Skip Repetitive Navigation Links

San Diego County Air Pollution Control District
It Has Used Vehicle Registration Fees to Subsidize Its Permitting Process, Reducing the Amount of Funds Available to Address Air Pollution

Report Number: 2019-127



To safeguard air quality across California and protect public health and welfare, state law gives air pollution control districts and air quality management districts (local air districts) primary responsibility to regulate the air pollution emitted by stationary sources, including manufacturing and industrial facilities, power plants, and gasoline stations. Created by the San Diego County Board of Supervisors in 1955, the San Diego County Air Pollution Control District (San Diego Air District) is one of 35 local air districts in the State. Although the San Diego Air District has primary responsibility for regulating stationary sources of air pollution, its mission is much broader: to "improve air quality to protect public health and the environment." Its duties include issuing and renewing permits for stationary sources of air pollution, administering program funds, and monitoring air quality throughout San Diego County (county), which includes 18 incorporated cities and more than three million people. The San Diego Air District also investigates air pollution complaints from the public.

The San Diego Air District currently operates as a department of the county. The San Diego County Air Pollution Control Board (district board) consists of the county's five-member board of supervisors and is responsible for holding public hearings in specific circumstances, appointing the air pollution control officer who manages the district, and adopting rules and regulations. The district board also created a nine-member advisory committee to provide it with recommendations on matters relating to the district's annual budgets, permit fees, annual progress reports, and regulatory changes. As we discuss later, recent changes to state law will significantly affect the governance of the San Diego Air District and impose new requirements beginning in 2021.

The Federal Government Establishes Air Quality Standards

The U.S. Environmental Protection Agency (EPA) establishes air quality standards for six principal air pollutants: ozone; carbon monoxide; sulfur dioxide; nitrogen dioxide; lead; and particle pollution, such as dust and smoke. Under state law, local air districts have primary responsibility for controlling air pollution caused by nonvehicular sources, including stationary sources, while the California Air Resources Board (CARB) maintains responsibility for adopting standards to control air pollution caused by motor vehicles and consumer products, and has primary responsibility for the State's compliance with the EPA's air quality standards. Federal law requires each state to monitor and make data available on air quality and to submit a State Implementation Plan (state plan) to the EPA specifying the manner in which that state will achieve and maintain air quality standards. Each state plan must include certain elements, including a system to monitor and analyze data on air quality and setting state emissions levels. In California, CARB is responsible for developing the state plan and for coordinating the activities of local air districts to ensure compliance with federal law.

Although states generally are not assessed financial penalties when they do not meet federal air quality standards, federal law does allow the EPA to impose sanctions under certain conditions. Sanctions may include denying federal transportation projects, withholding certain grant funding, or imposing federal plans for areas in limited circumstances. The EPA may impose sanctions if states do not submit plans to meet air quality standards in particular regions or if they fail to make good faith efforts to implement plans. Under certain conditions, the EPA may also promulgate a federal implementation plan when it disapproves a plan submission completely or in part.

The San Diego Air District Has Not Met Federal Ozone Standards

Selected Elements of San Diego Air District's
2016 Regional Plan

  • An inventory of emissions of air pollutants in the county organized by their sources.
  • A summary of measures necessary to meet ozone standards.
  • An analysis of reasonably available emissions control measures to ensure that they are being implemented as expeditiously as possible.
  • A demonstration of its progress toward meeting ozone standards.

Source: San Diego Air District's 2016 regional plan.

As Figure 1 shows, regions within several of the State's local air districts—including the San Diego Air District—are not meeting federal ozone standards. According to the EPA, ground-level ozone is a gas that can harm the respiratory system, causing—among other things—airway inflammation, coughing, and worsening of asthma.Ground-level ozone is not emitted directly into the air; rather, it is created by the chemical reactions of certain emissions in the presence of heat and sunlight. The EPA requires specified areas not meeting ozone air quality standards to address emissions of both volatile organic compounds and oxides of nitrogen, which are precursors to ozone formation. However, the San Diego Air District's 2016 regional plan anticipates that controlling oxides of nitrogen will become an increasingly effective strategy for lowering regional ozone concentrations. As a result, oxides of nitrogen are a main focus of the region's control measures. For this reason, throughout this report, we refer to oxides of nitrogen as ozone-causing emissions. It can also reduce lung function and has been linked to premature death from respiratory causes. To comply with 2015 EPA ozone standards, certain eight-hour measurements of ozone must not exceed 70 parts per billion. However, the level of ozone for the San Diego region from 2017 through 2019 was 82 parts per billion. In March 2020, an EPA report listed ozone as the only federal air quality standard not being met in the San Diego region.

