Sometimes you think the war is over, but the battle rages on nevertheless. Just ask Shawn Smith.

Smith, who is president of Kelterite Corp., an asphalt paving company in Downey, had submitted a permit application to the South Coast Air Quality Management District in December 2008 for an on-site asphalt production facility with recycling capability.

Smith then found himself in the middle of a tug-of-war between business and environmental groups over the South Coast Air Quality Management District’s practice of granting discounted pollution reduction credits. Smith could buy the credits at a reduced price, otherwise the cost would be prohibitive. The credits were supposed to go to about 1,500 projects deemed essential to the region’s economy and infrastructure, including schools and hospitals.

In late 2008, just weeks before Smith submitted his application, a judge ruled in favor of environmental groups that had sued to stop the AQMD from granting the discounted pollution reduction credits. The environmentalists object on the grounds that the price reductions would allow increased levels of pollutants.

Without the discounts, projects such as Smith’s were unfeasible – for example, a permit for a tortilla fryer costs $1.5 million on the open market, while the cost of a permit for a landfill gas-to-energy project costs $115 million. The asphalt plant permit would likely cost tens of millions of dollars.

Smith had counted on the discount for the permit.

“We had already demolished some buildings and released some tenants, so when the moratorium on AQMD credits hit, it devastated us,” Smith said.

Smith joined a coalition last year lobbying for Sacramento to restore the AQMD’s ability to grant the discounted air pollution reduction credits.

Gov. Arnold Schwarzenegger signed a law in the fall that restored the credits. Smith was one of 1,400 businesses that received affordable permits thanks to the law.

Not so fast.

Environmental groups, led by the Natural Resources Defense Council, filed for a temporary restraining order to block implementation of the new law restoring the permits. A judge rejected the TRO, but the groups also filed a suit seeking to overturn the law. The suit remains pending. And the groups also asked the U.S. Environmental Protection Agency to block any permits.

Business groups are now fighting to preserve the discounted district permits. A coalition including the California Chamber of Commerce, the California Manufacturers & Technology Association and several local chambers and trade associations convinced 33 Southern California state and federal lawmakers to write a counterletter to the EPA.

“With unemployment in California at over 12 percent and with certain areas of this region facing unemployment of 14 percent, the air permits … would allow thousands of clean, environmentally responsible projects to go forward, creating and sustaining tens of thousands of much-needed jobs and economic activity,” the lawmakers said in the letter.

The EPA has yet to rule on the issue.

For Smith at Kelterite Corp., these latest twists and turns are nerve-racking. “We’ve hired our work crews and are already in the construction phase,” he said. “If we have to stop again because of this, it will be even more devastating than the first time because we’ve sunk so much of our life savings into this project.”

Stay tuned.

Contractor Training

Home building contractors beware.

An April 22 deadline is looming to meet a U.S. Environmental Protection Agency requirement that all contractors that work or plan to work on homes built prior to 1978 get certified in lead removal practices. (1978 was the year the federal government banned the use of lead paint in homes, citing a health risk to children ingesting the paint chips.)

While a considerable amount of remodeling of older homes always takes place, this deadline is especially important now that the Obama administration has announced plans to promote energy-efficiency upgrades in older homes and buildings.

Homebuilding industry officials said that most contractors aren’t aware of the deadline. They noted that contractors caught without certification could face fines of up to $37,000 per day.

“Whenever I meet someone new that’s doing remodeling or rehab, I mention this to them,” said Holly Schroeder, chief executive of the Los Angeles-Ventura chapter of the Building Industry Association. “And 99 percent of the time it’s news to them.”

Schroeder said that it will be difficult for the tens of thousands of contractors nationwide to get the eight hours of training before the deadline because there are only a few hundred entities around the country offering the training.

For more information on the certification, log on to epa.gov/lead/pubs/renovation.htm or contact the local chapter of the Building Industry Association.

Pay What’s Owed

Businesses in Gardena are this month’s target for state regulators looking for sales tax scofflaws.

Inspectors from the state Board of Equalization are knocking on doors of businesses there and asking to see the books. They are looking for companies that have not paid all of their sales or use taxes. And they want to make sure that all companies have the proper seller’s permits.

This inspection round is part of a statewide program aimed at collecting some of the $2 billion the Board of Equalization has calculated that businesses statewide owe in sales and use taxes.

Staff reporter Howard Fine can be reached at [email protected] or at (323) 549-5225, ext. 227.