MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD BOARD HEARING ROOM 2020 L STREET SACRAMENTO, CALIFORNIA THURSDAY, APRIL 23, 1998 9:30 A.M. Vicki L. Medeiros, C.S.R. License No. 7871 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii MEMBERS PRESENT John D. Dunlap, III, Chairman Joseph C. Calhoun Mark DeSaulnier Dr. Friedman Lynne T. Edgerton Jack C. Parnell Barbara Patrick Sally Rakow Barbara Riordan James W. Silva Staff: Michael Kenny, Executive Director Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer Kathleen Walsh, General Counsel Jim Schoning, Ombudsman PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii I N D E X --o0o-- Page Proceedings 1 Call to Order 1 Pledge of Allegiance 1 Roll Call 1 Opening remarks by Chairman Dunlap 1 AGENDA ITEMS: 98-4-3 Public Meeting to Consider the Research Proposals Introductory remarks by Chairman Dunlap 3 Staff Presentation: Mike Kenny 3 Carlyn Black 4 Bob Barham 16 John Holmes 23 Public Presentation: Howard Carnahan 28 Paul Knepperath 35 George Soares 36 98-4-1 Public Meeting to Consider Amendments to Heavy-Duty Vehicle Regulations Introductory remarks by Chairman Dunlap 38 Staff Presentation: Mike Kenny 40 Renee Kemena 44 Nancy Steel 56 Public Comment: Jed Mandel 58 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv I N D E X (Continued) --o0o-- Page 98-4-2 Public Hearing to Consider the Adoption of a Proposed Regulation, "Definition of Minor Violation and Guidelines for Issuance of a Notice to Comply." Introductory remarks by Chairman Dunlap 85 Staff Presentation: Mike Kenny 86 Stephanie Trenck 88 Kathleen Meade 108 Public Presentation: Frank Caponi 111 Jot Condi 117 Open Session to Provide an Opportunity for Members of the Public to Address the Board on Subject Matters within the Jurisdiction of the Board 125 Adjournment 125 Certificate of Reporter 126 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 P R O C E E D I N G S 2 --o0o-- 3 CHAIRMAN DUNLAP: Will the April meeting of the 4 California Air Resources Board please come to order. 5 Ms. Edgerton, would you lead the Board and the 6 audience in the Pledge of Allegiance. 7 (Thereupon, all present recited the 8 Pledge of Allegiance.) 9 CHAIRMAN DUNLAP: Thank you, Lynn. 10 Will the Clerk of the Board call the roll. 11 MS. HUTCHENS: Calhoun. 12 BOARD MEMBER CALHOUN: Here. 13 MS. HUTCHENS: DeSaulnier. 14 BOARD MEMBER DeSAULNIER: Here. 15 MS. HUTCHENS: Edgerton. 16 BOARD MEMBER EDGERTON: Here. 17 MS. HUTCHENS: Friedman. 18 BOARD MEMBER FRIEDMAN: Here. 19 MS. HUTCHENS: Parnell. 20 BOARD MEMBER PARNELL: Here. 21 MS. HUTCHENS: Patrick. 22 BOARD MEMBER PATRICK: Here. 23 MS. HUTCHENS: Rakow. 24 BOARD MEMBER RAKOW: Here. 25 MS. HUTCHENS: Riordan. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 BOARD MEMBER RIORDAN: Here. 2 MS. HUTCHENS: Roberts. 3 Silva. 4 BOARD MEMBER SILVA: Here. 5 MS. HUTCHENS: Chairman Dunlap. 6 CHAIRMAN DUNLAP: Here. 7 Thank you. We are missing one only today. 8 All right. 9 Mr. Kenny, is it still your advice to me to take an 10 item out of order? 11 MR. KENNY: Yes, Mr. Chair. 12 I think what we would recommend to the Board is 13 that we do the Rice Research Item first. 14 CHAIRMAN DUNLAP: Very good. With the Board's 15 indulgence, then we will do that. 16 The first Item today will be 98-4-3, a discussion 17 of a research proposal. This is an Item that we considered 18 at our last meeting on March twenty-sixth. 19 This proposal is for a project to address the 20 health effects of particulate air pollution from burning 21 vegetative residue fuels. 22 Since a variety of interested stakeholders and 23 several Board Members had questions regarding this project, 24 the Board agreed to extend this Item an additional 30 days to 25 this meeting date. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 Staff was asked to use this time to address the 2 issues raised previously and to prepare a more formal 3 presentation for the Board on this matter. 4 At this time, I would like to ask Mr. Kenny to 5 provide any input he has and then we will go into the formal 6 presentation for the Board. 7 Mike. 8 MR. KENNY: Thank you, Mr. Chair and Members of the 9 Board. 10 As directed by you and the Board, staff has worked 11 very hard over the last 30 days to discuss the details of 12 this research proposal with the rice industry and other 13 stakeholders. We have made every effort to try to come to 14 some kind of a resolution on this matter. 15 As you will recall, the industry representatives 16 last month requested one month to try to raise additional 17 funds for research. 18 We are very aware of the rice industry's 19 sensitivity to this project, and since the Board last heard 20 this Item, staff has met several times with the industry 21 representatives, as well as with the American Lung 22 Association representatives, to discuss this project. 23 We are committed to working directly with the 24 industry and other interested stakeholders and plan to 25 continue the open dialogue on this issue through a special PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 stakeholder committee. 2 This committee will facilitate communication on 3 this project, and we will look forward to active 4 participation from the interested stakeholders. 5 The research proposal you have before you today 6 represents the first step in a larger effort to examine the 7 health effects of particulate air pollution from the burning 8 of vegetative fuels. 9 This project has been reviewed by staff and 10 approved by the Research Screening Committee. The Air 11 Resources Board has budgeted funding in the amount of 12 $374,875.00 to carry out this work over a three-year period. 13 The ultimate objective is to study different 14 vegetative fuels as funding becomes available. Staff will 15 work with interested stakeholders, the Research Screening 16 Committee and the University of California, San Francisco, 17 Davis and Irvine investigators to develop a proposal to 18 expand the scope of ARB's research effort to include other 19 vegetative residue fuels as soon as possible. 20 The funding for the study of other materials has 21 yet to be secured. I think it is important to reemphasize 22 that this research has been designed to better understand the 23 health effects associated with particulate pollution and was 24 never intended to be tied to an expanded regulatory program 25 for sources of vegetative burning. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 In the past 30 days, staff has worked very hard to 2 address the stakeholder concerns and has prepared a formal 3 presentation for the Board that will clearly outline the 4 nature and scope of this study. 5 At this point, I would like to take a moment to ask 6 Ms. Karlyn Black to report to the Board on the status of this 7 Item. 8 MS. BLACK: Thank you, Mike. Chairman Dunlap, 9 Members of the Board, good morning. 10 I have been asked to provide some information for 11 you today on particulate matter and vegetative burning as it 12 relates to the Health Effects Research Project that you have 13 before you today. 14 I will be the Contract Manager on this research 15 effort, and it is my hope that after this presentation the 16 value of this research project and others like it will become 17 more clear. 18 As you are aware, particulate matter air pollution 19 causes a variety of adverse health effects in humans. 20 Epidemiology studies using powerful statistical 21 tools have looked at populations that have been exposed to 22 various kinds and levels of PM. 23 Recent studies confirm what is being seen 24 historically, which is that mortality and illness track PM 25 levels very closely and that there is a high degree of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 consistency and coherence among the studies and that these 2 effects are seen worldwide. They certainly are not isolated 3 to the United States. 4 Yet while epidemiologic studies are very valuable 5 tools, they cannot tell us which components of PM might be 6 more harmful, nor can they identify the biologic mechanisms 7 involved in causing adverse health effects. That is why we 8 need controlled laboratory studies, such as the one before 9 you today, to help answer these questions. 10 In the past nine years, ARB has conducted more than 11 329 research projects. These were addressing many different 12 aspects of air pollution. 13 More than 81 of these projects were directly 14 related to PM air pollution. Of these, 22 were PM related 15 health studies. 16 My purpose in sharing these statistics with you 17 today is to show that the ARB and the Research Division have 18 been concerned about PM air pollution for some time, and we 19 have been actively conducting research in this area for many 20 years. 21 In addition, we are carrying out a number of 22 extensive regional PM studies. Among these are the 23 California Regional Particulant Ambient Air Quality Study, or 24 the San Joaquin Valley Study, which I think most of you are 25 familiar with. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 We also have the Los Angeles Kaiser Health Study, 2 and of course, the Children's Health Study, which I also know 3 the Board is aware of. 4 We have the UC Davis/UC Irvine Collaborative Animal 5 Toxicology Study, which came before the Board about a year 6 ago, and the Central Valley PM Health Study. 7 To provide another perspective, about half of the 8 entire research budget in the last nine years has been spent 9 on health studies. 10 In addition to our in-house research effort, ARB 11 staff are involved in PM health research that's being 12 conducted throughout the nation. 13 There's more than 38 epidemiology studies, or 14 projects, coming on-line in the next few years, something on 15 the order of 18 exposure assessments, 17 dosimetry studies, 16 looking at overall exposure and animal exposure studies 17 looking at toxicology, something like 37 total projects. 18 These efforts reflect a nationwide concern about 19 fine particulate matter as an air pollutant. The sponsors 20 include such members as U.S. EPA, Health Canada, National 21 Institutes of Health, Lovelace Respiratory Research 22 Institute, the Health Effects Institute, Mickey Leland 23 National Urban Air Toxics Research, Electric Power Research 24 Institute and American Petroleum Institute. 25 With this as a background, please allow me to shift PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 gears just a bit, but talk more about the specific project 2 you have before you. 3 The study of interest today is the effects of smoke 4 from burning vegetative residue on airway inflammation and 5 pulmonary function in healthy, asthmatic and allergic 6 individuals. 7 Please note that in response to stakeholder 8 concerns we have changed the title of the study to more 9 accurately reflect the intent of this study, which is to look 10 at the effects of smoke from a variety of vegetative fuels. 11 Now the reason smoke from vegetative burning is 12 even a point of discussion, or, in fact, never mind that the 13 fundamental focus of this research project today, is because 14 it is a significant source of particulate matter air 15 pollution in California, on an annual basis, vegetative 16 burning contributes more than 14 percent of the total 17 particulate emissions. 18 Because of our extensive efforts to address the 19 statutory issues of Rice Burning Phase-Down, we are quite 20 confident in our assessment of emissions from burning rice 21 straw. 22 However, contributions from residential wood 23 burning and prescribed burning for forest management we 24 suspect are underestimated. 25 So, it is safe to say that emissions from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 vegetative burning are probably even larger than what is 2 depicted here on this slide. 3 To provide yet another perspective, I would offer 4 that when you see smoke from any vegetative burning source, 5 think PM 10. 6 More than 90 percent of all smoke particles are 7 smaller than 10 microns in size, that is PM 10, and remember, 8 the particles in this size range are largely respirable. 9 In fact, more than 70 percent are actually PM 2.5, 10 or what we call, smaller than 2.5 microns in size. 11 In considering the recent national emphasis on 12 PM 2.5 and the newly proposed Federal Fine Particle 13 Standards, of which, I'm sure, we're all familiar, this may 14 have implications for California. 15 Clearly, from a health perspective, fine particles 16 from vegetative burning should pose a concern for all of us. 17 Now, stakeholders have raised a question and have 18 actually suggested that PM emissions from rice straw burning 19 are insignificant compared to the rest of the sources of PM 20 throughout the State, and we have many of these sources 21 listed here, windblown dust, construction, unpaved roads, 22 residential wood combustion, etcetera, but staff believes 23 this is a matter of perspective. 24 Particulate matter air pollution from burning rice 25 straw on an annual basis does appear small, something on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 order of four percent of the total emissions. 2 However, particulate air pollution from burning 3 rice straw is a seasonal source of emissions, just like 4 residential wood burning, or prescribed burning for forest 5 health. 6 So, it would be more accurate, we believe, to look 7 at emissions contributions on that basis. 8 For example, as depicted here, for a 3,000 acre 9 burn day, a modest burn day, if you will, rice straw smoke 10 could contribute upwards of 10 percent of the total PM for 11 that given day, and on a 10,000 acre burn day shown here, a 12 higher acreage study, if you will, but still very common 13 throughout the burn season, PM from rice straw burning could 14 contribute more than 20 percent of the total PM mass, 27 15 percent of the total PM mass. 16 On days when there are 15,000 or 20,000 acres 17 burned, then the emissions would be even greater. 18 While it is clear from these data that emissions 19 from rice straw burning are significant, stakeholders have 20 asked the question, does it make sense to study smoke from 21 rice straw when we are actively phasing down the burning? 22 The answer, yes. It still makes sense to look at 23 rice straw burning as a source of vegetative burning 24 emissions. 25 In the year 2001, even at full phase-down, the PM PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 emissions from rice straw burning will still be significant. 2 State law allows for up to 25 percent of the 3 acreage planted to be burned for disease control. At current 4 rates of planting, this translates to something on the order 5 of 125,000 acres of rice straw stubble. 6 Now, at three tons of rice straw per acre, that's a 7 lot of rice straw, 375,000 tons. So, for example, if you 8 bale up the straw, the straw from the 125,000 acres, kind of 9 like bales of hay, and you stack these bales end to end and 10 side by side, you would have a pile of bales of straw the 11 size of a football field, reaching approximately a thousand 12 feet high. 13 For a perspective, a thousand feet high is roughly 14 the same height as a 100 story building. The New York City 15 World Trade Center, one of the largest buildings in the 16 nation, is, coincidentally, 110 stories high. 17 So, you can see the potential health effects 18 associated with emissions from this amount of fuel, along 19 with that from other vegetative fuels, are of concern. 20 That brings us back to the details of the study 21 before you today. The purpose of this project is to examine 22 the health effects of particulate air pollution from burning 23 vegetative fuels. 24 This was planned as a multi-phased study to be 25 carried out over several years and to look at several PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 different fuels. 2 The information from this study will provide 3 additional information about the health effects of fine 4 particles. It was not designed for purposes of further 5 regulation on any vegetative fuel source. 6 In a way of a project design overview, let me take 7 just a moment here and remind you that the project is a human 8 clinical exposure study. There will be 45 subjects total. 9 These will include both men and women, ages 18 to 10 50 years. It will include three different groups, normal 11 healthy people, mild asthmatic people and people who are 12 allergic but do not have asthma. 13 The health end points measured will include 14 different measures of inflammation and tissue damage, as well 15 as immune cell function. It will also include pulmonary 16 function and airway responsiveness. 17 Now, subjects would be recruited from the Bay Area 18 as well as the Sacramento Valley. 19 Continuing on, the pollutant of study is, of 20 course, fine particulate matter. The source of particles is 21 smoke from burning vegetative material, as you have heard 22 before. 23 The proposed fuels include rice straw, residential 24 wood burning fuels and forest waste, or bio-mass fuels. 25 We have funding in place to address the first fuel, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 rice straw, but the funding to address the other fuels has 2 not been identified. 3 When additional funds become available, staff plan 4 to address other fuels as soon as technically feasible. 5 Since stakeholders have raised the issue regarding 6 other combustion sources, such as diesel, for example, I have 7 added a bullet here to remind us all that other combustion 8 sources are being actively addressed in other ARB programs 9 with other research efforts. 10 The particle exposures in the study address several 11 types of real world situations. The first is a low PM 12 exposure level, something around 300 micrograms, and the 13 second is a higher PM exposure level of something around 600 14 micrograms. 15 The next set of exposures look at multi-day versus 16 single day, in this case, one versus three days. 17 The idea is to see what the health effects might be 18 if a person breathes particles from smoke several days in a 19 row. 20 The PM health effects associated with this are yet 21 to be determined. The PM levels chosen were based on ambient 22 monitored PM samples that were collected on days when rice 23 smoke, for example, was significant. 24 The exposure levels in the study are midway between 25 the highest and the lowest measured ambient levels taken in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 the Sacramento Valley. 2 All the human exposures in this project will be 3 conducted at UC San Francisco Lung Biology Center. UC San 4 Francisco was chosen because it has the facilities and 5 experienced investigators to carry out this work. 6 We feel the study is well designed, and it takes 7 advantage of the collective expertise offered by three 8 different UC campuses here. 9 Dr. Colin Solomon is an Assistant Research 10 Physiologist with extensive clinical exposure experience. 11 Dr. John Balmes is an Associate Professor of Medicine and a 12 world reknowned specialist in asthma. 13 However, UC Davis expertise has also been included 14 in this study. Dr. Bryan Jenkins would be contracted to 15 engineer and build the combustion chamber, a smoke delivery 16 system for this project. 17 Dr. Jenkins is a Professor in the Biological and 18 Agricultural Engineering Department at UC Davis, and he has 19 extensive experience working on agricultural issues. 20 Dr. Michael Kleinman would also be contracted to do 21 additional laboratory analysis. Dr. Kleinman is a Professor 22 in the Department of Community and Environmental Medicine at 23 the College of Medicine, UC Irvine, and he has extensive 24 experience with air pollution related research. 25 The Air Resources Board staff who will be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 overseeing this work is myself, and I have a Ph.D. in 2 endocrinology, which is a bio-medical field, and that degree 3 is from UC Davis. 4 Collectively, this project takes full advantage of 5 the expertise offered, clearly, by all three UC campuses. 6 The UC San Francisco facilities are unique and do 7 not exist anywhere else in the State. The Lung Biology 8 Center houses a human exposure laboratory with a special 9 exposure chamber that was, in fact, designed and built with 10 ARB funding. 11 To this extent, this project that you have before 12 the Board today, again, makes good use of the funds that we 13 have already expended. 14 The facility provides immediate access to 15 physicians by its proximity to San Francisco General 16 Hospital, literally right across the street. 