, District is working to determine if a modification to URBEMIS or a separate calculator will be needed for construction. However, methodology for construction is known. Take vehicle type, hours of operation and compare to emissions from the state-wide average. URBEMIS can come up with default fleet numbers, we are working about refining them.

106. COMMENT: Developers and business with the same degree of concern on this issue that the APCD exhibits, albeit with a different perspective, have expressed serious reservations about the integrity of URBEMIS. Are these concerns dismissed out of hand with no attempt to verify the soundness beyond your belief that it must be okay because you are using it.

RESPONSE: The Staff Report contains a detailed discussion of why URBEMIS is appropriate for this rule, and why it was chosen over other models. The District has completed extensive research, including hiring a consultant to review existing models to determine the most appropriate, comparisons of models, and

detailed model research and has determined that URBEMIS is the most appropriate model for the rule. See Response to Comments # 157.

107. COMMENT: The socioeconomic impact predictions for Rules 9510 and 3180 were calculated using dated methodology (1995) that does not factor in the impact of the meteoric increases in valuations and costs and burden of stagnant incomes regarding affordability.

RESPONSE: The Socioeconomic impact report uses median price data up to 2005. Most data was no older than 2003. The methodology is standard for the air pollution rule development process and is not dated.

108. COMMENT: The financial windfall that will occur if these rules are implemented could total tens of millions of dollars per year in the valley. What accountability is associated with the ìmitigation accountsî? Who determines and what is the definition of quantifiable and enforceable mitigation projects?î Is there an audit of these accounts and by whom? How were the fee levels determined? Are they equitable?SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 83 RESPONSE: 1. Accountability ñ The District has successfully managed over $100 million in grant money over the last decade. The District has an outside auditing company to provide assurance to the Governing Board and the public that funds are appropriately managed. The California Air Resources Board has

also audited the District. Definition of quantifiable ñ The project to be funded must have emission factors, process rates, and use data, necessary to calculate baseline emissions and emission reductions after the project is implemented.3. Enforceable ñ The project must have a mechanism that ensures that the project will be implemented and that emission reductions will be achieved during the specified timeframe. 2. Fee level determination ñ The fee levels are based on the average cost of reductions projected for each year for each pollutant. See also Response to

Comment #114. 3. The fees are equitable because they are based on emissions generated bythe project and each projectís emissions are quantified using the same wellaccepted models and factors.

109. COMMENT: APCDís goal over the next ten years to reduce the ozone and PM10 emissions targets new development only. If the housing bubble bursts and the corresponding emissions from new growth cease, will the burden shift to commercial, industrial and/or existing housing in order to meet the goals?

RESPONSE : The emission reduction targets for ISR in the PM10 and ozone plan are based on the predicted growth in emissions from new development. ISR reduces, through on-site and/or off-site measures, emissions generated by new growth. If that growth does not occur as predicted, for example in a ëbubble burstí scenario, then the emissions from new development will be less than predicted. If the emissions do not occur, they would not have to be reduced through the ISR program. In this situation, ISR does not have to adjust the emission reduction ëburdení, or assess additional emission reductions.

110. COMMENT: There seems to be confusion about the degree of compatibility of these rules with the CEQA process, adding additional burden for businesses in meeting timelines and development schedules.

RESPONSE: See Response to Comment #8 and the Staff Report, Section IV.C.

111. COMMENT: Those of us who are tasked with promoting and marketing the valley for business locations and as a quality place to live and work are very concerned about the air quality issues that we fact. Certainly the air quality is a factor in decisions made by individuals and businesses alike when determining the suitability of the valley for their purposes. The major challenge is to addressSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 84 those issues in a fair and balanced way with techniques and plans that are based on sound logic and a strong scientific basis.

RESPONSE: The District concurs with the authorís statement.

Business, Industry & Government Coalition of the South San Joaquin Valley Date: August 30, 2005

112. COMMENT: Our organization and its members share a deep commitment to improving air quality in the South Valley and applaud all reasonable efforts to attain Federal and State mandates. Draft Rule 9510, as we are coming to understand it, is the program that will be employed by the San Joaquin Valley Unified Air Pollution Control District to involve indirect sources, those land uses that attract or generate motor vehicle trips, in the mitigation of air emissions. The required reviews of the draft rule are delineated, however, the fees associated with the draft rule are not easily understood.

The presentation on Draft Rule 9510 ñ DESIGN (Decreasing Emissionsí Significant Impact from Growth and New Development) gave several members of our organization cause for alarm after the initial public meeting was held. While there were references to fee schedules and proposed costs for building permits, the method describing the establishment of fees was not clearly reviewed. The Building Industry members of our organization are well aware of Public Facility Fees, Govt. Code 66000. Using that base of reference, the description about fee collection and fee usage was not congruent with their experience with Public Facility Fees. Upon further review after the meeting, the fees established through the Health & Safety Codes of California are the references for the Air Boardís proposed fees. These fees are ìnewsî to our members and additional information would be very helpful.

RESPONSE: See Response to Comment #6 and the Staff Report Section I(B) for a discussion on District authority for the rule.

113. COMMENT: For the next public meeting, scheduled September 1, 2005, our request is to have staff provide information about the process establishing the fee each year and how the fees are used for programs and projects under the authority of the Air Board. We want to know about the programs and the proposed costs for programs that will be instituted pursuant to Health & Safety Code 42311 (g). Our read of the statute indicates these fees are set annually based on estimated costs of air pollution control programs that will be conducted in the following year. In the event all funds are not expended, the fee revenue will carry over to the next year and will, then, reduce the fees for the subsequent year. What is the reporting mechanism and public process for these fees? While there are specific requirements outlined in the statute, none of our membershipSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 85 was aware of actual dates for the public hearings and none were aware of what projects are in process for this year or their related cost(s).

RESPONSE: The fee amount is based on the anticipated cost of reductions in each year. Staff performed an analysis of historical project funding costs from our existing grant programs that have successfully contracted over $100 million and examined the potential for projects in the future based on the emission inventory and population of project candidates, the technologies available to reduce emissions from the source, whether the reductions will be surplus in the future based on proposed and adopted regulations on the potential project candidates, and the feasibility the project. Based on these factors, the District made percentage funding estimates for each type of project for each year. This information allows the District to calculate a projected average cost-effectiveness for each year. To further verify these numbers, staff prepared project mix spreadsheets based on available projects and funding for each year to demonstrate that the cost-effectiveness averages are achievable. This information has been added to Appendix E of the staff report.

114. COMMENT: In concert with the fees proposed through H&S Code 42311(g) are the fees outlined in Draft Rule 3180. Those fees are cost recovery based ñ cost recovery for administering Rule 9510. We ask for clarification on how that rate is developed and how applicants will be billed for the actual hours of staff time to evaluate and review proposed projects. We also ask to be informed if the weighted average labor rate will be reviewed in a public meeting or public hearing prior to annual establishment. The Health and Safety Code reference for the cost recovery fees appears to be in section 40604. The draft report of Staff indicates that section 40604 was codified as a result of legislation SB709, Florez, from the past fiscal year. Section 40604 is devoid of explanation about the fee

structure other than to indicate there will be a schedule of fees and the fee schedule ìshall be designed to yield a sum not exceeding the estimated cost of the administration of this chapter and mitigation of emissions and the filing of applicationsî. How will this fee be published and through what public process? The project fees allow for annual rollover; how will the administrative fees be managed? If estimated costs are higher than annual costs, how will notification occur and what mechanism will be used to refund overpayment? We are hoping that the public meeting on September 1 st will provide answers to this fee.