California law requires local air districts that are not meeting certain state air quality standards to develop a regional attainment plan (regional plan), with CARB collaborating with the air districts and providing them with technical assistance upon request. The San Diego Air District's 2016 regional plan—its most recent plan—includes the items listed in the text box. This plan also stated that the district expected that the ongoing implementation of existing regulations would provide the additional reductions necessary to meet ozone standards.

Figure 1
California's 35 Local Air Districts Are Not All Meeting Federal Ozone Standards

A map of California divided into the 35 local air districts that illustrates their federal ozone standards status.

Source: CARB.

Note: Some districts show more than one attainment level because of multiple air basins within their jurisdictions.

Requirements in Certain Areas With Revised EPA Nonattainment Classification for Ozone

In certain areas classified as serious, the revised plans must include the following:

  • Enhanced monitoring.
  • A demonstration of progress toward meeting certain emissions standards.
  • A clean-fuel vehicle program and transportation controls.
  • Stricter requirements for emissions reductions.

In areas classified as severe, the revised state plans must identify and adopt specific enforceable transportation control strategies, as well as including the elements listed above.

Source: San Diego Air District's 2016 regional plan.

As a result of the San Diego region's inability to meet ozone standards, the chief of CARB's Air Quality Planning Branch stated that CARB intends to include a request in the state plan to reclassify the region's ozone nonattainment status from moderate to severe, as Figure 2 shows. When the EPA reclassifies a region that is not meeting ozone standards, federal law requires the state to submit a revised state plan for that area. The revised plan must include the elements described in the text box. In areas with serious or severe ozone classifications, the thresholds at which federal law requires facilities to have a permit for ozone-causing emissions (Title V permit)—which apply to major stationary sources of pollution, such as power plants and large manufacturing operations—are lower. These lower thresholds effectively increase the number of facilities that require those permits. For instance, if a major stationary source of air pollution in an area with marginal or moderate ozone classification emits less than 100 tons of ozone-causing pollution per year, it may operate without a Title V permit. However, sources in areas with a serious classification for ozone require Title V permits if they emit 50 tons or more per year, while sources in areas with a severe classification require Title V permits if they emit 25 tons or more per year.

Figure 2
CARB Will Recommend the San Diego Region's Federal Ozone Attainment Status Be Downgraded From Moderate to Severe

A figure that illustrates the San Diego region's current and future levels of ozone standards status based on CARB's recommendation to the region from "moderate" to "severe."

Source: Federal law, EPA 2015 ozone attainment status, and interviews with CARB staff.

As a result of the San Diego region's reclassification from a moderate area to a severe area, the San Diego Air District will have to require permits from additional stationary sources as described above. As Figure 3 shows, CARB reported that from 2000 through 2019, ozone-causing emissions in the San Diego region decreased from an annual average of 222 tons to 88 tons per day. Nevertheless, to meet the federal 2015 ozone standards, CARB estimated that the San Diego region must reduce its ozone-causing emissions to 62 tons per day—a reduction of 26 tons per day from current levels. CARB estimated that the San Diego region will meet this goal by 2032 by committing to new emissions reductions. According to CARB's chief of air quality planning, the San Diego Air District is preparing a revision to the state plan, and CARB expects to evaluate this revision following its consideration by the district board. The district expects this will occur in September 2020.

Figure 3
Estimated Ozone-Causing Emissions in San Diego From Mobile, Stationary, and Area Sources Decreased Significantly From 2000 Through 2019

A figure that shows CARB's average estimated and projected summer emissions of oxides of nitrogen decreased significantly between 2000 and 2032, from 222 tons per day to 62 tons per day.

Source: CARB California Emissions Projection Analysis Model emissions inventory 2019.

