AB 1777: Air pollution: indirect sources.
- Session Year: 2025-2026
- House: Assembly
- Latest Version Date: 2026-02-09
Current Status:
In Progress
(2026-05-18: Read second time. Ordered to third reading.)
Introduced
In Committee
Awaiting First Chamber Vote
Passed First Chamber
In Committee
Awaiting Second Chamber Vote
Passed Second Chamber
Enacted
Existing law generally designates the State Air Resources Board as the state agency with the primary responsibility for the control of vehicular air pollution, and air pollution control districts and air quality management districts with the primary responsibility for the control of air pollution from all sources other than vehicular sources. Existing law authorizes air districts to adopt and implement regulations to reduce or mitigate emissions from indirect sources of air pollution.
Existing law requires the state board to adopt rules and regulations relating to vehicular emissions standards, as specified, that will achieve the ambient air quality standards required by federal law in conjunction with other measures adopted by the state board, air districts, and the United States Environmental Protection Agency.
This bill would authorize the state board, if necessary to carry out that duty to achieve those ambient air quality standards, to adopt regulations to reduce or mitigate emissions from indirect sources of pollution.
Existing law makes any violation of a rule or regulation of the state board relating to nonvehicular air pollution control a misdemeanor.
Because a violation of these regulations of the state board with respect to nonvehicular sources subject to those regulations would be a crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(a)The state board shall adopt rules and regulations pursuant to Section 43013 that, in conjunction with other measures adopted by the state board, the districts, and the United States Environmental Protection Agency, will achieve ambient air quality standards required by the federal Clean Air Act (42 U.S.C. Sec. 7401 et seq.) in all areas of the state by the applicable attainment date, and to maintain these standards thereafter. The state board shall adopt these measures if they are necessary, technologically feasible, and cost effective, consistent with Section 43013.
(b)If necessary to carry out its duties under this section, the state board shall adopt and enforce rules and regulations that anticipate the development of new technologies or the improvement of existing technologies. The rules and regulations shall require standards that the state board finds and determines can likely be achieved by the compliance date set forth in the rule.
(c)(1)If necessary to carry out its duties under this section, the state board may adopt regulations to reduce or mitigate emissions from indirect sources of pollution.
(2)The Legislature finds and declares that paragraph (1) is declaratory of, and does not constitute a change in, existing law.
(d)For purposes of this section, indirect source has the same meaning as set forth in Section 7410(a)(5)(C) of Title 42 of the United States Code.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
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Date
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Status
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|---|---|
| May 18, 2026 | Read second time. Ordered to third reading. |
| May 14, 2026 | From committee: Do pass. (Ayes 10. Noes 4.) (May 14). |
| Apr 8, 2026 | In committee: Set, first hearing. Referred to APPR. suspense file. |
| Mar 24, 2026 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 4.) (March 23). Re-referred to Com. on APPR. |
| Feb 23, 2026 | Referred to Com. on NAT. RES. |
| Feb 10, 2026 | From printer. May be heard in committee March 12. |
| Feb 9, 2026 | Read first time. To print. |
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Date
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Description
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Location
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Votes
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|---|---|---|---|---|
| May 14, 2026 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
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| Mar 23, 2026 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Natural Resources |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| 350 Humboldt | ** Support | |
| Alliance of Nurses for Healthy Environments | ** Support | |
| american council of engineering companies | ** Against | |
| American Lung Association | ** Support | |
| American Trucking Association | ** Against | |
| Associated General Contractors | ** Against | |
| Association of Equipment Manufacturers | ** Against | |
| Bay Area Air Quality Management District | ** Support | |
| BOMA California | ** Against | |
| Breast Cancer Prevention Partners | ** Support | |
| California Advanced Biofuels Alliance | ** Against | |
| California Alliance for Jobs | ** Against | |
| California Association Of Port Authorities | ** Against | |
| California Association Of Realtors | ** Against | |
| California Automotive Wholesalers’ Association | ** Against | |