RESPONSE: The District will use the same average weighted labor rate method that it has used for many years in processing stationary source permits. It is based on labor and overhead rates used to develop the Districtís budget that is adopted in a public hearing each June. The project review fees are based on the hours predicted for a relatively simple project. Projects proposing standard on-site measures and having air quality impact assessments that use standard factors and default changes that have been agreed to in advance are expected to be covered by the fee amount. Complex projects are expected to requireSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 86 additional staff analysis and review time that would result in costs that exceed the application fee. The District will be using a project management and billing system to track hours for the project. An applicant can request the status of labor charges at any time. The amounts accumulated to date can be obtained from the database and provided to the applicant. When the District staff completes its review and determines the off-site fee amount, they will generate an invoice that itemizes charges for review and the proposed off-site fee amount.

115. COMMENT: We are concerned that implementation of additional fees (Rules 9510 and 3180) associated with new construction will adversely affect the addition of sorely needed housing stock to the South Valley. Our region of the state is expected to take the brunt of the projected population growth, and we are already woefully under stocked. Our coalition believes that inadequate attention has been placed on studying the socio-economic implications of implementing the proposed fees.

Reducing PM10 and NOX emissions from indirect sources is a commitment thrust upon everyone in the Central Valley. Adding additional reviews and controls during the planning phase of construction is workable as long as all steps in the review process are clearly communicated and upheld. Compounding the issue of added reviews are the added fees for air pollution control and emission reduction projects that are not well known to members of our organization. As requested, providing more information about the type of projects, costs for current year and the process for the annual review of these fees would be most beneficial. Added study and discussion about the factors that influence the socio-economic status of the Central Valley are desired before these draft rules are presented to the Board of Directors for their consideration

and vote.

Thank you for your attention to our concerns and we ask that this letter be read into the public record during the meeting on September 1, 2005.

RESPONSE: The District recognizes that the rule may add a relatively small cost to development; however, the rule is structured to maximize benefits for designs and features incorporated into the project that will reduce the fees and add value to the development. It is possible to significantly reduce the fee with measures now commonly included in projects. The District is committed to streamlining the review process wherever possible and strives to minimize costs and delays. The analysis will be accomplished with URBEMIS for most projects. URBEMIS is very easy to use and can be operated using information typically required by local agencies during the CEQA review process.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 87 INDUSTRY

The Construction Industry Air Quality Coalition (CIAQC) Date: September 15, 2005

The Construction Industry Air Quality Coalition (CIAQC) is composed of the Southern California Contractors Association and the Southern California chapters of the Associated General Contractors Association, Building Industries Association, Engineering Contractors Association and Rock Products Association. Its membership includes 3,500 construction/development companies.

116. COMMENT: 2.0 Applicability: The potential emissions from constructing 2,000 square feet of commercial space, 9,000 square feet of educational space and 10,000 square feet of government space appear too small when compared to emissions from constructing 50 residential units, 39,000 square feet of general office space and 25,000 square feet of industrial space.

RESPONSE: The difference is due to different trip rates for different land uses. Commercial space generates many trips per 1000 square feet compared to other

land uses.

117. COMMENT: While the rules do not have an effective date, the District should consider the economic impact on small contractors with a high percentage of Tier 0 engines of setting relatively small development project baselines in 2006. An annually decreasing baseline from, say, 200 residential units, 10,000 square feet of commercial space, etc., in 2006 would allow small contractors more time to upgrade their fleets and compete in the bidding process.

RESPONSE: The current approach in the rule using the baseline for each year construction occurs and emission based thresholds provides more incentive to purchase or rent the cleanest equipment at the earliest date. Once in use, the cleaner equipment is available for all future projects subject to the rule. Although small contractors may have an older fleet, those are the equipment and vehicles that are in need of upgrade.

118. COMMENT: 3.0 Definitions: The use of computer modeling to estimate construction emissions from potential land uses would eliminate many small contractors unless they can seek advice from the District on how to employ these models. Also, CARB should offer assistance in identifying a diesel emission control device that has been verified for typical diesel engines as well as instruction on the use of the construction emission calculator. Ideally, the contractor or developer could submit to the District the number and types of machines he proposes to use on a project and the number of hours he proposes to run them, and the District would estimate his emissions.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 88 RESPONSE: The District will provide assistance on the use of models to calculate construction emissions and staff can run the models for the applicants

on a time and materials basis.

119. COMMENT: 4.1.5 Housing projects directly assisted by government housing funds: Why is government assisted housing exempt from mitigation?

RESPONSE: Based on comments received, the District has removed this exemption so that sources are treated based solely on their emissions.

120. COMMENT: 5.0 The draft rule implies in 5.3 that the APCO is willing to produce an AIA from information supplied by the developer. Is that correct?

RESPONSE: The District will prepare air quality impact assessments if the applicant provides the information needed as inputs in the model.

121. COMMENT: 6.0 A developer should be given emission reduction credit for mitigating windblown dust (PM10) as a result of constructing buildings and landscaping an area.

RESPONSE: The developer is already required to mitigate windblown emissions to comply with District Regulation VIII ñ Fugitive Dust Rules, therefore, the reductions would not be considered surplus.

122. COMMENT: 7.0 Off-site Mitigation Calculations and Fee Schedules for Construction Activities: In order to be reasonably contemporaneous with emission increases, off-site mitigation should be designated and purchased by the District no later than six months after the payment of the funds by the developer.

RESPONSE: The District commits to spend any funds received as quickly as possible. The programs envisioned require an applicant to come to the District to request funds for qualifying projects, so there may be times when funds take longer than six months to expend.

California Building Industry Association (CBIA) Date: September 15, 2005

California homebuilders, represented by the California Building Industry Association (CBIA) and its five affiliated Building Industry Associations (BIAs) located in the San Joaquin Valley, are respectfully submitting comments on the Draft Rules, 9510 and 3180 (ìproposed rulesî) of the San Joaquin Valley Air Pollution Control District (ìthe Districtî).SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 89 123. COMMENT: CBIA continues to be troubled by what it sees as several fundamental flaws in the Districtís plan to assess new ìair quality mitigationî obligations on new development in the Central Valley: 1) The District has failed to show a nexus between the impacts of new development on air quality in the region and the massive amount of new fees it proposes charging for this purported impact; 2) The District is using flawed scientific modeling to justify charging massive new fees on housing and economic development; 3) The district singles out new development to bear the burden of its new mitigation scheme which contains highly questionable calculations and a woefully deficient cost-benefit analysis. 4) The District has failed to adequately explain what it intends to do with these new fees (taxes) ñ somewhere between $300 million and $450 million over the next five years ñ and how charging them will improve the regionís air quality; and 5) The District has failed to acknowledge and account for the impacts of these new fees on the regionís economy or on housing affordability.

RESPONSE : See Response to Comments #124 through #142 below.

124. COMMENT: For these and other reasons, CBIA remains strongly opposed to the adoption of the proposed rules and urges the District to withdraw them and, working with citizens and other stakeholders in the region, begin the work of developing a more responsible, equitable and scientifically grounded plan for improving air quality in the central valley.

