1 MEETING 2 BEFORE THE 3 CALIFORNIA AIR RESOURCES BOARD 4 5 6 7 8 9 10 BOARD HEARING ROOM 11 2020 L STREET 12 SACRAMENTO, CALIFORNIA 13 14 15 16 17 18 19 THURSDAY, OCTOBER 28, 1999 20 9:30 A.M. 21 22 23 24 Janet H. Nicol Certified Shorthand Reporter 25 License Number 9764 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii 1 APPEARANCES 2 MEMBERS PRESENT: 3 Alan C. Lloyd, Ph.D., Chairman Joseph C. Calhoun 4 Dorene D'Adamo Dr. William Friedman 5 C. Hugh Friedman Matthew R. McKinnon 6 Barbara Patrick Barbara Riordan 7 8 STAFF: 9 Michael Kenny, Executive Director Tom Cackette, Chief Deputy Executive Officer 10 Mike Scheible, Deputy Executive Officer Lynn Terry, Deputy Executive Officer 11 Kathleen Walsh, General Counsel Kathleen Tschogl, Ombudsman 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii 1 INDEX PAGE 2 Call to Order 1 3 Pledge of Allegiance 1 4 Roll Call 1 5 Opening Remarks by Chairman Lloyd 2 6 AGENDA ITEMS: 7 98-10-1 Public Hearing to Consider the Adoption of Proposed Amendments to the California 8 Consumer Products Regulation 9 Introductory Remarks by Chairman Lloyd 2 10 Staff Presentation: 11 Mike Kenny 3 Paul Milkey 6 12 Public Comment: 13 Michael Thompson 27 14 Catherine Beckely 34 John Carney 36 15 Bob Hamilton 40 Eileen Moyer 49 16 Richard Ratcliff 52 William Mercer 56 17 Chip Brewer 94 Robert Graham 98 18 98-10-2 Public Meeting to Consider Approval of the 19 San Joaquin Valley Unified Air Pollution Control District's California Clean Air 20 Act Triennial Progress Report and Plan Revision for 1995-1997 21 Introductory Remarks by Chairman Lloyd 111 22 Staff Presentation: 23 Mike Kenny 112 24 Tina Suarez-Murias 114 25 (continued) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv 1 INDEX (continued) 2 PAGE Public Comment: 3 Dave Crow 133 4 Cathy Reheis 147 5 99-8-3 Public Hearing to Consider Amendments to the Air Toxics Hot Spots Fee Regulation for 6 Fiscal Year 1999-2000 7 Introductory Remarks by Chairman Lloyd 157 8 Staff Presentation: 9 Mike Kenny 158 10 Carolyn Lozo 158 11 Public Comment: 12 None 13 99-8-4 Public Meeting to Consider a Status Report on the Air Resources Board's Heavy-Duty 14 Vehicle Smoke Inspection Program 15 Introductory Remarks by Chairman Lloyd 175 16 Staff Presentation: 17 Mike Kenny 176 Elizabeth Miller 177 18 Public Comment: 19 Mike Robertson 192 20 Open Session to Provide an Opportunity for Members 191 21 of the Public to Address the Board on Subject Matters Within the Jurisdiction of the Board 22 Adjournment 199 23 Certificate of Reporter 200 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 P R O C E E D I N G S 2 CHAIRMAN LLOYD: Good morning. The October 28th, 3 1999, public meeting of the Air Resources Board will now 4 come to order. Sorry for the slight delay. 5 Will the clerk of the board please call the roll. 6 Oh, sorry, Pledge of Allegiance first. 7 (Pledge of Allegiance recited.) 8 MS. HUTCHENS: Calhoun. 9 BOARD MEMBER CALHOUN: Here. 10 MS. HUTCHENS: D'Adamo. 11 BOARD MEMBER D'ADAMO: Here. 12 MS. HUTCHENS: DeSaulnier. 13 (No response.) 14 MS. HUTCHENS: C. Hugh Friedman. 15 BOARD MEMBER C.H. FRIEDMAN: Here. 16 MS. HUTCHENS: Dr. Friedman. 17 BOARD MEMBER FRIEDMAN: Here. 18 MS. HUTCHENS: McKinnon. 19 BOARD MEMBER McKINNON: Here. 20 MS. HUTCHENS: Patrick. 21 BOARD MEMBER PATRICK: Here. 22 MS. HUTCHENS: Riordan. 23 BOARD MEMBER RIORDAN: Here. 24 MS. HUTCHENS: Roberts. 25 (No response.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 MS. HUTCHENS: Chairman Lloyd. 2 CHAIRMAN LLOYD: Here. 3 Before we get into the agenda today, I would just 4 like to take this opportunity to thank the ARB staff who 5 participated in the ARB, CAPCOA, EPA symposium entitled 6 "Exploring New Technologies for Clean Air Zero and Near Zero 7 Emission Technologies," which was conducted down at the 8 Beckman Center at Irvine on October the 5th and 6th. 9 I think this was again the second of these type of 10 symposia, and I think it was excellent. It was really well 11 received. I think a lot of good information came out from 12 that and I think staff did an excellent job. 13 And I would like to take this opportunity to 14 recognize the individuals who played key roles there. Edie 15 Chang was the project manager. And I know how much Edie did 16 in that area. And then we had support by Patricia Velasco, 17 Marcelle Surovik, Lisa Kasper, Annalisa Bevan, Renee Kemena, 18 Jack Kitowski, Mike Carter, Sharon Anderson, Charles Kersey, 19 Bill Fell, Ravi Ramalingam and Jim Fisher. 20 Again, I think you all did an outstanding job, so 21 I really appreciate that from the board. 22 The first item today, and I would like to -- this 23 is agenda item 99-8-1. I would like to remind those of you 24 in the audience who would like to present testimony to the 25 board on any of today's agenda items to please sign up with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 the clerk of the board. Also, if you have a written 2 statement, please give 20 copies if you can to the clerk. 3 The first item on the agenda is, as I mentioned, 4 99-8-1, public hearing to consider adoption of proposed 5 amendments to the California consumer products regulation. 6 This item is the proposed Mid-term Measures II 7 amendments to the California consumer products regulation. 8 The proposed amendments are also an important component in 9 fulfilling the ARB's commitment under a SIP lawsuit 10 settlement agreement, and I think staff will be addressing 11 those commitments there. 12 I understand the staff, as usual, has worked 13 diligently and cooperatively with the affected industry, and 14 these discussions continued following the release of the 15 staff report, and as a result staff will be proposing some 16 changes to the proposal contained in the staff report. 17 Again, at this point I would like to ask Mr. Kenny 18 to introduce the item and begin staff's presentation. 19 MR. KENNY: Thank you, Mr. Chairman and members of 20 the board. 21 Before I introduce this item, I'd like to direct 22 the board members to the table at their left. This is a 23 display of a number of consumer products for which we are 24 proposing VOC limits today. We have examples of products 25 that currently comply with the proposed limits, as well as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 products that will require reformulation to meet the 2 proposed limits. 3 Staff is proposing VOC limits for two previously 4 unregulated consumer product categories and adding more 5 stringent VOC limits for 15 categories that have been 6 subjected to previous regulation. 7 To fulfill the requirements of the California 8 Clean Air Act, the board has adopted several consumer 9 product regulations to date, beginning with the 10 antiperspirant and deodorant regulation in 1989. 11 Since that time, the board has adopted Phase I, 12 Phase II and Phase III of the consumer product regulations, 13 as well as the aerosol coatings regulations. 14 Before I turn the hearing over to staff to present 15 the proposed amendments, I'd like to briefly describe the 16 consumer product elements of our SIP and the milestones that 17 need to be achieved. 18 The consumer products SIP element is divided into 19 near-, mid- and long-term measures. 20 The near-term measures have already been adopted 21 by the board and include the antiperspirant and deodorant 22 regulations, the first two phases of the consumer product 23 regulations and the alternative control plan and the aerosol 24 coating regulation. 25 Our mid-term measure SIP commitment is to achieve PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 an additional 25 percent reduction in VOC emissions from the 2 1990 consumer products inventory. 3 This commitment was partially fulfilled by the 4 adoption of the initial mid-term measures amendment in July 5 of 1997. 6 The proposed Mid-term Measures II amendments will 7 help us fulfill our mid-term measure of SIP commitment, as 8 well as partially fulfill a SIP lawsuit settlement agreement 9 for emission reductions from measures adopted in 1999. 10 As part of our SIP update next year we will 11 reevaluate our long-term consumer product strategy. 12 Collectively, the consumer products measures enacted to date 13 will realize a 40 percent reduction in consumer product 14 emissions, or about 106 tons per day from the 1990 baseline. 15 Before I turn the meeting over to staff I want to 16 reiterate what Chairman Lloyd said regarding the extensive 17 outreach staff has conducted. Staff has held four public 18 workshops in developing this proposal and has had numerous 19 meetings with industry associations and individual 20 companies. 21 Because some of our proposed limits are more 22 challenging than others, and affect smaller businesses, we 23 are proposing longer lead times before these limits would 24 become effective. 25 This proposal represents a cooperative effort PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 which we believe is cost effective, technologically and 2 commercially feasible, and will partially fulfill our SIP 3 lawsuit settlement agreement. 4 That said, I'll call upon Mr. Paul Milkey to 5 present the proposed amendments to the consumer products 6 regulation. 7 Paul. 8 MR. MILKEY: Thank you, Mr. Kenny. 9 Good morning, Chairman Lloyd and members of the 10 board. 11 As Mr. Kenny mentioned, today we are proposing for 12 your consideration amendments to California's consumer 13 products regulation. 14 As we will explain later in the presentation, the 15 amendments are necessary to help us fulfill our commitments 16 and the State Implementation Plan lawsuit settlement 17 agreement. 18 I'll begin our presentation with a brief 19 background and overview of our consumer products program. I 20 will then discuss our proposed Mid-term Measures II 21 amendments. 22 This will be followed by a detailed discussion of 23 the proposed requirements for auto windshield washer fluids. 24 Next I will discuss the environmental and economic 25 impacts of the proposal. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 I will then discuss how the proposal addresses a 2 recent State Implementation Plan lawsuit settlement. 3 Finally, I will end our presentation with our 4 future activities and a summary. 5 The ARB was granted the authority to regulate 6 consumer products by the California Clean Air Act of 1988. 7 As detailed in this slide, the state specifies 8 that consumer product regulations must achieve the maximum 9 feasible VOC reductions, be technologically and commercially 10 feasible, be based on adequate data and preserve product 11 forms such as aerosols. 12 As you can see from this slide, the ARB has taken 13 many steps to reduce VOC emissions from consumer products, 14 beginning in 1989. 15 In addition to the statutory mandate to regulate 16 consumer products, the federal State Implementation Plan, or 17 SIP, for ozone includes a consumer products element. This 18 element is a key component of a SIP and is needed to meet 19 the federal ozone air quality standard. 20 The consumer products SIP element is a 21 multifaceted program comprised of near-term, mid-term and 22 long-term measures which are targeted to achieve an overall 23 85 percent reduction in VOC emissions between 1990 and 2010. 24 This slide shows the number of product categories 25 subject to our consumer products program and the total PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 emission reduction. 2 Reductions, including today's proposal, would 3 achieve an overall 47 percent reduction in emissions from 4 consumer products, or about 125 tons per day based on the 5 1990 SIP inventory. 6 Note that two of the 17 categories included in the 7 Mid-term Measure II proposal are new categories with the 8 remaining 15 already being regulated. 9 In 1997, three environmental groups filed a 10 complaint with the US District Court against the Air 11 Resources Board, the South Coast Air Quality Management 12 District, and the US EPA related to California's progress 13 towards our SIP commitments. 14 ARB reached a settlement agreement with these 15 groups, under which the ARB agreed to reach certain 16 emissions reduction targets. 17 According to the settlement agreement, the ARB 18 must adopt regulations in 1999 that will achieve a 12 ton 19 per day reduction in VOC emissions in the South Coast Air 20 Basin in 2010. 21 The settlement further estimated that five to 12 22 tons per day of the emission reductions would come from 23 consumer products. 24 This reduction is significantly less than the 29 25 ton per day additional reduction that would be required to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 meet the mid-term measures SIP commitment in the absence of 2 the settlement agreement. 3 As shown later in the presentation, the estimated 4 emission reductions from today's proposal would achieve 5 about two-thirds, or eight tons per day, of the required 12 6 ton per day reduction. Note that the 12 ton per day 7 reduction in the South Coast Air Basin in 2010 is in what we 8 call SIP currency, meaning that the reduction is based on 9 the 1994 SIP inventory. 10 Now I will discuss our proposed Mid-term Measures 11 II amendments. 12 First, I will go through the process used to 13 develop our proposal. 14 Next, I will describe the proposed amendments as 15 listed in the staff report. 16 However, since the staff report was released we 17 have continued to work with the industry to try to address 18 remaining issues. As a result, we are proposing some 19 changes to the original proposal in the staff report, which 20 I will describe after I go through our original proposal. 21 The proposed amendments were developed with 22 extensive public participation. 23 The first step in developing the proposed 24 amendments was to conduct ARB's 1997 consumer and commercial 25 product survey, which I will discuss on the next slide. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 We also conducted four public workshops and 2 participated in numerous individual meetings, 3 teleconferences and video conferences. 