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 authorizes an air district to adopt a schedule of fees to be assessed on indirect sources of emissions to recover the costs of district programs related to these sources.

This bill would require the state board board, if necessary to carry out that duty to achieve those ambient air quality standards, to adopt and enforce rules and regulations applicable to indirect sources of emissions, as specified. If the state board elects to exercise that authority, the emissions. The bill would require the state board to establish a schedule of fees on facilities and mobile sources to cover the reasonable costs of implementing and enforcing the regulations and would require the fees to be deposited in the Air Pollution Control Fund and made available to the state board upon appropriation by the Legislature. The bill would require each air district, no later than 120 days after the adoption by the state board of indirect source regulations, to determine if the district or the state board will implement and enforce those regulations within its jurisdiction, as specified. The bill would require the state board to establish a statewide reporting program to quantify emissions and annually collect related information from indirect sources of emissions. annually prepare a presentation on the impacts and effects of any indirect source regulations that it adopts and to post that presentation on its internet website.

Existing law requires the state board to identify toxic air contaminants that are emitted into the ambient air of the state and to adopt airborne toxic control measures to reduce emissions of toxic air contaminants. Existing law also requires the state board to designate any substance that is listed as a hazardous air pollutant under federal law as a toxic air contaminant and to establish airborne toxic control measures applicable to the substance in accordance with specified procedures. Existing law requires each district to implement and enforce an airborne toxic control measure adopted by the state board or to propose regulations enacting airborne toxic control measures on nonvehicular sources within its jurisdiction that meets certain requirements, as specified.

This bill would authorize the state board to assess and collect reasonable fees on emitters of toxic air contaminants. The bill would require the fees to be deposited in the Certification and Compliance Fund and made available for the regulation of toxic air contaminants upon appropriation by the Legislature. require the state board, for a given toxic air contaminant or airborne toxic control measure, to adopt and enforce rules and regulations applicable to indirect sources of emissions. The bill would require the state board to establish a schedule of fees on facilities and mobile sources to cover the reasonable costs of implementing and enforcing the regulations and would require the fees to be deposited in the Air Pollution Control Fund and made available to the state board upon appropriation by the Legislature.

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 rules or regulations of the state board with respect to nonvehicular sources subject to those rules and 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.

Existing law requires the State Air Resources Board to make available to the public each technical, theoretical, and empirical study, report, or similar document, if any, on which the agency relies, related to, but not limited to, air emissions, public health impacts, and economic impacts, before the comment period for any regulation proposed for adoption by the state board.

This bill would make a nonsubstantive change to this provision.

ASSEMBLY THIRD READING

ATR Bill Id:AB 914

Author:(Garcia)

As Amended Ver:May 23, 2025

Majority vote

SUMMARY

Requires the Air Resources Board (ARB) to adopt rules to control emissions of criteria pollutants and toxic air contaminants (TACs) from indirect sources, as defined, and authorizes ARB to adopt fees on indirect source to fund implementation of the rules.

Major Provisions

1. Requires ARB, if necessary to carry out its duties to adopt rules and regulations to achieve National Ambient Air Quality Standard (NAAQS), to adopt and enforce rules and regulations applicable to indirect sources of emissions. Requires ARB to do all of the following:
   1. Consult with affected districts to ensure that any state regulation supports district emission reduction needs.
   2. Establish a schedule of fees on facilities and mobile sources limited in amount to cover only the reasonable costs of implementing and enforcing the regulations.
   3. Eliminate or minimize impacts to disadvantaged, low-income, and high-poverty communities.
   4. Prioritize controls for indirect sources that have the most significant impact on air quality or contribute to high-level, localized concentrations of pollutants in disadvantaged, low-income, and high-poverty communities.
2. Requires each air district, within 120 days of ARB's adoption of an indirect source regulation, to determine if the district or ARB will implement and enforce the regulation.
3. Requires ARB to post annually a presentation on the impacts and effects of any indirect source regulations.
4. Requires ARB, for a given TAC or airborne toxic control measures (ATCM), to adopt and enforce rules and regulations applicable to indirect sources of emissions. Requires ARB do all of the following:
   1. Consult with affected districts to ensure that any state regulation supports district emission reduction needs.
   2. Establish a schedule of fees on facilities and mobile sources limited in amount to cover only the reasonable costs of implementing and enforcing the regulations.
   3. Prioritize controls for indirect sources that have the most significant impact on air quality or contribute to high-level, localized concentrations of pollutants in disadvantaged, low-income, and high-poverty communities.
5. 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…"
6. Makes related findings.

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 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 the Warehouse ISR, 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.