17 It also provides, in association with San Francisco 18 General Hospital, a general clinical research center with a 19 dedicated bronchoscopy room and also a subject recovery room, 20 because these are clinical exposures. 21 Having taken these few minutes to provide you with 22 somewhat of an overview of this work, we would like to take 23 just a few more minutes of your time to talk about our 24 responses to stakeholder concerns regarding this particular 25 study. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 A special outreach committee will be established 2 specifically for this study. It will serve, we think, as a 3 very valuable communication tool for interested stakeholders. 4 Staff are hopeful the stakeholders will want to 5 take advantage of the opportunity that this affords. 6 We anticipate and expect and are hopeful that 7 participants will include members from the rice growers 8 community, other rice industry representatives, people from 9 environmental groups, the public health community, of course, 10 the American Lung Association, they were the actual sponsors, 11 or proponents, if you will, of this original research here, 12 the Air Resources Board and other interested stakeholders. 13 Communications would include quarterly progress 14 reports and meetings. 15 At this point, I would like to introduce to you, 16 Mr. Bob Barham, the Assistant Chief of the Research Division, 17 who will summarize the discussions we have heard over the 18 past few weeks with the interested stakeholders. 19 MR. BARHAM: Thank you, Karlyn, Board Members. 20 At the March Board meeting a number of concerns and 21 questions were raised about the proposal before you today. 22 We spent several weeks meeting with representatives 23 of the rice industry, the Lung Association, and I believe, 24 Karlyn today in her presentation has addressed most of the 25 issues that were raised at that meeting. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 The one issue that I would like to touch upon are 2 questions that the Board, specifically Dr. Friedman, had at 3 the meeting. 4 Dr. Friedman asked in the March meeting about the 5 need for certain approvals for the study and the timing of 6 the study. 7 We discussed these concerns with Dr. Friedman and 8 with the researchers and believe we have addressed most of 9 the concerns at this point in time. 10 Staff believe that understanding the health impacts 11 of the emissions associated with rice, or vegetative burning, 12 is an important area of investigation, and we look forward to 13 working with the stakeholders in this study and identifying 14 sources of funding for future efforts. 15 That concludes the staff's presentation. If you 16 have any questions, we will be glad to answer them. 17 CHAIRMAN DUNLAP: Mr. Parnell, do you want to go 18 first, or Mike, did you want to add anything? 19 MR. KENNY: I wanted to add that what we have tried 20 to do here is try to look at the issue in kind of a broad 21 base perspective that is associated with vegetative fuels in 22 general, and we are trying to work with the industry as they 23 try to pursue some additional monies that we can use to 24 really fund the entire range of vegetative fuel research that 25 we need to do. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 CHAIRMAN DUNLAP: Okay. Mr. Parnell, and then Dr. 2 Friedman, if you wanted to say anything. 3 BOARD MEMBER PARNELL: Perhaps Dr. Friedman will 4 answer some of my questions. 5 I want to thank the staff for their diligent effort 6 to work closely with the stakeholders and to answer some of 7 the questions. 8 However, notwithstanding your review of the size of 9 certain building and football fields and how that relates to 10 rice straw, I'm of the opinion that rice straw, under the Ag 11 Burning Statutes, are only burned on days when meteorological 12 conditions would tend to dilute the effects and atmospheric 13 conditions and could effectively handle that emission. 14 So, I know sometimes we miss, and that is not the 15 point of my question, the point of my question is, how, maybe 16 someone technically competent can answer, how a human chamber 17 study, where you are directly subjected to rice straw 18 inhalation, will emulate what happens in the real world, that 19 is the dilutive effect of what happens in the real world, and 20 that is a serious question to me, and will they equate at 21 some point in time? 22 I don't know who, maybe Dr. Friedman, you can -- 23 BOARD MEMBER FRIEDMAN: Well, there is no such 24 thing as a perfect clinical investigation. 25 In this particular study, they are using various PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 levels, if you will, I think 300 and 600 were the numbers, to 2 approach the problem. 3 There are probably some people who are exposed to 4 more than the maximum level and probably a fair number of 5 people exposed to less than the lowest level. 6 This study is probably the only, and the first 7 study, to directly look at the effects on the human lung 8 within a very sophisticated way of any PM substances. 9 It is not a perfect study, but it is a study 10 without which people will always make the claim that there is 11 no effect. 12 No amount of epidemiologic work will be convincing 13 to those people who don't want rice straw in any way to harm 14 anything. 15 What I said last time, I think that if you put any 16 human being in a box and you put stuff in that box, whether 17 it's road dust or rice straw burning, or anything, it is 18 almost inconceivable to me that you are not going to find 19 something. 20 The real question is, will those findings equate to 21 cautionary concerns or not? 22 I don't know the answer, and that is the reason for 23 doing the study. 24 I read this carefully, and I'm not an expert at 25 this kind of science, but you may want to have some more to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 say about Mr. Parnell's question. 2 MS. BLACK: Thank you, Dr. Friedman. 3 It is an excellent question, and it is a challenge 4 that you always face in bringing something like epidemiologic 5 evidence into the laboratory and trying to adequately 6 characterize that, and Dr. Friedman spoke to that very well, 7 I believe. 8 I'd like to reassure you that the levels chosen for 9 this particular study were based on ambient monitored or 10 measured PM levels, and they are conservative, if you will, 11 and they are trying to, in selecting these levels, mimic, if 12 you will, the exposures that someone might receive down wind, 13 quite a few miles away, for example, they are considered to 14 be diluted for that purpose. 15 So, the investigators are trying to approximate 16 what people might really, truly be breathing out in the real 17 world: 18 MR. SCHEIBLE: I would like to add that in managing 19 the Agriculture Burning Program, our goal is to make it so 20 that when the burning occurs, the meteorology is such that 21 although people may see the plumes, they won't be exposed to 22 perceptible levels of smoke. 23 So, like in normal cases, the vast majority of 24 days, we wouldn't expect these health effects. 25 Unfortunately, we know that occasionally the smoke does go PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 into urban areas, and we do get exposures, and this type of 2 study is essential for us to understand the nature of the 3 health effects, and is it a small health effect, or is it a 4 significant health effect. 5 As we go on, after the results of this study are 6 known, it will help us deal with that issue and deal with the 7 public concerns. 8 BOARD MEMBER PARNELL: Thank you for the 9 discussion. 10 I don't want to elongate the discussion any longer 11 than we have to, but I always get concerned in my government 12 life that we look at one specific thing, hone in on it, make 13 an issue out of something, where probably on balance there 14 are other issues equally as important. 15 We can't get to everything all at once, and I 16 recognize that, but I am told that even, you know, tire wear 17 on cars is a huge issue in terms of particulate matter, and 18 yet, we are focused here and maybe not there when that might 19 be the bigger issue, and that needs no more discussion. 20 I compliment the staff again for having really 21 gotten together with the stakeholders and to try to come to 22 some agreement with respect to this proposal. 23 CHAIRMAN DUNLAP: Dr. Friedman and Mrs. Riordan. 24 If I could, Mike, at some point address the 25 expansion of the research dollars, you know, what has been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 going on, if you can, or the staff, and I know there are some 2 folks from the rice industry here, I know we have a modest 3 sign-up for witnesses, but if somebody wanted to come up here 4 and say a word, what is going on, I think it eliminates some 5 things for us. 6 Perhaps you want to do that in a minute. 7 Dr. Friedman. 8 BOARD MEMBER FRIEDMAN: I have had two concerns 9 about the project. 10 One was whether or not we could get assurance that 11 they had permission from their Review Board for human subject 12 protection, and, in fact, we have that assurance now. 13 The second had to do with whether this really was a 14 three-year study, and I received really good materials gotten 15 for me by the Research Division from the investigators who, 16 because of the configuration of their labs, and so forth, 17 thought it was in the best interest of the patient safety to 18 do one patient only on a given day, and I buy that. 19 I heard you mention quarterly reports. I would 20 presume that built into this project is a mid-point analysis 21 to see if the study should continue. 22 Dr.. HOLMES: Yes, Dr. Friedman, I think that is 23 the normal practice with the Division. 24 If we see a project that is going in a direction 25 that is not going to help us with our programs, then we have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 a provision in the agreement to cut it off. 2 BOARD MEMBER FRIEDMAN: My concern, John, is that 3 if the findings are rather obvious with the smaller sample 4 size, then there is no need to do the full study. 5 I mean, if you see something microscopy, really 6 important inflammatory changes in the first half of the 7 subject cohort, you don't have to finish it, so that's what I 8 meant by a mid-point analysis. 9 DR. HOLMES: Oh, I see. 10 Well, I would defer to Karlyn. I'm not sure what, 11 if they discover midway that they were doing real damage to 12 the health of the subjects, then they would probably stop 13 doing it. 14 BOARD MEMBER FRIEDMAN: I should hope so. 15 I would like to make sure that is the case. That's 16 why I mentioned it. 17 MS. BLACK: One of the things that I would offer is 18 that my job, as a contract manager, as anyone else's job here 19 at the Air Resources Board responsible for research, is to 20 stay on top of these kinds of things, and the quarterly 21 meetings, for example, that are noted here for this project 22 are less frequent, for example, than obviously I would be in 23 communication with the investigators, and all along the way 24 we would be taking a look at the data. 25 John has mentioned already that the contract PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 language, standard contract language accommodates that, such 2 that if you need to maybe make an adjustment mid-stream, or 3 change your overall concentration, or maybe, even like you 4 suggested, if you are seeing tremendous results with the 5 healthy, normal people, then maybe you could continue on in a 6 shorter timeframe, for example, moving on to the asthmatic, 7 or allergic individuals, but that would be a collective 8 decision made with the Air Resources Board and with the 9 investigators. 10 BOARD MEMBER FRIEDMAN: Thank you. 11 CHAIRMAN DUNLAP: A footnote on the idea of, if 12 research is not needed and we have learned some things, you 13 know, the Board has always been supportive of saving a few 14 bucks of the people's money, you know, and we could opt that 15 as some research if we don't need to go as far as we 16 originally thought. 17 So, again, one of the roles we would hope the 18 contract manager research would pay to attention to are cost 19 and all of that, and I know you have been sensitive to that. 20 Dr. Holmes has spent a lot of time answering those questions, 21 but, you know, pay attention to the dollars, as well. 22 Ms. Riordan. 23 BOARD MEMBER RIORDAN: Just a question to help me 24 remember, this is the first of a series of studies, 25 hopefully, that can be funded. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 Remind me where you would go next. This happens to 2 be rice burning. What is next on your list? 3 DR. HOLMES: Well, I am glad you asked that 4 question, because we are very interested, in fact, we view 5 this expansion of the study in the future to be a real 6 opportunity. 7 We have been concerned for a long time about the 8 effects of other kinds of residue, combustion, fireplaces, 9 wood stoves, forest burns, control burns in forests, this is 10 going to be a problem that's likely to become critical as we 11 go down the road here with the idea that we have to burn 12 forests frequently. 13 So, what we are doing is investing a little more 14 money in this facility that we have already constructed so 15 that we can generate controlled exposures to various kinds of 16 smoke, and we hope to follow down that road. 17 BOARD MEMBER RIORDAN: Do you think, for instance, 18 residential wood combustion would be next on your list? 19 Have you gotten to the point of what is next? 20 DR. HOLMES: Well, I think Dr. Friedman has 21 addressed the first part of the question. 22 The second part, no, we have not decided definitely 23 as to what the next substance would be. 24 You and I have learned a long time ago, that is, 25 you know, if you sit upwind of the campfire, the smoke is not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 good for you. It doesn't make that much difference what kind 2 of smoke it is. 3 CHAIRMAN DUNLAP: On that note, I have gotten some 4 preliminary feedback, Mike, over the course of the last month 5 that indicated that the fireplace work could be done more 6 easily than the forest work, that was the indication that I 7 had from staff, so I am asking you to do more than say you 8 don't know. 9 MR. SCHEIBLE: It's -- I think residential is a 10 leading candidate. 11 CHAIRMAN DUNLAP: So, that is where you are 12 leaning, and you are going to look at it more closely, right? 13 MS. BLACK: Yes, definitely. 14 One of the challenges that we have is getting a 15 handle on what exactly people call residential wood burning 16 fuel. Is it oak? Is it almonds? 17 You know, some of the technical issues that need to 18 be ironed out, and we feel that residential wood burning, we 19 have more information on, and it would likely be the second 20 candidate. The third being the forest waste and bio-mass 21 fuels. 22 BOARD MEMBER RIORDAN: And forest, if I could 23 just -- that's going to be a very debatable one because one 24 can advance the theory that if you do the controlled burns, 25 you forego then the risk of the massive uncontrolled burns, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 and so, that one, I think, is the most, I mean short of any 2 of the study and the research, you are just going to have a 3 debate that will go far beyond what is this, or the next 4 study that you have, so I think residential might be the best 5 next one and then the other. 6 Thank you. 7 CHAIRMAN DUNLAP: Any over questions on this Item 8 before we get to the witnesses? 9 Okay. 10 I appreciate the preparatory work that went into 11 trying to explain this more fully. You know, Mr. Parnell and 12 I were chatting about, you know, the detail that went into 13 this, you know, as you were doing it, we appreciate that, try 14 to give it context. I think it helped. 15 Mike, do you want to say anything about, or can you 16 say anything about industry's efforts thus far, the work, you 17 know, for various means to come up with some suggestion for 18 expanding the research dollar pool? 19 MR. KENNY: Sure. 20 Last month when this was before the Board, one of 21 the key questions was, was there available money out there to 22 be utilized to expand the research pool, and over the last 23 month, I think the industry has tried fairly diligently to 24 try to work with the Legislature to see if there were some 25 additional funds that would be available, and it looks like PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 that process may bear some fruit. 2 It hasn't gotten to a point yet where we have 3 actually dollars in hand, but we are at least very hopeful, 4 in fact, that it will produce the kind of money that we would 5 be able to utilize to expand the studies. 6 CHAIRMAN DUNLAP: Very good. Again, the invitation 7 to the industry, if they wanted to say anything, if you need 8 to add to that, take the mike. 9 We have two witnesses, so why don't we go to them. 10 The first is Howard Carnahan, a self-employed rice producer, 11 it says. 12 Would you come forward, Mr. Carnahan. I think I 13 have seen you before. 14 I think you have been here before. Good to see 15 you. 16 Then Paul Knepprath, from the Lung Association, I 17 guess, has joined us. 18 Paul, if you are here, come to the front row, and 19 we will get you up there right after Mr. Carnahan. 20 Good morning. 21 MR. CARNAHAN: Good morning, ladies and gentlemen. 22 I live in Chico, and I spent my entire career in migrating 23 research, for the last eighteen and a half at rice experiment 24 station. 25 At the meeting last week, I pointed out two things, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 and I didn't hear those mentioned as a part of the 2 presentation today, but, Dr. Black, but one of them was my 3 idea on establishing research priorities, in other words, 4 attacking the biggest problem that you think where the 5 returns could be the greatest. 6 The other thing was in the proposal I saw no 7 protocol for the rice straw, which is the fuel that is going 8 to be studied. 9 I think that a protocol for that aspect of the 10 study is perhaps just as important as the protocol for the 11 medical technology. 12 Today, I would like to say that -- I have three 13 comments here, I believe that if a research proposal is 14 flawed, every effort should be made to remedy such flaws 15 before the research is conducted, rather than to use a flaw 16 to discredit research after it has been done. 17 That is a pretty simple statement, but I think it 18 is a statement that should be hanging in a prominent place in 19 every research person's office. 20 My concerns with this technical proposal, 2355-202, 21 I will avoid reading the title of it, are as follows, number 22 one, the choice of exposure levels seems quite arbitrary and 23 unrelated to the real world situation in the Sacramento 24 Valley. 25 For example, I refer to the July, 1997 Progress PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 Report on the Phase-Down of Rice Straw Burning in the 2 Sacramento Valley Air Basin 1995-96, produced by the 3 California Air Resources Board and the California Department 4 of Food and Agriculture. 5 Now let's examine, I don't have a copy of the 6 figures here, but does everybody here have a copy of my 7 presentation? 8 CHAIRMAN DUNLAP: I think so. 9 Ms. Hutchens, it's in the packet, isn't it, that we 10 have for the comments? 11 Mr. Carnahan, if you would hold that up, I will 12 look for it myself. Just a typed piece, handwritten, 420, 13 okay, I have got it. 14 MR. CARNAHAN: On page F 2, Figure 1, it shows that 15 in September the particulates rose sharply to about 31 per 16 cubic meter of air. 17 That was before the rice straw burning starts. 18 This was a sharp rise from what existed earlier in the year. 19 This, I think, easily can be related to the 20 inversion and the less favorable conditions for dispersion of 21 the particulates. 22 Then if you go to, compare that with September, 23 October and November, which are the months when rice straw is 24 being burned, you get a jump from that 31 base level to 36 25 parts, micrograms per cubic meter. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 So, that is an increase of 5, over from 31 to 36 is 2 an increase of 5, which easily, I think, could be 3 attributable, if you attribute all of that increase to rice 4 straw burning, you would have 5. 5 CHAIRMAN DUNLAP: Mr. Carnahan, I have had a chance 6 to look at this again, can I make a suggestion? 