| California Building Industry Association | ** Against | |
| California Business Properties Association | ** Against | |
| California Business Roundtable | ** Against | |
| California Chamber Of Commerce | ** Against | |
| California Citrus Mutual | ** Against | |
| California Construction And Industrial Materials Association | ** Against | |
| California Cotton Ginners & Growers Association | ** Against | |
| California Environmental Voters | ** Support | |
| California Family Beer Distributors | ** Against | |
| California Forestry Association | ** Against | |
| California Fuels And Convenience Alliance | ** Against | |
| California Grocers Association | ** Against | |
| California Hotel & Lodging Association | ** Against | |
| California Manufacturers & Technology Association | ** Against | |
| California Moving And Storage Association | ** Against | |
| California New Car Dealers Association | ** Against | |
| California Railroads | ** Against | |
| California Renewable Transportation Alliance | ** Against | |
| California Retailers Association | ** Against | |
| California Self Storage Association | ** Against | |
| California State Council Of Laborers | ** Against | |
| California Strawberry Commission | ** Against | |
| California Tow Truck Association | ** Against | |
| California Trucking Association | ** Against | |
| California Walnut Commission | ** Against | |
| California Waste Haulers Council | ** Against | |
| Calstart | ** Support | |
| Can Manufacturers Institute | ** Against | |
| Center For Biological Diversity | ** Support | |
| Center for Community Action and Environmental Justice | ** Support | |
| Center For Environmental Health | ** Support | |
| Central California Asthma Collaborative | ** Support | |
| Central California Environmental Justice Network | ** Support | |
| Central Coast Alliance United for a Sustainable Economy | ** Support | |
| Clean Energy | ** Against | |
| cleanearth4kids.org | ** Support | |
| Climate Action California | ** Support | |
| Coalition For Clean Air | ** Support | |
| Communities for a Better Environment | ** Support | |
| Downtown San Diego Partnership | ** Against | |
| E2 | ** Support | |
| Earthjustice | ** Support | |
| Environmental Defense Fund | ** Support | |
| Environmental Protection Information Center (EPIC) | ** Support | |
| Facts Families Advocating for Chemical and Toxics Safety | ** Support | |
| Family Business Association of California | ** Against | |
| Friends Committee On Legislation Of California | ** Support | |
| Greenlining Institute | ** Support | |
| Hexagon Agility | ** Against | |
| Industrial Environmental Association | ** Against | |
| INTERNATIONAL LONGSHORE & WAREHOUSE UNION LOCAL 13 | ** Against | |
| INTERNATIONAL LONGSHORE & WAREHOUSE UNION LOCAL 63 | ** Against | |
| INTERNATIONAL LONGSHORE & WAREHOUSE UNION LOCAL 94 | ** Against | |
| International Warehouse Logistics Association | ** Against | |
| Leadership Counsel for Justice and Accountability | ** Support | |
| Los Angeles Area Chamber Of Commerce | ** Against | |
| Los Angeles County Business Federation (BIZ-FED) | ** Against | |
| NAIOP of California | ** Against | |
| NAIOP SoCal | ** Against | |
| National Association of Pediatric Nurse Practitioners - San Francisco Bay Area Chapter | ** Support | |
| Natural Resources Defense Council | ** Support | |
| Nurse Heroes for Zero | ** Support | |
| Ocean Conservancy | ** Support | |
| Orange County Business Council | ** Against | |
| Orange County Chapter of National Association of Pediatric Nurse Practitioners | ** Support | |
| Pacific Environment | ** Support | |
| Pacific Merchant Shipping Association | ** Against | |
| Pesticide Action and Agroecology Network | ** Support | |
| Plug In America | ** Support | |
| Port of Long Beach | ** Against | |
| Prevention Institute | ** Support | |
| Rebuild Socal Partnership | ** Against | |
| Regional Asthma Management and Prevention (RAMP) | ** Support | |
| Resource Recovery Coalition Of California | ** Against | |
| Resource Renewal Institute | ** Support | |
| San Bernardino County Medical Society | ** Support | |
| San Diego Regional Chamber Of Commerce | ** Against | |
| San Francisco Bay Physicians for Social Responsibility | ** Support | |
| Sierra Club California | ** Support | |
| Society of Latinx Nurses | ** Support | |
| Southern California Leadership Council | ** Against | |
| Specialty Equipment Market Association (Sema) | ** Against | |
| St. John's Community Health | ** Support | |
| Streets for All | ** Support | |
| Supply Chain Council | ** Against | |
| The Climate Center | ** Support | |
| The Transport Project | ** Against | |
| Transportation California | ** Against | |
| Union Of Concerned Scientists | ** Support | |
| Western Growers Association | ** Against | |
| Western Propane Gas Association | ** Against | |
| Western States Petroleum Association | ** Against | |
| Western States Trucking Association | ** Against | |
| Western Tree Nut Association | ** Against |
ASSEMBLY THIRD READING
ATR Bill Id:AB 1777
Author:(Garcia)
As Introduced Ver:February 9, 2026
Majority vote
SUMMARY
Authorizes the Air Resources Board (ARB) to adopt regulations to reduce or mitigate emissions from indirect sources of pollution.