In 2020, ARB adopted the Advanced Clean Truck (ACT) regulation to accelerate a large-scale transition to zero-emission medium-and heavy-duty vehicles from Class 2b to Class 8. One component of the regulation is a manufacturer sales requirement. Manufacturers who certify Class 2b-8 chassis or complete vehicles with combustion engines would be required to sell zero-emission trucks as an increasing percentage of their annual California sales from 2024 to 2035. By 2035, zero-emission truck/chassis sales would need to be 55% of Class 2b – 3 truck sales, 75% of Class 4 – 8 straight truck sales, and 40% of truck tractor sales.

To further the transition to a zero-emission fleet, at the end of 2020, Governor Newsom issued Executive Order (EO) N-79-20, which requires 100% of medium- and heavy-duty vehicles in the state be zero-emission by 2045 for all operations where feasible and by 2035 for drayage trucks. EO N-79-20 charged ARB with developing and proposing medium- and heavy-duty vehicle regulations requiring increasing volumes of new zero-emission trucks and buses sold and operated in the state towards that goal. ARB proposed the Advanced Clean Fleet (ACF) regulation, which requires all Class 2b-8 vehicles sold into California must be ZEVs starting in 2036. Implementation of ACF relies on approval of CAA waiver by U.S. EPA, which has not been granted.

ARB's existing 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 direct and broad authority to regulate indirect sources to control both criteria pollutants and TACs, as well as authority to impose fees on sources to pay ARB's costs associated with these authorities.

According to the Author

My constituents are all too familiar with the deadly and harmful effects of air pollution – for years, it was difficult to see the San Gabriel Mountains clearly through the smog. Though impressive and effective strides have been taken to address the impact of warehouses in the area, there is still more that could be done regarding other pollution hotspots. And while my district has the worst air quality in the nation, we are not unique in dealing with these issues, as 87% of Californians live in areas that do not meet federal air quality standards. AB 914 is an important measure that provides the state with the tools it needs to reduce emissions and safeguard public health, while prioritizing flexibility and collaboration.

Arguments in Support

According to Earthjustice and a coalition of clean air and environmental justice advocates, while local air districts in California have explicit authority under state law to adopt ISRs and reduce this pollution, only a few air districts have pursued such regulations and only two air districts have adopted ISRs that require emission reductions from these sources. Existing ISRs are local in nature, and the associated health benefits are limited to those regions that have taken steps to adopt regulations. AB 914 will build on the success of existing regional ISRs and expand existing public health benefits to all communities…Not only do ISRs improve our air, but they have a proven track record of spurring clean transportation projects: two air districts in California opted to clean up pollution with these policies, and the model is working. In 2021, Southern California's Air District passed an ISR to tackle pollution from huge complexes of warehouses, and the program is ahead of schedule with hundreds of new zero-emission, heavy duty trucks and truck charging stations deployed in the last two years, ultimately helping to shape the goods movement system of the future.

Arguments in Opposition

According to the California Trucking Association and a coalition of business groups, AB914 would represent one of the largest expansions of ARB's regulatory authority in history, increase cost of living for Californians, stall improvement of our state's infrastructure and ignore decades of air quality improvement…AB914 would not only give this authority to ARB but also expand that authority to pollutants beyond what is allowed under the Clean Air Act. AB 914 would also give ARB nearly unlimited regulatory authority over infrastructure design and execution…AB914 would exacerbate this (affordability) crisis by adding another layer of regulation and unchecked fee authority upon already regulated sources. Nearly every good and service Californians consume would be impacted. Projects to improve our State's infrastructure could be held up indefinitely.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, ongoing cost pressure of an unknown but potentially significant amount, possibly in the hundreds of thousands to low millions of dollars, for ARB to adopt and enforce indirect source rules (Air Pollution Control Fund or other fund) and annually prepare a presentation on the impacts and effects of any ISRs it adopts. Actual costs will depend on whether ARB elects to exercise the authority granted by the bill and the extent to which the board pursues ISRs in districts across the state. The bill requires ARB to impose fees on facilities and mobile sources to cover its implementation and enforcement costs.

VOTES

ASM NATURAL RESOURCES: 10-4-0

YES: Bryan, Connolly, Garcia, Haney, Kalra, Muratsuchi, Pellerin, Schultz, Wicks, Zbur

NO: Alanis, Ellis, Flora, Hoover

ASM APPROPRIATIONS: 11-3-1

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Ta, Tangipa

ABS, ABST OR NV: Sanchez

UPDATED

VERSION: May 23, 2025

CONSULTANT: Lawrence Lingbloom / NAT. RES. / (916) 319-2092 FN: 0000814

Date of Hearing: May 7, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 914

Author:(Garcia) – As Amended Ver:March 24, 2025

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires the Air Resources Board (ARB) to adopt rules applicable to indirect sources of emissions and establish a statewide indirect source reporting program. The bill also requires and authorizes ARB to adopt fees, as specified.