7 Why don't I ask the staff to have a meeting with 8 you, and we take very seriously, I know if I would if I were 9 the staff, if someone stood up and had some thoughtful 10 comments about how we might be missing the mark with some of 11 the specifics in research, have them sit with you and walk 12 through some of these issues, and if there is a way for us to 13 make some changes to make our effort more accurate, I am 14 going to ask staff, with the support of my colleagues, to 15 make those suggested changes to the researchers, and if we 16 don't agree with you, have them explain why. 17 This is a technical Board in many respects, but I 18 am certain that there are a few of my colleagues, me 19 included, that may not know enough about the specific 20 framing, you know, the specifics of what you are talking 21 about, is my point, so what -- 22 MR. CARNAHAN: I'm not an expert either, but I was 23 contacted by a group of growers and farmers who say, we don't 24 understand this and you have a research background, would you 25 take a look at it and see what you think. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 I am not hired by anybody. I'm here as a retired 2 individual to try to have a favorable impact. 3 CHAIRMAN DUNLAP: Well, the way that I think you 4 will have the most impact is, Bob, I will ask you, and 5 arrange a meeting, you could even do it now when we end this 6 Item, sit down and if there are changes we can make to make 7 it better reflect his concerns, let's do that, but also, 8 Mr. Carnahan, you may be the right kind of candidate for this 9 Advisory Committee, and I'll see what the staff can come up, 10 and perhaps include you there. 11 MR. CARNAHAN: I am already on one. 12 CHAIRMAN DUNLAP: We like nothing better than 13 making people drive from Chico down here to advisory 14 committee meetings. 15 Would that be okay with you if we did that for you? 16 MR. CARNAHAN: I would appreciate it. 17 I don't like to drive too much anymore, but if they 18 could come up part way to Chico. 19 CHAIRMAN DUNLAP: Well, we will see if we can 20 arrange that. 21 Dr. Friedman, you look like you had a question you 22 wanted to ask. 23 BOARD MEMBER FRIEDMAN: No. I appreciate your 24 comments. 25 These studies are similar to acute toxicological PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 drug studies. I'm not as concerned as you are about certain 2 aspects of it. 3 The real world, of course, has exposure year after 4 year after year, and there is no way to study that in a 5 laboratory. 6 So, this is a first pass, and I think the science 7 on the first pass is appropriate. It is not dissimilar to an 8 acute drug study where you need to know whether you are going 9 to get a result or not, but I appreciated your remarks. 10 MR. CARNAHAN: One of the things that bothers me, I 11 will just say this and then pursue it later with the staff, 12 but this dosage level of 600 micrograms per cubic meter would 13 be 120 times that that is attributable to rice smoke, the 14 information that I suggested previously, going from September 15 to October, November and December, and that is 120 times, not 16 120 percent. 17 If you put it in percentage it is 12,000 percent 18 higher, and that seems to me like extreme. 19 CHAIRMAN DUNLAP: You mean from where they would be 20 starting at different seasons, what is in the ambient air, is 21 what you are talking about? 22 MR. CARNAHAN: I'm talking about that attributable 23 to rice smoke, if you go from September to October, November, 24 December. 25 CHAIRMAN DUNLAP: Okay. Well, that in particular PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 peaks my concern. 2 I am going to go a step further, ask staff to kind 3 of be able to assess his main points, and then give a 4 response back in writing to the Board about it, okay? 5 Just so we make sure that we are starting with a 6 level playing field is what you want, that is all that you 7 are asking for. 8 MR. CARNAHAN: I know there are a couple of other 9 points that I have here, too, but -- 10 CHAIRMAN DUNLAP: Well, if you think we need to 11 know that in detail, I am willing to listen to you. 12 All that I am saying is that I would rather jump to 13 a remedy more quickly and have the staff defend the building 14 of this specific baseline approach that they are taking. 15 MR. CARNAHAN: It would be nice to sit down with 16 the people who are going to conduct the research. 17 CHAIRMAN DUNLAP: I am not going to commit to give 18 you the face time with the researchers per say, but I will 19 let you talk to the staff. 20 The reason for it, we can drive researchers crazy 21 by having too many people have direct access. This Advisory 22 Committee process that we're setting up is an unusual thing 23 for us, and we do it on occasion, but it's fairly unusual. 24 We think that is going to suffice, so I am not 25 going to permit to give you a face to face with the research PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 team. 2 MR. CARNAHAN: But I think they should have the 3 opportunity to respond to some questions. 4 CHAIRMAN DUNLAP: Well, but I think the staff can 5 interface with that, okay? 6 Thank you. Why don't you get back to us in the 7 next week or so, Bob, okay, make this a priority, you and 8 John. 9 Mr. Knepprath. Good to see you, Paul. 10 Thanks for coming over. 11 MR. KNEPPRATH: Good morning, Chairman and Board 12 Members. Paul Knepprath, representing the American Lung 13 Association of California and our Medical R and D California 14 Thoracic Society. 15 We are here in support of the Resolution that is 16 before the Board. I am not a scientist, but we have been 17 impressed with the work with the Research Committee in 18 reviewing this proposal and in the staff work that has 19 happened between the March meeting and today in trying to 20 clarify the issues. 21 I know I certainly understand this research 22 proposal a lot better today than I did then. So, we urge 23 your support of the proposal at this time. 24 CHAIRMAN DUNLAP: Thank you, Mr. Knepprath. 25 Anybody want to ask questions of the witness before PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 he gets away? 2 Mr. Soares. George, state your name, because you 3 didn't sign up here. You violated protocol, but you were 4 invited, so it's okay. 5 Let the Court Reporter know your name and your 6 affiliation. 7 MR. SOARES: Thank you, Mr. Chairman. George 8 Soares, on behalf of the California Rice Industry 9 Association. 10 Mr. Chairman, I will be very brief. First, I will 11 respond to the staff comment regarding funding for additional 12 research in this area. 13 Staff's representation is exactly my understanding 14 of the process. We are actively engaged, and I am pleased to 15 report that we, CRI, is working closely with the Lung 16 Association in this effort in the Legislature. 17 As you know, that's a very unpredictable process, 18 but we are working on it on a daily basis, and we are 19 reasonably hopeful that we will be able to produce some 20 positive results in that regard. 21 I would like to also add just briefly, Mr. Chairman 22 and Members, that I think it's probably well understood by 23 everyone on the Board and the staff that the rice industry 24 has been uncomfortable with this process, in part because no 25 one likes to go first, and here we are first. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 We are very pleased that we have been able to find 2 a way to term this study a vegetative matter study with 3 several phases to it. 4 We think that it is extremely important to add 5 perspective, as Dr. Black has done in her presentation with 6 the chart that shows that there are various sources that need 7 to be looked at, so we think that movement in terminology is 8 very helpful to what we are all trying to accomplish here. 9 So, let me close by saying that the staff has been 10 just excellent to work with, and I want to thank you as a 11 Chair, as well as Board Members, for making the progress that 12 I think we have made over the last 30 days. 13 We will continue to look forward to working with 14 you. 15 CHAIRMAN DUNLAP: I appreciate that. Thank you. 16 It means a lot to us to see you all working with 17 the Lung Association and others. That's important for us to 18 see you working together and communicating. 19 I know your organization has made that a priority, 20 and Paul, I appreciated your comments in the perspective that 21 you are communicating, and that's good. 22 Okay. Thank you. 23 Looks like, Mike, we've got a research proposal 24 here that needs to be moved on. 25 Anything that you want to add? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 MR. KENNY: Nothing to add, Mr. Chair. 2 CHAIRMAN DUNLAP: Okay. We have before us a 3 Resolution that a couple of stakeholders have said, diverse 4 stakeholders, I might add, have said that they support. 5 The Chair would entertain a motion to move 6 proposal, let's see here, Research Proposal Resolution 98-14, 7 as written. 8 BOARD MEMBER PARNELL: So moved. 9 BOARD MEMBER FRIEDMAN: Second. 10 CHAIRMAN DUNLAP: A motion by Mr. Parnell, and a 11 second by Dr. Friedman. 12 Any discussion that we need to have? 13 Ms. Hutchens, we will proceed with a voice vote. 14 All those in favor of adopting Research Proposal 15 98-14, say aye. 16 Any opposed? 17 All right. Very good. 18 Thank you. Thank you to staff. 19 Dr. Black, I appreciate that. 20 Okay. Mike, can I go back with normal order, or do 21 you want me to deviate again? 22 MR. KENNY: No, I think we can go back to the 23 normal order. 24 CHAIRMAN DUNLAP: Okay. All right. 25 The second Item on the Agenda today is 98-4-1, a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 Public Hearing to Consider Amendments to the Heavy-Duty 2 Vehicle Regulations: 2004 Emission Standards; Averaging; 3 Banking and Trading; Optional Reduced Emission Standards; 4 Certification Test Fuel; Labeling; Maintenance Requirements 5 and Warranties. 6 In 1994, the Board approved the State 7 Implementation Plan for ozone, which became our SIP. The SIP 8 calls for a unified national and California emission standard 9 for engines used in heavy-duty vehicles. 10 The staff's proposal today presents the emission 11 standards that the Board committed to in the SIP. As we all 12 know, heavy-duty vehicles are one of the major mobile sources 13 of emissions in California. 14 Among several measures in this SIP to reduce 15 emissions from these sources, the most important are new 16 oxides of nitrogen emission standards, both Federal and 17 State, and these standards will take us a long way towards 18 meeting our SIP commitments. 19 In mid 1995, the Board, the U.S. EPA and the 20 manufacturers of engines for on-road heavy-duty vehicles 21 signed a statement of principles, or SOP, and this SOP is an 22 agreement that calls for new emission standards and the 23 harmonization of State and national heavy-duty requirements. 24 The SOP was a giant step toward meeting 25 California's SIP goals. It represented a hallmark of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 cooperation between industry, State and Federal Government, 2 and an agreement that I was personally proud to be able to 3 sign for our Board. 4 In October of 1997, the EPA adopted the emissions 5 standards described in that SOP for diesel engines used in 6 heavy-duty vehicles, making it effective in the year 2004. 7 For our consideration today, staff is proposing 8 changes to the State heavy-duty engine regulations to 9 harmonize California emission standards with the Federal 10 requirements. 11 This is, again, an important part of our SIP. It 12 is in line with our implementation agreement in the SOP. 13 I might add that it is extremely diverse, as far as 14 subject matter, and I would ask staff to take the time to 15 answer any questions that the Board may have, because we 16 probably have a few on this thing. 17 So with that, Mr. Kenny, do you want to introduce 18 this and the staff presentation? 19 MR. KENNY: Yes. 20 Thank you, Mr. Chair and Members of the Board. 21 Today staff will present a proposal that makes great strides 22 in reducing the overall contribution of heavy-duty vehicles 23 to California's air pollution. 24 In terms of emission benefits, this is one of the 25 largest new measures in the 1994 Ozone SIP. These proposed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 standards are a very significant achievement. 2 I want to commend the engine manufacturers, not 3 only for signing the SOP but also for working cooperatively 4 with staff to resolve program details that were not spelled 5 out in the SOP. 6 After the staff's original proposal was released in 7 early March, the engine manufacturers raised some concerns 8 because our proposal would not provide full harmonization 9 with the Federal Program. 10 The reason that the proposal did not provide for 11 complete harmonization was that adoption of the Federal 12 Program for California would have been a set back for our 13 Program in terms of meeting our SIP commitments. 14 We met with the engine manufacturers and we found a 15 solution to their concerns that would move closer to their 16 desired goal of a 50 State Program, while protecting our 17 progress toward our clean air goals as provided for in the 18 SIP. 19 That solution is the reason that we have some 20 changes in the original proposal. You have the proposed 21 changes, and they are also available at the entryway to the 22 hearing room. 23 The staff will address those changes in today's 24 presentation. I think the proposal staff is presenting today 25 provides the advantages of harmonized State and Federal PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 Programs while protecting our SIP benefits. 2 The proposal has a number of specific elements that 3 I would like to highlight. First, the proposal would 4 establish a combined NOx and hydrocarbon emission standard 5 for diesel engines used in heavy-duty vehicles beginning with 6 the 2004 model year. 7 The emission reductions from implementing the 8 standard would be about 50 percent from today's diesel and 9 heavy-duty engines. 10 Although the SOP, which the Chairman discussed 11 briefly, addressed gasoline as well as diesel and heavy-duty 12 engines, the U.S. EPA did not establish gasoline engine 13 emission standards in its October rulemaking. 14 When they do so, we will evaluate the Federal 15 requirements with the intent to propose harmonizing 16 California's requirements with the 49 State requirements. 17 The proposal includes a new feature for California 18 regulations, averaging, banking and trading, or ABT. This 19 feature allows engine manufacturers to produce engines that 20 are cleaner than they are required to and to earn credits for 21 being cleaner. 22 These credits can be used in several ways, 23 including keeping them for future use, such that engines 24 produced in future years could exceed the future emission 25 standards by the amount of the credits. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 Although we currently have such flexibility 2 arrangements for other classes of vehicles, this Program 3 would be different because the credits would be common to 4 California and rest of the country. 5 For the most part, ABT credits could be earned 6 anywhere and would draw on anywhere. The only restrictions 7 staff is proposing on this free-flow of ABT credits is for 8 the medium-duty diesel truck engines. 9 The proposal also contains a number of technical 10 elements that the staff will describe. These technical 11 elements are designed to harmonize our requirements with the 12 Federal requirements. 13 We recognize that harmonization with the Federal 14 requirements is a very important element because of the 15 interstate nature of the trucking industry. 16 Although we have tried to align California's 17 Heavy-duty Engine Program with the Federal Program, we are 18 not proposing that we have 100 percent harmonization. 19 Complete harmonization would set back our progress 20 towards our SIP goals. Staff will describe the proposed 21 requirements that differ from the Federal requirements. 22 The staff believes that the proposal was a balanced 23 one and provides for maximum harmonization between California 24 and the Federal requirements, while protecting our SIP 25 measures and emission reductions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 Renee Kemena of the Mobile Source Division will now 2 make the staff presentation. 3 Renee. 4 MS. KEMENA: Thank you, Mr. Kenny. Good morning, 5 Chairman Dunlap and Members of the Board. 6 My presentation today describes proposed amendments 7 to the Heavy-Duty Vehicle Regulations. This presentation 8 will include some background, the proposed regulation, the 9 Averaging, Banking and Trading, or ABT Program, cost and 10 benefits, including the SIP benefits, issues which have 11 mostly been resolved and the summary and staff 12 recommendation. 13 I will begin with the background with the events 14 leading up to this proposal. In 1994, the Board approved the 15 State Implementation Plan, or SIP. 16 The 1994 SIP is California's plan for attaining the 17 Federal Ambient Air Quality Standards for Ozone. Two 18 measures in the SIP, Measures M5 and M6, call for more 19 stringent State and Federal standards for on-road heavy-duty 20 diesels. 21 In 1995, ARB, U.S. EPA and engine manufacturers 22 signed the Statement of Principles agreeing to set those more 23 stringent standards. 24 Six months ago, in October of 1997, the U.S. EPA 25 adopted Federal standards based on the agreements set forth PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 in the Statement of Principles. 2 ARB staff committed to the engine manufacturers 3 that we would present proposed regulations to this Board 4 within six months of Federal adoption. 5 Today's Board Item fulfills that commitment. 6 Heavy-duty vehicles emit oxides of nitrogen, 7 particulate matter, nonmethane hydrocarbons, carbon monoxide 8 and other pollutants. 9 The primary pollutants of concern are NOx and 10 particulate matter. Although they log less than five percent 11 of the vehicle miles traveled, heavy-duty diesel vehicles are 12 responsible for 25 percent of the on-road vehicle NOx 13 emissions. 14 These heavy-duty diesel vehicles account for an 15 even higher percentage of the on-road NOx emissions 2010. 16 One of the challenges in reducing emissions from 17 heavy-duty diesel engines is the NOx/particulate matter 18 trade-off. 19 The control strategies that reduce NOx generally 20 tend to increase particulate matter and vice versa. 21 There are two methods for testing vehicle 22 emissions. Chassis certification is the method we use to 23 test passenger cars and trucks. 24 The whole engine, chassis and engine is tested and 25 emissions are measured in grams per mile. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 This proposal, however, applies to heavier 2 vehicles. For those heavier vehicles, the engine is tested 3 and certified before it is installed in a vehicle. 4 These are the work horses of the vehicle world, 5 like semi-trucks and garbage trucks and buses and tow trucks. 6 Their emission limits apply to the engine itself 7 and are measured in units of work, grams per brake horsepower 8 hour. 9 This next section of the presentation covers the 10 proposed regulation, except the Average, Banking and Trading 11 Program, which I will discuss later. 12 The main purpose of today's proposal is to adopt 13 standards for heavy-duty diesel truck and bus engines. 14 For this proposal heavy-duty vehicles are defined 15 as those over 14,000 pounds gross vehicle weight rating. 16 Some provisions in this proposal relate to other 17 on-road engines. For example, there are useful life 18 provisions for heavy-duty auto cycle, typically gasoline 19 engines, and Averaging, Banking and Trading provisions for 20 engines certified medium-duty vehicles. 21 The emission benefits of this proposal come from 22 on-road heavy-duty diesel engine standards. 23 This table is a summary of the main provisions of 24 our proposal compared to the Federal requirements. 25 As you can see, for the most part, staff is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 proposing adoption of the Federal provisions. Staff's 2 proposal is similar to the Federal Program for Averaging, 3 Banking and Trading, or ABT. 4 The proposal aligns with the Federal Program for 5 Heavy-Duty Averaging, Banking and Trading. The big issue 6 with the proposal has been Averaging, Banking and Trading for 7 medium-duty diesel engines. 8 Staff has been working with engine manufacturers 9 and we believe we have a Medium-Duty ABT proposal that works 10 for ARB and the engine manufacturers. 11 Staff's proposal also differs from the Federal 12 Program for nonconformance penalties, or NCP's, and for 13 marketable credits. 