In the pages that follow CBIA will enunciate in detail both its fundamental concerns as well as other defects in the proposed rules.

RESPONSE: Opposition noted. See Response to Comment #17 for additional information on the development of these rules.

125. COMMENT: The District has failed to demonstrate the required legal nexus for imposing its proposed fees. This has been an ongoing concern of CBIAís and thus far the responses to it given by the District have only caused to make that concern grow. Indeed, the sheer weight of the mitigation fees being proposed by the District for new housing, alone ñ somewhere between $300 million and $450 million over the next five years ñ demands a clear description as to what the impacts are that justify the Districtís fee plans and how the level of fees to be charged are supported by anticipated costs.

RESPONSE: Although the District is not subject to the Mitigation Fee Act (See Response to Comment #52), the Districtís legal counsel has prepared an analysis of nexus requirements. The analysis identifies if a nexus is required, and discusses the following:SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 90 The applicability of the 5 th amendment of the US Constitution.

o The analysis finds that the fees resultant from the rule are subject to the ìreasonable relationshipî test established by San Remo Hotel LP v. City and County of San Francisco 2

.

o Therefore, if the fee is collected from a development because of the expected air pollution from that development, and the fee is used to offset the type and amount of pollution caused by that development ñ the fee will likely pass under the reasonable relationship test.

California Mitigation Fee Act

o The analysis finds that the Mitigation Fee Act may not apply to the ISR rules, for the reasons cited from the District in the text of Comment # 126, and in the Response to Comment #52.

California Proposition 13

o The analysis finds that Proposition 13 does not apply to the ISR rules.

California Proposition 218

o The analysis finds that Proposition 218 does not apply to the ISR rules.

California Subdivision Map Act

o The analysis finds that the SMA does not preempt the District from assessing fees on a subdivision.

126. COMMENT: Remarkably, however, the District denies there is a problem. To summarize the Districtís position, the Mitigation Fee Act (AB 1600) does not apply to these types of fees because (1) the District has no approval authority over development projects, is not imposing the fee as a condition of approval of a development project, and the fee is purely regulatory in nature, (2) AB 1600 only applies to fees for ìpublic facilitiesî and mitigation measures such as diesel retrofit programs are not ìfacilities,î and (3) even if AB 1600 doesnít apply, the district has met the nexus standard under the Act as well as any other legal

standard.

This analysis contains multiple flaws. Government Code Section 66000(b) defines a fee as a monetary exaction other than a tax or special assessment, whether established for a broad class of projects by legislation of general applicability or imposed on a specific project on an ad hoc basis, that is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project. The proposed rules are applicable to a broad range of projects. Likewise, the proposed project-level analysis of on-site

2 San Remo Hotel, L.P. v. City and County of San Francisco , (2002) 27 Cal.4 th 643, 669-670.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 91 mitigation constitutes an ad hoc, project-specific review. Both types of analyses therefore apply to the proposed rules.

RESPONSE: See Response to Comment #52.

127. COMMENT: Indeed, the District is a local agency subject to the Mitigation Fee Act. Government Code Section 66000 (c) defines "Local agency" as ìa county, city, whether general law or chartered, city and county, school district, special district, authority, agency, any other municipal public corporation or district, or other political subdivision of the state.î Certainly the District qualifies as a special district, agency, or other political subdivision of the state.

RESPONSE: The District is considered a local agency, but this distinction is not relevant. The Mitigation Fee Act does not apply to the ISR rules. See Response

to Comment #52 for more information.

128. COMMENT: The attempt to limit the application of this statute to public facilities is also incorrect. Government Code Section 66000(d) includes within the definition of "Public Facilities" ìpublic improvements, public services and community amenities.î Cleaning up the air is a service provided by government and, as such, provides a benefit to the community.

Comment 64 states that the District does not have the authority to impose conditions of approval and contemplates that any project review will occur after the local agency has completed its approval of the project. The developer will be ìallowedî to either include on site mitigation measures or pay a fee. Regardless of the choice of words, it is impossible to characterize this requirement as anything other than a fee or exaction on new development. If this is not enforceable as an exaction, then it is voluntary and the District cannot take credit for it as a control measure for purposes of demonstrating compliance with the SIP goals and the Federal Clean Air Act requirement to demonstrate reasonable further progress.

RESPONSE: The District does agree that the ISR program may require a fee from new development. However, the District disagrees with this interpretation of air emission reductions as a public service under GC 66000(d). In addition, the Mitigation Fee Act does not apply to the ISR rules. See Response to Comment

#52 for more information.

129. COMMENT: The Districtís attempt to define itself out of the Constitutional requirement that nexus be demonstrated is highly questionable. As noted in Government Code Section 66005(c): ìIt is the intent of the Legislature in adding this section to codify existing constitutional and decisional law with respect to the imposition of development fees and monetary exactions on developments by local agencies. This section is declaratory of existing law and shall not beSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 92 construed or interpreted as creating new law or as modifying or changing existing

law.î

RESPONSE: See Response to Comment #125 for the findings of the Districtís analysis of nexus requirements. See also Response to Comment #52.

130. COMMENT: It is important to examine that larger body of existing law. The constitutional standards for legislatively enacted development fees of general applicability, such as the proposed indirect source fee on new development, are less stringent than are the standards for fees imposed on specific developments on an individual and discretionary basis (see Ehrlich v. City of Culver City 12 Cal. 4th 854, 50 Cal. Rptr. 2d 242; 1996). Where a development fee is imposed generally on a broad class of property owners, it need only bear a reasonable relationship to the impacts of the development project (Id. at 875-876, 50 Cal. Rptr. 2d at 256,257). In adopting the fee, the city must make the "nexus" findings

set forth in Government Code section 66001.

RESPONSE: Although the Mitigation Fee Act does not apply to the ISR rules (see Response to Comment #52), the rule has been designed to meet this test. The District analysis contained in the staff report for the rule provides supporting

information to draw this conclusion.

131. COMMENT: The District uses a flawed analysis to produce huge sums to be collected as fees on new housing and new businesses. According to an analysis conducted by Sierra Research (see attached letter) using the numeric emission reduction goals in the Districtís approved SIP Measures for NOx and PM-10, as well as the assumptions set forth in Section 7.2 of Draft Rule 9510, including the stated ton-per-year mitigations costs, the District will require a total of $38,844,869 to meet the SIPís emission reduction goals for calendar years 2006 through 2010. Assuming the Districtís ìworst caseî fee scenario of $856 per unit in 2006, rising to $2841 per unit in 2010, the District could collect as much as $292,719,600. The disparity between the cost of the service and the fee charged is 754%. Even at a lowered standard of review of ìreasonableness,î a disparity of that magnitude will not survive judicial scrutiny.

RESPONSE: The District has addressed the analysis that Sierra Research provided in Response to Comments #143 to #162. In these responses, the District details which parts of the analysis provided by Sierra Research are

flawed and/or inaccurate.