Major Provisions
- Authorizes ARB, if necessary to carry out its duties under state law to achieve and maintain National Ambient Air Quality Standards (NAAQS), to adopt regulations to reduce or mitigate emissions from indirect sources of pollution, and finds and declares that this provision is declaratory of, and does not constitute a change in, existing law.
- Defines "indirect source" by reference to the federal Clean Air Act (CAA) definition, i.e., "a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollution…" (42 U.S.C. 7410(a)(5)(C))
COMMENTS
The CAA defines indirect sources as "a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollution." For example, a warehouse or port could be an indirect source; it does not produce significant emissions itself, but it causes a concentration of mobile sources in a place they may not otherwise have been. New indirect sources are reviewed to ensure they will not attract sufficient mobile sources to exceed any NAAQS.
Actions taken to reduce these emissions (indirect source rules, or ISRs) can vary significantly and be implemented flexibly. Implementing an ISR could look like installing zero-emission vehicle infrastructure, requiring mobile sources to use cleaner technology, or requiring other mitigations or fees. In California, ISRs are currently the exclusive purview of the air districts, although many of the actions required under an ISR may have significant overlap with other mobile source regulations imposed by ARB. Still, other actions considered as part of an ISR could resemble actions taken by local governments, such as carrying out projects that are part of a Sustainable Communities Strategy. In short, the exact confines and contours of what an ISR can and cannot be are not entirely clear in statute.
In 2021, the South Coast Air Quality Management (SCAQMD) adopted an ISR rules for warehouses (Rule 2305), which requires warehouses greater than 100,000 square feet to directly reduce nitrogen oxide (NOx) and diesel particulate matter (PM) emissions, or to otherwise reduce emissions and exposure of these pollutants in nearby communities.
According to SCAQMD, warehouses are a key destination for heavy-duty trucks and have other sources of emissions like cargo handling equipment, all of which contribute to local pollution, including toxic emissions, to the communities that live near them. Emissions from sources associated with warehouses account for almost as much NOx emissions as all the refineries, power plants, and other stationary sources in the South Coast Air Basin combined. Those living within a half mile of warehouses are more likely to include communities of color, have higher rates of asthma and heart attacks, and a greater environmental burden.
As part of the rule, warehouse operators need to earn a specified number of points annually. These points can be earned by completing actions from a menu that includes acquiring and using natural gas near-zero and/or zero-emission on-road trucks, zero-emission cargo handling equipment, solar panels, or zero-emission charging and fueling infrastructure and more. As alternatives to the points system, warehouse operators can prepare and implement a custom plan specific to their site or choose to pay a mitigation fee. Funds from mitigation fees will be used to incentivize the purchase of cleaner trucks and charging/fueling infrastructure in communities near the warehouse that paid the mitigation fee.
SCAQMD has also proposed, but not adopted, an ISR rule for the Ports of Los Angeles and Long Beach, as well as voluntary measures through a memorandum of understanding (MOU). In February 2025, SCAQMD published its first draft of a proposed rule (Rule 2304) that would require the two ports to develop a plan by August 2027 to build charging and fueling stations to switch thousands of pieces of diesel equipment, trucks and vessels to electricity and hydrogen.
The proposed rule aimed to ensure that the Los Angeles and Long Beach ports can achieve the clean-air goals they set for themselves back in 2017: converting 100% of their diesel cargo-handling equipment – such as tractors and giant, 60-foot cranes that move containers – to zero emissions by 2030. They also aim for all drayage trucks, which haul the ports’ containers of cargo to warehouses, to run on electricity or hydrogen by 2035.
In November 2025, SCAQMD and the ports approved an MOU to address port emissions and SCAQMD put its ISR rulemaking process on hold.