14 Manufacturers agree to staff's original proposal 15 not to have NCP's, a pay to pollute mechanism, in California. 16 For marketable credits, staff is proposing optional 17 reduced emission standards. This slide shows the current and 18 proposed 2004 emission standards for on-road heavy-duty 19 diesel engines. 20 These standards apply to diesel engines used in 21 vehicles over 14,000 pounds gross vehicle weight rating. 22 Current Federal and California heavy-duty standards 23 are the same, four grams per brake horsepower hour of NOx and 24 1.3 gram per brake horsepower hour total hydrocarbons. 25 Current standards for particulate matter are also PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 the same, .1 gram per brake horsepower hour for heavy-duty 2 trucks and .05 gram per brake horsepower hour for urban 3 buses. 4 For 2004 and later model year heavy-duty vehicles, 5 U.S. EPA adopted a 2.4 gram per brake horsepower hour NOx 6 plus NMHC standard, or 2.5 with a 0.5 NMHC cap. 7 The particulate matter standards will remain at 8 current levels. Staff is proposing that California align 9 with the Federal Program and adopt these 2004 standards. 10 These proposed standards would cut NOx emissions 11 from new heavy-duty vehicles in half, beginning in 2004, a 12 huge achievement. 13 The 2.4, 2.5 standard, on the last slide, is the 14 proposed mandatory NOx plus NMHC standard. Staff is also 15 proposing a set of optional reduced emission standards, or 16 credit standards. 17 To generate marketable credits in California, a 18 vehicle would have to have an engine certified to one of 19 these optional standards. 20 This approach is somewhat different from the 21 Federal approach, however, it is consistent with the Board's 22 policy for marketable credits. 23 I have covered the proposed standards and other 24 requirements. Now I will discuss the proposed California 25 participation in the Federal Averaging, Banking and Trading PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 Program. 2 The ABT Program is an existing Federal Program that 3 U.S. EPA modified in 1997. It applies to engine 4 manufacturers and provides them some flexibility in complying 5 with the required standards. 6 California has not previously participated in the 7 Federal ABT Program. Staff is proposing full participation 8 in the Federal Program beginning in 2004. 9 The Program allows emissions to be averaged over 10 engine families, and after the end of the model year, 11 generated ABT credits could be banked or traded to other 12 engine manufacturers. 13 The ABT Program allows manufacturers to generate 14 NOx, NOx plus NMHC and particulate matter credits. It allows 15 manufacturers a certain amount of flexibility in meeting the 16 required standards. 17 Some engine families could be certified above the 18 required standards and others could be certified below. 19 The ABT Program could encourage the early 20 introduction of reduced NOx technology. Manufacturers plan 21 to introduce cleaner engines early and use the credits to 22 meet the 2004 standard. 23 To generate ABT credits, the engine manufacturers 24 selects a family emissions limit, or FEL, for each engine 25 family. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 The manufacturers can select FELs either above or 2 below the required standard. For example, the manufacturer 3 could select a 3.5 gram per brake horsepower hour NOx FEL, 4 which is below the 4.0 gram per brake horsepower hour NOx 5 standard. 6 FELs below the required standard generate credits. 7 In this example, the manufacturer would generate a 0.5 gram 8 per brake horsepower hour NOx credit. 9 Staff is proposing full participation in the 10 Federal ABT Program beginning in 2004. In 1998 through 2003, 11 heavy-duty diesel engine manufacturers could generate and 12 bank credits for use beginning in 2004, and medium-duty 13 engine manufacturers can generate ABT credits in California 14 before 2004. 15 This last item differs from the original proposal 16 in the staff report. In the staff report we proposed no 17 medium-duty ABT before 2004. 18 We altered our proposal to address staff's concerns 19 about maintaining emissions in California and manufacturers 20 concerns about being able to produce a 50 State product line. 21 Staff worked closely with manufacturers to modify 22 the proposal to benefit manufacturers without a negative 23 effect on air quality. 24 Staff's proposal has been modified to allow 25 medium-duty diesel engine manufacturers to generate ABT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 credits in California beginning 1998, then they could use 2 them in California in 2004 and later. 3 In California, manufacturers would generate 4 medium-duty ABT credits. They would develop a plan for 5 generating credits, submit it to the Executive Officer for 6 approval and then introduce cleaner engines into California. 7 That concludes discussion of the proposed 8 regulation. Next I will discuss the cost and benefits, 9 including the SIP benefits, of the proposal. 10 The estimated statewide benefits for the proposed 11 adoption of the 2004 standards are 96 tons per day of NOx and 12 10 tons per day of NMHC emission reductions based on the 13 latest emissions model. 14 These are impressive reductions that are vital to 15 California's attainment strategy. U.S. EPA estimated that on 16 the average the Federal standards would add about $500 to the 17 purchase price of a new engine. 18 This proposal would not impose additional cost 19 above the cost to comply with the Federal standards. 20 This measure, at about 20 cents per pound of ozone 21 precursors reduced, is very cost effective and well within 22 the range of other adopted mobile source measures. 23 If adopted, this proposal achieves substantial 24 emission reductions that benefit SIP Measure M5. Measure M5 25 is a two-part commitment. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 The first part is based on standards for new 2 heavy-duty diesel engines beginning in 2004. The second part 3 of the M5 commitment is for additional reductions beginning 4 in 2002. 5 M5 was split into two parts because M5 was 6 initially proposed as a 2002 standard for California only 7 on-road heavy-duty diesels. 8 However, 2002 standards were determined to be 9 infeasible for two reasons. 10 First, there are questions about the technological 11 feasibility of meeting the standards two years earlier. 12 Second, a separate California only standard in 2002 13 raises interstate competitiveness issues. 14 Since California needs those additional reductions 15 for attainment, M5 remains a two-part commitment. This 16 proposal is the emissions standards part of M5. 17 This Table shows the SIP benefits of the proposal 18 for the South Coast Air Basin. The estimated SIP benefits of 19 the proposed standards in 2010 are 51 tons per day of NOx and 20 five tons per day of nonmethane hydrocarbons. 21 These emission reductions are based on the SIP 22 inventory model and thus can be directly compared with the 23 commitments in the 1994 Ozone SIP. 24 Note that for purposes of this analysis, reactive 25 organic gas, or ROG emissions, and nonmethane hydrocarbon PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 emissions are considered to be equivalent. 2 We have already achieved enough reductions in 3 nonmethane hydrocarbons to meet the SIP commitment for both 4 parts of Measure M5 based on engine certification data. 5 Implementation of this proposal would achieve 6 enough NOx reductions to meet the SIP commitments for the 7 2004 standards part of M5. 8 This proposal is the standards based part of M5 and 9 actually fulfills the SIP associated with those 2004 10 standards. 11 The other part of M5, the remaining NOx emission 12 reductions beginning in 2002, will be achieved through 13 incentive measures. 14 These incentive measures could include the 15 introduction of new lower emission vehicles, heavy-duty 16 retrofits or other measures. 17 This Table shows those remaining emission 18 reductions. 19 That brings us to the next section of the 20 presentation, issues. 21 Medium-duty participation in Averaging, Banking and 22 Trading before 2004 has been the biggest issue. I will 23 discuss why this has been an issue with manufacturers and how 24 we resolved it. 25 Engine manufacturers wanted unrestricted use of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 medium-duty ABT credits. In this particular category, the 2 engine manufacturers produce a single engine family. 3 So, it is very important to them to be able to 4 produce a 50 State product. They want to use medium-duty ABT 5 credits to produce a 50 State engine. 6 Staff's original proposal would not have let 7 manufacturers generate ABT credits before 2004. Staff was 8 concerned that unrestricted credit use would increase 9 emissions in California. 10 Unrestricted credit use would have allowed 11 manufacturers to introduce cleaner engines in the other 49 12 states, generate credits in those states and then use the 13 credits to exceed the 2004 standard in California. 14 Staff did not want unrestricted credit use because 15 that would increase emissions, but manufacturers needed 16 credits to produce a nationwide engine. 17 Staff had numerous discussions with manufacturers 18 and worked closely with them to develop a new proposal that 19 would satisfy both manufacturers concerns and meet air 20 quality goals. 21 The new proposal allows manufacturers to generate 22 California-only credits before 2004 and gives them more 23 options to generate those credits. 24 The modified proposal gives manufacturers more 25 flexibility to generate credits in California. Medium-duty PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 diesel engine manufacturers would produce engines that 2 certify below the California medium-duty standards in order 3 to generate ABT credits for use in California. 4 Medium-duty diesel engine manufacturers would also 5 be allowed to certify in California's certification field 6 through 2005. 7 ABT credits could be generated for NOx plus NMHC 8 and for particulate matter. Staff's new proposal provides 9 the harmonization called for in the Statement of Principles. 10 It also protects California SIP benefits. It is a 11 win-win situation. 12 California benefits from cleaner engines, and 13 manufacturers get their 50 State product line. 14 To conclude, today staff recommends that the Board 15 adopt the proposed standards for 2004 and later model year 16 heavy-duty diesel engines, adopt provisions allowing full 17 participation in the Federal ABT Program, beginning in 2004, 18 adopt staff's medium-duty ABT proposal and adopt the other 19 proposed regulatory amendments to harmonize with the Federal 20 Program. 21 This concludes staff's presentation. 22 CHAIRMAN DUNLAP: Boy, you are sure asking the 23 Board to do a lot of stuff, Renee. 24 Mike, do you want to add anything, or Tom, to this? 25 MR. KENNY: No. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 I think the key thing here is that what we have 2 really tried to do is to maintain the spirit of the SOP, in 3 terms of harmonization with the Federal rules, and at the 4 same time recognizing that we do have certain needs in 5 California that have to be achieved. 6 The primary one of those was that we could not 7 really allow the harmonization to occur at a loss in the SIP, 8 and we have addressed that. 9 CHAIRMAN DUNLAP: All right. 10 Tom. 11 MR. CACKETTE: Nothing else. 12 CHAIRMAN DUNLAP: Okay. We have one witness. 13 Can we call the witness up, and then we will come 14 back and ask any questions; is that all right? 15 All right. Mr. Mandel. 16 Oh, yes. Jim Schoning -- Nancy Steel, I apologize 17 to you. 18 Jed, come on up to the mike, but we are going to 19 hear from the Ombudsman's Office first. I'm sorry, I did not 20 mean to slight you, Nancy. 21 MS. STEEL: Thank you, Mr. Chairman and Members of 22 the Board. The Item before you today, you've heard, had its 23 origins not only in California's SIP, but also in the 24 Statement of Principles signed by U.S. EPA, the ARB and the 25 engine manufacturers in 1995. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 This long history of discussions and negotiations 2 with industry allowed ARB to develop its current proposal on 3 a very short timeframe, roughly over about a six-month 4 schedule. 5 Thus, staff built their outreach efforts on top of 6 the much longer State EPA and industry SOP negotiations. 7 To prepare for today's proposal, staff conducted 8 one public workshop, in December of 1997, and held several 9 additional meetings with industry to discuss the differences 10 between the Federal regulations and California's proposal. 11 The workshop notice was mailed to approximately 12 2,900 people and was attended by about 30 individuals 13 representing the Engine Manufacturers Association, Ford, 14 Navistar, Isuzu, Cummins, General Motors, California Trucking 15 Association, ARCO/AAMCO Technologies, UPS, a couple of 16 transit authorities, the Metropolitan Transit Authority and 17 the Santa Clara Transit Authority, consultants, air quality 18 management districts and other public agencies, the Coalition 19 for Clean Air and others. 20 When staff's proposal was released on March sixth, 21 the Engine Manufacturers Association requested additional 22 discussions of their concerns over the medium-duty vehicle 23 provisions, which staff has discussed. 24 Staff met with the EMA, Cummins, Navistar, General 25 Motors and others to provide them with additional PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 opportunities for input. 2 The Sacramento Metropolitan Air District and the 3 Cleaner Air Partnership also had questions about the proposal 4 and met with staff to express their points of view. 5 As you have heard, in response to some of the 6 issues raised, staff will be making modifications to their 7 proposal. 8 In conclusion, we find that staff, in preparation 9 for this Item, have reached out to all affected and 10 interested parties and ensured adequate participation in the 11 process to develop the proposal before you today. 12 Thank you. 13 CHAIRMAN DUNLAP: Okay. Thank you. 14 All right. Jed, from the Engine Manufacturers 15 Association, you are the only representative. 16 MR. MANDEL: One witness? 17 I'm just trying to keep my streak of live, regular 18 appearances before this Board. Good morning, it's nice to 19 see you all. 20 I'm Jed Mandel, speaking on behalf of the Engine 21 Manufacturers Association. As you know, EMA members, the 22 principal manufacturers of heavy-duty engines used in trucks 23 and buses, have consistently taken a leadership role in 24 promoting air quality improvements. 25 While our focus must be on the future, it is worth PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 just a moment of your time, I think, to remind this Board of 2 some of the heavy-duty engine industry's accomplishments. 3 Manufacturers have reduced particulate matter 4 emissions from on-highway diesel engines by 90 percent from 5 unregulated levels, a significant engineering achievement, 6 and they did so while also dramatically reducing NOx and NMHC 7 emissions from both gasoline and diesel engines, improving 8 fuel economy and maintaining the heavy-duty engines 9 reputation for reliable, durable performance. 10 EMA and its members also have been in the forefront 11 on improving fuel quality. We work with the oil industry, 12 EPA and Congress to reduce the sulfur content of diesel fuel, 13 and we worked actively with you on further improving the 14 quality of California diesel fuel. 15 With all of the improvements that have taken place 16 in engine hardware and combustion process and the composition 17 of the fuel being burned, the ARB and industry can justly 18 boast that engine exhaust is not what it used to be. 19 Further, we have been long time supporters of 20 programs designed to ensure that the air quality benefits 21 associated with the manufacturers investment in new low 22 emission technologies are not undone by improper maintenance 23 or tampering. 24 In that regard, we have worked closely with you and 25 your staff on the J1667 Snap Acceleration Test Procedure and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 the Road-Side Smoke Inspection Program, which I just saw your 2 notice, is about to resume, I think, in June, both of which 3 programs we are promoting to the rest of the nation, and 4 which we hope to see as the cornerstone of the Federal 5 Guidance Program. 6 In keeping with our continuing commitment to clean 7 air, engine manufacturers work closely with ARB and EPA to 8 establish the joint Statement of Principles, which forms the 9 basis of today's rule. 10 The signing of the SOP and the events that have 11 followed represent a historic achievement. For the first 12 time, people who regulate engine emissions and the people who 13 build engines have come together voluntarily and committed 14 themselves to a program to cut emissions from truck and bus 15 engines. 16 By supporting the SOP goals, engine manufacturers 17 have made a substantial and unprecedented commitment to 18 develop new low emission technologies, which will require an 19 investment of millions of dollars in research, development 20 and testing. 21 Such a substantial economic investment could only 22 be feasible with the certainty of known emission goals in 23 stable nationally harmonized standards. 24 I want to underscore the importance of 25 harmonization. It not only is critical to manufacturers, it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 also is critical to California. 2 Without harmonization, both California's air 3 quality and economic well-being would be adversely affected. 4 The key to harmonization are the principles set 5 forth in the SOP. Among those principles, and especially 6 important to engine manufacturers, is the availability of 7 nationwide Averaging, Banking and Trading. 8 Without ABT, the 2004 standards would not have been 9 feasible in the timeframe provided, and without ABT, 10 harmonization cannot be achieved. 11 That is why the staff's proposed amendments are so 12 critical. They close the gap in the implementation of the 13 SOP, which would have precluded the full use of ABT and 14 prevented engine manufacturers from being able to sell a 15 harmonized engine in the 8,500 to 14,000 pound GVWR range. 16 The proposed amendments address our concerns and 17 enable manufacturers to achieve harmonization without any 18 adverse impact on California's SIP commitment. 19 I would like to think that all the work has now 20 been done, but of course, it hasn't. Manufacturers still 21 need to develop the technology that will be required to meet 22 the 2004 standards, and it may be necessary to implement 23 further improvements to the quality of the fuel on which 24 engines run. 25 California has been a leader in fostering improved PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 fuel quality, and that leadership may once again be required. 2 A special note is the fact that improvements in 3 fuel quality help reduce emissions from all engines not just 4 those newly manufactured. 5 Finally, there is also work to be done on 6 heavy-duty gasoline engine harmonization. EPA will be 7 proposing a regulatory program next year, and we expect to 8 work with EPA and ARB to ensure that harmonization is 9 achieved. 10 The commitments to California, EPA and engine 11 manufacturers made in the SOP do not stop with the SOP, or 12 for that matter, with the adoption of the 2004 standards. 13 We look forward to the challenges that lie ahead in 14 continuing to work with EPA and ARB to ensure the continued 15 existence of viable heavy-duty engines to meet the commercial 16 needs of our nation's trucking and mass transit industries, 17 while at the same time meeting the needs of the environment. 18 If you have questions, Mr. Chairman and Members of 19 the Board, I would be pleased to answer them. 20 CHAIRMAN DUNLAP: Okay. 21 Any questions of Mr. Mandel? 22 BOARD MEMBER CALHOUN: Mr. Mandel, I don't see any 23 members of your supporting cast, so I assume they allowed you 24 to come out and make the statement that you have made? 25 MR. MANDEL: Every once in a while they let me PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 speak. There are members in the audience. 