132. COMMENT: Again, the proposed rules are in direct conflict with California law as they are proposing to collect fees well in excess of what might be justified under a nexus test. State law is clear about what burden is on local agencies which propose to impose new fees on development. Government Code Section 66005(a) says ìWhen a local agency imposes any fee or exaction as a conditionSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 93 of approval of a proposed development Ö or development project, those fees or exactions shall not exceed the estimated reasonable cost of providing the service or facility for which the fee or exaction is imposed.î

RESPONSE: As stated in Response to Comment #52, the Mitigation Fee Act does not apply to the ISR rules. The author points out a significant reason why. Section 66005(a) clearly states ìas a condition of approvalî. The District cannot place conditions of approval on development projects through the ISR program, as it is a ministerial action. In addition, the fees are designed to mitigate only a fraction of project emissions and there is nearly zero potential for over mitigating. The fees are tonnage based (what is required to buy one ton of reduction for a particular pollutant) and are charged on a tonnage base. For example, if a project is required to mitigate 2 tons of NOx, then the price per ton is multiplied by 2 to obtain the off-site emission reduction fee.

133. COMMENT: Discretionary, site specific fees, the kind that the District proposes to impose on individual development projects after a project-specific analysis of all on-site mitigation measures, are subject to the stricter "essential nexus" and "rough proportionality" requirements of Nollan v. California Coastal Commission, 483 U.S. 825, 107 S. Ct. 3141 (1987), and Dolan v. City of Tigard , 512 U.S. 374,114 S. Ct. (1994); see discussion in Ehrlich at 12 Cal. 4th 876, 50 Cal. Rptr. 2d at 256,257; City of Monterey v. Del Monte Dunes at Monterey Ltd ., 526 U.S. 687, 119 S. Ct. 1624, 1635, 143 L. Ed. 2d 882 (1999).

RESPONSE: Although the District will not be making discretionary actions, the Rule has been designed to meet this test. The District has prepared an analysis of nexus requirements. See Response to Comment #125 for the findings of the analysis.

134. COMMENT: In spite of repeated requests from various local agencies and members of the public, the District has not made available any calculations of the amount of emissions credits that will be awarded for on-site mitigation measures. For reasons explored in greater detail in Sierra Researchís comment letter, the URBEMIS model was not designed to, and is incapable of, accurately calculating the amount of emissions reductions from most of the design or location-based indirect source mitigation measures included in the Districtís proposed mitigation checklist. The unknown cost of the deferred mitigation (achieved after the fact through a grant program) makes an accurate analysis of proportionality even more difficult. For this reason, any project-specific fee calculation will be suspect, and subject to the higher standard of review.

RESPONSE: The onsite emission reduction measures are calculated using the URBEMIS v8.7 mitigation component. The model is available for free at urbemis.com. The authorís statement that URBEMIS is, ìwas not designed to, and is incapable of, accurately calculating the amount of emissions reductionsSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 94 from most of the design or location-based indirect source mitigation measures included in the Districtís proposed mitigation checklist,î is inaccurate at best, and misleading at worst.

The URBEMIS model is maintained by a state-wide working group that includes representatives from air districts throughout California, state agency representatives (such as CalTrans). Proposed changes to the model are vetted through peer review. The last model update, sponsored by the District, was changes to the Area Source module, specifically overhauling and quantifying the mitigation section.

The model components and methodologies are available to the public in the URBEMIS Userís Guide, available at South Coast Air Quality Management

Districtís website http://www.aqmd.gov/ceqa/urbemis.html , and will be made available at the Districtís website. In addition, the details of the model and therecent update are available in the Staff Report and as Appendix DRecommended Changes to URBEMIS.For more information on URBEMIS components, see Response to Comment #9.

The authorís second main point is that, ìthe unknown cost of the deferred mitigation (achieved after the fact through a grant program) makes an accurate analysis of proportionality even more difficult.î The cost of ëdeferred mitigationí is exactly that of the off-site emission reduction fee. The applicant is assessed a fee based on the calculations provided in the rule. The per-ton fee is also provided in the rule. The applicant is assessed an administrative fee, stated in Rule 3180 as 4% of the off-site fee. The applicant is also assessed time and materials for the AIA review in excess of that covered by the application fee, detailed in Rule 3180. This is the full extent of fees. The ëdeferred mitigationí fee is expressly stated in the rules.

135. COMMENT: The District has failed to explain its calculations in determining a massive revenue-raising plan or the cost-benefit of the plan. According to the proposed rules, the District plans to raise between $300 million and $450 million in fees between 2006 and 2010 from housing alone. Similar fees will be collected from new schools, hospitals, government facilities, transportation projects, retail, office, and industrial development. The use of these funds, presumably, is to cut NOx emissions by 4.1 tons per day and PM-10 emissions by 5.2 tons per day. Yet, the Districtís own estimates show that NOx will cost an estimated $4,650 per ton in 2006, rising to $13,250 per ton in 2010 and that PM-10 reductions will cost $2,907 per ton, climbing to $13,850 per ton in 2010. These totals are far less than the fee revenue the District intends to raise during the same period.

RESPONSE: The ruleís emission calculations are designed to identify a level of reductions from new development that will meet the SIP targets at the cost per ton predicted each year for each pollutant. The $300-450 million for residentialSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 95 development severely overstates the fee potential and is based on an erroneous analysis of the rule requirements and incorrect calculations. For a detailed analysis of the cost effectiveness calculations, please review Appendix E ñ Cost Effectiveness Analysis for Rule 9510 ISR. For a detailed analysis of the emission reductions, please review Appendix B ñ Emissions Reductions Analysis

for Rule 9510 ISR.

136. COMMENT: The District has failed to lay out a coherent plan for using its mitigation plan to actually clean the air and to account for it. How the District intends to spend the massive amounts of money it is proposing to raise remains unclear. This in light of the recent concerns expressed by the Districtís Governing board that the District has not expended its existing motor-vehicle surcharge fees ñ representing over $50 million in taxpayer dollars ñ on mitigation measures in a timely and effective manner. In addition, in advancing these proposed rules ñ again, raising hundreds of millions of dollars over the next five years ñ the District has failed to present a clear and specific program to insure timely expenditures for measures that reduce emissions proportionately in the areas contributing fees.

RESPONSE: The District will provide additional information to clarify the proposed plan for expending any fees collected and has amended Appendix E ñ Cost Effectiveness Analysis for Rule 9510 ISR accordingly. The District has successfully contracted over $100 million in funds for air quality projects.

137. COMMENT: Finally, the District has failed to adequately recognize or account for the impact of the proposed rules on housing affordability and the regionís economy. The Socioeconomic Analysis examines narrowly examines housing impacts in terms of homebuilder profits without any similar analysis of housing cost and affordability impacts. This overlooks some important facts. Fees have a direct impact on homebuyers. According to a national study, every $1,000 added to the price of a home, locks more than 23,000 California families out of the housing market. Further, $1,000 to $4,000 added to the purchase price of a home escalates dramatically when it is financed with a typical 30 year mortgage.