According to the Author
This bill aims to add more tools for California to combat the drastic rollback by the Trump Administration's desire to jeopardize Californians health and safety…AB 1777 codifies regulatory authority for ARB to focus on combating the public health catastrophe of the Trump Administration. By using Indirect Source Rules, ARB can allow flexible compliance mechanisms that allow companies to choose how to meet their obligations.
Arguments in Support
According to co-sponsors Earthjustice, American Lung Association, and Natural Resources Defense Council), while ARB has a long history of adopting innovative policies to reduce air pollution, many parts of the state still do not meet basic state and federal air quality standards. This problem is exacerbated by federal government attacks on the state's lifesaving vehicle emission standards. ARB's analysis shows that these federal actions will lead to an additional 175 tons per day of smog-forming NOx emissions statewide, or a 40% increase in NOx pollution from vehicles. This added pollution will have a direct impact on the health of all Californians, including an estimated 14,500 premature deaths and nearly 7,000 excess emergency room visits. (This bill) provides a critical pathway for the state to curb this dangerous pollution and safeguard public health using indirect source rules. These innovative and commonsense regulations have a proven track record of helping Californians breathe cleaner air. Details including specific regulated entities, cost-effectiveness and timeline will be deliberated through ARB's regulatory process during which all stakeholders have an opportunity to provide input.
Arguments in Opposition
According to a coalition of business and agriculture organizations, AB 1777 would represent one of the largest expansions of California's regulatory regime in history, allowing ARB to adopt redundant, costly measures for sources that are already tightly, directly regulated by existing rules. Worse, this expansion of the regulatory state would be of dubious benefit towards the State’s clean air goals. For example, the Biden EPA gave California no emission reduction credit for Rule 2305. ISRs have been proven to be ineffective as an emission reduction strategy. A recent study conducted by Ramboll found that the SCAQMD Warehouse ISR has failed to produce meaningful emission reductions and has been significantly more costly than projected.
FISCAL COMMENTS
According to the Assembly Appropriations Committee, ongoing cost pressures of an unknown but potentially significant amount, likely in the low millions of dollars, for ARB to adopt and enforce regulations to reduce or mitigate emissions from indirect sources of pollution (General Fund or special fund such as the Air Pollution Control Fund, Cost of Implementation Account, or Greenhouse Gas Reduction Fund). Actual costs will depend on whether ARB elects to exercise the authority granted by the bill, the extent to which the board pursues ISRs in districts across the state, and the scope and complexity of future rulemakings.
VOTES
ASM NATURAL RESOURCES: 9-4-1
YES: Bryan, Connolly, Garcia, Haney, Kalra, Pellerin, Schultz, Wicks, Zbur
NO: Ellis, Alanis, Hoover, Macedo
ABS, ABST OR NV: Muratsuchi
ASM APPROPRIATIONS: 10-4-1
YES: Wicks, Aguiar-Curry, Calderon, Caloza, Fong, Krell, Pacheco, Pellerin, Sharp-Collins, Solache
NO: Hoover, Dixon, Ta, Tangipa
ABS, ABST OR NV: Mark González
UPDATED
VERSION: February 9, 2026
CONSULTANT: Lawrence Lingbloom / NAT. RES. / (916) 319-2092 FN: 0002676
Date of Hearing: April 8, 2026
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Buffy Wicks, Chair
ABPCA Bill Id:AB 1777
Author:(Garcia) – As Introduced Ver:February 9, 2026
Policy Committee: | Natural Resources | Vote: | 9 - 4 |
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| ||
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Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill authorizes the Air Resources Board (ARB), if necessary to carry out its duties related to achieving ambient air quality standards, to adopt regulations to reduce or mitigate emissions from indirect sources of pollution.
FISCAL EFFECT:
Ongoing cost pressures of an unknown but potentially significant amount, likely in the low millions of dollars, for ARB to adopt and enforce regulations to reduce or mitigate emissions from indirect sources of pollution (General Fund or special fund such as the Air Pollution Control Fund, Cost of Implementation Account, or Greenhouse Gas Reduction Fund). Actual costs will depend on whether ARB elects to exercise the authority granted by the bill, the extent to which the board pursues ISRs in districts across the state, and the scope and complexity of future rulemakings.