Note: In addition to these sources, CARB estimates natural sources—such as wildfires—produced almost 3 tons of oxides of nitrogen in 2017 and will produce almost 4 tons annually in the future. Oxides of nitrogen transform into ozone when they react with sunlight and other gases.

* CARB uses summer estimates for ozone planning because they reflect the conditions when higher ozone levels occur in the Southern California region.

Area sources include residential fuel combustion and outdoor burning.

The San Diego Air District Receives Funding From Several Sources

Although the San Diego Air District currently operates as a department within the county government, it is not supported by the county's general fund. Rather, the majority of its funding comes from vehicle registration fees, state and federal grants, and permitting fees, as Figure 4 shows. The county includes the San Diego Air District's financial activity as a part of its annual countywide budget and financial reports. However, these county documents provide only high-level summaries of the district's major expenditures and revenue. We present more detailed information that we obtained from the district regarding its budgeted expenditures and revenue in Appendix B.

Figure 4
In Fiscal Year 2018–19, the San Diego Air District's Three Largest Sources of Funding Were Vehicle Registration Fees, Permit Fees, and State and Federal Grants
(Dollars in Millions)

A figure that illustrates the San Diego Air District's sources of revenue for fiscal year 2018-19 by amount and percentage.

Source:  Analysis of San Diego Air District's financial data, fiscal year 2018–19.

Vehicle Registration Fees

In 1990 the Legislature authorized certain local air districts, including the San Diego Air District, to receive $2 in fees collected per vehicle by the Department of Motor Vehicles from owners of vehicles registered in those districts. In that same year, the San Diego Air District's board approved a $2 fee for vehicles registered in the county. In 2004 the Legislature amended state law to allow specific local air districts to collect up to $6 in fees for each vehicle registered in their districts, a portion of which was required to be used for specific purposes. In 2009 the San Diego Air District's board authorized a fee increase from $2 to $4 for each vehicle registered in the county. In fiscal year 2018–19, the district received $12.9 million in vehicle registration fee revenue.

The Legislature originally intended that local air districts generally use vehicle registration fees for programs and activities to reduce pollution from motor vehicles. However, in 2015 it amended state law to give most local air districts—including the San Diego Air District—broader discretion to use these vehicle registration fees to meet or maintain state or federal air quality standards. The amended law does not include a clear requirement that districts use the vehicle registration fees to reduce mobile emissions from vehicles (mobile emissions). In addition, state law specifies that the local air districts may use up to 6.25 percent of the vehicle registration fees for administrative costs.


From fiscal years 2016–17 through 2018–19, the San Diego Air District collected a total of $22.8 million in grant funds, and it is expected to collect another $30.4 million in fiscal year 2019–20, for a total of $53.2 million. These grants come from CARB and federal agencies, such as the EPA and U.S. Department of Homeland Security (Homeland Security). During fiscal years 2016–17 through 2018–19, the district distributed roughly $14.4 million in grants, and it expects to distribute another $29.2 million in fiscal year 2019–20, for a total of $43.6 million. The district directs incentive grant funds to businesses and public agencies for projects that reduce air pollution. For instance, CARB's Carl Moyer grant program provides funding to be granted to private businesses, nonprofit organizations, and public agencies for certain projects that reduce air pollution emissions from sources such as vehicles, locomotives, and agricultural equipment. The San Diego Air District used some fo the funds it received through this program to fund a portion of the costs of replacing a number of excavators and tractors with new equipment with emissions lower than the standards applicable to the equipment being replaced. The San Diego Air District also received federal grants to monitor air quality in the region. For example, during the four-year period we reviewed, it received an average of $659,000 annually from Homeland Security to monitor air quality and provide early warning in the event of a bioterrorist attack.

The San Diego Air District also participates in the Community Air Protection Program (community air program). Created by CARB in response to a 2017 state law, the community air program aims to reduce emissions and improve public health in select disadvantaged areas of the State that experience high exposure to toxic air contaminants, among other goals. To achieve this goal, the program requires certain air districts to deploy air monitoring systems in these communities. In May 2018, CARB awarded the San Diego Air District $18.9 million to reduce emissions and improve public health in selected neighborhoods—which the district refers to collectively as the portside community because of its proximity to the Port of San Diego—where diesel particulate matter air pollution is a major concern. Under the law, the district must also perform outreach to this community and involve its residents in making air quality-related decisions.