4 The ARB's 1997 consumer and commercial products 5 survey collected detailed sales and formulation information 6 on about a hundred categories of consumer products. These 7 product categories represent 75 to 80 percent of the total 8 consumer products inventory, excluding aerosol paints. 9 Over 500 companies participated in the survey, 10 reporting about 13,000 products. The survey was an 11 important tool in developing the Mid-term Measures II 12 amendments. All of the survey categories, both regulated 13 and unregulated, were analyzed in developing staff's 14 proposal, based on their emissions and potential for 15 emission reductions. 16 The survey will also be used to update the 17 consumer products emission inventory. 18 In developing the proposed VOC limits for each of 19 the product categories, we followed some guiding principles. 20 First, based on our analysis of reformulation 21 technologies, we believe the proposed limits would achieve 22 the maximum feasible emission reduction at this time for 23 these categories. 24 We also believe that the proposed limits are 25 technologically and commercially feasible and would not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 eliminate a product form, such as the aerosol form. 2 We are also considering -- we also considered, 3 rather, the number of products that already comply with the 4 staff proposal and their market share. 5 Finally, we propose limits that we believe can be 6 met without increased use of toxic air contaminants, such as 7 perchlorethylene and methylene chloride. 8 The proposed amendments would add VOC limits for 9 two new product categories in the consumer products 10 regulation. The amendments would also include lower VOC 11 limits for 15 previously regulated categories. 12 On the next two slides we list the 17 product 13 categories subject to today's proposal. The first two 14 categories highlighted in the left column are the only new 15 categories we are proposing to add to the regulation. As 16 mentioned previously, we are proposing lower VOC limits for 17 the remaining categories, which are already regulated. 18 With the additional changes we are proposing 19 today, we have reached general agreement with the industry 20 on the categories subject to today's proposal, with the 21 exception of auto windshield washer fluids. Therefore, 22 rather than discussing each of the categories individually, 23 we will discuss the remaining issues with auto windshield 24 washer fluids in detail later in the presentation. 25 We are also proposing to expand and consolidate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 the reporting requirements for perchloroethylene and 2 methylene chloride, which are both toxic air contaminants. 3 The proposed changes will require manufacturers of 4 regulated products containing either of these compounds to 5 provide annual reports. This will allow ARB staff to track 6 the use of these compounds and take appropriate action, if 7 needed. 8 We are also proposing to add or modify numerous 9 definitions subject to the proposed amendments. For 10 example, we are proposing to add definitions for the new 11 categories added to the regulation. 12 We are also proposing to modify the definition for 13 fabric protectants. Although this category is not subject 14 to the proposed Mid-term Measures II VOC limits, we needed 15 to clarify that it does not apply to waterproofing products 16 and products designed solely for use on leather. 17 Finally, we are proposing some miscellaneous 18 changes to improve the clarity of the regulation, such as 19 reorganizing the table of standards and removing outdated 20 reporting provisions. 21 In the next few slides we will describe the 22 changes we are proposing to the original proposal as 23 described in the staff report. We are proposing to modify 24 the VOC limits for the four product categories as listed on 25 the slide based on further analysis of reformulation issues. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 Based on industry comments, we were also proposing 2 to modify the definitions for dilutable and premixed auto 3 windshield washer fluids to reflect that dilutable products 4 are sold in 55 gallon or larger containers. 5 Finally, we are requesting that the board allow us 6 to evaluate the need to expand the Type A areas as defined 7 in our current regulation to include areas not originally 8 covered. 9 Type A areas are areas of the state with colder 10 climates that are allowed to sell higher VOC windshield 11 washer fluid to provide greater protection from freezing. 12 It recently came to our attention that additional high 13 elevation areas of the state may need to be included in the 14 Type A area definition. 15 Okay. Now, I will go through the proposed changes 16 to the VOC limits. 17 We're proposing to increase the original 20 18 percent VOC limit for double-phase aerosol air fresheners to 19 25 percent. The proposed change was made based on further 20 discussion of reformulation issues with the industry. 21 The original proposal for nonaerosol general 22 purpose cleaners and degreasers established a one percent 23 VOC limit for dilutable products and a three percent limit 24 for ready-to-use products. 25 We are now proposing to create a single four PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 percent VOC limit for all products in these categories. 2 Based on technical discussions with industry, this 3 change is necessary to allow for removal of a greater 4 variety of soils, particularly for dilutable industrial and 5 institutional products. 6 Similar to the proposal for general purpose 7 cleaners and degreasers, we are now proposing a single four 8 percent limit for nonaerosol glass cleaners to address 9 concerns related to dilutable products. 10 Now I will discuss the staff proposal for auto 11 windshield washer fluids in more detail. Additional 12 explanation is provided for this category because it is the 13 largest emission source in this proposal and because two 14 manufacturers have expressed concerns about the staff 15 proposal. 16 Auto windshield washer fluid is the largest 17 emissions category in our proposal at over eight tons per 18 day statewide in 1997. 19 The proposed one percent limit for this category 20 would achieve over 40 percent of the total emission 21 reductions from this proposal, at about 3.2 of the 12 ton 22 per day SIP lawsuit commitment for 1999. 23 Auto windshield washer fluids are available in 24 either premixed or dilutable liquids. They are also sold in 25 solid tablet form. And we have some examples for you to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 look at at the back table. 2 Dilutable or concentrated products make up an 3 estimated five percent of the emissions from this category. 4 These products are generally sold in one quart or 5 smaller sizes to consumers or in 55-gallon drums to large 6 commercial customers. 7 As such, the staff proposal defines these products 8 to be sold in one quart or less or 55 gallons or greater. 9 These products require that the user mix the concentrate 10 with water as instructed on the label prior to use. 11 Premixed products make up an estimated 95 percent 12 of the emissions and are most commonly sold in one-gallon 13 jugs that can be poured directly into an automobile's 14 windshield washer reservoir. 15 Some manufacturers have raised concerns about the 16 proposed VOC limit, completeness of the survey data and the 17 definitions of dilutable and premixed auto windshield washer 18 fluids. 19 I will address each of these issues in the next 20 few slides. 21 Two manufacturers have expressed concerns about 22 the proposed one percent VOC limit in the staff proposal. 23 However, many products already on the market currently 24 comply at the proposed limit. Specifically, based on ARB's 25 consumer product survey and shelf surveys, we estimate that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 50 percent of the entire market, including 30 of the 55 2 products reported in the survey, already meet the proposed 3 one percent limit. 4 Another issue raised was the completeness of the 5 survey data. Our survey included about 55 different 6 products. However, after conducting shelf surveys in local 7 stores, we found that some products were not included in our 8 survey. Therefore, we supplemented the survey data with 9 information from other sources to estimate the total 10 emissions from this category. Specifically, we used data 11 from a manufacturer's brochure on the national usage of auto 12 windshield washer fluids and data from the California State 13 Automobile Association on the percentage of national usage 14 by Californians. 15 Our emissions estimate based on this information 16 agrees well with other sources such as the US EPA's consumer 17 and commercial product survey and our SIP inventory. 18 Although our survey did not include all 19 manufacturers, we believe that the survey data adequately 20 represent the formulation technologies used in the 21 marketplace. 22 Some manufacturers have raised concerns regarding 23 the proposed definitions for dilutable and premixed auto 24 windshield washer fluids. As discussed previously, we are 25 proposing to define dilutable products to be sold in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 containers of one quart or less or 55 gallons or greater, 2 and premixed products to be sold in sizes between a quart 3 and 55 gallons. 4 These definitions reflect current industry 5 practice and with very few exceptions would not require 6 manufacturers to change their container sizes or labeling. 7 We believe these definitions are necessary because 8 we are concerned that manufacturers may add California-only 9 dilution instructions on the label of one gallon premixed 10 products to avoid reformulation. Therefore, we are 11 proposing these definitions to preserve the emission 12 reductions from this proposal. 13 Now I will discuss the environmental and economic 14 impacts of the proposed Mid-term Measures II amendments. 15 The proposed amendments would achieve a statewide 16 emission reduction of 18 tons per day based on the ARB's 17 1997 survey. 18 This equates to an eight ton per day emission 19 reduction in the South Coast Air Basin in 2010 based on SIP 20 currency that represents two-thirds of the 12 ton per day 21 SIP lawsuit commitment. 22 As explained previously, SIP currency means the 23 estimated emission reductions based on the 1994 SIP 24 inventory. 25 We have identified one short-term environmental PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 impact to the staff proposal. We are proposing to remove 2 the ten percent VOC limit for nonaerosol general purpose 3 degreasers effective on January 1st, 2001, and replace it 4 with a lower four percent VOC limit effective on December 5 31st, 2004. Removing the ten percent limit will result in 6 excess emissions of about a half a ton per day for a 7 four-year period from 2001 through 2004. 8 However, a four percent limit will result in a .7 9 ton per day greater reduction in emissions than with the 10 existing limit beginning in 2005. 11 We believe it is necessary to remove the ten 12 percent limit, which is not yet effective, to allow 13 manufacturers to focus their reformulation efforts on the 14 lower four percent effort. 15 As seen in this slide, we estimate the cost 16 effectiveness of the mid-term measures to range from 17 essentially no cost to about $6.30 per pound of VOC reduced, 18 depending on the product category. The average cost 19 effectiveness is estimated to be about 40 cents per pound of 20 VOC reduced. 21 Based on our analysis, we found that the Mid-term 22 Measures II proposal is cost effective, relative to similar 23 ARB and district regulations. 24 Now I will briefly discuss how our Mid-term 25 Measures II proposal relates to the SIP lawsuit commitment. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 As mentioned previously, the Mid-term Measures II 2 proposal will achieve an estimated eight ton per day 3 reduction in the South Coast Basin in 2010, based on SIP 4 currency. This will achieve two-thirds, or eight tons per 5 day, of the ARB's 12 ton per day lawsuit commitment in 1999. 6 Now I will discuss some of our plans for future 7 activities related to consumer products and then end the 8 presentation with a brief summary and a recommendation. 9 In order to monitor industry's progress in 10 complying with the proposed limits we will conduct 11 technology reviews for all the VOC limits as their effective 12 dates approach. 13 We will also use the data from our 1997 survey to 14 update the consumer products inventory. 15 We will develop voluntary reactivity-based limits 16 for aerosol paints that take into account the ozone 17 formation potential of individual VOCs. 18 Finally, we will revisit the consumer products 19 component of the State Implementation Plan in the next SIP 20 update. 21 In summary, the proposed VOC limits from the 22 Mid-term Measures II proposal were developed with extensive 23 outreach. All of the limits are technologically and 24 commercially feasible. Also, based on our cost analysis, 25 the Mid-term Measures II proposal is cost effective. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 Finally, the proposal is a positive step towards 2 meeting our SIP commitments. 3 We recommend that you adopt the Mid-term Measures 4 II proposal. 5 This concludes our presentation. 6 At this time we will be happy to answer any 7 questions that you may have. 8 CHAIRMAN LLOYD: Thank you very much. 9 Ms. Ombudsman, would you please address the 10 process prior to today by which the item came before us, and 11 share any concerns or comments that you may have on this 12 item. 13 OMBUDSMAN TSCHOGL: Mr. Chairman, members of the 14 board, the item before you was developed by ARB staff with a 15 substantial public outreach and involvement process. 16 ARB staff invited nearly 3,000 companies and 17 interested parties to attend four workshops that were 18 conducted between March and July of this year. 19 Approximately 50 people attended the first 20 workshop held in ARB's El Monte office on March 18th. 21 Participants included consumer product manufacturers, 22 marketers and trade associations. 