California Court Rules That Local Air Districts Can Determine Validity of PERP Registration

Hardesty v. Sacramento Metropolitan Air Quality Management District

California's Third Appellate District has answered the longstanding question over whether a local air district can decide the validity of portable equipment air permits issued under the state's Portable Equipment Registration Program ("PERP"). In Hardesty v. Sacramento Metropolitan Air Quality Management District, the court held that local air districts indeed have the power to declare a PERP registration invalid, and require a local air permit.

The PERP program, enacted in 1997, allows businesses to operate portable combustion engines (generators, processing plants, drill rigs, pumps, etc.) without obtaining local air permits. To gain the benefit of the program, engines must be registered with the California Air Resources Board under the PERP program, and the equipment must be "portable" in the sense that it does not and will not remain at a fixed location for over 12 consecutive months. (Cal. Health & Saf. Code, § 41750, et seq.) The program has engendered confusion, however, because of language in the statute which broadly states that local districts are "preempted" from regulating equipment once a PERP registration has been filed. (See Health & Saf. Code, § 41753.) Thus, the question which often arose was whether local districts had any authority to review and consider the validity of a PERP registration.

The Hardesty case presented the court of appeal with this precise question. The lawsuit involved a gravel mining operation which moved periodically from location to location within a 3,900-acre site to extract gravel from tailings piles created by the former gold mining. The operation's plant and conveyor equipment were powered by a large diesel generator. By the time the generator gained the attention of the local air district, it had been used in the same location for approximately four years. The district determined that the generator was ineligible for PERP registration, and after an abatement hearing, ordered the operator to stop using the unit until a local air permit could be obtained. In the ensuing court proceedings, the operator defended on the basis that only the state, not the local air district, had the authority to determine whether a PERP registration was invalid.

The court rejected the operator's argument, and found that the local district was empowered to consider and revoke a PERP registration that did not meet program requirements. The court explained that the overall regulatory scheme, read as a whole, charged local districts with enforcing PERP registrations "in the same manner as the District's own rules and regulations." Consequently, the court reasoned that "the District must possess the authority to determine whether a PERP registration is valid, and if not, to require a local permit." The court also appeared moved by the position of the California Air Resources Board, which had intervened and weighed in favor of the local district's authority. Finally, the court found that the evidence did not support the operator's claim that the generator was occasionally moved off-site for other jobs, or was validly registered in the program.

Of particular interest to mining operators, the operator in Hardesty also raised a series of defenses based upon its purported vested mining rights. The operator asserted that the local air permitting requirements unlawfully interfered with its vested rights, and alternatively, that its vested rights required the court to apply a standard of judicial review that was less deferential to the district. Unsurprisingly, the court rejected these arguments as well, finding that the district's air permit requirements did not present the type or degree of interference with vested mining rights that merited special protection.

By making it clear that local air quality management districts possess the power to consider and decide the validity of PERP registrations, the Hardestyruling clarifies the process for addressing disputes between businesses and local air districts when questions over PERP registrations arise.

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