2 CHAIRMAN DUNLAP: They are watching what he says. 3 BOARD MEMBER CALHOUN: There are no mavericks in 4 the Association, relative to this? 5 MR. MANDEL: No, not only are there no mavericks, 6 but through the work that we accomplished in the SOP process 7 by, and I should underscore that that was substantially a 8 result of the efforts of your staff in generating an interest 9 in getting a nationwide program and in the subsequent efforts 10 in the last week to 10 days in working with the staff, the 11 issues of all of EMA's members has been satisfactory to us. 12 BOARD MEMBER CALHOUN: This is an issue that has 13 been talked about for a long time, and it's a long time in 14 coming, and I'm happy to see that you guys are happy, and I'm 15 sure that will make the life of this Board easier in the 16 future. 17 MR. MANDEL: That is what we are here for, to make 18 the life of this Board easier. 19 CHAIRMAN DUNLAP: With that, we should let him go 20 back to Chicago with that comment. 21 Yes, Ms. Riordan, and then Ms. Edgerton. 22 BOARD MEMBER RIORDAN: Last year we had the 23 opportunity to visit, a few of us from the Board, and I was 24 very impressed with the work that was going on, in terms of 25 research and the efforts to improve the engines. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 I think we see some of the good things that are 2 coming and the excellent attitude that's held by many of your 3 members in helping California achieve the air quality goals. 4 We thank you for that and hope that you continue to 5 do that research, because it is going to make a difference 6 for not only California but, I suspect, a number of other 7 states who also face some degradation of their air quality. 8 MR. MANDEL: There's no question, the work that we 9 are doing here in California will have benefits throughout 10 the nation. 11 I would like to extend an invitation to other 12 Members of the Board to come visit engine manufacturers back 13 in the midwest. Don't do it in the middle of winter if you 14 can avoid it, but I'm sure that they would welcome visits to 15 show what's going on in their research laboratories and in 16 their test cells that, I think, will impress you. 17 CHAIRMAN DUNLAP: Okay. Ms. Edgerton. 18 BOARD MEMBER EDGERTON: It is not a question but a 19 comment. 20 Does anybody else have any questions for the 21 witness? 22 CHAIRMAN DUNLAP: No, I don't think so. 23 BOARD MEMBER EDGERTON: I have a comment. 24 If you want to sit down, you can. 25 Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 I think it is important to remember that as we 2 discuss harmonization and the importance of doing it where we 3 can, as Mr. Kenny has said, that the success of any 4 relationship depends on clarifying expectations. 5 There are real differences that need to be spoken 6 about when we speak about harmonizing with Federal standards, 7 because our air problems are so much worse than those that 8 are elsewhere in our nation, and because they are 9 qualitatively different, in some instances, say for example, 10 some of the PM 10 issues in our dust and our agricultural 11 issues are just quite different. 12 So, I want to focus for a minute, as we think about 13 how nice it is that we have gotten some achievements in the 14 Statement of Principles over harmonization, on the fact that 15 it's not, harmonization with the Federal standards, is not 16 always the solution and cannot be achieved in every instance. 17 If we are going to have clean air in California, it 18 can't become a mantra. We can do it the way it works for 19 California, but it can't be a mantra which dilutes our 20 Program into any respect and then results in our citizens 21 having worse air to breathe. 22 So, I just think so that our relationship keeps 23 good, to be a good one, we have to be honest with ourselves 24 that there are some of these differences. 25 Now, historically, just for my own role in this, in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 1994, when we approved the SIP, I was very supportive of 2 having the 2002 standards in California come into effect and 3 be more stringent than 2004, and just I wanted you to know 4 that I wanted our SIP to be whole, and I was perfectly 5 convinced that we should go ahead of the nation in order to 6 meet what is, in fact, the Clean Air Act, the nation's law, I 7 thought legally that we should do that. 8 The way that we worked around that was that we said 9 that if we didn't do that, we would have a package of market 10 incentives that would make up that difference. 11 To this Chairman's great credit, and I have great 12 tremendous admiration and enthusiasm for the Statement of 13 Principles, it's my understanding that about 92 percent of 14 what we needed was gotten, captured, better word, in the 2004 15 proposal, which is now being codified in front of us today, 16 but that does leave the eight percent that in our SIP was 17 originally, maybe we will do a 2002, earlier standard, what 18 it did was it transferred it into a, now we definitely have 19 to have the market incentives, we have to have this other 20 percentage that we captured in order to keep our SIP whole, 21 which brings me to a concern that I wanted to ask the 22 Chairman about, and I wanted to discuss here a bit, and that 23 is my general concern about our responsibility to keep the 24 SIP whole, which I think we are doing, but our second 25 responsibility is to make it obvious that we are keeping it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 whole, which I don't think we have been doing so well. 2 I think that is part of the reason why we have been 3 in litigation. I think that's part of the reason why we get 4 some distrust, is because at one meeting we say that we are 5 going to get 92 percent and then later, the next meeting, we 6 capture the other eight percent, and people can't put it 7 together. 8 So, Mr. Chairman, I wanted to ask you whether, not 9 as a matter of law, but as a matter of policy and management, 10 whether for the next meeting we might, rather than me -- the 11 resolution now, whether we might have a group, or whether we 12 might move California toward a more formal policy of trying 13 to fix these things at the same time so the public can see 14 them. 15 I have one other subject after that. 16 CHAIRMAN DUNLAP: Let me, because I share some of 17 the same concerns, let's talk about the '94 SIP for a minute, 18 of which I was grateful that I came in a month after you all 19 dealt with that, because that was just a very difficult plan. 20 BOARD MEMBER EDGERTON: Mr. Parnell had an 21 especially good time. 22 CHAIRMAN DUNLAP: Mr. Kenny, and Tom and others can 23 recall me getting extensive briefings about the content of 24 the SIP, but I think we would all agree that because of 25 events beyond our control, California's control, we had a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 very difficult and short turn around time, really, to develop 2 this SIP. 3 In this SIP, we threw pretty much everything, 4 including the kitchen sink, into it about things we hoped to 5 be able to squeeze emission reductions from, and as time 6 matches on, Lynn, we have all determined that there were some 7 things that we've learned that, perhaps, have shown that we 8 have over reached in some cases, and in rare occasions, under 9 reached, and we are finding ourselves now, and have in the 10 last couple of years, adjusting as we bring programs forward 11 to be implemented. 12 The Governor has made it very clear to me, I think 13 that I have said it several times, but I will say it again, 14 that before the Wilson Administration leaves office, the 15 Governor leaves, we are to have a full accounting of the tons 16 that we committed to in that SIP, and I have been leaning on 17 Mike and the staff pretty hard to make sure that we are 18 getting emissions reductions and that we can leave that SIP 19 whole. 20 I am confident that if we do what we are slated to 21 do, and we are all familiar with the Regulatory Agenda we 22 have this year, staff is working very hard and does not have 23 time there either, I think, to do it completely to their 24 liking, but we should be able to leave that SIP in good shape 25 and whole. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 Unfortunately, Lynn, I can't tell you, I can get a 2 briefing for you and the other Board Members, and Tom, and 3 Mike and Mike, and tell you about how things in the books are 4 going to balance at the end, but that is their goal and 5 responsibility. 6 So, as we adjust, I appreciate you being concerned 7 about that, I think we need to watch that, but if I might 8 talk a bit about the motivation of some who have chosen to 9 litigate on these issues, and I have come to this reasoned 10 opinion, I think it is a reasoned opinion, that many folks 11 are either politically motivated, or unwilling to invest for 12 whatever reason into finding out the facts surrounding what 13 changes we have made, and you personally have expressed 14 frustration to me on a couple of specific issues, Mr. Kenny 15 and the staff, Legal staff, Kathleen has spent untold hours 16 flying all over the State, all over the west, talking to 17 people from the environmental community, other stakeholders 18 about what we are doing, and why we are doing it, and what 19 it's going to mean in the long run. 20 So, I will commit to you and others here, the 21 audience, that we are going make sure that we keep that SIP 22 whole. 23 Mike knows his charge, and we are going to have to 24 rely on staff, like we have done, and I think positively 25 during my tenure, to come to us with some solutions, setting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 the policy objective, the goal to keep that SIP whole. 2 So, Mike, perhaps as follow-up, and if you think I 3 am missing things, you are welcome to add to it, but I would 4 ask you, maybe, to schedule, because we have had different 5 Board presentations where Mike has tried to demonstrate where 6 we are with the tons, perhaps, Mike, we could do some, I 7 don't want to say private Board briefings, but group Board 8 meetings where you can, Board discussions, excuse me, 9 Kathleen, keep me out of trouble here, where you can talk to 10 them about where we stand with the accounting of the tons for 11 the SIP. 12 MR. KENNY: We would be happy to do that. 13 I think in part what we would try to do there is 14 give the Board Members a better sense of, kind of the 15 disconnectiveness Ms. Edgerton describes, because the 16 disconnect does exist. 17 The SOP, for example, does have a slight shortfall 18 associated with it because of the harmonization that is 19 associated with 2004 as opposed to going with the 2002 20 standard. 21 That does not mean that we are not committed in 22 every respect to achieving that tonnage that was associated 23 with the combination of both 2002 and 2004, we are working to 24 achieve that tonnage. 25 The difficultly for us often is that from a timing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 standpoint, we come to you today with the harmonization 2 regulation before you, and yet we can't come to you today 3 with that shortfall and tell you exactly how we are going to 4 achieve it. We have some pretty good approaches that we can, 5 basically, put before the Board, but they are not fully 6 flushed out in time, and some of them are even a little bit 7 premature to discuss. 8 CHAIRMAN DUNLAP: Well, we've all been hearing, and 9 Tom, you might want to respond to this, the LEV II proposal, 10 there is an area that's going to be coming to us; what month 11 is that going to be, Tom? 12 MR. CACKETTE: November. 13 CHAIRMAN DUNLAP: And it's my understanding, we are 14 going to be able to do some things with emissions reductions 15 there that we previously hadn't anticipated. 16 MR. CACKETTE: Right. 17 On the item -- 18 MR. KENNY: Can I interrupt? 19 One comment that I do want to make is that one of 20 the things that we are trying to do is we are trying to at 21 least stay within the categories. 22 We are talking about a slight shortfall here with 23 regard to the heavy-duty sector, and we do not want to shift 24 that shortfall to a different sector. 25 CHAIRMAN DUNLAP: I understood, but I wanted to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 demonstrate, Lynn, that something is coming. 2 It's going to be larger than anticipated, and it's 3 going to deal with some of these issues about shortfalls. 4 Did I get that right, Tom? 5 MR. CACKETTE: Yes. 6 I think that it is refreshing to know that we don't 7 have one's that just hit the target and one's that fall 8 short, but we are finding a few areas where we can go beyond 9 what was in the SIP, and more than that one, there is going 10 to be one on pleasure craft that goes beyond what was in the 11 SIP, as well, by fairly big chunks, not a ton or two. 12 I just wanted to point out that this Item and the 13 problem that was raised and the solution that came up, we 14 were dealing with less than one ton per day. 15 In some circles one might say that's, you know, why 16 did we bother to have all this discourse on it, but, in fact, 17 you know, we did feel very strongly that we have to make the 18 SIP whole, we have to deliver on the tons, that makes small 19 but meaningful emission reductions important, and, you know, 20 all of the talk about ABT and all of that kind of stuff, what 21 it -- the net outcome of this means that we will -- the 22 solution that we came up with means that there will be 23 cleaner trucks prior to 2004, medium-duty trucks which will 24 benefit California's air quality, will overcome the shortfall 25 that we identified, not the 2002 one, but the problem was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 identified in the SIP in a way that gets us the air quality 2 benefit and also provides the harmonization, so we take your 3 charges very seriously about trying to deliver on the tons. 4 CHAIRMAN DUNLAP: Yeah, and I know staff's heard 5 that, but, Lynn, the other thing, too, when you look at the 6 1994 SIP development process, and again, I know secondhand 7 how hard the Board and staff worked on that, because as time 8 overtakes us as we update models, as we learn more, and we 9 learn more about technological advances that are underway, we 10 need to adjust. 11 And why I think that it is a disingenuous argument 12 from some in the environmental community, and from without 13 the environmental community, that it asserted that we are not 14 serious about achieving the emissions reductions we need, or 15 must have, to keep our SIP whole, I don't think they have 16 looked at the issues in context. 17 It is irresponsible for this Board not to adjust 18 its thinking based upon what's going on in the real world. 19 If we are going to be held accountable to a best 20 guess estimate from four or five years ago and told that we 21 cannot change that, despite us learning new and better things 22 about what is truly going on, I think that's just ridiculous, 23 and I reject that notion. 24 So, this Board, I think, has adjusted accordingly 25 and has been responsible in its discussions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 Mike cleared up not too much of a small point that 2 I overlooked, which is, I am not suggesting that we get our 3 tons from the heavy-duty area, from the light-duty, or from 4 consumer products, we shift to mobile, I mean, we need to be 5 sensitive to what we have allocated to different categories. 6 I am not as sensitive as I was six months ago to 7 people that assert some things about us not being serious, or 8 falling short, because I think it is responsible action to 9 adjust. 10 Now, we have got to watch the bottom line, and 11 that's what we are directing staff to do, to watch that 12 bottomline and find us ways to keep it whole. 13 I'm told that I just cannot leave office unless the 14 SIP is whole, so, it has been said, so I'm keeping you with 15 me until we do this, so Mike, there is your charge. 16 BOARD MEMBER EDGERTON: Could I make a comment? 17 I appreciate very much the colloquy, Mr. Chairman. 18 I would like to say that this may be an excellent opportunity 19 to put my remarks in context, in that I do believe that 20 Governor Wilson's leadership on clean air and your particular 21 leadership, Mr. Chairman, I have served under you, I guess, 22 was it three years or four years? 23 CHAIRMAN DUNLAP: Seems like four, but it's only 24 been three and a half. 25 BOARD MEMBER EDGERTON: It's only been three and a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 half, and it has been excellent. 2 You have earned my respect and admiration and 3 appreciation as a California citizen, as a lawyer, for the 4 way that you have gone about the seriousness of making this 5 SIP whole, as putting us in a position where we can really be 6 proud, and that is true of Mr. Kenny, I appreciate that very 7 much. 8 I want to be sure that my remarks do not reflect 9 the lack of my personal confidence in our role. I have been 10 well briefed, and I always learn more each time I speak with 11 the Board, and I'm sure I will leave this Board with a lot of 12 information that I didn't have when I came, and a lot of 13 information I still woefully, you know, don't have. 14 CHAIRMAN DUNLAP: Lynn, that is a good reminder, 15 and you do not need to apologize, you don't need to worry 16 about asking that question and holding the Board and the 17 staff accountable to that. 18 We need to do that. We need to make sure the SIP 19 is whole. 20 BOARD MEMBER EDGERTON: My point is that we need to 21 make sure that everybody understands it, that it's obvious, 22 and to the extent that we have this colloquy and that people 23 hear and the record shows Mr. Chairman speaking to this point 24 directly, the more that we can have the public understand it, 25 the better. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 So, I'm done on that point, but I had one other 2 little point. 3 CHAIRMAN DUNLAP: We need to move along because I 4 am going to lose a couple of Board Members a little before 5 lunch, so I want to get to this next Item. 6 BOARD MEMBER EDGERTON: I did have one issue here, 7 that's a technical one, so the staff may want to, now that we 8 have stopped our other discussion. 9 I am in support of this proposal with one 10 exception. It may be that I don't understand it, and it may 11 be that I am in support of the proposal with one exception 12 that I want to delete. 13 The one that I am referring to has to do with, 14 there was a slide that said, what are manufacturers options 15 for generating MDD ABT credits? 16 The first thing said, put cleaner engines in 17 California for ABT credit. The second one said, California 18 certification fuel allowed through 2005. 19 The one that I am concerned about, and I think I 20 want to delete, is the California certification fuel allowed 21 through 2005. 22 It seems to me, if I understand this, that what we 23 give with one hand, we lose with the other hand. I mean, it 24 makes sense, obviously, if the engines are cleaner than 25 California standards, and they are in California, yes, give PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 credit. 2 CHAIRMAN DUNLAP: I think there is a simple 3 explanation for this. 4 Tom, we had a meeting the other day. 5 BOARD MEMBER EDGERTON: People have spent a long 6 time trying to explain it to me, and I still haven't 7 understood it. 8 CHAIRMAN DUNLAP: Jed, you are welcome to come up, 9 you and Tom, and have a response session on this. 10 BOARD MEMBER EDGERTON: I don't understand it, and 11 I am against it. 12 So, there you are. 13 CHAIRMAN DUNLAP: Talk about how the certification 14 fuel is used. 15 It made sense to me. 16 MR. CACKETTE: First of all, you need to know that 17 the California, as you do, I'm sure, that the California fuel 18 and the Federal fuels are different. 19 In fact, the Federal fuel is a dirtier fuel. It 20 produces more emissions. If a manufacturer chooses to 21 certify on the dirtier fuel, in other words, with the dirtier 22 fuel it meets our emission standards, then when that engine 23 comes to California it ends up being cleaner, because we have 24 cleaner actual in-use fuel. 25 All we have done here is allow for a limited period PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 of time a way for them to generate emission credit against 2 the SIP because the SIP is premised on using California fuel 3 and then certifying on California fuel as a way of dealing 4 with this, provide some flexibility under the ABT Program. 5 BOARD MEMBER EDGERTON: Let me just ask the 6 questions that confuse me. 7 I understood the words that you said, but my 8 understanding was that if we have a California engine 9 standard, we are using this California certified fuel anyway 10 in that car when we are certifying it for California; is that 11 correct? 