California Senate Bill 318 (SB 318), the “California Clean Air Permitting Modernization Act”, threatens to disrupt the status quo for stationary source air permitting and shift the power dynamics from localized oversight by California’s 35 air districts to the state California Air Resources Board (CARB). SB 318 was introduced by Senator Becker on February 11, 2025. The bill went through three rounds of amendments and passed without opposition on May 5, 2025, and was placed on suspense file due to the fiscal impacts of SB 318. The bill would impact both the New Source Review process and the Title V permit renewal process.

Background

The California Air Resources Board (CARB) is the lead air quality regulatory agency in California. CARB establishes state ambient air quality standards and provides oversight for achieving federal ambient air quality standards as required by the Clean Air Act (CAA). CARB is primarily responsible for the regulation of mobile sources (such as cars). California’s 35 local air districts are responsible for regulating stationary sources of air pollution (such as factories) and are the primary agencies that review and issue air quality permits for these stationary sources. A stationary source is generally considered a major source of air pollution if it has the potential to emit 100 tons per year of a regulated air pollutant (or less for certain pollutants under conditions of non-attainment of air quality standards). Major sources of air pollution are required to obtain major source permits (i.e., Title V Permits) from its local air district to operate.

SB 318 Proposed Measures

SB 318 would make several changes to the CAA permitting processes for major sources. Highlighted changes proposed under SB 318 include:

• Expansion of the Best Available Control Technology (BACT) and Best Available Retrofit Control Technology (BARCT) definitions and application for major sources;
• Additional requirements for Title V renewals and the involvement of CARB in the Title V permitting and renewal process; and
• Reorganization of the existing precertification program for commonly used equipment from the local to state level and expansion of the program to include identification of equipment, controls, fuels, and processes, as specified.

BACT and BARCT

Current regulation requires each local air district with moderate, serious, or severe air pollution to establish BACT standards for new and modified stationary sources and BARCT requirements for existing stationary sources.
SB 318 would expand the definition of BACT to include fuel selection and “may include a requirement to use electric power to power a process or source”. Additionally, the definition of BARCT would be expanded to include the consideration of fuels, processes changes, or alternative technologies. The perceived goal of this expansion is to require lower or zero-emission alternatives for new, modified, and existing stationary sources.
SB 318 would standardize BACT and BARCT determinations by requiring CARB to periodically issue BACT and BARCT determinations for any class or category of sources and related technologies for the control of toxic air contaminants. The public would also be allowed to petition for CARB to issue a determination.
Furthermore, SB 318 would require air districts to use the information in CARB’s statewide BACT clearinghouse when issuing Title V permits for all applicable categories and classes of sources. This would be a notable departure from the existing framework for technology review at existing sources which is driven by individual air districts regulating their air basins.

Title V Permits

Title V permits are required for facilities that are major sources of air pollutants. Currently, California’s local air districts issue initial and renewed Title V permits and are subject to review by the United States Environmental Protection Agency (EPA).
SB 318 would require local air districts to submit Title V permits to CARB for review and approval. The bill would allow CARB to object to the issuance of any Title V permit if CARB determines the permit does not comply with the CAA. Local air districts would be required to revise permits to address the objection(s) before finalizing. SB 318 would also authorize any person to petition CARB to object to a proposed Title V permit.
In addition, SB 318 would require Title V permit renewal applicants to complete a “technical feasibility analysis” for specified equipment or control apparatus. The analysis would be required to be performed between at most 25 years and at least 10 years depending on the facility’s location and equipment technology. The technical feasibility analysis would contain a ranked list of emitting equipment and sources in descending order of potential to emit pollutants, and for each source a ranked list of control measures in descending order of air pollution control effectiveness. These identified sources in the technical feasibility analysis would be required to meet BARCT or other measures approved by the local air district. The local air district would be authorized to impose measures more stringent than the facility’s proposed measures.

Precertification Program

Local air districts are currently required to establish an expedited permit program. One element under this expedited review is a precertification program for equipment that is mass-produced and operated by numerous sources under the same or similar conditions. SB 318 would eliminate the precertification program at the local level and instead require CARB to establish a precertification program to include the identification of equipment, controls, fuels, and processes that can achieve emissions limits lower than BACT as well as BACT for toxic air contaminants. CARB would be required to update the criteria and guidelines for precertification at least once every 8 years. Facilities seeking expedited permit review would be required to use equipment and processes identified by CARB’s precertification program.

SB 318 Support and Opposition

SB 318 has gained support by environmental and equity organizations. South Coast Air Quality Management District, Bay Area Air Quality Management District, and the California Air Pollution Control Officers Association oppose SB 318 as it would impact current permitting programs and shift permitting control from the local to state level.

SB 318 Facility Impacts

SB 318 could be interpreted as an unrealistic overreach of CARB’s authority. Poised as a bill to modernize permitting processes, SB 318 would likely lead to even longer permitting processes and impose an undue financial burden on facilities.
SB 318 would take power out of the local air district’s hands and instead centralize it at the state level. Facilities would be subject to CARB’s BACT and BARCT definitions and determinations, which may be more stringent than local BACT and BARCT determinations. Additionally, Title V permits would require CARB’s approval, potentially making it more difficult for facilities to acquire permits. The proposed technical feasibility analysis and required BARCT implementation would likely be extremely costly for facilities and further disincentivize doing business in California.
Due to the financial burden of SB 318, facilities may choose to delay installation of new, cleaner equipment and processes if BARCT will be required for existing equipment. SB 318 could effectively discourage collaboration between facilities and local air districts to achieve air quality goals. Lastly, elements of the expedited permit program would move from the local air district level to the state level. This may result in delays in permitting commonly used equipment and create confusion and frustration for both facilities and air districts alike.

The Senate will hold their suspense file hearing on May 23, which will determine if the bill continues to move forward. The fiscal analysis indicates that CARB expects to spend about $12 million annually to support 50 positions and contracts for implementing, coordinating, and enforcing the bill’s requirements.

May 23, 2025 Update: As of Friday, May 23, SB 318 has been held under submission by the Senate Appropriations Committee, so no motion has been made, and the bill will not move forward the rest of the year. Trinity will continue to monitor SB 318 if additional amendments are proposed or another hearing is set.
If you would like to discuss SB 318 and how it may impact your facility, please contact Trinity Consultants’ Oakland office at 510.285.6351.