The San Joaquin Valley, now the smog capital of the nation, is daring to do something that no other major region in California has done: impose hefty fees on new houses, strip malls and distribution centers to offset their effects on the air.
For more than a decade, air districts from Los Angeles to Fresno to Sacramento have failed to tap into this cash cow. The potential revenue -- hundreds of millions of dollars each year -- could have funded cleaner-running buses and farm irrigation pumps; street sweepers powered by natural gas; and biomass plants that recycle waste.
The main reason that air districts have declined to impose the mitigation fee on large projects such as Newhall Ranch in northern Los Angeles County is a reluctance to take on powerful builders and developers, regulators say.
Now, the San Joaquin Valley air district is pursuing the fee a decade after the last attempt was defeated by intense lobbying from the building industry.
Air districts in Southern California say that they are watching this valley closely, contemplating the same fee as one of the last measures to offset the pollution from suburban sprawl.
"It's going to create a political battle, but it's an area we're exploring and looking at with interest," said Barry Wallerstein, executive officer of the South Coast Air Quality Management District.
The so-called indirect source fee, incorporated in the state's health and safety code, is based on the idea that houses, strip malls and distribution centers become indirect polluters once construction is finished. Those developments -- often built on the fringe of town -- increase commuter trips and diesel truck traffic, and encourage people to use drive-through lanes at fast-food restaurants.
In recent months, the San Joaquin Valley Air Pollution Control District, which covers a 250-mile trough from Bakersfield to Stockton, has found its hand strengthened by a new state law compelling the district to pass an indirect-source rule and levy a fee.
This time, local builders and developers, flush with record profits in a booming housing market, appear to be resigned to the fee. The battle, it seems, will be over how much the local air district charges for every house, commercial building and warehouse built -- and how the money will be spent.
"We haven't committed to any dollar amount yet, but the building industry is obviously going to push for the cheapest fee possible," said Dave Mitchell, a planning manager for the San Joaquin Valley air district. "This fee is one of the few ways we have left to raise real money for real mitigation measures."
A few smaller air districts such as Colusa County charge indirect source fees for commercial and industrial projects, but the fees tend to be small or cover only administrative costs. The larger air districts, for the most part, have chosen not to rouse the building industry.
"I'm not going to agree to any number unless I'm convinced that it's going to help clean the air," said Kevin Sharrar, head of the Building Industry Assn. in San Joaquin County. "Who's going to be collecting and spending the money and on what programs? Do we charge just new development?"
A decade ago, the San Joaquin Valley air district proposed a fee of $5,000 per house for subdivisions on the fringe of town and a lesser fee for projects built in a city's core. Since then, an average of 17,000 houses have been built each year, most of them on farmland, according to the local air district. Had the indirect source rule been adopted in 1992, the air district would have raised about $850 million for programs to clean the air.
"We would have reduced air pollution by a third in the valley had that fee been imposed a decade ago," said Kevin Hall, the local Sierra Club member who has led the fight for cleaner air in the region. "We would have been able to replace all the farm diesel pumps and enclosed the dairy lagoons to turn their waste into energy.
"We would have more biomass plants running and a lot less sprawl because the higher fees would have encouraged infill development. The valley would have smelled a lot different."
Throughout California's postwar boom cycles, cities and counties have been reluctant to charge fees on new growth, arguing that such costs hurt business and ultimately are passed on to consumers.
But the passage of Proposition 13 in 1978 forced a new kind of thinking. Housing and strip malls began to be viewed as economic drains, bringing more in infrastructure costs -- roads, schools, sewers, police and fire -- than they collected in taxes. But even as localities have raised fees for infrastructure, they have largely exempted new development from paying for cleaner air.
In the canyons north of Los Angeles, Newhall Land & Farming Co. and other large developers are building tens of thousands of houses ringed by commercial strips, industrial parks and distribution centers. The Newhall Ranch project, which will add nearly 21,000 houses to the Santa Clarita Valley, will result in 325,000 average daily traffic trips, according to environmental documents.
Yet the South Coast Air Quality Management District has chosen not to collect any money from the developer. "We don't pay air impact fees in Los Angeles County," said Marlee Lauffer, a spokeswoman for Newhall Land & Farming Co.
The eight counties that make up the San Joaquin Valley might have continued the same course if not for a recent package of clean air bills written by state Sen. Dean Florez (D-Shafter) and passed by the state Legislature this year. The bills removed the 60-year-old exemption that allowed agriculture to elude federal and state clean air rules. And one bill compelled the local air district to impose the long-ignored fee on new growth.
"The San Joaquin Valley air district has had this authority for 10 years under state law and they've done nothing with it," Florez said. "We've let hundreds of millions of dollars slip out the back door. We could have been ahead of the game. Now it's a game of catch-up."
The last decade has seen the San Joaquin Valley overtake Los Angeles as the worst basin in the country for smog, according to the eight-hour federal ozone standard. The valley has averaged more than 110 days a year above the eight-hour standard since 1999. This year, so far, it has exceeded the eight-hour ozone standard by a record 130 days. The South Coast Air Basin, by comparison, has violated the same standard fewer than 100 days a year in the same period.
Florez and others emphasize that new houses are not the only target. Equally important are the big distribution centers being built on farmland and rangeland in Kern, Tulare and Fresno counties. Distribution centers for Ikea and Target draw trucks around the clock, loading and unloading with engines idling.
"These distribution centers create jobs and we need jobs. But we also need to set up a standard and they need to start paying for their air pollution impacts," Florez said.
"In the past year, we've asked agriculture to pony up. Now it's time for the building industry and new growth to do the same."