Sacramento Air Board Construction Mitigation Rule 1052: Upcoming Costly Regulation

William L. Porter Founder & President Specializing in Construction Law, Business Law and Labor Law
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Another costly new regulation is heading our Industry’s way early next year. The Sacramento Air Quality District (AQMD) has recently released a proposal that would force every construction project (Over 2,000 sq ft Commercial) to reduce their total project baseline carbon emissions by 20% Nitrate Oxide (NOx) and by 45% Particulate Matter (PM 10). Submittals of full equipment lists, project durations, and the size of the job-site are all necessary for the Air Board’s “scientific determination” of whether a project has met its carbon emission targets. If companies do not meet the stringent new guidelines, they will be required to pay a fee ranging from a minimum of $16,400 to a maximum of $38,960 per ton of (NOx). Particulate matter will also be charged via Cap & Trade, but this fee has not yet been released to the public.

This environmental rule will force companies to either buy entire new fleets of costly equipment or pay extremely high off-site fees (Air Board Estimates 80% Will Take This Route) for their carbon emissions. The proposal makes no mention of exemptions for small businesses that would in no way be able to comply with this regulation and it does not explain for what purpose the off-site fees would be used (SB 1402, Chapter 413, Statues of 2010, Mandates ARB to Explain Fee Purpose) other then vaguely stating they would go to “Carbon Reduction Projects”. Limited Carl Moyer Funds (Financial Incentives) are available; however, companies who lease their equipment because of the lack of affordability are inexplicably ineligible for these incentives. Applicants also need to be years ahead of compliance with new regulations, which is a risky endeavor for businesses since many regulations have been delayed and/or suspended because of numerous mistaken carbon emission estimates by the California Air Resource Board. Thus, early compliant businesses can be severely punished for acting quickly.

The Sacramento AQMD is focusing solely on protecting the environment while completely disregarding the negative effects it will have on the economy. This is not the time for imposing new scientific experiments and costly new requirements on our local employers. Rather, it is the time to focus strongly on our economy by finding ways to support local companies and create job growth; it is not time to penalize businesses for simply operating within our region. Reducing carbon emissions by putting companies out of business is not a viable option while most Americans are just trying to find jobs and feed their families.

Rule 1052 is a huge LOSE-LOSE for our Industry. The Sacramento Regional Builders Exchange staff is currently building a business coalition to fight this Rule by any means necessary and make it evident that this proposal is “dead-on-arrival” when it is heard for adoption in 2011. The SRBX will work with local elected officials and our member companies to educate the public on this crucial issue and clearly advocate that this measure would: devastate the regional construction industry in the worst possible economic climate, increase local unemployment, and make it virtually impossible for small construction businesses to exist and large construction businesses to flourish. Contact SRBX staff if you would like to help in this effort.

Mr. Porter is a shareholder in Porter Law Group, Inc. of Sacramento, California. Mr. Whyte is the Political Director of the Sacramento Regional Builders Exchange.

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