23 At three subsequent workshops held in Sacramento 24 on April 14th, May 18th and July 13th, participation ranged 25 between 30 and 50 people, with individuals again PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 representing consumer product, manufacturers, marketers and 2 trade associations. 3 At the request of several industry associations, 4 staff arranged a meeting on June 16th, 1999, to provide an 5 opportunity for industry representatives to present 6 technical information to staff on reformulation of aerosol 7 products. 35 people participated in this meeting. 8 In addition to these large workshops and meetings, 9 staff worked closely with stakeholders through more than 45 10 small one-on-one meetings and conference calls between March 11 and October of this year. 12 On September 14th, staff mailed out notices to the 13 8,000 invitees announcing this hearing and the availability 14 of the staff report. 15 Additionally, the staff report was mailed to the 16 Hot Spots Fee Industry and Environmental Stakeholders Group, 17 and the local air districts, along with the board hearing 18 announcement. 19 ARB staff also posted the availability of the 20 staff report and the notice of today's hearing on ARB's Web 21 site at that time. 22 As you can see, the staff did a good job of 23 reaching out to all appropriate stakeholders and affected 24 parties and involving them in inclusive, deliberative and 25 meaningful public process. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 CHAIRMAN LLOYD: Thank you very much. 2 Board members have any questions for the staff at 3 this time? 4 Yes, Professor Friedman. 5 BOARD MEMBER C.H. FRIEDMAN: I have a quick 6 question. 7 I see a letter dated October 26th from Sherwin 8 Williams Company, addressed to Ms. Brooks, and it, at the 9 end, the second page, raises concerns about the feasibility 10 of the VOC limits for several categories of products they 11 make, crawling bug insecticides, aerosols, furniture waxes 12 and polishes, also aerosols, and dual-phase aerosol air 13 fresheners, that the limits are as proposed are too low to 14 make efficient and effective products. 15 Does the staff have any comment on that? 16 MS. FRY: Since our original proposal we are 17 proposing an increase to the dual-purpose air freshener 18 category due to technical issues raised by industry and for 19 the other categories -- 20 BOARD MEMBER C.H. FRIEDMAN: So your change that 21 you -- 22 MS. FRY: We are changing it. 23 BOARD MEMBER C.H. FRIEDMAN: -- made accommodates 24 this concern? 25 MS. FRY: For the aerosol air fresheners. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 Then for the other categories, the crawling bug 2 category, we are providing the maximum time allowable under 3 the lawsuit agreement for compliance, so they will have up 4 to five years to comply with the proposed limits. 5 BOARD MEMBER C.H. FRIEDMAN: Thank you. 6 MR. VENTURINI: If I may just add, one of the 7 things that's been a tradition with all of our consumer 8 products regulations was mentioned at the end of 9 Mr. Milkey's presentation, that's also incorporated into the 10 resolution, as we conduct prior to the effective dates of 11 any of these limits, basically a technology review to assure 12 ourselves that the technology is available, the 13 manufacturers are making progress towards reformulation and 14 if it's shown to us that there are some problems meeting 15 those limits, then we would bring those back to the board 16 for reconsideration. And we have done that in the past when 17 we've brought certain categories back for adjustment because 18 of technology reviews. 19 CHAIRMAN LLOYD: Thank you. 20 BOARD MEMBER C.H. FRIEDMAN: Thank you. And I 21 also have some questions about the windshield. 22 CHAIRMAN LLOYD: Can I just have a follow-up. 23 How long before the implementation dates will the 24 technology review be conducted? 25 MR. VENTURINI: We typically do those about a year PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 before the date, so if there's a change, manufacturers will 2 have sufficient time. 3 BOARD MEMBER C.H. FRIEDMAN: I'll defer those 4 until I'm sure we have some testimony to hear on that. 5 CHAIRMAN LLOYD: Yes, we do. 6 Mr. Calhoun. 7 BOARD MEMBER CALHOUN: What is the impact on the 8 total tons removed as a result of the changes that you 9 propose today? Is there any difference in the total tons? 10 MS. FRY: About a ton per day in the South Coast 11 in 2010 and overall three tons per day difference statewide. 12 BOARD MEMBER CALHOUN: The second question I have 13 is your change included a provision whereby certain areas 14 could have certain concentrations of windshield washer 15 fluid. And how do you propose to control that? 16 MR. VENTURINI: Mr. Calhoun, the current 17 regulation has in it provisions that are called Type A 18 areas, and these are specific areas in the state that 19 routinely will have high low temperatures in the winter 20 months, and those areas historically we've set a limit of 35 21 percent to provide freeze protection. 22 Just in the last few days we recognized that there 23 may be some additional areas that are high altitude areas, 24 for example like the Big Bear area, that were not included 25 in that Type A definition, and so our proposal to the board PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 was to go back, take a look at whether or not we need to 2 provide an expansion of that Type A definition to cover some 3 of those areas that weren't initially covered. 4 MR. KENNY: I think in direct response to your 5 question, though, with regard to how we actually would 6 enforce that, it is possible that someone could go to a high 7 altitude area and buy high VOC windshield washer fluid, and 8 they could use that in the lower altitude areas, and that 9 does present some problems to us and we do lose some 10 emission benefits. 11 We are relying upon the fact that consumers are 12 probably not going to go out of their way to drive a long 13 distance up to high altitude areas to purchase a product 14 that is not all that expensive and then transport it down to 15 the lower elevations. 16 BOARD MEMBER CALHOUN: Thank you. 17 CHAIRMAN LLOYD: Any more questions? 18 Yes, Dr. Friedman. 19 BOARD MEMBER FRIEDMAN: I have a small question. 20 The presentation made the point, properly, that 21 you don't want to meet the SIP requirements and then at the 22 same time have an increase in toxic air contaminants. When 23 you said that there was going to be some expansion of 24 reporting requirements, I assume by industry, how do we then 25 validate the accuracy of those, of this new amplified report PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 on text that we're going to get? 2 MS. FRY: Well, we have extensive information on 3 the current usage of these compounds, so when we get annual 4 updates we can look at that and how it compares to where 5 they are now. 6 BOARD MEMBER FRIEDMAN: I understand that. But 7 whose data is it? 8 MS. FRY: It's data from the manufacturers. 9 BOARD MEMBER FRIEDMAN: Okay. 10 MR. VENTURINI: One of other things we tend to do 11 is these products have to have on their can an indication of 12 the major ingredients, and so we if we're going to do shelf 13 surveys to give us an indication and to help us verify that 14 the information that we're getting is credible. 15 BOARD MEMBER FRIEDMAN: But we don't independently 16 look for perchloroethylene in something? I mean, it comes 17 off the can or the bottle or the container and -- 18 MR. SCHEIBLE: When we do compliance testing, we 19 can go out into the field and buy the products and take them 20 into our lab and do a complete analysis. So we can tell if 21 a product before didn't contain perc and now contains perc 22 or if it has increased. We have to rely upon the 23 manufacturer for information on the net sales, because we 24 cannot trace how many units were sold. 25 MR. VENTURINI: I was just going to follow up. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 The manufacturer also will have to have data sheets that 2 spell out the material that's in their products as well. 3 CHAIRMAN LLOYD: I think, Dr. Friedman, one of the 4 things that happened in the last month, the lab actually 5 unveiled a new consumer product testing lab where in fact 6 they just do those sort of tests, very impressive facility. 7 Any more questions from the board? 8 I think with that then, we would like to move 9 ahead and call the first witness who has signed up to 10 testify, and that is Michael Thompson. 11 We also have about ten people. So we have Michael 12 Thompson, Catherine Beckley, John Carney, and Bob Hamilton, 13 if they can get ready for testifying. 14 MR. THOMPSON: Good morning, Mr. Chairman. 15 Unfortunately, I have the great pleasure of coming 16 behind Mr. Milkey, who has done an excellent job putting 17 together a presentation, so if at a certain point I'm moving 18 ahead quickly, I'm not going to repeat comments that he has 19 already made. 20 CHAIRMAN LLOYD: Michael, for the record it would 21 be helpful for the recorder if you could identify your full 22 title and -- 23 MR. THOMPSON: My name is Mike Thompson. 24 T-h-o-m-p-s-o-n. I'm vice president of the Chemical 25 Specialties Manufacturers Association. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 CHAIRMAN LLOYD: Thank you very much. 2 MR. THOMPSON: CSMA, just for your information, is 3 a voluntary trade association. We are headquartered in 4 Washington, D.C., and, frankly, we represent most of the 5 categories that are subject to the regulation here today, 6 household cleaning products, institutional, industrial 7 products, automotive products, floor maintenance products 8 and other cleaning compounds. 9 In addition to CSMA we have several other trade 10 associations and companies who have worked cooperatively 11 with ARB staff on this effort. 12 This is not a new industry to this board, nor is 13 it new for a regulatory process. 14 These are the six current regulations that have 15 been adopted in the last decade and we are now facing the 16 seventh regulation for consumer products. 17 The implementation dates for these regulations 18 varied from 1991 through the year 2005. 19 There are 71 standards for your typical consumer 20 products. In addition there are 35 or so for aerosol 21 coatings, with approximately 110 standards that are already 22 on the books, not counting the ones that are being proposed 23 today. 24 They regulate manufacturers, distributors and 25 retailers, right on down the line throughout the channels of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 trade, and many of these are what we are calling, and the 2 staff would agree with the term, technology-forcing 3 standards for the industry. 4 The definition of consumer product is found in the 5 California Clean Air Act, the household and institutional 6 products. And there was a long list of those products that 7 are found in the act, that is the basis by which the 8 authority for the agency to go forward and regulate these 9 products is specifically laid out. 10 In addition to the requirements to regulate 11 products, there are certain other items of guidance that are 12 given to the agency and to the industry, and I will just 13 repeat those basically from our perspective. But you have 14 to achieve the maximum feasible reductions if the state 15 board has adequate data. You shall not adopt regulations 16 unless they are technologically and commercially feasible 17 and necessary and, as Mr. Milkey mentioned, you are barred 18 from banning any product form. 19 In a nutshell what that does is to force the 20 burden on all forms of products, the reductions have to be 21 made across the board equally between various product forms. 22 There was a discussion of the consumer products 23 settlement. This is something which this industry supports 24 and thinks that it is a fair resolution of the situation. 25 The settlement, as we read it, requires five to 12 tons per PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 day reduction in the year 2010 in the South Coast. The 2 board must adopt this by the first or second quarter of the 3 year 2000, and the implementation dates are between 2002 and 4 2004. 5 A few industry concerns. 6 At this time, virtually all of the standards, I 7 think it's 16 of 18 are reregulation of existing products. 8 This is placing a significant burden on those specific 9 products. 10 We view this in effect as to what you are doing is 11 jumping to the long-term measures for those products, 12 because this is in some cases the third or fourth reduction 13 has been made to these products in the last decade. 14 In addition, we will have extensive written 15 comments that we have provided to you. I will not go into 16 all of those comments, but rather these are just a few of 17 the highlights. 18 There is significant cost to the manufacturers to 19 reformulate these products. 20 There will be cost to consumers. 21 And there is another area that we will probably 22 agree to disagree on, and that is on the methodology. 23 According to our information, we feel that it's an 24 underestimation of the overall costs, because it's 25 California-only costs versus nationwide costs that are being PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 borne by manufacturers. 2 We further elaborate on that in our written 3 comments. 4 Enforcement concerns. 5 We would encourage that this is another area of 6 disagreement, that there be no standard below three percent. 7 The enforcement mechanism that this board has approved is 8 ARB method 310, and it is incapable of distinguishing 9 between complying and noncomplying products. This is again 10 a concern we have as we're going forward. 11 The proposed standards. 12 CSMA supports the proposed amendments that were 13 put on the table today as presented by staff. We feel it 14 recognizes the importance of these products. And it's a 15 fair and equitable solution in accordance with the 16 California Clean Air Act. 17 Now to the tough one, the windshield washer fluid. 