What this does to housing affordability in the region is completely ignored. In addition, the Analysis overlooks the impact of higher housing costs on the regional economy. First, more money spent on housing means less money spent on other goods and services. Second, higher housing costs discourage new business development as housing costs are viewed by executives as having the biggest impact on labor costs. Finally, fewer buyers mean fewer homes to be built which means fewer construction jobs and the profound ripple effects on the regional economy. Right now, home construction represents more than $7 billion in annual economic output in the Central Valley and is responsible for creating nearly 70,000 new jobs every year.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 96 RESPONSE: First, the August 24, 2005 Socioeconomic Analysis provided at the September 1 st workshop contains an analysis of housing costs and affordability impacts in Section 6.3 ñ Impacts on Affected Industries. Section 6.3 ¶1 states, ìIn addition to impacts on homebuilders, the section analyzes how changes in price affect prospective homebuyers and renters,î and contains Affordable Housing for Low-and Moderate Income Households as a subsection. The analysis found: ...that while the residential fee that the typical residential development would pay under Draft Rule 9510 and 3180 can increase the amount of household income required to finance the purchase of a new home, the estimated increase represents a small fraction of the original household income required to finance a new home the event no air quality fees were in place. The affect of the fees on rents is similarly small. Page 1 Executive Summary

Second, 100 percent of all off-site funds collected will be spent on emission reduction projects in the San Joaquin Valley. This will create economic activity and jobs. Many of these projects involve the construction industry; for example, road paving to control PM10. The District recognizes that all off-site fees have an impact on the cost of development; however, the emission reductions obtained from the rule will benefit all residents of the San Joaquin Valley.

Finally, refer to Response to Comment #53 for additional information.

138. COMMENT: In addition to the impacts on housing, those on businesses and public service activities have not been fully analyzed. Half of the vehicle trips addressed by the proposed rules are assumed to come from non-residential uses, but it remains unclear how much non-residential uses are going to pay their mitigation obligations (fees). The Socioeconomic Analysis fails to mention fees for new schools, medical facilities or public facilities such as government offices, roads and libraries. The Socioeconomic Analysis concludes that the impact on commercial and industrial development will be significant, but fails to identify Valley-wide costs based on the full range of non-residential uses, or the ripple effect on public agencies, business start-ups and expansions, job generation and the cost of goods and services.

RESPONSE: The District is unsure where the author is referencing the assumptions on vehicle trips. The cost to any sector is proportional to the emissions caused by indirect, area, and construction emissions generated by the project. The potential cost to any development can be calculated using the URBEMIS model to calculate emissions and the cost of reductions for the year of development and fee formula from the rule. The fee formula and cost of reductions applies to all development subject to the rule equally.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 97 Valley-wide impacts would be speculative. As stated in the Socioeconomic Analysis (p. 42), ìIt is not clear how the development will adjust to the additional costs.î Although the analysis states that, ìa typical commercial or industrial development could absorb air quality fees in 2006 or 2010,î developers may choose to pass on the cost to the buyer or renter. This aspect is unknown, andany projected valley-wide impacts as a result would be speculative and nonquantifiable.

139. COMMENT: The proposed rules 9510 lack effectiveness estimates for on-site mitigation that lead to uncertainty and inaccurate fees. Appendix C contains a 12-page checklist of mitigation measures that developers must consider for their project. Project applicants are instructed to justify why they did not apply a particular mitigation measure if they decided not to use it. However, the checklist provides no control efficiencies for the measures, making it impossible for project developers to reach an informed decision about the most cost-effective methods. Of greatest concern, a large number of mitigation measures are not included in URBEMIS, and their effectiveness must be negotiated between the project applicant and the District. These off-model mitigation decisions inject great uncertainty and potential inaccuracy into determining the amount of mitigation provided and fees exacted.

RESPONSE: The effectiveness of on-site measures varies depending on the design of the project and the land uses and transportation systems supporting the project. A single percentage number for each on-site measure is not appropriate. Please see Response to Comments #7 and #9 on URBEMIS quantification of measures. It should be noted that URBEMIS is free, available to the public, and user-friendly.

140. COMMENT: The proposed rules will create an expansive new bureaucracy to perform duties that duplicate and conflict with existing local planning processes. Local jurisdictions already have the ability to address and mitigate construction and operational emissions of new development through environmental reviews ñ pursuant to the California Environmental Quality Act (CEQA). The most recent draft of the proposed rules actually appears to dismiss this likelihood for greater conflict and overlap with CEQA by eliminating previously published schedules for District staffís performance of project reviews, mitigation analyses and fee calculations. Indeed, at a recent District-sponsored workshop regarding the proposed rules, District staff essentially said that their measures were separate from those identical ones mandated by CEQA. Indeed, the failure of the District to clarify its role as a ìresponsible agencyî within the meaning of CEQA will foster conflicts with local governments, result in conflicting mitigation standards and requirements and fuel legal challenges ñ with direct and negative implications for job-generating business projects, affordable housing, schools, roads, and medical and public facilities urgently needed in the area.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

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Rule 9510 and Rule 3180 A - 98 RESPONSE: The rule will be revised to make the Districtís timeline more closely match CEQA timelines. An applicant may come to the District prior to or concurrent with the local agency discretionary application. This is similar current District consultation in its role as a commenting agency. Once the applicant has settled on a project design and scope and on-site measures that will be used for reducing air impacts, the District or the applicant can prepare an air quality impact assessment to determine project baseline emissions, mitigated emissions, and a off-site fee, if any is required. There will be no conflict with local agency mitigation standards since all on-site measures will be sent to the agency for voluntary review and the District will not accept conflicting measures. In addition, it is the responsibility of the applicant to ensure that measures selected are approvable by the public agency. If a selected measure is not approvable, the District will remove the selection and re-assess the projectís air impacts. Although more projects will be subject to analysis under this rule, air quality is a critical concern in the San Joaquin Valley and should be receiving this

additional attention.

141. COMMENT: The proposed rules lack essential information on construction emission reduction requirements. The latest draft rule requires new development to reduce construction emissions, but does not provide any details on how emission reduction requirements will be calculated. At the September 1 st

rule workshop, District staff was unable to confirm that a construction emissions ìcalculatorî would be available during the public comment period, or indeed prior to Board consideration of the rule. The homebuilding industry will be directly affected by this provision of the rule, but we cannot gauge the impact of the requirement without information on the assumptions and methods for calculating project emissions. Itís requested that this information be provided with time for public review period or eliminate construction emission requirements from the proposed rules.

RESPONSE: URBEMIS V 8.7 is available to quantify construction emissions. The District is working on enhancements to the default values in the model and will be considering a spreadsheet based calculator if it is more appropriate. This will be completed at least 30 days prior to program implementation.

142. COMMENT: For these reasons, as well as reasons previously placed on the record, we request that the District withdraw these proposals as inequitable and unworkable and unenforceable. Continuing down this path is a waste of public resources, which could be better put to use in developing alternative control measures well-designed and well-calculated to achieve compliance with the emission reduction goals set forth in the SIP.

RESPONSE:

• The District considers the ISR Rules to be equitable

Fees and assessment are emissions based and same for all land-uses.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 99 • The District considers the ISR rules to be workable. The rules set a clear path of what is required and how to achieve that. The URBEMIS model is used statewide by air districts and public agencies for project-specific air impacts.

• The District considers the ISR rules to be enforceable. The District is granted the authority to promulgate and enforce the rules through the following: The Clean Air Act Sec. 110 (5)(C) and 110 (5)(D)

Sierra Research Date: September 15, 2005

On behalf of the California Building Industry Association (CBIA), Sierra Research (Sierra) is pleased to submit the following comments on the revised draft Indirect Source Rules (ISR) 9510 and 3180 released by the San Joaquin Valley Unified Air Pollution Control District (the District) in late August.