12 MR. CACKETTE: If a manufacturer, take the case of 13 cars, yes, we require them to certify on a different fuel, 14 which is like the fuel that you can buy at your neighborhood 15 ARCO station, that is the way that the Program works. 16 In this case however, the Federal Government, since 17 we have a harmonized program, the Federal Government requires 18 them to test on a fuel that looks like the Federal fuel, 19 which is a different and dirtier fuel than ours. 20 So, we would like -- we want to provide the 21 opportunity for harmonization's sake, for manufacturers to 22 use the Federal fuel, so there is just one engine sold 23 nationally. 24 The point is that when that engine has been 25 certified against a two and a half gram standard, it will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 emit two and a half grams somewhere else. 2 When it comes to California, it will emit at 2.2 3 grams because we are feeding it fuel here that is much 4 cleaner. 5 BOARD MEMBER EDGERTON: Yes, but when it comes to 6 banking credits, if we give it credit for that differential, 7 it's getting excess credit over what it would have gotten if 8 it had been the California engine using the California fuel 9 under California standards preharmonization; is that not 10 correct? 11 MR. CACKETTE: Yes. 12 It gets -- the point is, in this instance, is that 13 the SIP was based on the assumption that the engines would 14 certify, this is only in the medium-duty category, would 15 certify on California fuel. 16 BOARD MEMBER EDGERTON: So, we are slipping? 17 MR. CACKETTE: No, no. 18 It is the opposite way. They are going to be 19 certified on the dirtier fuel, and when they come here they 20 will be even cleaner than they would have been if they were 21 certified on California fuel. 22 CHAIRMAN DUNLAP: Jed, do you want to -- 23 MR. MANDEL: I will be happy to add a comment or 24 two. 25 BOARD MEMBER EDGERTON: Just a minute, Jed, excuse PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 me, by giving two years you are saying that we are getting 2 more emission benefits? 3 MR. CROSS: We are breaking even. 4 In other words, the SIP assumed that the engines 5 would be certified on California fuel to a certain number, 6 which means a certain technology, and if the engines, if that 7 engine was certified on a Federal fuel to the California 8 standard, it would need more technology if it was certified 9 on the Federal fuel to the SOP, which is what is actually 10 happening, it needs more technology. 11 I think the way of looking at it is that the SOP 12 requires Federal fuel. The SIP assumed California fuel. 13 There is a three-tenths difference caused by the fuel. 14 The issue is, yes, in other words, you could, if 15 you wanted to, look at it from a purely environmentalist 16 perspective, you would want the dirty engine, or the engine 17 that is certified on the dirty fuel, and take credit for the 18 clean fuel for the breathers, but that's not what we did in 19 the SIP. 20 In the SIP we assumed that it was the engine 21 certified on the clean California fuel, so, essentially, what 22 we are doing is we are giving the manufacturers credit for 23 the extra work that they are having to do to certify on the 24 Federal fuel and letting them use that for more flexibility 25 for a limited amount of time while they introduce product. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 BOARD MEMBER EDGERTON: But if I understand you 2 correctly, the reason that that happened is because we 3 started with the certified fuel in the SIP. 4 The engine is certified under California fuel. 5 Okay. That's point one. 6 Point two, the Statement of Principles, we 7 abandoned certifying under California, with the California 8 fuel, we moved to Federal fuel. So right there is we lost. 9 We lost some emissions. 10 BOARD MEMBER RIORDAN: No, we gained. 11 MR. CROSS: We gained. 12 BOARD MEMBER EDGERTON: We gained. 13 So, we are giving it back in the two years, I 14 understand. 15 MR. CROSS: It is harder to certify on the Federal 16 fuel. 17 They have to put more technology in the engine 18 because the Federal fuel is dirtier. 19 BOARD MEMBER EDGERTON: So, that's why you gave the 20 two years back? 21 MR. CROSS: Yes. 22 What we are saying is that we assumed they would, 23 in the SIP, we assumed that they would have the easy fuel. 24 The SOP gave them the difficult fuel. So, when you bring 25 these Federal engines into California, they run cleaner, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 slightly, because of the fuel difference, but now the 2 manufacturers need some flexibility in terms of a few years 3 of product introduction, and we're saying, well, since that 4 was our basic assumption in the SIP, let's give that 5 flexibility to them and, basically, we are breaking even in 6 terms of the SIP. 7 BOARD MEMBER EDGERTON: Thank you. I understand. 8 Okay. I will support the proposal. 9 CHAIRMAN DUNLAP: All right. Jed, don't say a 10 thing. 11 MR. MANDEL: I was glad to contribute to the 12 discussion. 13 CHAIRMAN DUNLAP: Don't say a thing. Go back to 14 Chicago. 15 Any other questions? 16 I'm not looking for any, but I will ask. 17 Sally, did you raise your hand, and I cut you off 18 earlier? 19 BOARD MEMBER RAKOW: I clarified it in my own mind. 20 CHAIRMAN DUNLAP: If I have forgotten you -- Mark, 21 you just have to speak up, and I will give you some time 22 there. 23 All right. Staff, why don't you take a minute. 24 I am going to conclude public testimony. Jed was 25 the only one that signed up. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 I will ask staff to briefly summarize the written 2 comments that we have received, and we have the file, so you 3 don't need to go into exhaustive detail. 4 MR. LOVELACE: Mr. Chairman, for the record, I'm 5 Bill Lovelace, of Mobile Source Control Division staff. 6 We received one comment, a letter dated April 7 twenty-second. We received it just a few moments ago. It's 8 from the Coalition for Clean Air. 9 The letter basically is summarized in their first 10 paragraph. They describe the SOP as a flawed, probably 11 illegal process leading to rulemaking, the unwillingness of 12 the California Air Resources Board to set heavy-duty 13 standards, which would push the use of clean alternative 14 fuels and the failure of the proposal to deliver the emission 15 reduction commitment in the State Implementation Plan. 16 CHAIRMAN DUNLAP: Okay. Thank you. 17 Is there anything else in the written comments? 18 All right. Very good. 19 Mr. Kenny, anything else that you wanted to say? 20 MR. KENNY: No. 21 My only request would be that the Board approve the 22 staff recommendation as modified. 23 CHAIRMAN DUNLAP: All right. A couple of comments 24 from me. 25 I will now close the record on this Agenda Item, or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 the record will be reopened when the 15-day notice of public 2 availability is issued. 3 Written or oral comments received after this 4 hearing date, but before the 15-day notice is issued will not 5 be accepted as part of the official record on this Agenda 6 Item. 7 When the record is reopened for a 15-day comment 8 period, the public may submit written comments to the 9 proposed changes, which will be considered and responded to 10 in the final Statement of Reasons for the regulation. 11 Ex parte communications. While the Board, as we 12 know, may communicate off the record with outside persons 13 regarding rulemaking, we must disclose the names of our 14 contacts and nature of the contents on the record. 15 Is there any ex parte communications that need to 16 be reported? 17 All right. I have one. 18 On April 17, I met with Navistar, Cummins, 19 Mr. Mandel and staff to discuss the issues that they 20 mentioned today, and it was a successful discussion. 21 All right. The Board has before it Resolution 22 98-17. 23 BOARD MEMBER RIORDAN: Mr. Chairman, I would be 24 happy to move that Resolution as modified. 25 BOARD MEMBER PATRICK: Second. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 CHAIRMAN DUNLAP: Okay. There's a motion and a 2 second. The motion by Mrs. Riordan and a second by 3 Supervisor Patrick. 4 Any discussion that we need to have on this? 5 We will proceed with a voice vote. 6 All those in favor of Resolution 98-17, say aye. 7 Any opposed? 8 Very good. The motion carries. 9 Thank you, staff, appreciate it. 10 Bob, I appreciate the response to Ms. Edgerton. 11 You cleared that up, and we will go forward to the last -- I 12 have two more Items, one of which is an open comment period. 13 The third Item is a minor violations Item. Again, 14 I would like to remind those of you in the audience who wish 15 to provide written testimony, please sign up with the Clerk 16 of the Board, Ms. Hutchens, who sits to our left in the pink. 17 The next Item is 98-4-2, a Public Hearing to 18 Consider the Adoption of a Proposed Regulation titled, 19 Definition of Minor Violation and Guidelines for Issuance of 20 a Notice to Comply. 21 AB 2937 was enacted in 1996 by Senator Bruelty, and 22 requires the Board to adopt a regulation that defines a minor 23 violation in areas for which it adopts regulations and has 24 direct enforcement authority. 25 These areas include motor vehicles fuels, consumer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 products and cargo tank inspections. It is current Board 2 policy that a notice of violation must be issued for all 3 emissions related violations and a notice to comply may be 4 issued for any minor violation that is not emission related. 5 The adoption of the proposed regulation would make 6 it mandatory to issue a notice to comply for all violations 7 determined to be minor, except in certain specified 8 situations, which will be outlined by the staff in their 9 presentation today. 10 I understand that staff has worked diligently with 11 affected industry and interested parties by holding 12 workshops, soliciting written comments and holding meetings 13 with industry and other representatives. 14 At this point, Mike, I would like you to introduce 15 this Item and have the staff begin their presentation. 16 MR. KENNY: Thank you, Mr. Chairman and Members of 17 the Board. Staff has prepared a proposed regulation which 18 classifies minor violations for ARB fuels, consumer products 19 and cargo tank regulations. 20 The proposed regulation also provides guidelines 21 for issuance of a notice to comply associated with these 22 violations. 23 Adoption of the regulation will satisfy the mandate 24 of AB 2937. The ARB staff held two workshops during 25 development of the regulation, on April 24, 1997, in El PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 Monte, and on May 1, 1997, in Sacramento. 2 The Ombudsman's report will provide details on 3 these outreach efforts. The comments made at public 4 workshops and issues raised at meetings can be distilled into 5 two categories, concern over the definition of chronic 6 violation and whether emission related violations would be 7 eligible for a notice to comply. 8 Staff's proposal deals with both of these issues 9 and will be addressed by today's presentation. Essentially, 10 staff is proposing that emissions related violations not be 11 eligible for an NTC unless the emissions are deminimous. 12 The term, deminimous, is used to identify an 13 emissions violation so inconsequential that it is trivial and 14 the increase in toxics emissions are excluded from 15 consideration for a notice to comply with a modification that 16 is also being proposed there, but again, it meets that same 17 level of definition. 18 Certain procedural violations are also proposed to 19 be considered minor violations, and staff will provide 20 examples of instances where a notice to comply would be 21 issued under this proposed regulation. 22 AB 2937 does specifically prohibit any violation 23 that is knowing, willful or intentional, benefits the 24 violator economically or competitively, or is part of a 25 pattern of neglect or disregard for the law from being PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 classified as a minor violation. 2 One goal of AB 2937 is to develop a more productive 3 working relationship between ARB and the regulated community. 4 To this end, ARB staff has worked diligently with 5 interested parties in the development of the proposed 6 regulation. 7 At the request of interested parties, staff is 8 proposing that the Minor Violation Program be revisited in 9 one year to report on the Program's effectiveness. 10 This one year visitation clause is contained in the 11 proposed resolution before you today. As proposed, ARB staff 12 believes this regulation may well have an overall positive 13 effect on business in California by realizing these goals, 14 and also providing an essential public protection. 15 Ms. Stephanie Trenck, Branch Chief of the Program 16 Assessment and Compliance Data Management Branch in the 17 Compliance Division will present this Item to you today. 18 She and her staff are responsible for developing 19 the regulation and the staff report. 20 Ms. Trenck. 21 MS. TRENCK: Thank you. Good morning. 22 Today we will present to you a proposed regulation 23 that will classify minor violations and provide guidelines 24 for the issuance of a notice to comply for those violations 25 that are considered minor. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 Our presentation today will provide you with 2 background information on the purpose and intent of the 3 Legislation, will talk about the agencies affected by the 4 Legislation, which, of course, is AB 2937. 5 We are going to outline key elements of the 6 proposed regulation. We will address issues raised by public 7 comment, and we will tell you about the proposed 8 modifications that we would like to suggest to the regulation 9 as given to you in your Board book, and finally, we will 10 speak about staff's conclusions and recommendations. 11 First, background on the Bill that made this 12 happen. As Mr. Kenny mentioned, AB 2937 was enacted in 1996. 13 A copy of the Bill in its entirety was provided to 14 you in the staff report. The purpose of the Bill was to 15 establish an enforcement policy for specified agencies for 16 minor violations. 17 Enforcement of violations that are found by 18 agencies to be minor is to be reduced to the writing of a 19 notice to comply, rather than the issuance of a notice of 20 violation. 21 It's up to the agency to identify what violations 22 are eligible for a notice to comply, therefore classification 23 of minor violations is necessary. 24 Further guidance is needed to provide information 25 on how to write and issue a notice to comply, or fix-it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 ticket, as it has been referred to by outside agencies. 2 We will now address what enforcement agencies are 3 affected by this regulation. 4 First of all, AB 2937 affects only air and water. 5 The ARB and local districts are required to adopt regulations 6 classifying minor violations. 7 It's important to note that the only rulemaking 8 that you have before you pertains to ARB's Program not local 9 air district programs. 10 Local air districts are currently drafting and 11 adopting their own rules to comply with the Legislation. 12 State Water Board and the regional boards are also 13 required to either amend their policies or adopt a regulation 14 themselves. 15 It is our understanding that the Water Board has 16 amended its policy. 17 ARB's responsibility, the requirements of AB 2937, 18 the Board is required to adopt a regulation and implement a 19 Minor Violation Program. 20 One of the foremost considerations in AB 2937 is 21 that our enforcement policy for minor violations must take 22 into account the danger they pose to and the potential they 23 have for endangering public health, safety, welfare or the 24 environment. 25 The Legislation goes on to define certain factors PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 which shall be considered when determining what violations 2 are minor. 3 They are the magnitude, scope and severity of the 4 violation, the degree to which human health, safety or 5 welfare, or the environment is placed in jeopardy, the degree 6 to which it could contribute to the failure to accomplish an 7 important Program goal or objective, the degree to which it 8 may make it difficult to determine if a violator is in 9 violation with other air pollution laws. 10 AB 2937 specifically excludes for consideration 11 minor violations that are knowing or willful, violations 12 which allow an economic benefit, violations which are chronic 13 or have been committed by a recalcitrant violator. 14 The Bill also requires that an appeals process be 15 established. This will be handled by the ARB's Office of 16 Legal Affairs after adoption of the regulation. 17 We are required, the Board is required to report to 18 the Legislature by January first in the year 2000 on the 19 effects and implementation of our Program, as well as on the 20 implementation of all district programs. 21 We will now discuss what ARB programs are affected. 22 The ARB programs affected are consumer products, motor 23 vehicle fuel specs and cargo tank inspections. 24 Basically, the Compliance Division conducts 25 inspections of consumer products, motor vehicle fuel sampling PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 and testing and cargo tank inspections. 2 The present policy is that if a violation is found, 3 a report of violation, or notice of violation is issued and 4 penalties are often assessed. 5 In some cases, however, prosecutorial discretion is 6 used and penalties are waived, or suspended, depending on the 7 severity of the violation and the circumstances. 8 These are the areas where minor violation 9 classifications must be determined. Rather than a report of 10 violation being issued, a minor violation detected by an ARB 11 inspector would be issued in the notice to comply. 12 I will address the proposed classifications for 13 minor violations. The first classification is for procedural 14 violations. 15 Here we are talking about record keeping, or 16 submitting late cargo tank forms. For example, they would be 17 held for consideration as a minor violation, and I will give 18 you some more specific examples a little bit later. 19 One of the points that I would like to make, 20 though, is that these procedural violations should not 21 conceal other violations of air regulations, and that goes to 22 the point in the Legislation that it's difficult to determine 23 if another violation exists. That would be one of the 24 concerns before we establish a minor violation. 25 The second classification is deminimous emissions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 related violations. Here there may be some emissions 2 violations that are so trivial, or inconsequential, that it 3 may be possible to consider them as deminimous, again, more 4 details later. 5 Third, a qualifier of sorts was included in the 6 original proposed regulation provided to you. In this 7 qualifier, it states that the deminimous emissions related 8 violations cannot have any increase in air toxic 9 contaminants, and we will pay special attention to this later 10 in the presentation. 11 Okay. Next slide. 12 Violations not eligible for consideration, again, 13 we outlined this in the Board book, knowing, willful or 14 intentional violations, violations where someone benefits 15 economically, chronic violations, violations committed by a 16 recalcitrant violator. 17 Particularly chronic violations, and to some 18 extent, recalcitrant violations, definition of those terms, 19 created some discussion and comment in our public workshop 20 and outreach area. 21 After careful consideration of input from the 22 affected industry, local districts and other interested 23 parties, it was clear that sharper definitions were needed. 24 ARB has defined chronic violation and recalcitrant 25 violators contained in the proposed regulation in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 following manner. 2 Chronic violation, evidence indicating a pattern of 3 neglect or disregard in complying with air pollution control 4 requirements. 5 A violation where there is evidence indicating this 6 would be considered, indicating a pattern of neglect or 7 disregard complying with those requirements. 8 The issues raised during the public comment process 9 indicated that a specific definition of pattern of neglect 10 was needed. 11 We also needed a definition that addressed industry 12 concerns and also provided flexibility to our agency. 