18 This is the one problem area that has not been resolved. It 19 is, as we all agreed, the largest category in the 20 regulation. It is an integral part of this rule. 21 The new dilutable subcategory is what is causing 22 the greatest concern and the industry will present concerns 23 or additional information, there are two speakers that will 24 be here this morning, that will discuss the initial 25 statement of reasons and will lay out their concerns PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 associated with it. 2 We continue to seek a fair and equitable 3 resolution of this for the benefit of the ARB, the industry 4 and the consumers of California. 5 ARB and industry cooperation. 6 The consumer products industry has and will 7 continue to do our fair share for ozone attainment in 8 California. There are 18 categories that are being proposed 9 for regulation today. 17 of the 18 we do not oppose. 10 ARB staff is to be applauded for their efforts in 11 accomplishing this. It has really been a challenge to do 12 this on a hurry-up basis. Three folks in particular have 13 sort of spearheaded this effort, Janette Brooks, Barbara Fry 14 and Paul Milkey, who gave the presentation, and they have 15 worked long hours in working with us. 16 I would also applaud the comment that Mr. Milkey 17 made about revisiting the SIP. It is very important that we 18 have accurate information for the new SIP and we look 19 forward to working together with the staff. 20 As a side comment also, the Web site that the ARB 21 has has been very productive in that we are reducing the 22 production of documents like this that we take some great 23 time to produce them to us to make copies, et cetera, and it 24 has been very effective. We would encourage that process 25 continue. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 We understand the challenge and we look forward to 2 continuing the good working relationship between the 3 industry and ARB, although we may not be in a hundred 4 percent agreement on all points. 5 Thank you very much. 6 CHAIRMAN LLOYD: Thank you very much. 7 Any questions from the board? 8 BOARD MEMBER CALHOUN: Yes, I have one. 9 CHAIRMAN LLOYD: Mr. Calhoun. 10 BOARD MEMBER CALHOUN: Mr. Thompson, you mentioned 11 the fact that the dilutable subcategory was a problem area. 12 Would you care to elaborate on the problem at this point? 13 MR. THOMPSON: To be honest with you, there are 14 two speakers that are coming. I would much prefer that they 15 address it. They are experts in the area and can make 16 specific comments. 17 BOARD MEMBER CALHOUN: Fine. 18 MR. THOMPSON: I hate to have my comments and then 19 have them repeat it. 20 CHAIRMAN LLOYD: Can you identify them by names so 21 we know? 22 MR. THOMPSON: Yes. There are two companies, they 23 are Prestone Allied Signal, and Pennzoil, who have both 24 signed up. 25 CHAIRMAN LLOYD: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 MR. THOMPSON: And they are marketers of consumer 2 products, so I think you prefer to hear from the marketers 3 on those. 4 Thank you very much. 5 CHAIRMAN LLOYD: No questions? 6 Thank you very much. 7 Next person is Catherine Beckley. 8 MS. BECKLEY: Hi. My name is Catherine Beckley. 9 I'm associate general counsel for the Cosmetic, Toiletry and 10 Fragrance Association. 11 My comments today are a supplement to the written 12 comments that I submitted today to the clerk. 13 CTFA is the national trade association for the 14 personal care products industry in the US. We represent 15 approximately 600 personal care product manufacturers. 16 First, CTFA would like to acknowledge the efforts 17 of the ARB staff in working with CTFA members to understand 18 the serious technical challenges presented in reformulating 19 personal care products used by millions of California 20 consumers. 21 We appreciate that ARB staff responded positively 22 to industry's concerns about whether reformulation was 23 technologically and commercially feasible for several 24 product categories. 25 As to the proposed changes to the consumer product PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 rule, the future limit for hair mousse will be a challenge 2 for many companies and reaching a consensus among CTFA 3 members on the six percent VOC limit was difficult. 4 However, affected CTFA members have agreed to use 5 their best efforts with the new limit to comply with the new 6 limit in the requisite time frame. 7 Regarding the nail polish remover. Under the 8 proposed rule change, all manufacturers of nail polish 9 removers must market a zero percent VOC content product by 10 December 31st, 2004. 11 The current standard is 75 percent VOC. 12 This would be the third reformulation of the nail 13 polish remover category, mandated by California's consumer 14 product rules since 1994. 15 After a lengthy technical debate between industry 16 and ARB staff, affected CTFA members have agreed upon the 17 ARB proposed changes to the current VOC standard for nail 18 polish removers. 19 A third reformulation of the category is a 20 significant commitment by the industry, and the zero percent 21 limit poses substantial technical challenges for certain 22 types of products, especially non-acetone products and 23 acetone-blend products. 24 CTFA members will need the 2004 effective date to 25 overcome the technical challenges in reformulating these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 products. 2 Thank you very much. 3 CHAIRMAN LLOYD: Thank you very much. 4 Any questions? 5 Again, I'd like to just make a generic comment 6 there, we appreciate the difficulty of going down to the 7 zero VOC in 2004. Obviously we think that's a reasonable 8 time, but again you see the direction where we're going here 9 in terms of if you go through a number of iterations or 10 reformulation. And sometimes it's helpful, I think, to send 11 the signal to the industry that's where we're generally 12 heading, so it gives you an opportunity to plan accordingly. 13 MS. BECKLEY: We'll do our best. Thank you. 14 CHAIRMAN LLOYD: Thank you. 15 Next speaker is John Carney. 16 Then Bob Hamilton, Eileen Moyer and Richard 17 Ratcliff. 18 MR. CARNEY: Good morning. My name is John 19 Carney. I'm the group executive in charge of the Automotive 20 Chemical Manufacturers Council. 21 I won't take a lot of your time this morning. 22 ACMC is in agreement with most of what CSMA said 23 earlier. We had worked together closely throughout this 24 entire process. 25 These comments are prepared on behalf of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 Automotive Chemical Manufacturers Council and its member 2 companies. We manufacture and market automotive products 3 affected by ARB's Mid-term Measures II. 4 ACMC is a product line division of the Motor and 5 Equipment Manufacturers Association, a national trade 6 association representing more than 700 manufacturers of 7 motor vehicle parts, accessories, chemicals and related 8 equipment. 9 ACMC and MEMA believe it is appropriate to 10 recognize the formidable undertaking ARB faced in 11 preparation of these regulations and to acknowledge the 12 efforts of ARB staff and/or member manufacturers to reach 13 agreement in many of the automotive product categories. To 14 this extent, we support the position of our manufacturers. 15 While it is customary for ACMC to discuss 16 individual categories separately, I will not do that at this 17 time. I have submitted comments for the record that explain 18 many of these things. 19 While ACMC member companies may have concerns in 20 each category, we have chosen not to oppose the regulations 21 with regard to automotive brake cleaner, carburator and fuel 22 injection air intake cleaner, engine degreaser, general 23 purpose degreaser, glass cleaner and tire sealant and 24 inflater. 25 The industry worked closely with staff and, while PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 not exactly happy to be regulated again, we do not oppose 2 them at this time. 3 The same cannot be said, unfortunately, for the 4 automotive windshield washer fluid category. ACMC strongly 5 objects to this proposed regulation, and we are confused by 6 staff's decision to insert themselves in marketing decisions 7 previously left to individual companies. 8 Page 74 of the statement, I'm sorry, of the staff 9 report states that dilutable concentrates are predominantly 10 found in small containers. 11 Well, this is a true, that is a manufacturer 12 marketer decision. 13 We fail to see how a product contained in 14 one-quart container can be acceptable, while the same 15 product in any other size container may not be. 16 We must take issue with staff's assertion that 17 label directions regarding dilution ratios are unacceptable. 18 ACMC questions the basis for this assertion that 19 is, quote, highly unlikely that typical consumers who 20 purchase dilutable products in large containers would not 21 dilute them as directed. 22 Product formulators rely on these ratios not only 23 in setting VOC levels, but also in testing product efficacy 24 and computing costs to themselves and to the consumer. 25 For staff to arbitrarily toss the ratios aside PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 strikes ACMC as unfair and possibly in conflict with 2 established regulatory procedures nationwide. 3 ACMC appreciates the opportunity to submit its 4 comments on these regulations. 5 While we have some concerns, we do hope that the 6 spirit of cooperation and trust forged between ACMC and 7 staff will extend to future efforts as well. 8 In closing, I strongly support the comments that 9 will be presented soon from Pennzoil and Prestone and stand 10 ready to work with staff to reach an agreement that we can 11 all accept. 12 Are there any questions? 13 CHAIRMAN LLOYD: Thank you very much. 14 BOARD MEMBER C.H. FRIEDMAN: Mr. Chairman, I do 15 have questions, but I hate to do this piecemeal. I think 16 that we're probably going to hear from Pennzoil. 17 MR. CARNEY: That is true. 18 BOARD MEMBER C.H. FRIEDMAN: And the other and 19 they're going to be addressing these same issues with 20 respect to the windshield washer fluids, and I'm wondering 21 if it's possible to put them all together or else I will 22 defer any questions until the last speaker addressing this 23 topic, hoping that he or she can respond at that time. I 24 don't want to ask the same question to the same people. 25 MR. CARNEY: I think we should defer until the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 last two have spoken. 2 BOARD MEMBER C.H. FRIEDMAN: I'll be glad to do 3 that. 4 CHAIRMAN LLOYD: Right. We just have two more. 5 Thank you very much. 6 The next speaker is Bob Hamilton. 7 MR. HAMILTON: Before I begin, in response to your 8 question, there was a meeting last evening and our goal was 9 to gather presentations together in a logical fashion, and 10 the last of the grouping of presentations will address the 11 windshield washer fluid. I realize that you have some 12 questions that are burning, but we will get there. 13 My name is Bob Hamilton. I am a research 14 associate for Amway Corporation. Research associate is a 15 senior position in the science area of research and 16 development at Amway. 17 And I appreciate the opportunity, Chairman Lloyd 18 and members of the board, to address you on behalf of Amway 19 Corporation in response to these proposed amendments for the 20 consumer products regulation. 21 Amway Corporation is a multilevel marketing 22 company which formulates, manufactures and distributes 23 products that include household products, personal care 24 products and industrial and institutional product usage 25 categories. These products are sold by a network of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 independent business owners who are related to the Amway 2 Corporation through an association which is called the Amway 3 Distributor Association. 4 We also have a facility in Southern California, 5 Nutralite Farms and Manufacturing, which is a large facility 6 for the farming and processing and manufacturing of vitamins 7 and food supplements. 8 Amway markets its products nationally and in over 9 50 countries around the world. 10 And since its inception, Amway has been committed 11 to human health and safety and environmental stewardship, 12 while at the same time fostering the best possible business 13 opportunity for Amway distributors. 14 Representatives of the Amway Corporation have 15 participated in the ARB staff and stakeholder meetings as 16 part of the process for developing these amendments to the 17 consumer products regulation. 18 Our goal in these efforts has been to assist the 19 ARB in developing standards that are effective and 20 contributing to ozone attainment, while meeting all of the 21 statutory constraints. These include that the standards be 22 technologically and commercially feasible, are based upon 23 adequate data and do not eliminate any product form. 24 In making these comments, I am representing not 25 only the Amway Corporation, but also the tens of thousands PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 of Amway distributors who live and work in the State of 2 California. 3 While participating actively in the development of 4 these amendments and the Mid-term II process, we had 5 expressed strong concerns regarding the technical and 6 commercial feasibility of further regulation of these 7 consumer product categories. 8 We feel that the reregulation of these categories 9 is in conflict with the proposed original SIP, which stated 10 that the reactive organic gas emissions from these product 11 categories not currently regulated would be the areas that 12 would be in view for mid-term measures. 13 We feel that because the mid-term measures 14 primarily seeks to regulate categories that have already 15 been subject to VOC standards in the State of California, 16 that this is an indication that technical and commercial 17 feasibility is in some doubt for the SIP at large. 