Specifically, this bill, among other things:

1. Requires ARB, if necessary to carry out its duties to adopt rules and regulations to achieve national ambient air quality standards, to adopt and enforce rules and regulations applicable to indirect sources of emissions, as defined. Requires ARB to do all of the following:
   1. Consult with affected districts to ensure that any state regulation supports district emission reduction needs.
   2. Establish a schedule of fees on facilities and mobile sources limited in amount to cover only the reasonable costs of implementing and enforcing the regulations. Requires these fees be deposited into the Air Pollution Control Fund (APCF) and made available to ARB upon appropriation by the Legislature.
   3. Eliminate or minimize impacts to disadvantaged, low-income, and high-poverty communities.
   4. Prioritize controls for indirect sources that have the most significant impact on air quality or contribute to high-level, localized concentrations of pollutants in disadvantaged, low-income, and high-poverty communities.
2. Requires ARB to establish a statewide reporting program to quantify emissions and annually collect related information from indirect sources of emissions, as specified.
3. Requires ARB, for a given toxic air contaminant (TAC) or airborne toxic control measure (ATCM), to adopt and enforce rules and regulations applicable to indirect sources of emissions. Requires ARB to comply with items 1 a), 1 b), and 1 d), above.
   
4. Authorizes ARB to assess and collect reasonable fees on emitters of TACs. Requires any revenue collected be expended to carry out the responsibilities authorized by a specified chapter of the Health and Safety Code, including (a) developing new, and amending existing, ATCMs; (b) developing new, and amending existing, emission reduction measures for on-road and nonroad sources; (c) implementing and enforcing ATCMs and emission reduction measures for on-road and nonroad sources; and (d) identifying, quantifying, inventorying, monitoring, evaluating, and reducing emissions of toxic pollutants in communities across the state, as determined to be necessary by ARB.
   
5. Requires fees collected pursuant to item 4, above, be deposited in the Certification and Compliance Fund (CCF) and made available upon appropriation for specified purposes. Provides that fees collected shall be limited to an amount sufficient to cover ARB’s reasonable costs in developing and implementing specified programs, including any administrative costs, and may be adjusted for inflation, as specified.

FISCAL EFFECT:

1) Ongoing cost pressures of an unknown but potentially significant amount, possibly in the hundreds of thousands to low millions of dollars, for ARB to adopt and enforce indirect source rules (APCF, CCF, or other fund). Actual costs will depend on whether ARB elects to exercise the authority granted by the bill and the extent to which the board pursues ISRs in districts across the state. The bill requires ARB to impose fees on facilities and mobile sources to cover its implementation and enforcement costs.

2) ARB estimates costs of approximately $1.5 million in fiscal year (FY) 2026-27 and ongoing (CCF) for six new positions to develop and maintain a statewide reporting system for facility-level emission inventories, such as ports, railyards, airports, warehouses, and distribution centers.

As part of the Governor’s fiscal year 2025-26 budget, the administration proposed a budget trailer bill that provides ARB with broad authority to levy fees on entities it regulates to cover the costs of developing, implementing, and enforcing programs and regulations.

COMMENTS:

1. Purpose. According to the author:

While my district has the worst air quality in the nation, we are not unique in dealing with these issues, as 87% of Californians live in areas that do not meet federal air quality standards. AB 914 is an important measure that provides the state with the tools it needs to reduce emissions and safeguard public health, while prioritizing flexibility and collaboration.

1. 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 other 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.

According to a coalition of organizations writing in support of this bill, while local air districts have explicit authority under state law to adopt ISRs, only a few districts have pursued such regulations and only two districts have adopted ISRs that require emission reductions from these sources. The support coalition notes that emissions associated with indirect sources include localized toxic diesel pollution, which disproportionately harms nearby communities, and other pollutants that contribute to regional air quality issues, such as smog.

This bill gives ARB broad authority to regulate indirect sources to control both criteria pollutants and TACs, and gives ARB the ability to impose fees on sources to pay its costs associated with these authorities. The bill also requires ARB to establish a statewide indirect source reporting program. Finally, the bill gives ARB authority to impose fees on emitters of TACs for a broad range of purposes beyond controlling emissions of TACs from indirect sources.