13 After weighing all of the factors and 14 considerations, we came up with the following definition. 15 In this case, this is the one in your Board book, a 16 pattern of neglect can be established by one or more 17 violations of the same or similar nature. 18 As we just stated, this was a major item of issue 19 with industry, and we received some comments on the 20 definition. 21 We will discuss these in greater detail near the 22 close of the presentation where we talk about public comments 23 and issues. 24 The recalcitrant violator, we have also indicated 25 that we needed something that was a little bit more specific, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 and again, we have defined it as a person who, based upon the 2 evidence, has engaged in a pattern of neglect or disregard 3 with respect to the violation. 4 Right now another major term fundamental to this 5 regulation needs to be discussed. That is the deminimous 6 emission related violations. 7 Staff has proposed in the regulation provided to 8 you that no violation be considered minor if it results in 9 any increase in toxic air contaminants. 10 The issue of toxic air contaminants is fundamental 11 and germane to ARB's role to protect public health. It's 12 consistent with the requirements and scope defined by the 13 Health and Safety Code statutes and AB 2937, that is that the 14 degree of harm to human health is an overriding factor for 15 determining what are minor violations. 16 We have distinguished toxics because they are not 17 regional pollutants and they can have life expectancy 18 effects, or long latency periods and deserve separate 19 treatment. As stated earlier, we will revisit this area. 20 Deminimous is also proposed to be determined on a 21 case by case basis by the Executive Officer, or his or her 22 delegated staff. 23 Now that we have outlined our proposed 24 classifications for minors, we will move on to how this 25 affects our current enforcement policy. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 How will this regulation change things? 2 First, you need a little background on how we do 3 things now. As we stated before, we, the Air Resources 4 Board, regulates consumer products, cargo tanks and motor 5 vehicles. 6 Its standard practice right now that most 7 violations of these regulations are handled with the issuance 8 of an NOV, or ROV. 9 ARB uses its prosecutorial discretion to determine 10 what cases will be pursued, whether penalties are assessed or 11 suspended, and which cases are determined to not warrant any 12 further action. 13 That is the way that it is done now. If a 14 violation is found, the issue to report determines the 15 severity of the violation, determines the penalty amount. 16 AB 2937 now requires that ARB adopt a regulation 17 making it mandatory that a minor violation, as determined in 18 the regulation, which is found in the field by an ARB 19 inspector, be issued a notice to comply and that no penalties 20 be imposed. 21 Therefore, the main difference between the NOV and 22 the NTC is that there are no penalties associated with the 23 notice to comply. 24 We will now discuss some guidelines for issuance of 25 the notice to comply. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 Most violations found in the field by ARB 2 inspectors will be issued, most minor violations found by ARB 3 in the field will be issued a notice to comply, unless 4 testing is required. 5 If testing is required and the results are not 6 immediately available, the notice to comply will be mailed to 7 the owner or operator of the facility. 8 A notice to comply will not be issued for any 9 violation that is fixed immediately in the presence of the 10 inspector. 11 This quick fix violation can, however, be 12 documented and used later to establish a pattern of neglect. 13 The owner or operator has up to 30 days, as 14 determined or specified in the notice to comply, to fix the 15 violation. 16 Within five days of achieving compliance, the owner 17 or operator must notify ARB whether they have complied with 18 those requirements. 19 The false statement of compliance results in an NOV 20 issued for a violation of the notice to comply regulation. 21 Failure to fix in 30 days will result in an NOV, 22 which is based on the statutory criteria that a person who 23 fails to comply, the State Board may take any needed 24 enforcement action. 25 We will now move on to give you some specific PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 examples of violations which will be eligible for the notice 2 to comply. 3 Again, the areas that ARB regulates are in the 4 slide, motor vehicles fuels, consumer products and cargo 5 tanks. 6 With respect to fuel violations, fuel 7 specifications, as you are all aware, there is cleaner 8 burning gasoline regulations, they provide the gasoline 9 producers with several compliance options. 10 Some of these actually involve submitting a report 11 to ARB about the gasoline that is produced. If a company 12 reports incorrect information to ARB, it is considered a 13 reporting violation. 14 ARB may determine that the violation is minor if 15 the company can demonstrate that the incorrect reporting was 16 inadvertent and not due to its negligence. 17 Reporting errors may include items such as 18 reporting the wrong storage tank number, reporting the wrong 19 batch number, errors in rounding, things of that nature. 20 In the cargo tank inspection areas, cargo tanks are 21 required to be certified as leak-free every year, 22 recertification is then required. 23 Subsequently, sometimes a tank may have passed the 24 test, but the test results do not reach ARB before 25 certification expires. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 This may be considered a minor violation. It is 2 possible that the truck company has not put its decal on the 3 truck. Again, if it's recertified, that would be considered 4 as a possible minor violation. 5 In the consumer products area, consumer products 6 categories include code dating. Each manufacturer is 7 required to display the date of manufacture, or the code of 8 the date. 9 If the manufacturer does not supply a key to the 10 code, a key to read the code, that would be considered as a 11 possible minor violation. 12 Also, each year manufacturers are required to 13 submit a written report. If a report is late, again, that is 14 another example of a minor violation. 15 The failure to register a product might also be 16 eligible for a minor violation as long as the manufacturer 17 supplies any information when requested to do so. 18 Now I would like to turn to the area of public 19 comments and issues. We held two workshops, and Mr. Schoning 20 will speak to this in much greater detail later. 21 We did have two workshops last year, one in El 22 Monte and one in Sacramento, 27 people attended. 23 We received written comments. The major issues at 24 the time were the definition of chronic violations, and many 25 commenters felt that our definition was too limited. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 So, the current language has been included in your 2 Board book, and talks about one or more, so it is clear that 3 it is not just one, establishing a pattern. 4 Another major issue covered by affected industries 5 was whether emissions related violations would be eligible 6 for minor. 7 Originally we had said that no emissions related 8 violations would be allowed. That position has been 9 modified. We are now saying that deminimous emissions 10 violations would be okay. 11 These are inconsequential or trivial violations, 12 provided there were no toxic emissions that were emitted as 13 part of that violation. 14 Industry also suggested to the Board that we report 15 back, as staff, to you in approximately a year and let you 16 know how implementation was going. 17 We have included in the Resolution for your 18 consideration that we do that, we do that by June of 1999. 19 So, as you can see, we did consider comments. We 20 have made some changes. We will have some additional 21 proposals to present to you. 22 Since the publication of the proposed regulation, 23 we have received some additional comments, and we would like 24 to go over these with you. 25 We have received comments from Dalt Trucking, Mr. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 Terry Klinsky, President of that company. One of his 2 concerns is how could you allow deminimous emissions 3 violations, and at the same time not allow toxic violations, 4 at least a little bit, and again, we are going to address 5 that one later. 6 Mr. Klinsky also talked about inspectors having a 7 bad day and then, perhaps, inappropriately issuing an NOV 8 when it should be an NTC. 9 Again, I will point out that if it's an emissions 10 related violations that would require testing and would be 11 brought back to our office for consideration by our 12 management. 13 If it is in the field, one of the things that we 14 plan to do is educate staff about the minor violation 15 regulation and make sure that they are trained to do a good 16 job in the field, which we believe they are at present. 17 Finally, the next comment that we received was from 18 Mr. Frank Caponi, Supervising Engineer with LA Sanitation 19 District. He had some concerns about odor violations. 20 I should point out to you that Mr. Caponi's 21 sanitation district is regulated by the South Coast Air 22 Quality Management District and not by this Board. 23 One of the significant issues that Mr. Caponi 24 raised was the issue of odor violations. He felt that if 25 there were no emissions exceedences, there was an odor PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 violation, then there should be some consideration of that as 2 a minor violation. 3 We believe that if there is an odor violation, in 4 effect, that means there is a public nuisance. To create a 5 public nuisance, a considerable number of people have to be 6 affected. 7 If a considerable number of people are affected, 8 then we believe that should be a major violation and not a 9 minor violation. It's also a concern from State law 10 perspective. 11 Mr. Caponi's letter also addressed issues 12 concerning chronic violations. Again, we have some proposed 13 changes that we will make at the end of this presentation. 14 The final letter of comment that we received was 15 from the Department of Trade and Commerce. They had some 16 concerns that our regulation might not have been written in 17 plain English. 18 They acknowledged that it was, but they weren't 19 sure that we actually said it was. We clarified that with 20 them, and they understand that we did do that. 21 They also had some concerns about the 22 classification of minors, and we explained that it has been 23 classified, there is procedural and there is deminimous 24 emissions related violations, so we felt that we addressed 25 the concerns that they had raised. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 CHAIRMAN DUNLAP: Did they give you any feedback on 2 that, Stephanie, I mean, did you feel like -- did they 3 indicate to you that they felt their concerns were satisfied 4 with their response? 5 MS. TRENCK: I think they understood that the plain 6 english provision had been satisfied, right, Judy? 7 Yes. 8 In terms of cost and impacts of this proposal, the 9 Government Code requires that State agencies assess the 10 potential for adverse economic impacts on business and 11 industry in California. 12 We believe there would be no negative cost or cost 13 impact on industry. We also looked at environmental impacts, 14 and we believe that since only deminimous emissions 15 violations would be allowed that any impact would be very 16 small, trivial, in effect, no impact on the environment. 17 Our staff report discusses some of these issues. 18 Now some important dates that I want to bring to your 19 attention. 20 First of all, as I indicated, to satisfy public 21 concerns, the staff proposes to come back to you before June 22 of 1999, and tell you how things are going with regard to 23 implementing the regulation. 24 There is also a requirement in the law that a staff 25 report be provided by January first in the year 2000. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 That staff report would address not only ARB's 2 implementation of the Minor Violation Regulation, it would 3 also deal with the district and how they were implementing 4 that Regulation. 5 Finally, just for your information, the original 6 proposed regulation contained a sunset date. The reason that 7 was included in the Board book was that the Legislation 8 itself requires that, however, we have some changes in this 9 area, which I promise I will get to. 10 Okay. Now the modifications to the originally 11 proposed regulation. 12 Based on some testimony that we have received, we 13 do have some proposals for modification. The main issues, 14 again, were the pattern of neglect needed to establish that a 15 violation was chronic, and then whether emission violations 16 were to be considered as minor violations. 17 The original proposal that we presented and 18 workshopped will have no emission increase, that's changed. 19 As you know, it says now that you can have 20 deminimous, and then no increase in toxics, that's been 21 modified. 22 We also talked about modifying the definition of 23 chronic, we are going to change that. Finally, we are 24 proposing, and we will discuss this a little bit, the 25 creation of an ad hoc committee that will continue to look at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 the way that the regulation is implemented in its early 2 stages. 3 The new proposed definition for chronic violations. 4 What we have said here to establish the pattern of neglect or 5 disregard, we are now proposing that more than one reasonably 6 contemporaneous violation of the same or similar nature 7 occurs. 8 This clearly establishes the pattern must consist 9 of at least two violations, and that really was our original 10 intent, however it may not have been clear in the way that we 11 drafted the regulation. 12 These two violations would occur within a similar 13 time period. We agree with the stakeholders, the original 14 language was not clear. 15 The term reasonably contemporaneous will be applied 16 using good judgement and based upon the nature of and the 17 circumstances surrounding the violations. 18 Now we have a new proposed language change for the 19 toxics exclusion. Again, we are talking about, originally 20 we had said, no increase in toxics, and again, I think our 21 drafting might have been a bit better here. 22 What we really want to say is that any excess over 23 an emissions standard, that would preclude definition as a 24 minor violation. 25 Finally, what we are suggesting is that we delete PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 the sunset clause, and the reason for that is that you as a 2 Board have the authority at any time to repeal any 3 regulation, or modify any regulation you wish, so we feel 4 that is unnecessary. 5 Lastly, our conclusions and recommendations. The 6 Board is required to adopt a regulation. We have considered 7 a number of alternatives. 8 We believe that our modified proposal is the best 9 one. We have identified that there are no costs, or negative 10 impacts. 11 We have addressed outreach and public input. We 12 have suggested the creation of this ad hoc committee, which 13 would consist of ARB staff and also other stakeholders, 14 including industry representatives, and we recommend that 15 this Board approve the proposed modified proposal. 16 Thank you for your attention. 17 CHAIRMAN DUNLAP: Thank you, Ms. Trenk. I 18 appreciate the effort that went into this. 19 I know this was a challenging endeavor. I also 20 know Mike Kenny spent a lot of time personally tracking the 21 Legislation and has taken a personal interest in it. 22 Are there questions of staff? 23 Ms. Rakow, and then we will go to the Ombudsman's 24 Office. 25 BOARD MEMBER RAKOW: First of all, before the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 question, I think it was a very thorough presentation. 2 A very small point, I read the Trade and Commerce 3 letter and they mentioned something about clarified to delete 4 the double negative in the sentences, and was that a 5 clarification? 6 MS. KRINSK: We understood it. I didn't find a 7 double negative. 8 BOARD MEMBER RAKOW: You didn't find a double 9 negative. 10 So, it is just an interpretation of a double 11 negative. You think it doesn't need it. 12 MS. TRENK: Read it and see if you think there is a 13 double negative. 14 BOARD MEMBER RAKOW: These former elementary school 15 teachers, you can't trust them. 16 BOARD MEMBER FRIEDMAN: Well, whether it's a double 17 negative or not, their modification makes their reading make 18 better sense than what we had originally. 19 You know, it's on the second page of their letter, 20 it's crystal clear. 21 MS. WALSH: I can assure you, Dr. Friedman, that we 22 will look at the language of the regulation and if that 23 language is a clearer and correct rendition of what the 24 regulation is intended to do, then we will go with that with 25 the 15-day notice. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 CHAIRMAN DUNLAP: The words matter, that is the 2 message that the Board is giving the staff. 3 The words matter. We know you take great pride. 4 Mr. Morgister has made it very clear to me, you know, that he 5 wants Bill to make sure that we have language where we can, 6 you know, enforce against the people who have a chronic 7 problem an issue, and we certainly want you to have the 8 ability to do that, but the words matter. 9 So just, Kathleen, make sure that you and your team 10 watch that carefully. 11 Madam Ombudsman person, would you give a report to 12 us about this process, and then I will get to you, Ms. 13 Edgerton, in just a moment. 14 MS. MEADE: Good morning, Mr. Chairman and Members 15 of the Board. The proposal before you, as you have heard, is 16 a result of Assembly Bill, AB 2937, enacted in 1996. 17 To prepare for today's proposal, staff worked 18 closely with the California Air Pollution Control Officers 19 Association, CAPCOA, and affected industry groups. 20 Staff conducted two workshops on April 24, 1997 and 21 May 1, 1997. Workshop notices were posted on ARB's website 22 and mailed to over 600 stakeholders representing consumer 23 products, fuels retailers and environmental organizations, 24 local air pollution control districts and the 25 AB 2937 author, Senator Bruelty. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 27 participants attended the workshops representing 2 Western States Petroleum Association, Chevron, the California 3 Manufacturers Association, California Trucking Association, 4 LA Department of Water and Power, local air pollution control 5 districts, California Trade and Commerce Agency and U.S. EPA. 6 Because of the lack of participation by the 7 consumer product stakeholders, an additional solicitation for 8 comment was mailed to the consumer product representatives in 9 mid May. 10 Since mid May to present, staff have participated 11 in many meetings and telephone calls with stakeholders. 12 On March sixth of 1998, this year, the staff report 13 and the proposed regulation for today's Item was mailed to 14 600 cargo tank operators, 150 consumer product manufacturers 15 and distributors, oil refiners and another 125 interested 16 parties. 17 Notices of today's public hearing was mailed to 18 2,500 aforementioned and other interested parties, and posted 19 on ARB's web page. 20 As you heard from staff, this proposal only 21 addresses actions within ARB's authority. California's 35 22 air pollution control districts are in the process of 23 adopting similar programs for minor violations, over which 24 they have enforcement authority. 25 To provide for consistent regulations at the State PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 and local levels, staff worked closely with the development 2 of CAPCOA's model rule, which will in turn go through the 3 public process in front of each of the 35 local district 4 boards. 5 To ensure coordination, staff participated in five 6 CAPCOA enforcement manager subcommittee meetings and 7 participated in three CAPCOA public workshops June second, 8 third and fourth, in Fresno, Diamond Bar and Sacramento, 9 along with numerous telephone conversations with CAPCOA 10 leadership and local districts. 11 In conclusion, staff provided adequate outreach and 12 access to affected and interested parties to participate in 13 the development of the proposal before you today. 