18 Amway is concerned that the reregulation of 19 categories is an indication that the 1994 SIP is not a 20 realistic representation of technically and commercially 21 feasible reductions. 22 Therefore, we are strongly encouraging a thorough 23 review of the emissions inventory during the current SIP 24 revision or proposed SIP revision to enable the setting of 25 achievable goals for furthering emission reductions from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 consumer products categories. 2 Further, we specifically encourage the 3 consideration of the advisory capacity of the Reactivity 4 Science Advisory Group, RSAG, and the national Reactivity 5 Research Working Group, RRWG, as well the advisory capacity 6 of the Reactivity Research Advisory Committee. 7 Amway also expresses a concern about the statement 8 within the initial statement of reasons that the exact 9 reductions in ozone and PM 10 cannot be accurately predicted 10 due to the wide variety of factors that impact the formation 11 of ozone and PM 10. 12 We do agree that this is a very complicated 13 assessment and difficult to do. 14 However, we believe that it is incumbent upon the 15 Air Resources Board to make accurate determination of 16 regulatory impacts in order to provide appropriate economic 17 justification. 18 The correct measure of economic effectiveness is 19 cost per mass of ozone and PM reduction, not cost per mass 20 of VOC reduction. 21 The state of atmospheric science is not complete, 22 but we believe that it is sufficient to indicate that there 23 are disproportionate impacts, disproportionately small 24 impacts, from consumer products in both of these areas for 25 the VOC emissions that are being regulated. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 Further, Amway has joined with other members of 2 the industry to make presentations which demonstrate that 3 VOC emissions are substantially reduced when water-miscible 4 VOC solvents are used in applications in which there is a 5 significant component of washed solution disposed of down 6 the drain, so that these VOCs are captured, flushed down the 7 drain, biodegraded and not emitted to the atmosphere. 8 The CARB staff has already acknowledged this 9 technical argument. These findings and scientific 10 principles underlying them must be addressed as a component 11 of the revised SIP insofar as they reduce the VOC 12 inventory -- VOC emissions inventory, excuse me. 13 Amway also participated in a presentation of 14 modeling studies that further support investigation of 15 availability of VOCs for atmospheric reactivity. It is 16 shown that there are many mechanisms that reduce the 17 emissions or re-entrain typical consumer products solvents 18 during use. These mechanisms must be considered before 19 estimating the effectiveness of any VOC emissions reduction 20 strategy. 21 The principle of VOC availability has been 22 recognized as a component of VOC photochemical reactivity 23 assessment by the National Reactivity Research Working 24 Group, on which ARB, EPA, CSMA and Reactivity Science 25 Advisory Committee to CARB, all those scientists who are on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 the RSAG, are all represented. 2 Therefore, Amway strongly encourages CARB to 3 consider the issue of atmospheric availability as a 4 component of the SIP revision. 5 All these comments are captured in a written 6 document that I provided to the clerk. 7 In addition to that, there are comments with 8 regard to the initial statement of reasons which I would 9 like to leave in the docket, but I would like to reflect 10 that at this point they are somewhat moot in that the ARB 11 staff has presented amendments which address these issues. 12 They are for nonaerosol general purpose cleaners, nonaerosol 13 general purpose degreasers and dilutable nonaerosol glass 14 cleaners. 15 We would like to, although some of the proposals 16 that I've made in my written comments are at slight variance 17 with the final staff proposal, we would like to be 18 supporters of that final staff proposal. 19 In conclusion, I'd like to say that Amway has 20 appreciated the cooperative attitude and hard work of the 21 ARB staff while these proposed amendments were being 22 developed. The task has not been an easy one. It's been 23 exceedingly challenging and the time frames have been very 24 very short. 25 However, the staff has been very open and we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 appreciate the openness of this process. It is an excellent 2 process in order to secure the best science to see good 3 discussion of the issues and to come to reasonable and 4 appropriate regulatory conclusion. 5 Amway is willing to accept the proposed 6 recommendations as they affect our products, as challenging, 7 but we believe attainable goals, given the implementation 8 dates that are also included in the proposal. 9 Thank you very much for the opportunity of making 10 these comments. 11 CHAIRMAN LLOYD: Thank you. 12 Any questions from the board? 13 Just a question. I heard you relied strongly in 14 terms of relating the VOC emissions to ambient ozone. Amway 15 obviously being a major distributor, you in essence then 16 with your products will account for thousands of point 17 source of VOC emissions. In order for us to get a better 18 handle, can you provide us the information then, both in 19 terms of location and the source strength of those 20 emissions? 21 MR. HAMILTON: We have been providing information 22 on the sale of our products and on any point source 23 emissions in Southern California for which we are 24 responsible to the board as a routine part of our reporting 25 requirements. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 I have also been actively a participant in the 2 RSAC advisory, have met with the board independently and 3 participated in all aspects of mid-term measures consumer 4 products working group. 5 I am actively involved in the RRWG, which is the 6 federal analogous group. 7 So we have been making every possible effort to 8 accurately reflect the VOC emissions and their impact on 9 ozone production. 10 CHAIRMAN LLOYD: Yeah. I think you know what 11 you're asking, but when you use an urban airshed model, and 12 you're trying to see those emissions and look at mobile 13 sources, it's with current capability it's a nontrivial 14 task. 15 MR. HAMILTON: It is certainly a nontrivial task 16 and yet at the same time we would like to be agents of 17 change as we move from VOC emissions measurements to ozone 18 attainability, which is really the desirable goal. It's the 19 health and safety of California consumers and potential 20 Amway distributors. 21 CHAIRMAN LLOYD: We understand. 22 But that's again you've got the -- unfortunately, 23 you've got sunlight and NOx complicating the issues, so it's 24 a tough act. 25 MR. HAMILTON: We concur. We feel like it's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 important for us to reflect state of the art and of the 2 science and we believe that it moves us further along than 3 the 1994 SIP. 4 CHAIRMAN LLOYD: Well, certainly I know staff 5 wants to do the same thing to base these on the best 6 science, and obviously we're trying to make use of the best 7 science available. And we all need to progress in that 8 area. It's a tough job but -- 9 MR. HAMILTON: And I would not want these comments 10 to reflect that I doubt the staff's desire to do that. I 11 believe that they are fully committed, and we are just 12 trying to be encouragers and facilitators of that process. 13 CHAIRMAN LLOYD: Well, I'm encouraged that you're 14 also participating, which is great. 15 I would like to ask staff one comment there which 16 you raised, and that is that reregulation may be in conflict 17 with the SIP. Maybe Mr. Kenny could respond to that or 18 Kathleen. 19 MR. JENNE: The SIP provides sort of a blueprint 20 of how we propose to proceed, but there isn't any legally 21 binding restriction that allows us to go faster than what's 22 in the SIP or to use strategies that we thought maybe would 23 be used during the long-term measures and the mid-term 24 measures. 25 I don't think anything we've done today is in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 conflict with the SIP, because the overriding principle is 2 that we're supposed to be getting the maximum feasible 3 reduction in VOC emissions. 4 MR. HAMILTON: If I might make a clarification. 5 My statement was not intended to be a legal 6 statement, but rather to reflect on technical and commercial 7 feasibility, that if we couldn't meet that goal, which was 8 stated in 1994, then perhaps it was an indication that 9 technical and commercial feasibility of that '94 SIP is 10 being challenged and therefore should be reviewed. 11 CHAIRMAN LLOYD: I see. Thank you for 12 clarification. Thank you very much. 13 Next is Eileen Moyer. 14 MS. MOYER: Good morning, Mr. Chairman and ladies 15 and gentlemen of the board. My name is Eileen Moyer. I am 16 director of regulatory relations for Reckitt and Colman Inc. 17 Reckitt and Colman manufactures a broad range of 18 consumer products, marketed nationally for use by 19 homeowners, commercial establishments and public and private 20 institutions. 21 We currently market products that fall into 20 of 22 the existing regulated product categories. 23 Our portfolio products includes a number of 24 well-known brands such as Wizard aerosol air fresheners, Old 25 English furnisher polish, Glass Plus glass and surface PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 cleaner, Easy Off glass cleaner, and Glass Wax glass 2 cleaner. 3 All of these brands are impacted by the amendments 4 to the consumer product regulations under consideration 5 today. 6 All of these brands have been reformulated in the 7 past to meet previously adopted CARB VOC standards. 8 It should be noted that this will be a third time 9 in less than ten years that our glass cleaners will have to 10 be reformulated to meet CARB standards. 11 Reckitt and Colman recognizes the challenge that 12 the Air Resources Board faces in identifying opportunities 13 for VOC emission reductions from a wide range of sources. 14 However, the 20 percent VOC limit that was 15 initially proposed for double-phased aerosol air fresheners 16 in the September 10th, 1999, regulatory notice, would have 17 resulted in the elimination of this product form. 18 We have worked cooperatively with the ARB staff to 19 provide additional information that would assist them in 20 reevaluating this proposal. 21 Today's revised proposal of 25 percent VOC for 22 double-phase aerosol air fresheners will still present 23 significant technological challenges to Reckitt and Colman. 24 The path to reducing our VOC content to 25 percent 25 is not clear. However, given the compliance date of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 December 31st, 2004, we feel that we will be able to meet 2 the limit either through reformulation, packaging 3 modifications or a combination of both. 4 With today's revision it is clear that the ARB 5 staff has recognized that product reformulation is as 6 complex as developing a new product and may actually require 7 the development of a new product to replace an existing one. 8 We also want to point out that we are facing 9 technological challenges in meeting the 17 percent VOC limit 10 for furniture polishes and four percent limit for glass 11 cleaning products. 12 In the case of Glass Wax, a niche specialty 13 product, it was extremely difficult to reformulate this 14 product to meet the six percent VOC limit that went into 15 effect in 1996 because of the special requirements of the 16 formula. Reducing the VOC level in this product any further 17 will truly jeopardize the commercial viability of the 18 product and the likelihood exists that we will be prohibited 19 from selling this product in California after December 31st, 20 2004. 21 We do not expect the reformulation of our other 22 glass cleaners or furniture polish to be accomplished 23 easily, but we feel that we will be able to manufacture 24 compliant products by the proposed compliance dates. 25 Reckitt and Colman appreciates the opportunity to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 comment on the proposed amendments to the consumer products 2 table of standards. 3 And I would like to commend the staff for the work 4 they've done in this regulatory process. They have worked 5 cooperatively with us to obtain the appropriate information 6 that they have needed to make the educated decisions that 7 resulted in today's proposal. 8 We commit to continue working with the ARB staff 9 as they move forward with the 2000 State Implementation 10 Plan. 11 Thank you very much. 12 CHAIRMAN LLOYD: Thank you very much. 13 Any questions? 14 Thank you very much. 15 I guess now we have the two long-awaited 16 witnesses, Richard Ratcliff and William Mercer. 17 MR. RATCLIFF: Mr. Chairman and members, my name 18 is Richard Ratcliff, and I represent Pennzoil Quaker State. 19 I'm glad to be here this morning and good morning to 20 everybody. 21 I'm going to take advantage, I think, of the fact 22 that there are witnesses behind me -- there is a witness 23 behind me and the manner in which you have approached this 24 seems to make a lot of sense in terms of trying to pull 25 everybody together in terms of dealing with the issues that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 are presented. 2 That being the case, I'd like to indicate that I 3 passed or gave to the staff a copy of testimony that was 4 prepared for me to give today, and in addition written 5 submissions which raises the issues and concerns that we 6 have. 7 And since you have those or have access to them, 8 I'm going to highlight it and then I'll step down and let 9 you get on with it. 10 First of all, I think people are generally 11 familiar with who Pennzoil Quaker State is. It's a 12 combination company at this point with two lines of products 13 which are being merged and two companies are being merged. 