Writing in opposition, a coalition of business groups argues this bill represents one of the largest expansions of ARB’s regulatory authority in history and hands ARB “blank check fee authority, transferring a core power of the Legislature to an unelected bureaucracy with little to no oversight.” The coalition believes the bill will increase the state’s cost of living, stall infrastructure projects, and disrupt supply chains and vital industries.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: April 28, 2025

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Isaac G. Bryan, Chair

ABPCA Bill Id:AB 914 (

Author:Garcia) – As Amended Ver:March 24, 2025

SUBJECT: Air pollution: indirect sources: toxic air contaminants

SUMMARY: Requires the Air Resources Board (ARB) to adopt rules to control emissions of criteria pollutants and toxic air contaminants (TACs) from indirect sources, as defined, and authorizes ARB to adopt fees on indirect sources, as specified.

EXISTING LAW:

1. 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.)
2. 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.)
3. 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)
4. 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.)
5. Requires ARB to:
   1. Review the district attainment plans to determine whether the plans will achieve and maintain state air quality standards by the earliest practicable date.
   2. Review district rules, regulations and programs to determine whether they are sufficiently effective to achieve and maintain state air quality standards.
   3. Review district and other local enforcement practices to determine whether reasonable action is being taken to enforce their programs, rules, and regulations.

(HSC 41500)

1. 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)
2. 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)
3. 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)
4. Requires ARB to adopt airborne toxic control measures (ATCMs) to reduce emissions of TACs from non-vehicular sources, as specified. (HSC 39666)
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)
6. 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)
7. Authorizes a district to adopt a schedule of fees to be assessed on areawide or indirect sources of emissions which are regulated, but for which permits are not issued, by the district to recover the costs of district programs related to these sources. (HSC 42311)

THIS BILL:

1. Requires ARB, if necessary to carry out its duties to adopt rules and regulations to achieve NAAQS, to adopt and enforce rules and regulations applicable to indirect sources of emissions. Requires ARB to do all of the following:
   1. Consult with affected districts to ensure that any state regulation supports district emission reduction needs.
   2. Establish a schedule of fees on facilities and mobile sources limited in amount to cover only the reasonable costs of implementing and enforcing the regulations.
   3. Eliminate or minimize impacts to disadvantaged, low-income, and high-poverty communities.
   4. Prioritize controls for indirect sources that have the most significant impact on air quality or contribute to high-level, localized concentrations of pollutants in disadvantaged, low-income, and high-poverty communities.
2. Requires ARB to establish a statewide reporting program to quantify emissions and annually collect related information from indirect sources of emissions, including data from on-road and off-road mobile sources that visit those sources, but are not owned or operated by those sources.
3. Requires ARB, for a given TAC or ATCM, to adopt and enforce rules and regulations applicable to indirect sources of emissions. Requires ARB do all of the following:
   1. Consult with affected districts to ensure that any state regulation supports district emission reduction needs.
   2. Establish a schedule of fees on facilities and mobile sources limited in amount to cover only the reasonable costs of implementing and enforcing the regulations.
   3. Prioritize controls for indirect sources that have the most significant impact on air quality or contribute to high-level, localized concentrations of pollutants in disadvantaged, low-income, and high-poverty communities.
4. Authorizes ARB to assess and collect fees on emitters of TACs, limited to an amount sufficient to cover ARB’s reasonable costs, which may be used for:
   1. Developing new, and amending existing, ATCMs.
   2. Developing new, and amending existing, emission reduction measures for on-road and nonroad sources.
   3. Implementing and enforcing ATCMs and emission reduction measures for on-road and nonroad sources.
   4. Identifying, quantifying, inventorying, monitoring, evaluating, and reducing emissions of toxic pollutants in communities across the state, as determined to be necessary by the state board.
5. 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))
6. Makes related findings.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author’s statement:

My constituents are all too familiar with the deadly and harmful effects of air pollution – for years, it was difficult to see the San Gabriel Mountains clearly through the smog. Though impressive and effective strides have been taken to address the impact of warehouses in the area, there is still more that could be done regarding other pollution hotspots. And while my district has the worst air quality in the nation, we are not unique in dealing with these issues, as 87% of Californians live in areas that do not meet federal air quality standards. AB 914 is an important measure that provides the state with the tools it needs to reduce emissions and safeguard public health, while prioritizing flexibility and collaboration.

1. 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 the Warehouse ISR, 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.