14 Thank you. 15 CHAIRMAN DUNLAP: Thank you. We appreciate that. 16 We have Ms. Edgerton. Would you yield to the two 17 witnesses, by chance? 18 Frank Caponi, LA County San District, and then Jot 19 Condi. Could we get you to come up to the front row there, 20 we will cue you up next. 21 Mr. Caponi, welcome. We heard the staff run 22 through some of your suggestions in the letter. 23 MR. CAPONI: Let me just briefly say, as was 24 correctly pointed out by staff, this does not directly impact 25 my agency, but it was also pointed out that there is going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 35 other districts that will be developing a minor violation 2 rule. 3 What will be done here is very important because 4 it's likely to be used as a model for the other agencies. 5 We felt this was a good opportunity to make the 6 points that we came here today to make. 7 The rule addresses air contaminants. Now, what we 8 are simply asking for is a definition of air contaminants to 9 be included in this regulation. 10 The definition exists already. It is in the 11 California Statute. It's in the Health and Safety Code, 12 specifically 39013, and this includes odors, and this is our 13 specific concern. 14 We think in minor violations, the program should be 15 broad enough to include odors and specific odor events as a 16 possibility for minor violations. 17 CHAIRMAN DUNLAP: Well, if I could say a word or 18 two about that. 19 I'm certain you don't know much about my 20 background, but I served as a public advisor in the 21 South Coast Air District. 22 I was responsible for a number years for doing 23 community meetings, you know, going out in the evening, 24 meeting with folks when they get home from work about 25 concerns that they have, and I did countless odors meetings, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 particularly in the south bay. 2 I was, I can tell you stories about the number of 3 folks that come out to those meetings and stuff, so just so 4 you know, philosophically, and I also know that in some 5 cases, san districts have been unfairly maligned about how 6 serious they have been about controlling odors and the like, 7 and I have not seen any indication that your county, in 8 particular, has ever ignored these folks. 9 I just want to caution you that you are going to 10 have to do a pretty big sales job for me to consider making 11 it difficult for air districts not to go out and respond to 12 these concerns, because people, you know, as you have seen, 13 people are very concerned about that. 14 They expect the air quality officials to react to 15 it. So, tell me in a nutshell, what would you have us direct 16 the staff to do differently than what they have come up with, 17 specifically as it relates to odors? 18 MR. CAPONI: We think the districts should go out 19 and respond to these. We think there are situations where 20 they should be able to interpret. 21 This comes down to the discussion about the 22 nuisance regulations. The nuisance regulations ask for a 23 considerable amount of people to be impacted, and that is up 24 to the discretion of the district to figure out what those 25 amount of people are. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 The South Coast uses a range of about six to ten 2 people. All we are saying is that -- 3 CHAIRMAN DUNLAP: Does that work pretty well, as 4 far as you are concerned, that six to eight number? 5 MR. CAPONI: To be honest, in certain situations, 6 no. We don't think that is appropriate. 7 We think that the inspectors should be given the 8 tools to go out and make the judgment that this is a minor 9 violation. 10 Number one, we run, in our largest landfill we run 11 a Christmas tree program every year. We take in Christmas 12 trees. We grind them up, and we try to make use of the 13 Christmas tree, use it as ground cover, or whatever, instead 14 of just disposing it in the landfill. 15 This particular year there was a severe 16 meteorological event during the grinding of the Christmas 17 trees although. Inversion would cause the odors to transport 18 it off-site, we got slapped with a notice of violation. 19 I think we all could agree that it was no public 20 health problem here, but it was the six people who did not 21 like the odor, or they didn't like the landfill, whatever the 22 case may be, and we got slapped with an NOV. 23 This is the way the situation was. I think the 24 inspector -- I talked to the inspectors and they wish they 25 had the latitude to say give a notice to comply rather than PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 an NOV. They didn't think it was fair. 2 There are numerous other types of these examples, 3 and just one more, we run an odor control system at this 4 plant where we have a mist of a citrus type odorant, which 5 supposedly will help the odor problems. 6 One night the concentration was a little bit too 7 high. Residents smelled citrus smell, and we got an NOV for 8 the citrus smell, and this is another example of where there 9 is no public health problem here. 10 It mentally may have been an annoyance to a few 11 people, but it wasn't a major violation. It was something 12 that NTC could have easily taken care of. 13 Just to wrap up, I know you are trying to end this 14 by noon and I think I maybe have five seconds left, your own 15 Resolution states that what AB 2937 is trying to achieve is a 16 more resource efficient enforcement mechanism. 17 I think if you give this tool to the inspectors -- 18 CHAIRMAN DUNLAP: To give them more discretion. 19 MR. CAPONI: To give them more discretion, it would 20 be a more streamlined process. 21 CHAIRMAN DUNLAP: Staff, what about that? 22 MR. KENNY: Well, if I could address that really 23 quickly. I think that what the witness is asking for, 24 really, is kind of something that is a change in 25 long-standing historical practice. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 When you look at the nuisance law, you look at 2 something that has really existed in practice for centuries. 3 There is a lot of discretion associated with 4 nuisance law. Just simply the way that the statute is 5 written, the statute does talk about the fact that you have 6 got to have an impact on a considerable number of people. 7 Every district will define a considerable number of 8 people differently. At the same time, even if that 9 definition is in the six to ten person range, once an NOV is 10 issued, that NOV can still be reviewed by others. 11 There is nothing that is occurring today, if the 12 Board adopts this particular proposal, that eliminates 13 enforcement discretion and is practiced by the attorneys who 14 review the NOV's that are issued. 15 CHAIRMAN DUNLAP: In other words, as part of the 16 settlement process, mutual MSA's, is that what they are 17 called? 18 MR. KENNY: Mutual settlement conferences. 19 CHAIRMAN DUNLAP: They could use a mitigating 20 circumstance and say, you know, the Christmas tree thing was 21 a public service. 22 MR. CAPONI: And what we are saying is that is more 23 administrative work on our part, on the district's part, and 24 it shouldn't be necessary when it could be solved right there 25 in the field by an inspector. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 CHAIRMAN DUNLAP: Well, okay. I appreciate hearing 2 that. I'm going to have a thing to say when we have our 3 discussion. 4 Anything else that you wanted to add, Mr. Caponi? 5 MR. MORGESTER: If I could add one more thing, Mr. 6 Chairman. About three weeks ago, I had the honor of sitting 7 on a panel where the South Coast Air Quality Management 8 District had a one day seminar on odors, and I was absolutely 9 amazed, 350 people showed up on a work day to talk about 10 odors and the impact on odors. 11 CHAIRMAN DUNLAP: I read the press clips, it was a 12 scientist that developed the, Jim might have heard about 13 this, the little sensor for odors that could pick up a whole 14 host of smells. 15 An electronic nose. Okay. 16 Thank you. I appreciate that. 17 By the way, for what it's worth, I know your 18 district, I know how serious you take these issues, and I 19 have had good experience with you all from years ago, so I 20 appreciate you coming here. 21 Mr. Condi. If I am not mistaken, CMA, your 22 employer, was very interested in this Legislation originally. 23 MR. CONDI: Yes. 24 Mr. Chairman and Members of the Board, Jot Condi, 25 with the California Manufacturers Association, and as the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 Chairman said, we were, I guess, what you would call a 2 sponsor of the Bill, AB 2937, authored by then Assemblyman 3 Jim Bruelty. 4 We worked hard with Mr. Bruelty's staff and with 5 ARB staff on crafting a piece of Legislation that would be 6 acceptable to all. 7 We were pretty comfortable with the way that the 8 Legislation turned out. We subsequently worked with CAPCOA 9 on their draft model rule, and with ARB, and we had some 10 initial concerns with the original proposal put out by ARB, 11 as is evidenced by our comments at the workshop and in our 12 written comments that you have in your packet today. 13 The proposal that you have before you today, we 14 feel, is significantly better, and we just want to recognize 15 the hard work that the ARB staff has put into this proposal 16 and the revised version, Mike Kenny, all of the work that he 17 has done, and also in the Ombudsman's Office, Mr. Schoning 18 and Kathleen for the work that they have put into this as 19 well. 20 So, I think at this point we are comfortable with 21 the proposal as it is. We look forward to working with the 22 staff through the ad hoc group as the process moves along. 23 CHAIRMAN DUNLAP: Now how do you feel about the 24 review next summer; do you think that is too soon? 25 We have a report we ought to get to the Legislature PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 by January 2000; do you have any feelings about the timing of 2 that? 3 MR. CONDI: About the 2000 report? 4 CHAIRMAN DUNLAP: No, about the review being the 5 summer right before; do you think that gives us enough time? 6 MR. CONDI: We are fully supportive of that. 7 When the Bill was drafted, and year 2000 report to 8 the Legislature was considered, we had anticipated that the 9 process would have, the rules and the regulations would have 10 been in sooner, and so we feel that if it's critical to have 11 kind of a mid-term report, although there is a short window 12 for this regulation to actually take effect. 13 CHAIRMAN DUNLAP: But you wanted it done right 14 rather than rushed. I remember you telling me that on 15 different occasions. 16 MR. CONDI: Right. So, we have no problem with the 17 timing that the Board has taken and the other agencies, the 18 districts. 19 Again, we are comfortable with it. We want it done 20 right. 21 CHAIRMAN DUNLAP: All right. Well, good deal. 22 I appreciate that. 23 Any questions for the author? 24 A comment to perhaps give Mr. Condi some credit. I 25 appreciated very much attending a couple, or a month or so PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 ago, the California Manufacturers Association had a 2 recognition dinner where they recognized a forward thinking 3 manufacturer, and that was Toyota, and I was very pleased 4 with them recognizing the Numi work, which is our only auto 5 production plant, and I appreciated their interest in the 6 Clean Car Program that we have, and John and his boss have 7 been supportive of what we try to do in that area, and you 8 all should know that. 9 MR. CONDI: We have 799 other forward thinking 10 members, also. 11 CHAIRMAN DUNLAP: Yeah. Okay. 12 BOARD MEMBER EDGERTON: I have a question of staff, 13 could you give me a reasonable explanation of what reasonably 14 contemporaneous means? 15 MR. KENNY: As a layer, we actually had a fair 16 amount of discussion about that. 17 BOARD MEMBER EDGERTON: I have no doubt that it 18 took quite a good deal of time. I bet there was a range of 19 feeling about it. 20 MR. KENNY: What we were really trying to do, and 21 that was really the best term that we could come up with to 22 express it, was to reflect that a chronic violation had to 23 occur on at least more than one occasion over a specified 24 period of time, but we didn't want to really specify that 25 period, and so reasonably contemporaneous when you look in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 the dictionary does essentially give you phrases such as, 2 present, current, modern, and that gave us the flexibility 3 that we felt that the Air Resources Board, and in dealing 4 with CMA and WSPA, that they were comfortable with. 5 So, that is the nice, simple lawyer answer that I 6 can give you. 7 CHAIRMAN DUNLAP: Well, Mr. Kenny, you need to be 8 reminded of this, I think, and your staff, that there are 9 four former public school educators on this Board, but I 10 think actually five, if you count Dr. Friedman's work, so you 11 will have no problem in having people reading this fine print 12 from now on anything that you guys propose, and I want to 13 encourage my colleagues, Sally and Barbara and, two Barbara's 14 and others to take a look. 15 BOARD MEMBER RIORDAN: We would have a hard time 16 defining that. It may be written correctly, but -- 17 MR. KENNY: It is difficult to define, because what 18 we are really trying to do here with the Minor Violation 19 Regulation as a whole is take a practice as it has existed 20 for years, which is enforcement discretion, and try to 21 provide some greater level of definition to it. 22 The difficulty though is that when you talk about 23 chronic, chronic can be defined by one person as maybe two 24 violations in two weeks, or by another person as two 25 violations in two years, and the reality is that it is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 somewhere in the middle. 2 So what we are trying to do is provide that range 3 of discretion in the context of the regulation to make sure 4 that, in fact, what we are doing is really addressing the 5 issue that it's going to be, probably more than anything, 6 factually specific. 7 CHAIRMAN DUNLAP: The issue of odors. 8 BOARD MEMBER PARNELL: I thought you made it very 9 clear using good judgment, whatever that means. 10 BOARD MEMBER EDGERTON: Just for the record, I 11 don't think that you mean modern. Modern, that is one of the 12 definitions that it would not mean. 13 MR. KENNY: Modern is probably getting toward the 14 very, very broad side. 15 BOARD MEMBER EDGERTON: Modern is out, I think, for 16 the purposes of the Legislature. 17 Modern as opposed to what, B.C., A.D.? 18 MR. KENNY: We looked at it simply as contemporary. 19 I think that would have been somewhat fuzzy enough, but we 20 decided to go one step further and make sure, in fact, we had 21 the ability to put a lot of good judgment into it and 22 that's -- 23 BOARD MEMBER EDGERTON: Well, I am for the good 24 judgment. 25 CHAIRMAN DUNLAP: If I could come back to odors for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 a moment. You all are talking about ad hoc advisory 2 committee, and you are also talking about this review. 3 I would encourage you to stay close to the San 4 District and others like them in the State and make sure that 5 they, Mr. Caponi, are you still here, make sure that you, Mr. 6 Caponi, watch this issue. 7 I'm not inclined to specify anything beyond what 8 staff has, but I would ask you to stay involved and if there 9 are problems, I expect you to come back, if you would, and 10 let us know, and then we will take another look at it. I 11 personally will watch this. 12 I have come to believe that the real strength of 13 the Air Quality Control Program in the State is enforcement. 14 Enforcement where good judgment is able to be used, 15 where accountability, reasonableness and a perspective about 16 what we are trying to achieve is also essential. 17 This, I would have to say, and Mike, I don't want 18 to tell a story on the staff, but when this Legislation was 19 initially proposed, staff was very concerned about it. 20 Limiting discretion, tying our hands. Mike, I 21 think, has been won over with what the goal and objective was 22 for this to be more predictable for the business community 23 and others, that we weren't going to look for, so-called, 24 ticky tack things, that we were going to focus on what we 25 truly needed to be focusing on, and I want to commend staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 for working with this Legislation, and working with the 2 industry groups that have been tracking it to try to find a 3 common ground. 4 That was very difficult, I know, and appreciate you 5 staying with it. 6 So, for my part, I am comfortable with where we 7 have ended up, and I have seen this emerge through a long 8 process. 9 Mike, maybe it's taken a few extra months to put it 10 together, but I think, because you have support, it has been 11 worth it, you know, from the folks that felt they needed this 12 Legislation. 13 Are there any other comments or questions that the 14 Board has? 15 If not, we will proceed and get through this, and 16 have our Open Comment, and then break for lunch. 17 We have summarized the written comments; is that 18 correct? 19 Those have all been done. Mike, I don't expect you 20 have anything else to add. 21 We will now close the record on this Agenda Item. 22 However, the record will be reopened when the 15-day notice 23 of public availability is issued. 24 Written or oral comments received after this 25 hearing date, but before the 15-day notice is issued will not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 be accepted as part of the official record on this Agenda 2 Item. 3 When the record is reopened for a 15-day comment 4 period, the public may submit written comments on the 5 proposed changes, which will be considered and responded to 6 in the Final Statement of Reasons for the regulation. 7 Also, as it relates to ex parte communication, we 8 need to report on the record if we have had any such contact. 9 Is there anything that needs to be reported? 10 Okay. I have one. 11 I ran into Mr. Condi on the street about a week ago 12 and asked him how this was going, and he said that they were 13 still at it, and I will try to find that date, and if Jot is 14 here, maybe he has a date he can suggest to me, but other 15 than that, I think we don't have anything else to report 16 there. 17 We have before us Resolution 98-18, which contains 18 the staff recommendation. 19 The Chair would entertain a motion and a second to 20 adopt this Resolution. 21 BOARD MEMBER RAKOW: I so move. 22 BOARD MEMBER RIORDAN: Second. 23 CHAIRMAN DUNLAP: Mrs. Rakow made the motion and 24 seconded by Mrs. Riordan. 25 Any other comments that we need to have, or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 discussion on this point? 2 If not, then we will proceed with a voice vote. 3 All those in favor of Resolution 98-18, say aye. 4 Any opposed? 5 Very good. The motion carries unanimously. 6 Thank you again to the staff. 7 The very last Item is an Open Comment Period. 8 During this period, although no formal Board action may be 9 taken, we will provide an opportunity for members of the 10 public to directly address the Board on items of interest 11 that do not appear on today's Agenda. 12 We are asking that each witness limit his or her 13 testimony to topics that are within the subject matter 14 jurisdiction of our Board. 15 To ensure that everyone has a chance to speak, we 16 will also be asking that each witness limit his or her 17 comments to three minutes, or so. 18 Is there anyone that wishes to speak before the 19 Board? 20 Unless the Board has anything else, the April 21 meeting of the California Air Resources Board is now 22 adjourned. 23 (Thereupon the Air Resources Board meeting 24 was adjourned at 12:15 p.m.) 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 I, VICKI L. MEDEIROS, a Certified Shorthand 4 Reporter of the State of California, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing hearing was reported in shorthand by me, Vicki L. 7 Medeiros, a Certified Shorthand Reporter of the State of 8 California, and thereafter transcribed into typewriting. 9 I further certify that I am not of counsel or 10 attorney for any of the parties to said hearing nor in any 11 way interested in the outcome of said hearing. 12 IN WITNESS WHEREOF, I have hereunto set my hand 13 this twenty-fourth day of April, 1998. 14 15 16 VICKI L. MEDEIROS 17 Certified Shorthand Reporter License No. 7871 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345