14 Out of that, there's a long list of products, 15 employees and the rest, which are included in the statement. 16 Let me focus on this thing that gives us the most 17 concern, and that's the proposed automotive windshield 18 washer fluid regulations that are proposed in the rule 19 before you. 20 We have two concerns. 21 One is the proposed one percent VOC limit for 22 automotive windshield wiper fluid sold in non-Type A areas 23 and the method of calculating compliance for dilutable. 24 And the second is the proposed container size 25 restriction. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 Just so you understand, it's our feeling that the 2 goals that are before the board and have been the goals that 3 the staff has been wrestling with are appropriate goals, and 4 we think they are goals that can be met with regard to these 5 products, among others. 6 We think, however, that there are ways and means 7 of approaching and reaching those goals which may differ. 8 And I think our focus at this point, and there are 9 some suggested changes to the regulation that I'm frankly 10 not going to spend a lot of time on, because I don't think 11 this is the purpose of the meeting. 12 But we would like to see if we can continue 13 working and see if we can reach a resolution of this such 14 that the goals are met and they're met in a manner that the 15 compliance is easier for both those of us who produce these 16 materials and the consumers that expect to buy them. 17 And it has to do I think with a lot of the 18 definitions and lot of the work that was done that led up to 19 the statement of reasons. 20 But other than these two issues, we'd like to see 21 I think the VOC limit at three percent rather than one 22 percent. 23 We would like to see something done with regard to 24 container requirement, just as an aside. 25 Being in this business, we have dealt with many PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 efforts by the State of California and others to try and 2 reduce the waste stream problem, and one of the things that 3 has given some access to success in that area is the use of 4 dilutables, and if you in effect set up a barrier to 5 dilutables, which we feel is done by this proposal, then 6 what you end up doing is promoting more products into the 7 waste stream. 8 And we feel that this and the related impacts are 9 such that there is an adverse effect. 10 So basically at this point I think you know what 11 our concerns are. They are represented by the staff in 12 their initial presentation. And I think the comments that 13 you've heard from CSMA and others, there's a steady stream 14 and line of concerns that have been expressed in terms of 15 approach. I think everybody is kind of consistently 16 supportive. But in this particular area we think that there 17 are problems which can be met in a different way. 18 At this point, I think what I'll do is step down 19 and ask if there are any questions now as a matter of form, 20 but be available for questions after the next testimony. 21 CHAIRMAN LLOYD: Thank you. 22 Any questions or we're going to wait? 23 BOARD MEMBER CALHOUN: He's going to be available 24 after the next person. 25 CHAIRMAN LLOYD: Yes, that's fine. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 Let's take William Mercer. 2 MR. MERCER: Good morning, Mr. Chairman, members 3 of the board. My name is Bill Mercer. I'm director of 4 research and development at the Prestone labs. 5 Prestone is responsible for marketing automotive 6 consumer products. We are now part of Allied Signal 7 Corporation. Specifically we're in the consumer products 8 group of Allied Signal Corporation. The consumer products 9 group markets automotive products under brand names such as 10 Fram, Auto Light and Prestone. We are part of a 11 multinational company that produces aerospace products, 12 services, chemicals, fibers, plastics and advanced 13 materials. We have over 70,000 employees in 40 countries 14 around the world. In California alone we have over 4,000 15 employees at 40 locations. 16 As director of R and D, I'm responsible for the 17 development of the products that are marketed under the 18 Prestone brand name. That is, we make the formulas that go 19 into the containers that deliver the performance that we 20 promise by our labeling. 21 I'd like to take this opportunity to comment 22 briefly verbally on some issues that we have specifically 23 with the windshield washer fluid rulemaking and to serve as 24 that, I don't know whether sacrificial lamb is the correct 25 term, but as the person designated to answer the questions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 that have not yet been answered. 2 And I will certainly do my best to answer those 3 questions, and any questions that I can't answer at this 4 time I'd be more than willing to go back and get answers and 5 provide written answers to those questions. 6 First, I'd like to start off and say that we 7 generally echo the comments made by CSMA, ACMC, and Pennzoil 8 Quaker State. 9 We'd also like to thank the ARB staff for their 10 cooperative efforts as we have tried to work this out, and 11 we really I think on both sides have tried to work this out, 12 and it is indeed unfortunate that at this point we have not 13 yet been able to come to the resolution that we have seen in 14 all the other product categories. 15 I might add at this point that we do market 16 product that fall into other categories regulated by the Air 17 Resources Board, and we have been able to come to agreement 18 with the ARB staff in those other categories and formulate 19 products that meet standards. 20 In fact, the product I'm going to talk the most 21 about today does in fact meet the current standard for 22 windshield washer fluids. 23 We have three main concerns with the proposal. 24 We have concern with the adequacy of the data that 25 was used to establish the inventory. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 We have concerns that the proposed regulation will 2 not be commercially and technically feasible. We believe 3 that it will result in the ban of a product form. 4 And we have real concerns about the proposed 5 amendment with respect to dilution language. 6 I'd like to talk about those in somewhat more 7 detail. 8 With respect to the inventory data, the Air 9 Resources Board staff has carried out surveys to determine 10 the size of the market for windshield washer fluids, to 11 determine the number of complying products, to determine the 12 complying market share percent, et cetera. 13 They state in their ISOR that those surveys 14 generally did not provide adequate information with which to 15 make a determination. 16 They have presented today information that 17 suggests that they have augmented the data available from 18 those surveys with information from shelf surveys, and also 19 indicated in the ISOR that they have augmented that 20 information with sales information that we provided in a 21 sales brochure. 22 We feel that the staff acknowledges that the 23 surveys were inadequate and feel that more work is needed to 24 establish what the actual emissions are in this category and 25 what the potential emission reductions are. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 We do not believe that the combination of the 2 survey with some sales information that we provide to our 3 customers to give them an idea of the size of the market is 4 that the combination of that data gives a scientifically 5 defensible analysis point. 6 We also don't believe that the survey data that 7 they did with respect to their shelf survey gives an 8 example, true example, of the products and the VOC levels in 9 those products. 10 For instance, staff states that they went out and 11 did a shelf survey and that if a product did not make a 12 claim for freeze protection, they assumed that the VOC level 13 was zero. 14 We note that for at least our product and others 15 that we have surveyed that that is not true. 16 We may specifically direct our consumers that they 17 should not use our product, which does contain approximately 18 eight percent VOC, should not use it in subfreezing 19 temperatures, because the freezing protection afforded by 20 that formula, that eight percent VOC level, is not 21 sufficient to prevent freezing. 22 The assumption that -- and that is really a 23 fundamental part of their assumption where they get to a 24 five percent average VOC level for sales in the State of 25 California. We do not feel that they were able to really PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 get to that point using that method of analysis. 2 In summation, we think that the emissions 3 reductions and emissions inventory is inadequate to support 4 this rulemaking. 5 Further, the proposed regulation essentially 6 eliminates a product form, and I don't know, before I got 7 into this category discussion, I thought windshield washer 8 fluid was windshield washer fluid, was windshield washer 9 fluid. And it turns out that it's not. We've heard today 10 from staff that there are at least three different types of 11 windshield washer fluid. There's those that prevents 12 freezing, that's a 35 percent fluid in Type A areas. We 13 have that sold in non-Type A areas, which is normally a 14 concentrate, a premix, a ready-to-use product. And there is 15 a dilutable product that one would have to add water to to 16 be able to use. 17 We would suggest that there's at least one other, 18 a fourth, and that would fall into the windshield washer 19 fluid category in the ten percent, currently regulated at 20 ten percent, and that would be a premium windshield washer 21 fluid, those fluids utilize VOCs not to provide freeze 22 protection, because, as I said before, the amount of VOC in 23 those products is inadequate to provide the freeze 24 protection, but rather to provide superior cleaning 25 performance. That is, during the course of driving, one can PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 acquire bugs, one can acquire tar, one can acquire all sorts 2 of road grime and various other things. 3 Windshield washer fluids that are essentially dyed 4 blue water, those that are one percent VOC or less, are not 5 adequate to remove all of those materials. 6 Premium windshield washer fluids utilize the VOC 7 level allowed in the current regulation to remove that 8 debris from the windshield in fairly difficult condition. 9 The residence time of the cleaner on the windshield is very 10 short, while one is driving. The mechanical action afforded 11 by the windshield wipers is actually much less than you 12 would get, say, using a regular glass cleaner and a cloth or 13 a piece of paper. 14 So under very difficult conditions the windshield 15 washer fluid is being asked to remove debris and provide 16 effective visibility to drivers at the time when they need 17 it the most, when they're driving. 18 We feel that the premium products marketed by us 19 and others afford that performance. The proposed limits 20 will not allow us to deliver that performance in our 21 products. It's technologically a very difficult area to 22 work in and a technologically very difficult goal to get to. 23 And in fact staff presents a couple of proposed 24 formulations and states that they specifically are -- would 25 be compliant with the new proposed regulation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 We went through and looked at those formulations, 2 went out to the manufacturers' Web site, and discovered that 3 in fact the components used in those formulations are VOCs, 4 and those formulas would not be compliant with the proposed 5 regulations. 6 So it really is a complicated and difficult 7 technical issue to get a handle on. 8 Finally, I'd like to talk about the dilution 9 language. 10 We feel that the amendment changing the dilution 11 language arbitrarily treats windshield washer fluids 12 different than any other dilutable product that ARB 13 regulates. There is no other situation where ARB says that 14 a dilutable product must be in a certain size container. 15 And as Mr. Carney said, that takes a marketing 16 decision and puts it squarely in the hands of ARB staff. 17 In addition to disagreeing with the idea behind 18 that, we also disagree with the basis offered for this 19 exception. The basis essentially is that consumers do not 20 read product labels, and that they will take a dilutable 21 product in a container larger than a quart or smaller than 22 55-gallon drums and just dump it directly into the 23 windshield washer reservoirs and not achieve the emissions 24 reductions desired by this rulemaking. 25 We have reason to believe in other products PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 categories that consumers do read labels. We maintain a 800 2 hotline for consumer questions and we routinely field 3 questions from consumers based on their reading of the 4 labels. 5 Further, in the State of California we sell, 6 market two different types of antifreeze products, one a 7 premixed product, which is 50/50 with water that can be 8 added directly to the cooling system, and more generally our 9 Prestone yellow jug product, which is a concentrate product 10 and must be diluted before being used in the cooling system. 11 We have no evidence of consumer confusion over 12 whether one is supposed to be diluted before use or one is 13 not supposed to be diluted before use. 14 All evidence that we have suggests that consumers 15 read the labels, they understand from the principal display 16 panel where the distinctions are made between those two 17 products, that they need to treat them differently and they 18 do in fact treat them differently. 19 In conclusion, we think there are considerable 20 issues with this rulemaking. We feel that the staff and the 21 board need to reexamine this. We continue to be willing to 22 work with staff to come up with a product that will allow 23 reductions in VOC emissions. We do feel that there is some 24 room below the ten percent for premium products and we will 25 be glad to continue to work with staff to be able to come up PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 with a compromise on this. 2 Questions? 