Our comments in this letter expand upon those presented before the District at the September 1 st workshop. As directed by CBIA, our comments focus on, but are not limited to, technical and modeling issues related to the use of the URBEMIS model under the proposed rules based on our independent review of the model and its underlying assumptions. In this review we were assisted by Dowling Associates, Inc. (Dowling), a transportation planning firm with extensive travel demand modeling experience supporting a number of the San Joaquin Valley Transportation Planning Agencies (TPAs).

Our comments are summarized briefly blow. Detailed explanations of each comment

follow in attachment A.

143. COMMENT: Summary Our overarching concerns with the draft ISR rules stem from their use of the URBEMIS model to calculate pollutant emission impacts from development projects and the fact that URBEMIS broadly overstates vehicular emission impacts from residential projects . Our analysis of typical single-family residential projects indicates that URBEMIS overstates vehicle emissions of both NOx and

PM 10 (the two pollutants targeted by these ISR rules) by over 70%. Since the mitigation fees that developers would pay under the proposed rules are directly related to the emission impacts calculated by URBEMIS, this model also substantially inflates the fees developers should be required to pay by roughly the same percentage . Our key concerns are summarized below.

RESPONSE: Sierra Researchís conclusions are based on erroneous information. URBEMIS is designed to estimate all emissions related to a development project and counts all trips going to and coming from the development as is appropriate for a project level analysis. This accounts for theSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 100 higher emission numbers. By using trip counts using both ends of the trip, URBEMIS can credit developers who design their projects to generate less trips with reductions for both ends of the trips that were reduced. To avoid charging a fee on emissions that may be attributable to another new or existing indirect source, the fee formula is based on 50% of the baseline emissions after mitigation is applied onsite. The regional transportation model used as a comparison with URBEMIS is flawed when used for a project level analysis. The fees are not inflated compared to the impact. Sierra incorrectly calculated the potential fees.

144. COMMENT: URBEMIS Defaults Are Biased High ñ Most but not all of our concerns with the URBEMIS model result from its heavy reliance on detailed default assumptions that are not likely to be well understood by project applicants required to use the model under the proposed rules. As our analysis shows, a number of these default assumptions substantially overestimate residential project emissions in the following areas:

• by about 20% for NOx due to over-represented heavy-duty vehicles in the fleet mix;

• by over 20% for NOx, ROG and PM 10 because of older age distribution assumptions; and

• by roughly 50% for PM 10 due to incorrect silt loading factors; and

• by 20-30% for all pollutants from overstated average vehicle trip lengths in the San Joaquin Valley.

RESPONSE: The District will provide revised defaults accounting for land use specific fleet mix information, a Valley specific silt loading factor, and updated trip length data prior to rule implementation. The District will consider an age correction factor; however, more evidence of the validity of this approach is

needed.

145. COMMENT: URBEMIS Is Inconsistent With SIP Methodology ñ Region-wide pollutant emissions calculated under State Implementation Plans (SIPs) use a more rigorous set of models to determine motor vehicle travel impacts and resulting emission impacts than represented in URBEMIS. During the ISR rule development, the District has provided no clear evidence that URBEMIS is capable of calculating emissions from development projects in a manner that is

consistent with SIP-level emissions and has simply asserted its appropriateness

for use under these rules.

To test the Districtís assertion, Sierra and Dowling performed an equivalent, side-by-side analysis of travel and emissions impacts of a typical hypotheticalSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 101 ìsuburban fringeî residential project using both URBEMIS and the Fresno County regional travel demand model (one of several county-level travel demand models used to calculate vehicle travel under the SIP). (As in URBEMIS, emission impacts were calculated using the Air Resources Boardís EMFAC2002 vehicle emission factor model.) Our analysis found that URBEMIS estimates over 60% higher vehicle miles traveled (VMT) and over 50% higher emissions for all pollutants than the travel model/SIP-based approach. Moreover, this discrepancy cannot apparently be corrected by using ìbetterî URBEMIS inputs than the default assumptions built into the model. Thus, these findings cast doubt on the validity of broadly applying URBEMIS under the ISR rule as URBEMIS clearly does not produce SIP-consistent emission impacts

.

RESPONSE: Prior to implementation, the District will provide updated default values to provide the most accurate emission estimates possible. Regional travel demand models are not practical for project level analysis. The rule requires 50 percent of baseline emissions to be mitigated. The 50 percent more than accounts for emissions due to counting both ends of the trips related to the project. URBEMIS counts two way trips to account for the total impact of the project. When used in analyze a single project, this is appropriate measure of impact. When looking at regional impacts, only half of the trips should be counted since if every project, new and existing were examined at once it would exactly double count the trips. Using URBEMIS will result in consistent analysis from project to project. Emission reductions achieved by the rule from offsite measures will be calculated using emission factors and methods consistent with the SIP. Onsite measures will be credited in accordance with EPA Voluntary and Emerging Emission Measures Policy.

146. COMMENT: Residential Fees Appear Understated in Socioeconomic Report ñ In addition to the comments summarized above on the URBEMIS model, we also have concerns with the fee estimates for typical residential developments contained in the Districtís socioeconomic analysis of the ISR rules. Table 16 of the socioeconomic report cites ìworst-case î fee estimates ranging from $856 per unit in 2006 to $2,841 per unit in 2010 . The supporting text offers no explanation of how these estimates were developed.

Its fundamental flaws notwithstanding, Sierra independently estimated residential fees using URBEMIS, and the fee formulas and cost reduction ratios contained in the August drafts of Rule 9510 and 3180. Our analysis found fees were twice as high ($1,607-$7,971 per unit) over the same period for a single-family residential development, assuming a default housing density of 3 units/acre. When the housing density was doubled (to 6 units/acre), per unit fees were still over 50% higher ($1,295-$5,556 per unit) than those cited (without explanation) In the socioeconomic report. . We also calculated fees assuming a 93% vs. 7% split between single and multi-family units, based on the average number of new single- and multi-family housing units permitted in the San Joaquin Valley inSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 102 2002 obtained from the California Department of Finance ( http://countingcalifornia.cdlib.org/title/castat.html ). Even under these mixed use assumptions, our fee estimates ranged from $1,550-$7,702 per unit, still nearly twice as high as those in the socioeconomic report.

Thus, we question how the estimates in that report were developed. Our analysis suggests that the worst case residential fees are substantially higher than those employed in the socioeconomic analysis. If this is correct, then the impacts quantified in the study are understated and would need to be revised.

RESPONSE: Sierra incorrectly calculated the construction emission reductions.

This accounts for the differences between the Districtís numbers in the socioeconomic impact report and Sierraís inflated numbers.

147. COMMENT: Revenue From Residential Fees Will Dramatically Exceed the Cost of Purchasing Mitigation Needed to Meet ISR SIP Commitments ñ Using information developed by the District for this rulemaking, Sierra prepared estimates of the funds that will be generated from residential fees and spent purchasing mitigation between 2006 and 2010. We found incoming fee revenue exceeded outgoing mitigation expenses by $146 to $728 million depending on the level of the fee assumed (the percent difference ranges from 377% to 1,873%). The magnitude of these differences indicates that the rule is seriously flawed. There are two primary reasons for the discrepancy between fee revenue and mitigation expenses. First, as noted above, URBEMIS default assumptions include biases that lead to significant overestimates of project emissions, which in turn lead to overpayment of mitigation fees. Second, there is a fundamental flaw in the fee formulas developed for the rule that overstates the cost of purchasing mitigation.