State law authorizes local air districts to establish, by regulation, a permitting system to require operators of certain stationary sources of air pollution to obtain permits. These stationary sources include machines, equipment, or other devices that emit air contaminants. Local districts may also establish a schedule of annual fees charged to those operators that covers the cost of regulating programs related to the permitting system that are not otherwise funded. Under the San Diego Air District's permitting program, an owner must submit an application to the district to construct or operate each piece of equipment of a type identified in county regulations. If that application is complete and the district determines that the proposed equipment is likely to meet district regulations, the San Diego Air District will issue what we refer to, for the purposes of this report, as a temporary permit. It subsequently issues a final permit to operate (operating permit) if the equipment passes an on-site inspection. County regulations further require the owner to renew the permit annually.

State law specific to the San Diego Air District generally authorizes it to create specific permitting fees for at least 120 types of equipment and process categories—including equipment used in cement manufacturing, asphalt operations, and food processing. Because the San Diego Air District also regulates the renovation and demolition of certain properties that contain asbestos, it has also established fees for these tasks. The district submits its permit fee calculations to the county for review, which the district board may adopt by district rules. For fiscal year 2018–19, fees for initial permits for stationary sources of air pollution ranged from roughly $280 for types of portable tubs of roofing tar to more than $4,800 for equipment used for applying surface coatings, such as spraying paint. The district requires holders of operating permits to renew them annually, which involves payment of a renewal fee. For instance, the annual renewal fees for the equipment described above were $163 and $623, respectively.

State law limits the San Diego Air District's permit fees to the actual costs of its permitting program in the prior fiscal year, adjusted for the change in the annual California consumer price index. In addition, for a district with an annual budget exceeding $1 million, state law also generally prevents the district from increasing the fees it charges for certain individual permits by more than 15 percent per calendar year. Further, the San Diego Air District may not increase existing fees in the aggregate by more than 15 percent in any fiscal year. For fiscal years 2016–17 through 2018–19, the San Diego Air District authorized nearly 200 new permits annually and renewed an average of 7,100 annually. In fiscal year 2018–19, it collected $8.7 million in permit fee revenue.

Selected 2019 Statutory Changes to
Increase the San Diego Air District's
Transparency and Public Engagement

State law requires that effective March 2021 the San Diego Air District will create and maintain a separate website and publish the following:

  • Its budget, including its projected and actual revenue and expenditures.
  • The district board's agendas and minutes.
  • All permit applications.
  • Current permit information in a searchable and downloadable format (including maximum permitted and actual emissions by permit).
  • All settled enforcement actions, face sheets of notices of violation, and notices to comply.

State law also requires the district to evaluate the current public complaint process by December 2021 and recommend a plan to update that process, including posting on its website information on complaints and their resolutions.

Source: State law.

Recent Amendments to State Law Will Restructure the San Diego Air District's Governing Board and Impose New Reporting Requirements

To make the San Diego Air District more representative and responsive to the diverse needs of the county's residents and businesses, the Legislature amended state law in 2019 to restructure the district board. As Figure 5 shows, as of March 2021, the district board will no longer consist of the five members of the county board of supervisors. Rather, it will expand to 11 members and include county, city, and public representatives. The changes in law also impose new requirements on the San Diego Air District that will increase the transparency of its operations, as the text box outlines. These include a requirement that it create and maintain a website on which it posts, among other things, district program information.

Because the San Diego Air District will not be governed by the county board of supervisors, it will no longer function as a county department and will have to either negotiate with the county to continue receiving the administrative services that it currently pays the county to provide or find other ways to obtain these services. These essential services include information technology, legal counsel, and human resources. The San Diego Air District's legal counsel confirmed that the district will have to either contract with the county to obtain these services, secure them from independent contractors, or hire additional staff and administer these services internally.

Figure 5
State Law Will Restructure the San Diego Air District's Governing Board to Expand Stakeholder Involvement

A figure that compares the San Diego Air District's governing board's current and future number of members and composition of members.

Source: State law.

Back to top