For context, according to ARB, an approximate range for a larger rulemaking is between $1 million and $10 million. This type of rulemaking typically takes between three and five years and can involve between three and seven full-time program staff, as well as other ancillary staff (such as legal and IT) as needed. Some rulemakings also require contracts for studies, surveys, and dataset purchases, which can cost tens of thousands of dollars.
The Legislative Analyst’s Office recently warned of General Fund structural deficits of around $35 billion per year in the 2027-28 fiscal year and ongoing.
COMMENTS:
1) Purpose. According to the author, this bill:
Aims to add more tools for California to combat the drastic rollback by the Trump Administration’s desire to jeopardize Californians health and safety…AB 1777 codifies regulatory authority for the California Air Resources Board to focus on combating the public health catastrophe of the Trump Administration. By using Indirect Source Rules, ARB can allow flexible compliance mechanisms that allow companies to choose how to meet their obligations.
2) Background. The Clean Air Act defines an indirect source as “a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollution.” For example, a warehouse or port could be an indirect source; it does not produce significant emissions itself, but it causes the concentration of mobile sources in a place they may not otherwise have been. Actions taken to reduce these emissions (indirect source rules, or ISRs) can vary significantly and be implemented flexibly. Implementing an ISR may look like installing zero-emission vehicle infrastructure, requiring mobile sources to use cleaner technology, or requiring other mitigations or fees.
In California, ISRs are currently the exclusive purview of local air districts, although many of the actions required under an ISR may have significant overlap with mobile source regulations imposed by ARB. Still, other actions considered as part of an ISR could resemble actions taken by local governments. In short, the exact confines and contours of what an ISR can and cannot be are not entirely clear in statute. ARB’s authority to regulate indirect sources is indirect. Under current law, if ARB finds that a district is not taking reasonable action to enforce the statutory provisions, rules, and regulations relating to air quality in such a manner that will likely achieve and maintain state air quality standards, ARB may exercise any of the powers of that district to achieve and maintain such standards. This bill gives ARB explicit authority to regulate indirect sources, potentially on a statewide basis, as opposed to district by district.
In 2021, the South Coast Air Quality Management (SCAQMD) adopted an ISR rule for warehouses (Rule 2305), which requires warehouses greater than 100,000 square feet to directly reduce nitrogen oxide and diesel particulate matter emissions, or to otherwise reduce emissions and exposure of these pollutants in nearby communities. According to Earthjustice, American Lung Association, and Natural Resources Defense Council – the co-sponsors of this bill – “since this rule went into effect in the Los Angeles region, not only has there been a marked decrease in NOx emissions, but we have also seen steady growth in the warehouse industry, proving that clean air solutions and a strong economy go hand-in-hand.”
Among other organizations in opposition, the California Chamber of Commerce (CalChamber) argues this bill creates “expansive and unbounded” statewide regulatory authority and creates “duplicative, costly, and uncertain compliance obligations that will ultimately increase costs for consumers and discourage investment in California.”
The committee notes there is no requirement in the bill for an ISR to be an inflexible “one-size-fits-all” model. ARB notes it has extensive experience with developing regulations that have built-in flexibility and multiple compliance options. For example, the Ocean-Going Vessels At Berth Regulation has tiered compliance deadlines that include a two-year difference for tankers at the Ports of Los Angeles and Long Beach and tankers at other California ports.
3) Related Legislation. AB 914 (Garcia) of the current legislative session requires ARB to adopt rules to control emissions of criteria pollutants and toxic air contaminants from indirect sources and authorizes ARB to adopt certain fees to fund implementation of the rules. AB 914 died on the Assembly Inactive File.
SB 34 (Richardson) of the current legislative session imposes specified conditions and limits on actions by SCAQMD to impose new or additional emissions reduction requirements on sources of air pollution associated with operation of the Ports of Los Angeles and Long Beach until 2031. SB 34 was vetoed by the Governor.
Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081
Date of Hearing: March 23, 2026
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Isaac G. Bryan, Chair
ABPCA Bill Id:AB 1777 (
Author:Garcia) – As Introduced Ver:February 9, 2026
SUBJECT: Air pollution: indirect sources
SUMMARY: Authorizes the Air Resources Board (ARB) to adopt regulations to reduce or mitigate emissions from indirect sources of pollution.