The fee formulas are designed to advance to the District a monetary sum necessary to mitigate excess emissions not mitigated onsite for a period of ten

years . Assuming no onsite mitigation, the operational NOx formula requires payment for 2.5 times and the operational PM 10 formula requires payment for 5 times the estimated base year emissions . The important point is that developers would be required to pay mitigation fees that offset several years of project emissions. Mitigation expenses, however, are not denominated in years. Instead they represent a single one-time purchase that continues to provide emission reductions for multiple years. According to the staff report the average project life for NOx mitigation is 7 years and for PM 10 it is 12 years.

Thus, assuming no onsite mitigation, a project applicant can expect to pay for 17.5 years of mitigation for the base year NOx emissions of the project (i.e., 2.5 × 7) and 60 years of mitigation for the base year PM 10 emissions of the project (i.e., 5 × 12). This bias is extreme and comes on top of the significant default biases incorporated into URBEMIS. Collectively, they explain the huge absoluteSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 103 and percentage difference between incoming fees and outgoing mitigation expenses. Since the residential fees in this analysis are used to purchase all of the ISR SIP mitigation commitments, the inclusion of both residential and nonresidential (e.g., industrial) development fees would only worsen the already enormous inconsistency between ISR revenue and expenses.

RESPONSE: The fee formula does not include a project life multiplier of 7 or 12 years. Any funds collected will be used on projects with average project lives of 7 for NOx or 12 years for PM10, so the mitigation is effective for that long on average. The fee formula calculates an amount of emissions in tons that must be mitigated at the cost of reductions for each year. For most projects funded, the reductions may be considered permanent since at the end of the project life new engines/devices will be purchased that achieve reductions that are equivalent or better.

148. COMMENT: Conclusions.

The draft ISR rules have serious and fundamental flaws related to their reliance on URBEMIS and its extreme overstatement of residential project emissions. Moreover, our analysis of incoming and outgoing revenue streams indicates that the ISR fee formulas dramatically overstate the amount of revenue needed to buy emission reduction offsets for NOx and PM 10 at ìmarketî prices estimated by

the District.

RESPONSE: The District strongly disagrees with this conclusion. Sierra based its conclusions on erroneous calculations and comparisons.

SIERRA RESEARCH

ATTACHMENT A

DETAILED COMMENTS

Our detailed comments on the ISR rules are presented below. Some of these comments were provided by Sierra to the District in July in response to the preceding versions of the draft rules. For completeness and where relevant as related to the Districtís response to these earlier comments, they are repeated in this letter. At the end of each of these comments, we have listed the Districtís response as contained in Appendix A of the August version of the ISR rule packet and provided follow-up comments to these responses.

149. COMMENT: URBEMIS Fleet Mix Overstates Residential Project Emissions

ñ One of the most striking instances of inappropriate default data in URBEMIS is the distribution of vehicle types (e.g., passenger cars, light trucks, heavy trucks, etc.) or ìfleet mixî employed in the model. Fleet mix differences can significantly impact calculated vehicle emissions because of the relative stringency imposed on different vehicle types under emission certification standards adopted and implemented by the state Air Resources Board (ARB). Generally speaking,SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 104 passenger cars must meet more stringent (i.e., lower) emission standards than larger vehicle types such as heavy-duty trucks.

The default fleet mixes in URBEMIS (which vary slightly by calendar year) are based on statewide average distributions contained in ARBís EMFAC2002 model. Those default distributions assume that roughly 3% of the vehicles are heavy-duty vehicles (trucks and buses). This is reasonable for a statewide or air basin average of a large vehicle fleet, but clearly not representative of the mix of vehicles operating in a new residential project . New residential projects are not likely to contain any heavy-duty vehicles (in the ìoperatingî phase following construction). Thus, the use of the URBEMIS default fleet mixes that contain heavy-duty vehicles is clearly inappropriate for these projects

.

Table 1 compares the results of URBEMIS runs with default and ìno heavy-dutyî adjusted fleet mixes. These URBEMIS runs were performed for hypothetical 100-unit residential development with single family detached housing for calendar year 2005 using default assumptions for the remaining inputs and assume no mitigation.

The upper portion of Table 1 shows the existing default fleet mix and the corrected fleet mix which was adjusted by removing all heavy-duty vehicle categories and renormalizing the remaining percentages. The lower portion compares operating emissions calculated by URBEMIS using each fleet mix. Although the emission impacts for ROG and PM 10 are minimal, NOx emissions

are some 23% lower (2.13 vs. 2.76 tpy) when representative fleet mix is used to model residential project emissions.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 105 Table 1 Emission Impacts of Corrected Vehicle Fleet Mix (SJV Fleet, Calendar Year 2005)

Vehicle Class Default Mix (%) Adjusted Mix (%)

Light Auto 56.1 58.1

Light Truck 1 15.1 15.6

Light Truck 2 15.5 16.1

Med Truck 6.8 7.0

Light-Heavy Truck 1 1.0 -

Light-Heavy Truck 2 0.3 -

Med-Heavy Truck 1.0 -

Heavy-Heavy Truck 0.8 -

Line Haul 0.0 -

Urban Bus 0.1 -

Motorcycle 1.6 1.7

School Bus 0.3 -

Motor Home 1.4 1.5

FLEET TOTALS 100.0 100.0

Heavy-Duty Pct. 3.5 0.0

Operating Emissions (tpy) for 100-Unit Residential Project:

ROG 2.18 2.16

NOx 2.76 2.13

PM 10 1.99 1.98

This is a clear instance where URBEMIS default inputs are not appropriate and significantly overstate NOx emissions and resulting mitigation fees that would be calculated under the District proposed ISR rules. This finding clearly points out the need for the District to thoroughly review the default assumptions in URBEMIS and carefully consider the technical capabilities of applicants as end

users of the model under these rules.

RESPONSE: The District is working to ensure that the fleet mix assumptions in URBEMIS are appropriate for each land use type. The District will provide updated land use specific fleet mix information for residential development and possibly other land uses prior to rule implementation. URBEMIS data files containing the updated fleet mix data will be available for ease of use. We will accept changes to default information such as fleet mix when supported by adequate documentation. While the fleet average may somewhat overstate emissions [from] residential developments there are heavy-duty truck emissions associated with them. These include school buses, refuse collection, package delivery and other service vehicles.

150. COMMENT: Follow-Up ñ Refuse collection vehicles are contained in the heavyheavy truck (HHT) category. In 2004, ARB adopted a statewide rule for controlling emissions from solid waste collection vehiclesSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

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Rule 9510 and Rule 3180 A - 106 ( http://www.arb.ca.gov/regact/dieselswcv/dieselswcv.htm ). Under that effort, a solid waste collection vehicle emissions inventory was prepared which identified the statewide population of both residential and commercial refuse collection vehicles as 11,778 in calendar year 2000. According to EMFAC2002, the statewide population of all HHTs in 2000 was 158,204. Thus, residential and commercial refuse collection vehicles represent only 7% (11,778  ̃ 158,204) of the total HHT population, with residential collection vehicles less than that.

