Local semiconductor companies are nervous about a new air quality rule recently enacted by California regulators because it could require them to spend major sums of money to reformulate the solvents they use.

Late last month, as part of its strategy to limit greenhouse gas emissions, the state Air Resources Board passed a rule capping the use of fluorinated gases at semiconductor plants. The agency cited recent findings that once these gases are in the atmosphere, their ability to trap heat is thousands of times greater than carbon dioxide, the main contributor to global warming.

"These chemicals, though used in small quantities, pose a danger to the planet because they have such a high capacity to trap atmospheric heat," Mary Nichols, Air Resources Board chairwoman, said in a statement. "It's important that we begin the process of phasing them out."

The panel's limits on fluorinated gases are an "early action" required by the state under AB 32, the landmark anti-global warming law passed in 2006. The goal of AB 32 is to cut greenhouse gas emissions to 1990 levels by 2020.

Under the rule, chip makers must inventory their fluorinated gas emissions starting next year and start reducing the amount by Jan. 1, 2012. The Semiconductor Industry Association in San Jose has estimated that the regulation would cost its members about $37 million.

While this rule is expected to have the most impact upon the dozens of semiconductor chip makers in Silicon Valley, it could affect three L.A.-area companies. These include El Segundo-based International Rectifier Corp. and two Camarillo companies: Vitesse Semiconductor Corp. and Semtech Corp.

Graham Robertson, spokesman for International Rectifier, said the impact of the regulation on his company is uncertain. In response to dramatic downturn in demand due to the recession, International Rectifier has announced it plans to reduce output at its Temecula plant and shut down its smaller plant in El Segundo by the end of 2010.

Robertson said the company now finds it difficult to predict emission levels when the regulation kicks in.

"We're going to have to carefully monitor the emission levels to see if they exceed the allowed threshold," he said. "If they do, of course we will have to take the appropriate measures."

Executives at Vitesse and Semtech did not return calls and e-mails by press time last week.

Chemical Limits

The California Occupational Safety and Health Standards Board has scheduled a March 19 hearing in Costa Mesa on a proposal to enact new workplace exposure limits on 13 chemicals and substances.

Steve Smith, manager of research and standards health unit for Cal-OSHA, said the workplaces that would be most impacted are auto repair shops and aerospace companies. Auto shops use the solvent 1-bromopropane; aerospace companies use refractory ceramic fiber as insulation.

Smith said that in most cases, increased ventilation would be sufficient to meet the regulation.

The regulation has been in the works for eight years. Among the other chemicals and substances targeted: ozone, nickel, bituminous coal dust, vinyl bromide and vinyl fluoride.

For more information, go to the standards board Web site at dir.ca.gov/oshsb/airborne_contaminants09.html.


Tax Up

Regulators at the state Board of Equalization have sent letters to all retailers in California reminding them they will have to pay more in sales taxes starting April 1.

All retailers in Los Angeles County must add one penny to their current sales tax rate, under last month's state budget. That will bring L.A. County's base rate to 9.25 percent.

The two-year hike could bring in as much as $6 billion a year to state coffers, though with overall consumer spending down because of the recession, the take could be considerably less.

But retailers in two L.A. County cities will have to ask their customers for even more. In November, voters in El Monte approved a half-cent boost in that city's sales tax and voters in Pico Rivera approved a one-cent increase. Both measures were placed on the ballot to generate more general fund revenues for their respective cities. El Monte's tax rate climbs to 9.75 on April 1 and Pico Rivera's will soar to 10.25 percent.

Also, Measure R, the countywide half-cent sales tax for transportation projects, will kick in July 1.

Meanwhile, the Board of Equalization is targeting retailers in four more L.A.-area ZIP codes as it goes after retail business owners who either aren't registered as sellers with the state or fail to pay all of the required sales and use taxes. Letters either have already gone out to or will soon be sent out to retailers in parts of Koreatown (90006), Long Beach (90814), Chatsworth (91311) and Santa Clarita (91350).

Staff reporter Howard Fine can be reached at hfine@labusinessjournal.com or at (323) 549-5225, ext. 227.

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