EXISTING LAW:
- The federal Clean Air Act (CAA) and its implementing regulations set National Ambient Air Quality Standard (NAAQS) for six criteria pollutants, designate air basins that do not achieve NAAQS as nonattainment, and require states with nonattainment areas to submit a State Implementation Plan (SIP) detailing how they will achieve compliance with NAAQS. (42 U.S.C. 7401 et seq.)
- Establishes ARB as the air pollution control agency in California and requires the ARB, among other things, to control emissions from a wide array of mobile sources and coordinate with local air districts to control emissions from stationary sources in order to implement the CAA. (Health and Safety Code (HSC) 39000 et seq.)
- Requires, subject to the powers and duties of the ARB, air districts to adopt and enforce rules and regulations to achieve and maintain the state and federal air quality standards in all areas affected by emission sources under their jurisdiction, and to enforce all applicable provisions of state and federal law. (HSC 40001)
- Requires air districts to develop attainment plans detailing how they will attain and maintain state air quality standards, and submit those plans to ARB. (HSC 40910 et seq.)
- Requires ARB to:
- Review the district attainment plans to determine whether the plans will achieve and maintain state air quality standards by the earliest practicable date.
- Review district rules, regulations and programs to determine whether they are sufficiently effective to achieve and maintain state air quality standards.
- Review district and other local enforcement practices to determine whether reasonable action is being taken to enforce their programs, rules, and regulations.
(HSC 41500)
- Authorizes ARB, if it finds that the program or the rules and regulations of a district will not likely achieve and maintain state air quality standards, to establish a program, or rules and regulations it deems necessary to enable the district to achieve and maintain such standards, which shall have the same force and effect as a district program, rule, or regulation and shall be enforced by the district. (HSC 41504)
- Authorizes ARB, if it finds that a district is not taking reasonable action to enforce the statutory provisions, rules, and regulations relating to air quality in such a manner that will likely achieve and maintain state air quality standards, to exercise any of the powers of that district to achieve and maintain such standards. (HSC 41505)
- Requires ARB to adopt rules and regulations that, in conjunction with measures adopted by the air districts and the U.S. Environmental Protection Agency, will achieve and maintain NAAQS. (HSC 39602.5)
- Authorizes a district to adopt and implement regulations to reduce or mitigate emissions from indirect and areawide sources of air pollution, while preserving the existing authority of counties and cities to plan or control land use. (HSC 40716)
- Requires each district with moderate air pollution to include provisions to develop areawide source and indirect source control programs in its attainment plan. (HSC 40918)
THIS BILL:
- Authorizes ARB, if necessary to carry out its duties under HSC 39602.5 to achieve and maintain NAAQS, to adopt regulations to reduce or mitigate emissions from indirect sources of pollution, and finds and declares that this provision is declaratory of, and does not constitute a change in, existing law.
- Defines “indirect source” by reference to the CAA definition, i.e., “a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollution…” (42 U.S.C. 7410(a)(5)(C))
FISCAL EFFECT: Unknown
COMMENTS:
- Background. The CAA defines indirect sources as “a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollution.” For example, a warehouse or port could be an indirect source; it does not produce significant emissions itself, but it causes concentration of mobile sources in a place they may not otherwise have been. New indirect sources are reviewed to ensure they will not attract sufficient mobile sources to exceed any NAAQS.
Actions taken to reduce these emissions (indirect source rules, or ISRs) can vary significantly and be implemented flexibly. Implementing an ISR could look like installing zero-emission vehicle infrastructure, requiring mobile sources to use cleaner technology, or requiring other mitigations or fees. In California, ISRs are currently the exclusive purview of the air districts, although many of the actions required under an ISR may have significant overlap with other mobile source regulations imposed by ARB. Still, other actions considered as part of an ISR could resemble actions taken by local governments, such as carrying out projects that are part of a Sustainable Communities Strategy. In short, the exact confines and contours of what an ISR can and cannot be are not entirely clear in statute.
In 2021, the South Coast Air Quality Management (SCAQMD) adopted an ISR rules for warehouses (Rule 2305), which requires warehouses greater than 100,000 square feet to directly reduce nitrogen oxide (NOx) and diesel particulate matter (PM) emissions, or to otherwise reduce emissions and exposure of these pollutants in nearby communities.