In 2020, ARB adopted the Advanced Clean Truck (ACT) regulation to accelerate a large-scale transition to zero-emission medium-and heavy-duty vehicles from Class 2b to Class 8. One component of the regulation is a manufacturer sales requirement. Manufacturers who certify Class 2b-8 chassis or complete vehicles with combustion engines would be required to sell zero-emission trucks as an increasing percentage of their annual California sales from 2024 to 2035. By 2035, zero-emission truck/chassis sales would need to be 55% of Class 2b – 3 truck sales, 75% of Class 4 – 8 straight truck sales, and 40% of truck tractor sales.

To further the transition to a zero-emission fleet, at the end of 2020, Governor Newsom issued Executive Order (EO) N-79-20, which requires 100% of medium- and heavy-duty vehicles in the state be zero-emission by 2045 for all operations where feasible and by 2035 for drayage trucks. EO N-79-20 charged ARB with developing and proposing medium- and heavy-duty vehicle regulations requiring increasing volumes of new zero-emission trucks and buses sold and operated in the state towards that goal. ARB proposed the Advanced Clean Fleet (ACF) regulation, which requires all Class 2b-8 vehicles sold into California must be ZEVs starting in 2036. Implementation of ACF relies on approval of CAA waiver by U.S. EPA, which has not been granted.

1. 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 direct and broad authority to regulate indirect sources to control both criteria pollutants and TACs, as well as authority to impose fees on sources to pay ARB’s costs associated with these authorities. The bill also requires ARB to establish a statewide indirect source reporting program. Finally, the bill gives ARB broad authority to impose fees on emitters of TACs for a broad range of purposes beyond controlling emissions of TACs from indirect sources.

1. Related legislation. SB 318 (Becker) makes numerous changes to permitting processes for local air districts and ARB, in large part to expand the scope of lower- or zero-emission alternatives considered when permitting polluting sources. The bill also included indirect source regulation and fee provisions similar to this bill. SB 318 passed the Senate Environmental Quality Committee on April 23, by a vote of 5-3, with amendments to remove the ISR provisions.

REGISTERED SUPPORT / OPPOSITION:

Support

Earthjustice (sponsor)

Alliance of Nurses for Healthy Environments
American Lung Association in California
Asthma Coalition of Los Angeles County
Better World Group Advisors
Breathe Southern California
California Environmental Voters
California Nurses for Environmental Health and Justice
California Thoracic Society
CCEAJ
Center for Climate Change & Health
Center for Environmental Health
Central California Environmental Justice Network
Cleanearth4kids.org
Climate Action California
Climate Health Now
Coalition for Clean Air
Comite Civico Del Valle
Communities for a Better Environment
East Yard Communities for Environmental Justice
Environmental Defense Fund
Environmental Health Coalition
Facts: Families Advocating for Chemical & Toxics Safety
Leadership Counsel for Justice & Accountability
National Association of Pediatric Nurse Practitioners - San Francisco Bay Area Chapter
National Association of Pediatric Nurse Practitioners, Los Angeles
Natural Resources Defense Council
Nurse Heroes for Zero
Ocean Conservancy
Pacific Environment
People’s Collective for Environmental Justice
Physicians for Social Responsibility - Sacramento Chapter
Public Health Advocates
Regional Asthma Management and Prevention (RAMP)
San Francisco Baykeeper
Santa Clara County Medical Association
Sierra Club California
Society of Latinx Nurses
St John’s Community Health
The Climate Center
Union of Concerned Scientists
Vote Solar

Opposition

Agricultural Energy Consumers Association
American Pistachio Growers
American Trucking Associations
Associated General Contractors
Association of Equipment Manufacturers
Building Owners and Managers Association of California
California Advanced Biofuels Alliance
California Airports Council
California Association of Port Authorities
California Business Properties Association
California Chamber of Commerce
California Cotton Ginners and Growers Association
California Council for Environmental & Economic Balance
California Forestry Association
California Fresh Fruit Association
California Grocers Association
California Manufacturers & Technology Association
California Moving and Storage Association
California Railroads Association
California Renewable Transportation Alliance
California Retailers Association
California State Council of Laborers
California Tomato Growers Association
California Trucking Association
Chemical Industry Council of California
Clean Energy
Forest Landowners of California
Harbor Trucking Association
Hexagon Agility
International Warehouse Logistics Association
NAIOP California
NAIOP SoCal Chapter
Pacific Merchant Shipping Association
Specialty Equipment Market Association
Supply Chain Federation
The Transport Project
Transportation California
Trillium
Western Growers Association
Western Plant Health Association
Western Propane Gas Association
Western States Petroleum Association
Western Tree Nut Association

Analysis Prepared by: Lawrence Lingbloom / NAT. RES. /