3 CHAIRMAN LLOYD: Thank you very much. 4 Questions? 5 Mr. Calhoun. 6 BOARD MEMBER CALHOUN: Mr. Mercer, as I read your 7 statement, and I think that I read the same thing in the 8 previous person's statement, that the one percent 9 concentration would effectively ban the sale of your 10 product. What evidence do you have of that to support that? 11 MR. MERCER: Because our products, because we do 12 not feel that we can get the premium performance for our 13 products at the one percent level. If we -- if the 14 regulation is passed, we will be obligated, if we wish to 15 sell in the State of California, to meet the one percent 16 limit. Since we do not feel that we can deliver the 17 performance required of our products to meet our label 18 claims, we will be unable to sell the product in the State 19 of California. 20 In other words, we have internal standards for 21 performance. We have external standards mandated by our 22 customers and our competitors, and external standards 23 mandated by the fact that we are a national marketer of 24 products and are subject to increased regulatory scrutiny. 25 BOARD MEMBER CALHOUN: What percentage of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 market, if you know, consists primarily of premium product? 2 Of the total market, how much are we talking about? 3 MR. MERCER: I'm sorry I can't answer that 4 question. I can try and find that out. I have in fact 5 tried to find that out. 6 Staff is not the only one who has difficulty 7 assessing the size, shape and completion of the California 8 windshield washer fluid market, so without being able to 9 determine exactly what the sales of the market are, and then 10 being able to go out and analyze product and look at to 11 determine whether they do in fact meet the performance 12 claims, we would really be unable to give a good answer to 13 that question. 14 BOARD MEMBER CALHOUN: You raise some concern 15 about the dilutable aspect of the proposed regulation. Are 16 you familiar with the innovative products provision of these 17 regulations? 18 MR. MERCER: I am to a limited degree, yes. 19 BOARD MEMBER CALHOUN: And is that procedure 20 something that you would consider in deciding whether or not 21 your product would be acceptable as far as California? 22 MR. MERCER: It is something that we are willing 23 to consider. Such an innovative products exemption would 24 require significant amount of work and a significant amount 25 of data provided to the board to be able to get such an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 innovative product -- 2 BOARD MEMBER CALHOUN: But you would not be 3 opposed to doing that? 4 MR. MERCER: No, we would not. 5 CHAIRMAN LLOYD: Yes, Dr. Friedman, Professor 6 Friedman. 7 BOARD MEMBER C.H. FRIEDMAN: I've been biding my 8 time to ask questions. 9 MR. MERCER: I was hoping that you had forgotten. 10 No. 11 BOARD MEMBER C.H. FRIEDMAN: I want to be sure I 12 understand the distinctions you're seeking to be made here. 13 Let me ask you this. Are there windshield washer 14 products commercially available that contain no VOCs? 15 MR. MERCER: To the best of our knowledge there 16 are, yes. 17 BOARD MEMBER C.H. FRIEDMAN: They do have no VOC. 18 And are they reasonably effective? 19 MR. MERCER: We have not carried out -- we have 20 not evaluated those products. We typically benchmark our 21 product against those products which we consider to be our 22 competitors, and our competitors in the marketplace would be 23 the premium products. 24 BOARD MEMBER C.H. FRIEDMAN: So you really haven't 25 compared or contrasted the effectiveness of your products, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 which I gather you're defining as premium products, they 2 have superior, as you put it, cleaning ability. 3 MR. MERCER: We have demonstrated the cleaning 4 ability of our products. 5 While we have not specifically gone out and 6 evaluated non-VOC products, there are data contained in 7 product formularies which compare the performance of 8 essentially VOC products to what we would consider to be 9 premium products, although not necessarily ours, and those 10 data, which we provided to the staff, do demonstrate that 11 there is a significant decrease in visibility associated 12 with cleaning standard soils with water only or very low VOC 13 products. 14 BOARD MEMBER C.H. FRIEDMAN: So therefore less 15 cleaning ability? 16 MR. MERCER: That's correct. 17 BOARD MEMBER C.H. FRIEDMAN: For soils or tar or 18 bugs or whatever? 19 MR. MERCER: Yes, sir. 20 BOARD MEMBER C.H. FRIEDMAN: Is it your 21 conclusion, or should we -- are you asking us to conclude 22 you can't get superior performance, as you described it, 23 without using ingredients that do contribute to polluting 24 the air? 25 MR. MERCER: That's correct. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 BOARD MEMBER C.H. FRIEDMAN: So the tradeoff has 2 got to be -- 3 MR. MERCER: The question would be -- I'm sorry to 4 interrupt -- but the question really would be how much of 5 that one percent product do you need to use to get to the 6 same level as the performance afforded by the higher VOC 7 product, which goes to Mr. Calhoun's question, and we have 8 not, I'm afraid, done those studies. 9 BOARD MEMBER C.H. FRIEDMAN: Has anybody done 10 tests that compare water, soap and water or non-VOC 11 containing soap or blue water or whatever you described it? 12 MR. MERCER: One of the problems that you run into 13 with trying to put those things, which, when the solvent, 14 water, dries are solid, is that you leave now, your cleaning 15 solution leaves debris on the windshield, on the rest of the 16 windshield, and can run down into the windshield with drips. 17 So something like soap is going to leave a debris 18 on the windshield in the non-swept areas and potentially 19 move into the swept areas and perhaps makes things actually 20 worse. 21 So the idea is that you need to get something that 22 dries completely and does not leave solids behind. 23 So it is indeed a challenge. 24 BOARD MEMBER C.H. FRIEDMAN: The cleaning, the 25 cleaned windshield is only the part that is swept and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 reached by the wipers. 2 MR. MERCER: That's correct. But if you notice 3 that very often after you use your wipers there is still 4 residual water or residual solvent left in the non-swept, 5 which requires more use of the windshield wipers. 6 BOARD MEMBER C.H. FRIEDMAN: You're suggesting 7 that's one of the superior attributes of -- 8 MR. MERCER: It does not -- 9 BOARD MEMBER C.H. FRIEDMAN: It doesn't drip? 10 MR. MERCER: Our products would not contribute to 11 decreased visibility in the non-swept areas. 12 I realize that primarily vision is done through 13 the swept areas, but there is still some done in the 14 non-swept areas that you need to be able to see in more than 15 just the swept areas. It's advantageous to be able to see 16 in more than just the swept areas, if at all possible. 17 BOARD MEMBER C.H. FRIEDMAN: I guess I'm missing 18 something. You're suggesting that if the sprayer is aimed 19 right or works as you are suggesting, I guess it should, it 20 will spray the entire windshield or more of it than is 21 swept? 22 MR. MERCER: I personally have followed many cars 23 down the road and not been using my windshield washers and 24 gotten wet, because the car in front of me it's not aimed 25 correctly. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 BOARD MEMBER C.H. FRIEDMAN: I sometimes wondered 2 whether if I didn't get my windshield washed free. 3 MR. MERCER: They often don't aim properly. So 4 they're -- you do get spray all over the place. 5 BOARD MEMBER C.H. FRIEDMAN: I could be wrong, but 6 it seems to me that really in terms of the public interest, 7 the tradeoff is between the emissions that are created, the 8 additional emissions, or we get cleaner windshields, 9 potentially. 10 MR. MERCER: But the tradeoff -- 11 BOARD MEMBER C.H. FRIEDMAN: I don't know how much 12 cleaner or how much more quickly cleaner. 13 MR. MERCER: I would agree that the tradeoff is 14 exactly that, is that you get, while you are driving, when 15 you need to be able to see, you get cleaner windshields. 16 There's no argument that if you had -- we would 17 never make an argument that you couldn't get to a clean 18 windshield. Obviously, if you used an ineffective product 19 you could take a glass cleaner and go home and clean your 20 entire windshield and the next time you went out you would 21 have a clean windshield. But that would be the next time 22 you went out. 23 BOARD MEMBER C.H. FRIEDMAN: Of course if it 24 really gets dirty, you need to clean it, you pull over or 25 you go into a gas station and you really clean it, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 that's when you can use something that comes from you, if 2 you don't have any other liquids available, or you can use 3 what you have. 4 But in terms of commercial use, is there any data 5 on how often people need to clean really dirty windshields 6 while they're still driving using windshield wipers and wash 7 solutions, as opposed to just, you know, road dirt and after 8 a rain there's spots or while it's raining trying to clean 9 off -- 10 MR. MERCER: If you drive through areas where 11 there's significant numbers of bugs, you need to clean your 12 windshield regularly. I personally have driven through 13 areas where I have emptied a bucket going on a 200-mile 14 drive, because of the amount of bugs on the windshield. 15 BOARD MEMBER C.H. FRIEDMAN: I had one other 16 question on the dilution issue. It's really more of staff, 17 maybe we can wait. 18 CHAIRMAN LLOYD: Yeah. 19 Ms. D'Adamo. 20 BOARD MEMBER D'ADAMO: Yes. I had some questions 21 about the superior nature of these products. 22 This would be required, you're saying, when you're 23 in an area where there are a lot of bugs. You also mention 24 debris. 25 MR. MERCER: Road tar where there's construction PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 going on and there might be tar put down on the road. 2 BOARD MEMBER D'ADAMO: Because I notice that one 3 of the products, and I don't know who makes the product, but 4 one of the products over there that is on the shelf that 5 says that it's not complying or noncomplying indicates that 6 for debris and bugs that are dried on that you would have to 7 apply with water liberally. 8 MR. MERCER: That might likely be our product, 9 which is designed to convince consumers that if they're 10 going to get residue off the windshield, time is of the 11 essence. They need to do it as those, especially bug 12 residues, dry protein is very difficult to remove, they need 13 to move quickly. If they let the bugs build up, it's going 14 to be very much more difficult to remove. 15 BOARD MEMBER D'ADAMO: I guess it gets back to -- 16 MR. MERCER: It's not to say that if they do 17 remove -- if they do move quickly that it doesn't come off. 18 They do come off if you do move quickly, it's just that if 19 you let them sit on the windshield for a period of time, it 20 may be difficult. 21 BOARD MEMBER D'ADAMO: I guess probably is 22 somewhat repetitive, but if you move quickly, then I'm 23 having a hard time distinguishing whether or not necessarily 24 a superior product would be needed. 25 MR. MERCER: Water does not solvate protein. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 BOARD MEMBER D'ADAMO: I'm not referring to water, 2 but some of the other products. 3 MR. MERCER: I think you will find that the 4 non-VOC products are essentially water and blue dye and 5 perhaps a tiny amount of surfactant. 6 BOARD MEMBER RIORDAN: A tiny amount of what? 7 MR. MERCER: Surfactant, something that will allow 8 things to be perhaps removed from the surface, like a 9 detergent. 10 BOARD MEMBER D'ADAMO: But if you move quickly -- 11 well, you haven't done studies, so I guess you wouldn't be 12 able to answer that, but if you move quickly, which is what 13 is required of one product, it's hard for me to say which -- 14 MR. MERCER: There's nothing -- there's a priority 15 that, there's nothing that you would expect to dissolve 16 those remains in those formulas. Since they're mostly 17 water, virtually all water, there's nothing there that would 18 effectively dilute or solvate those residues. 19 BOARD MEMBER D'ADAMO: I didn't realize I was 20 buying basically water all these years, not getting a good 21 bargain. 22 A few questions on dilutables. 23 Now, you're speaking for some of the other 24 witnesses that came before you as well. I don't know if you 25 can answer this or not. But does your company and the other PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 companies that spoke before you, do they sell dilutables 2 right now? 3 MR. MERCER: We have sold in California a 4 dilutable product with label recommendations to be diluted. 5 We have -- we do not currently offer that in our 6 catalog. We sell two products -- well, we sell one product, 7 one is going to be introduced in the next month or so, that 8 are designed to be added to the reservoir to augment either 9 the freeze protection afforded by an ordinary blue fluid, so 10 that would be a relatively high-VOC product, not designed to 11 be diluted, but -- not designed to be diluted in the 12 classical sense that you would take this and empty it into a 13 empty windshield washer reservoir and then fill it up with 14 water, rather they're designed to be added on top of 15 existing fluids and boost the performance of those. One is 16 designed for additional freeze protection in the winter and 17 one is designed for additional cleaning performance in the 18 summer. 