According to SCAQMD, warehouses are a key destination for heavy-duty trucks and have other sources of emissions like cargo handling equipment, all of which contribute to local pollution, including toxic emissions, to the communities that live near them. Emissions from sources associated with warehouses account for almost as much NOx emissions as all the refineries, power plants, and other stationary sources in the South Coast Air Basin combined. Those living within a half mile of warehouses are more likely to include communities of color, have higher rates of asthma and heart attacks, and a greater environmental burden.
As part of the rule, warehouse operators need to earn a specified number of points annually. These points can be earned by completing actions from a menu that includes acquiring and using natural gas near-zero and/or zero-emission on-road trucks, zero-emission cargo handling equipment, solar panels, or zero-emission charging and fueling infrastructure and more. As alternatives to the points system, warehouse operators can prepare and implement a custom plan specific to their site or choose to pay a mitigation fee. Funds from mitigation fees will be used to incentivize the purchase of cleaner trucks and charging/fueling infrastructure in communities near the warehouse that paid the mitigation fee.
SCAQMD has also proposed, but not adopted, an ISR rule for the Ports of Los Angeles and Long Beach, as well as voluntary measures through a memorandum of understanding (MOU). In February 2025, SCAQMD published its first draft of a proposed rule (Rule 2304) that would require the two ports to develop a plan by August 2027 to build charging and fueling stations to switch thousands of pieces of diesel equipment, trucks and vessels to electricity and hydrogen.
The proposed rule aimed to ensure that the Los Angeles and Long Beach ports can achieve the clean-air goals they set for themselves back in 2017: converting 100% of their diesel cargo-handling equipment – such as tractors and giant, 60-foot cranes that move containers – to zero emissions by 2030. They also aim for all drayage trucks, which haul the ports’ containers of cargo to warehouses, to run on electricity or hydrogen by 2035.
In November 2025, SCAQMD and the ports approved an MOU to address port emissions and SCAQMD put its ISR rulemaking process on hold.
- Author’s statement:
Assembly Bill 1777 reflects a changing legal and policy environment across the United States where the Trump Administration has taken it upon themselves to be the most environmentally destructive Administration since science first understood the health impacts of pollution.
AB 1777 reflects this changing environment and aims to add more tools for California to combat the drastic rollback by the Trump Administration’s desire to jeopardize Californians health and safety. Against all science and despite widely agreed upon facts from scientists across the world, the Trump Administration decided to reverse the Endangerment Finding, reaching the non-scientific conclusion that greenhouse gas emissions do not affect the health of generations of Americans.
The indirect source rule around warehouses by the South Coast Air Quality Management District is already helping residents of the 50th Assembly District and the rest of the Inland Empire. The warehouse ISR is helping Californians and our goods movement sector wean off foreign oil, made more vulnerable by the irresponsible acts of the Trump administration in the Middle East.
AB 1777 codifies regulatory authority for the California Air Resources Board to focus on combating the public health catastrophe of the Trump Administration. By using Indirect Source Rules, ARB can allow flexible compliance mechanisms that allow companies to choose how to meet their obligations.
- If air districts have ISR authority, then ARB has ISR authority (if they want it). ARB’s authority to regulate indirect sources is…indirect. Under current law, if ARB finds that a district is not taking reasonable action to enforce the statutory provisions, rules, and regulations relating to air quality in such a manner that will likely achieve and maintain state air quality standards, ARB may exercise any of the powers of that district to achieve and maintain such standards. This bill elevates ARB’s role in the ISR world, giving ARB explicit authority to regulate indirect sources, potentially on a statewide basis, as opposed to district by district.
- Prior legislation:
AB 914 (Garcia, 2025) required ARB to adopt rules to control emissions of criteria pollutants and toxic air contaminants from indirect sources, and authorized ARB to adopt fees on indirect source to fund implementation of the rules. AB 914 passed this committee on April 28, 2025, but was not taken up for a vote on the Assembly Floor.
SB 34 (Richardson, 2025) limited SCAQMD’s authority to impose new or additional emissions reduction requirements on sources of air pollution associated with operation of the Ports of Long Beach and Los Angeles until 2031. SB 34 passed this committee on July 7, 2025, but was later vetoed by the Governor, who commented:
With the current federal Administration directly undermining our state and local air and climate pollution reduction strategies, it is imperative that we maintain the tools we have and encourage cooperative action at all levels to avoid the worst health and climate impacts. To that end, I am encouraged by the productive discussions between the SCAQMD and the Ports of Los Angeles and Long Beach to identify and advance prudent air quality improvement measures and the SCAQMD's recent unanimous direction to staff to further their efforts to reach a Cooperative Agreement. This locally driven and collaborative approach toward reducing air and climate pollution is the type of consensus that should be supported and encouraged. This bill interferes with this approach, the progress made, and the ongoing good faith efforts made by the SCAQMD and the Ports of Los Angeles and Long Beach.