Package delivery and other service vehicles generally span the light-heavy truck (LHT) and medium-heavy truck (MHT) categories, but the vehicle populations and vehicle miles traveled for those vehicles serving residential customers is likely much less than those serving commercial customers. Thus, the EMFAC2002 fleet percentages for the LHT and MHT categories still overstate the fractions of those vehicles serving residential areas.

To address these issues, the analysis presented earlier in Table 1 was revised to include school buses and all LHTs and MHTs at the same proportions of the original EMFAC2002 fleet mix. This addresses the District concern that school buses be included and conservatively overstates the representation of residential package delivery and other service vehicles. Since residential refuse collection vehicles represent a very small fraction of all HHTs (less than 7%), the HHT residential fleet fraction was set to zero. Using this revised residential fleet mix, NOx emissions were calculated to be 2.44 tpy, which are 12% lower (2.44 vs. 2.76 tpy) than those based on URBEMIS defaults.

Thus, we believe NOx emissions for a properly determined residential fleet mix

are still 12-20% lower than if URBEMIS defaults are used , depending on what assumptions are made with respect to the package delivery and other service

vehicle fractions of LHTs and MHTs.

RESPONSE: EMFAC emission projections are revised periodically to account for changes from adopted motor vehicle emission regulations. The next version of EMFAC is expected to be released in 2006. The District will help fund the next upgrade to URBEMIS to utilize the new EMFAC. The Districtís methodology for estimating land use specific fleet mixes will be available prior to rule implementation

151. COMMENT: URBEMIS Age Distribution Overstates Residential Project

Emissions ñ Another area where URBEMIS does not accurately reflect particular project conditions relates to the distribution of vehicle ages internally built in to the model. The vehicle age distributions contained in URBEMIS are based on statewide average vehicle registrations for the entire on-road fleet contained in the EMFAC2002 model. These distributions likely reflect a generally older vehicle fleet than exists in a new residential project. Vehicle emissions strongly depend on vehicle age due to ARBís implementation of dramatically tighterSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 107 emission standards over the last 30 years. New vehicles today are approximately 10-20 times cleaner than those introduced in the early 1970s. And this trend will continue into the future. Thus, it is necessary to accurately represent the age distribution of a fleet of vehicles when calculating their

emissions.

Our subcontractor Dowling has compiled statistics on housing age and vehicle fleet age from two readily available data sources: 1) the 2000 U.S. Census; and 2) the 2001 Caltrans Statewide Household Travel Survey. They compared vehicle age from households in the San Joaquin Valley in two groups:

1. ìnewî households defined as those that were ≤ 10 years old; and 2. ìoldî households defined as those older than 10 years.

Dowling found that the ìnewî housing areas had a 49.5% to 50.5% mix between

vehicles ≤ 5 years old and vehicles > 5 years old. In the ìoldî household areas, the split between ≤ 5 year old vehicles and vehicles > 5 years old was 35.7% to 64.3%, indicating that new households in the San Joaquin Valley reflect a newer vehicle fleet than represented by the URBEMIS model defaults for the entire

area

.

Figure 1 illustrates the differences in vehicle age distributions between those in the EMFAC2002 model (upon which URBEMIS is based) and those developed for a typical new residential development based on Dowlingís findings. As highlighted in Figure 1, new residential developments exhibit a much larger fraction of newer and therefore generally cleaner vehicles.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 108 Figure 1

Comparison of Light-Duty Automobile Age Distributions (Calendar Year 2005)

0.00 0.02 0.04 0.06 0.08 0.10 0.12

0 5 10 15 20 25 30 35 40 45

Age (years)Population Fraction URBEMIS-Statewide EMFAC-SJV New Residential SJV

New residential developments exhibit a much

higher fraction of newer, cleaner vehicles

The emissions impact of using a younger age distribution typically found in new residential developments was determined from a series of spreadsheet calculations by individual model year using age-specific emissions factors

extracted from the EMFAC2002 model.

Table 2 presents and compares resulting light-duty automobile exhaust emission factors (in grams per mile) during summer in calendar year 2005. Table 2 also shows the percentage difference in emission factors (and thus calculated project exhaust emissions) using the URBEMIS and New Residential age distributions.

Table 2 Exhaust Emission Impacts of Corrected Vehicle Age Distribution (SJV Light-Duty Auto Fleet, Calendar Year 2005, Summer)

Quantity/Age Distribution ROG NOx PM 10 Emission Factor (grams/mile) - URBEMIS Default 0.177 0.290 0.0082

Emission Factor (grams/mile) - New Residential 0.132 0.222 0.0065

% Difference (New Residential vs. URBEMIS) -25.6% -23.3% -20.5%

As highlighted in Table 2, exhaust emissions of light-duty automobiles were found to be over 20% lower for ROG, NOx and PM 10 when an age distribution representative of a typical new residential neighborhood is used compared to theSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT

Appendix A: Comments and Responses Rule 9510 and 3180 December 15, 2005

Final Draft Staff Report for Proposed

Rule 9510 and Rule 3180 A - 109 existing fleet-average age distribution contained in URBEMIS. These emission impacts calculated for automobiles are likely to be similar for light-duty trucks as well, which together with automobiles account for about 90% of the vehicles in a residential project fleet.

RESPONSE : The District will consider adding an age correction factor in the fee calculation formula for residential development. The emissions for PM10 in the table appear to be from exhaust and are small compared to the entrained road dust that is not affected by the age of the vehicle.

152. COMMENT: Unlike the previous fleet mix problem which can be addressed by issuing guidance to supply a different fleet mix in one of the URBEMIS input screens, the model cannot be easily revised to properly account for a representative residential vehicle fleet age distribution . The way URBEMIS is currently designed, it internally uses a series of calendar year and season specific emission factor files developed from ìupstreamî runs of the EMFAC2002 model for a statewide average vehicle fleet . Although it is possible to generate air basin-specific EMFAC2002 files, URBEMIS would need to be re-programmed to utilize these air basin-specific emission factors. More importantly, fleet age distributions for an air basin as a whole are still not likely to reflect those of a typical new residential project . This can clearly be seen from the ìEMFAC-SJVî and ìNew Residential SJVî distribution plotted earlier in Figure 1.

The EMFAC2002 model maintained by ARB is designed to produce several types of outputs under the following three modes: 1) ìBurdenî; 2) ìEmfacî; and 3) ìCalimfacî. URBEMIS is currently designed to work with ìEmfacî mode outputs from EMFAC2002. Although EMFAC2002 can be run with different age distributions, this feature is only available under the ìBurdenî output mode, not

the ìEmfacî mode.

Thus, we believe the District will need to completely overhaul the design of

URBEMIS and its interaction with ARBís ìofficialî EMFAC2002 emission factor model or consider another analysis method/tool to adequately address this age distribution issue for residential project analyses under the ISR rules.

RESPONSE: The District continues to believe that URBEMIS is the appropriate tool for the job. The District will consider an off model vehicle age correction if well documented. However, the District believes that the fleet average is a reasonable assumption for new development projects. There are a number of factors that impact emissions including age, vehicle class, and fleet turnover. If more specific information is available, the District would consider utilizing project specific numbers.