SB 1028 (Padilla, 2007) enacted the section amended by this bill, requiring ARB to adopt rules and regulations governing motor vehicle emissions that are necessary, cost-effective, and technologically feasible that, together with other measures, will achieve federal ambient air quality standards.
REGISTERED SUPPORT / OPPOSITION:
Support
350 Humboldt
Alliance of Nurses for Healthy Environments
American Lung Association in California
Bay Area Air Quality Management District
Breast Cancer Prevention Partners
California Environmental Voters
CalSTART
Center for Biological Diversity
Center for Community Action and Environmental Justice
Center for Environmental Health
Central California Asthma Collaborative
Central California Environmental Justice Network
Central Coast Alliance United for a Sustainable Economy
CleanEarth4Kids.org
Climate Action California
Coalition for Clean Air
Communities for a Better Environment
E2
Earthjustice
Environmental Defense Fund
Environmental Protection Information Center (EPIC)
Facts Families Advocating for Chemical and Toxics Safety
Friends Committee on Legislation of California
Greenlining Institute
Leadership Counsel for Justice and Accountability
National Association of Pediatric Nurse Practitioners - San Francisco Bay Area Chapter
Natural Resources Defense Council
Nurse Heroes for Zero
Ocean Conservancy
Orange County Chapter of National Association of Pediatric Nurse Practitioners
Pacific Environment
Pesticide Action and Agroecology Network
Plug in America
Prevention Institute
Regional Asthma Management and Prevention (RAMP)
Resource Renewal Institute
San Bernardino County Medical Society
San Francisco Bay Physicians for Social Responsibility
Sierra Club California
Society of Latinx Nurses
St. John's Community Health
Streets for All
The Climate Center
Union of Concerned Scientists
Opposition
American Council of Engineering Companies
American Trucking Association
Associated General Contractors
Association of Equipment Manufacturers
BOMA California
California Advanced Biofuels Alliance
California Alliance for Jobs
California Association of Port Authorities
California Association of Realtors
California Automotive Wholesalers’ Association
California Building Industry Association
California Business Properties Association
California Business Roundtable
California Chamber of Commerce
California Citrus Mutual
California Construction and Industrial Materials Association
California Cotton Ginners & Growers Association
California Family Beer Distributors
California Forestry Association
California Fuels and Convenience Alliance
California Grocers Association
California Hotel & Lodging Association
California Manufacturers & Technology Association
California Moving and Storage Association
California New Car Dealers Association
California Railroads
California Renewable Transportation Alliance
California Retailers Association
California Self Storage Association
California State Council of Laborers
California Strawberry Commission
California Tow Truck Association
California Trucking Association
California Walnut Commission
California Waste Haulers Council
Can Manufacturers Institute
Clean Energy
Downtown San Diego Partnership
Family Business Association of California
Hexagon Agility
Industrial Environmental Association
International Longshore & Warehouse Union Local 13
International Longshore & Warehouse Union Local 63
International Longshore & Warehouse Union Local 94
International Warehouse Logistics Association
Los Angeles Area Chamber of Commerce
Los Angeles County Business Federation (BIZ-FED)
NAIOP of California
NAIOP SoCal
Orange County Business Council
Pacific Merchant Shipping Association
Port of Long Beach
Rebuild SoCal Partnership
Resource Recovery Coalition of California
San Diego Regional Chamber of Commerce
Southern California Leadership Council
Specialty Equipment Market Association (SEMA)
Supply Chain Council
The Transport Project
Transportation California
Western Growers Association
Western Propane Gas Association
Western States Petroleum Association
Western States Trucking Association
Western Tree Nut Association
Analysis Prepared by: Lawrence Lingbloom / NAT. RES. /
Discussed in Hearing
Assembly Standing Committee on Appropriations
Assembly Standing Committee on Natural Resources
Bill Author
Bill Co-Author(s):