19 BOARD MEMBER D'ADAMO: And the products that you 20 sell in California right now, the ones that are dilutable, 21 not the ones that you would augment in another product, you 22 don't? 23 MR. MERCER: It's not to say that there may not be 24 some products remaining on the shelf that have been on the 25 shelf for long periods of time, but we do not offer them -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 BOARD MEMBER D'ADAMO: By your company? 2 MR. MERCER: We do not offer in our catalog and 3 have not offered them in our catalog for -- 4 BOARD MEMBER D'ADAMO: What size were those 5 containers when you did offer them? 6 MR. MERCER: 24 ounces, in that vicinity. There 7 are some that we've offered perhaps -- I believe that's 8 approximately. 9 BOARD MEMBER D'ADAMO: And the other companies, I 10 don't know if you can speak for them. 11 MR. MERCER: No. 12 BOARD MEMBER D'ADAMO: Could anyone else speak to 13 that, if you offer dilutables and what containers they're in 14 right now. 15 MR. RATCLIFF: Richard Ratcliff again, for 16 Pennzoil and Quaker State. 17 Generally I think the answers that Mr. Mercer has 18 given are pretty much the answers that apply to Pennzoil's 19 products also, although I think it's clear, at least my 20 understanding is that we do sell dilutables, and that one of 21 the questions that arises is really how you measure 22 compliance. And if you've got a product where it's a ten 23 percent requirement or under ten percent as of now, and the 24 standard is changed, then the question is how do you get to 25 a measurement then that complies. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 And I think that from our perspective, the 2 dilutable approach is one way in which you can in an 3 efficient manner from the commercial side and also an 4 efficient manner from the air quality side reach the desired 5 result. 6 BOARD MEMBER D'ADAMO: But as far as the container 7 size? 8 MR. RATCLIFF: The container size it's a gallon, 9 on a general basis, and I think there's some others that are 10 kind of in that range. 11 I think the problem of going to a quart is 12 something which presents a problem, I think, because if you 13 think of the fact that you're dealing with in one category 14 with the commercial users and the 55-gallon provision takes 15 care of that person, but with regard to the consumer when 16 you go to a quart you're relegating them to buying in 17 relatively smaller quantities, and I think their patterns as 18 we see them are to look at a gallon potentially as being 19 something that they feel is an efficient effective purchase. 20 BOARD MEMBER D'ADAMO: I know I myself have seen 21 the dilutables in smaller containers. That's why I at first 22 glance this seemed appropriate, because it's what I'm used 23 to seeing. 24 MR. MERCER: I believe there's one next to kind of 25 the -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 BOARD MEMBER D'ADAMO: Perhaps could staff respond 2 to it if you've surveyed -- 3 BOARD MEMBER FRIEDMAN: How many quarts does a one 4 quart of the dilutable make up with water? 5 MR. MERCER: It depends on what level you're 6 requiring it to be diluted to. 7 BOARD MEMBER FRIEDMAN: To the level that we're 8 asking you to comply with. 9 MR. MERCER: I'm sorry? 10 BOARD MEMBER FRIEDMAN: Well, I think that's a 11 fair question. You all stated that you have a problem with 12 these quarts, gallons, this, that and the other thing. And 13 in the dilutable, now you're telling me you have an option 14 because you have directions on these dilutables as to how 15 much to use? 16 And I'm asking you then what are the other 17 volumes? 18 MR. MERCER: Let me, if I can go back and give a 19 little bit of history about the dilutable language. 20 I believe that the reason that the amendment came 21 up is that we went in and asked staff if it would be 22 possible to make use of the existing dilutable language to 23 achieve for California a desired level of VOC in the 24 product. 25 What we would do is put on our existing product, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 we would not change the VOC level in our existing product or 2 we might formulate it down a little bit if we had to, we 3 would put directions on the principal display panel that 4 said this product, if it is used in California, should be 5 diluted four to one, five to one, six to one, something. 6 BOARD MEMBER FRIEDMAN: That's what I was asking. 7 MR. MERCER: And we asked if we could come to a 8 compromise with our existing gallon bottle and say, all 9 right, we think that you will get better performance if you 10 use it at eight percent, and we would continue to sell it 11 nationwide at eight percent, but we would tell California 12 consumers that if you diluted it to whatever percent we 13 agreed to, that you can still get reasonably good 14 performance and meet the emissions reductions desired by the 15 Air Resources Board. 16 It was a simple attempt to try to come to a 17 compromise. 18 The result was that it was felt that consumers 19 would ignore the label directions, and that they would 20 continue to use the product as they have used it and just 21 dump it straight into the washer bottle. 22 And, thus, our attempt to come to a compromise 23 became an amendment to the dilution language applying only 24 to automotive windshield washer fluids that would say, no, 25 you actually -- we will absolutely not accept that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 compromise. 2 And so we are perfectly willing to talk about 3 dilution language and things like that to achieve the 4 emission reductions that are necessary. 5 BOARD MEMBER FRIEDMAN: Just work with me a little 6 here. What's the capacity of the windshield wiper fluid 7 system in my car, regular car? Is it a gallon? It's 8 probably in quart range. 9 MR. MERCER: It ranges. 10 BOARD MEMBER FRIEDMAN: One to two quarts? Anyone 11 know? 12 MR. VENTURINI: Mine is about two quarts. I know 13 mine. 14 MR. MERCER: Mine is about a gallon and a half. 15 BOARD MEMBER FRIEDMAN: We'll talk about your SUV 16 later. 17 (Laughter.) 18 BOARD MEMBER FRIEDMAN: But it doesn't make sense 19 for a consumer, like an individual consumer, to buy a gallon 20 without having a laboratory to a mix a piece of the gallon 21 into two quarts. 22 MR. MERCER: I'm sorry, Doctor, but I beg to 23 differ with you. It is done routinely -- 24 BOARD MEMBER FRIEDMAN: Where? 25 MR. MERCER: There are 180 million gallons of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 antifreeze sold in the United States each year. That 2 product, to be able to be used by consumers, must be diluted 3 to 50/50 to provide adequate heat transfer, corrosion 4 protection, freeze protection and boil protection for 5 automobiles. People routinely do that. Or they're 6 routinely getting themselves into trouble. 7 BOARD MEMBER FRIEDMAN: They're getting it done 8 elsewhere. 9 MR. MERCER: It's routinely happening. 10 MR. SCHEIBLE: If I could comment. I think there 11 is a difference in the antifreeze system in a car and the 12 cooling system in a car typically takes several gallons, so 13 you are buying a container or maybe two, then mixing it with 14 water to get the right concentration of antifreeze. 15 With the windshield washer fluid, I think we 16 believe that typically the cars are less than a gallon. 17 Mine is about -- gets about two fills out of a gallon 18 container. And in that case a consumer would be buying it 19 and if it had to dilute it to typical four-to-one or greater 20 ratio would be having that container for several years and 21 using it. It is a somewhat different situation. 22 MR. MERCER: If I can respond to that comment. 23 Antifreeze cooling systems leak, and antifreeze 24 leaks out of cars. It's an unfortunate thing, but they do 25 leak. And consumers have to top off their cooling systems PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 on a routine basis. And they must do that with 50/50 and 2 they do, as our consumer surveys show, they do mix and they 3 do add 50/50 and they do keep containers of 50/50 solution 4 of antifreeze and water in their garages for extended 5 periods of time to be able to do that. 6 I think that you were referring to coolant 7 changes, and in fact the days of the coolant change appear 8 to be essentially over. Unfortunately for our business, but 9 they do. 10 BOARD MEMBER C.H. FRIEDMAN: I think I would be 11 inclined to be worried about my engine and my radiator and 12 be more scrupulous in adhering to dilution requirements than 13 I would using the bug remover full-blown, just pouring it 14 into mine, if it wasn't convenient for me, because it 15 wouldn't affect the mechanics of anything, would it? Unless 16 you're saying that that's going to jam or freeze the 17 windshield washers. 18 MR. MERCER: No. 19 BOARD MEMBER C.H. FRIEDMAN: Matter of fact, a 20 little more will do you, you know. Maybe, I -- 21 MR. MERCER: And I would agree with that analysis. 22 BOARD MEMBER C.H. FRIEDMAN: Consumer psychology. 23 MR. MERCER: I would agree with that analysis, but 24 I don't necessarily know that that analysis allows the jump 25 to consumers will universally and exclusively ignore label PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 instructions. 2 BOARD MEMBER C.H. FRIEDMAN: Can I move, or are 3 you finished with dilution? 4 CHAIRMAN LLOYD: Dee. 5 BOARD MEMBER D'ADAMO: I'm just having a hard time 6 grappling with this. I'm trying to put myself in your shoes 7 and I'm thinking, okay, in California, if I could get away 8 with putting one-fourth of the amount of the product in a 9 gallon container, or whatever it is, a fourth, a half or 10 whatever it is, and then I as a manufacturer add water and 11 dilute it myself, then I could meet the requirements and put 12 less product in and still make the same amount of money, or 13 I could put one-fourth of it into a smaller container and 14 require dilution and still make the same amount of money. 15 I'm just having a hard time seeing -- 16 MR. MERCER: We have no issue with dilution. We 17 would -- we accept the fact that you could require dilution 18 to get -- in fact we asked for dilution language to be -- as 19 a method of getting to achieve the goals. It's not the 20 dilution that's the problem. It's the elimination of a 21 container size to be able to get to that that we object to. 22 BOARD MEMBER D'ADAMO: I think what's going to 23 happen, and I just look at my own self, I would probably buy 24 the gallon container, not read the directions, put the whole 25 thing in and then we would be adding to the waste problem in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 California rather than addressing that issue. At the same 2 time if I get a smaller container and I realize, oh, I've 3 got to mix this, I mix it and then I throw a little tiny 4 container. 5 MR. MERCER: You're at a gas station, you're at a 6 convenience store, not even a gas station, you're out of 7 windshield washer fluid. You walk into the convenience 8 store, the only thing that's in there is a quart 9 concentrate. Where do you get the water? 10 BOARD MEMBER FRIEDMAN: Next gas station. 11 CHAIRMAN LLOYD: I think we've just got a 12 regulation passed, the Governor signed, that every gas 13 station has to provide water and air free for consumers. 14 MR. MERCER: Convenience stores as well? 15 CHAIRMAN LLOYD: I'm not sure about convenience 16 stores. 17 BOARD MEMBER RIORDAN: If they're selling gas. 18 MR. MERCER: Again, the significant sales of these 19 products are at places like mass merchandisers and auto 20 supply stores, like Wal-Mart and Kmart and they are not 21 obligated to provide water and air. 22 CHAIRMAN LLOYD: You've brought up the example. 23 We just finished it off, I think. 24 Mr. McKinnon. 25 BOARD MEMBER McKINNON: I want to follow up on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 Member Friedman's question a little bit. I mean, clearly I 2 dilute coolant for my truck, because I don't want to buy a 3 new radiator. 4 And is there anything else that can happen by not 5 diluting the windshield wiper fluid? Does it ruin paint, is 6 there something that can go on a label that's going to get 7 my attention when I buy a gallon bottle that's going to make 8 me know that I have to dilute or I'm going to have some 9 other consequence? 10 MR. MERCER: I don't -- yes, we could formulate 11 windshield washer fluids that remove paint from cars, but 12 that's not -- it wouldn't be our objective. We're trying 13 to -- 14 BOARD MEMBER McKINNON: I'm talking about your 15 concentrated -- 16 MR. MERCER: I understand. And I don't mean to 17 make a joke of your question. I'm just saying that when we 18 formulate the products, we do try to make sure that they do 19 not harm other components, and so we would be sort of 20 unwilling to take the risk of putting a product in there 21 that had the potential of causing damage to paint just so 22 that we could tell consumers there's another reason why they 23 should dilute. 24 So, yes, in principle you could, but I'm not sure 25 that then in order to get there the dilution amount that you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 have to do would have to very very high in order to get to 2 the levels. 3 BOARD MEMBER McKINNON: Yeah. Then if that's the 4 case, I tend to agree, a little more will do me better. 5 And I think that I agree with the staff's analysis 6 on the gallon container. 7 Particularly if I live in a farm area, just 8 outside of this area, where there's a lot of bugs, I would 9 want a little heavier dose. 10 And so that's it. That was my question. 11 CHAIRMAN LLOYD: Yes. 12 BOARD MEMBER C.H. FRIEDMAN: If I can just ask one 13 more while I've got you, Mr. Mercer. Here's a product that 14 says clearly visible windshield wash, environmentally safe, 15 it's a summer formula, removes bugs and road film, fast 16 drying, streak free. And this is complying. 17 So are you saying that you would seriously doubt 18 the efficacy of this product? 19 MR. MERCER: Yes. 20 BOARD MEMBER C.H. FRIEDMAN: That it can't 21 remove -- 22 MR. MERCER: And because -- 23 BOARD MEMBER C.H. FRIEDMAN: It won't remove bugs 24 and road film? 25 MR. MERCER: Yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 BOARD MEMBER C.H. FRIEDMAN: Unless you get out of 2 the car and scrub. 3 MR. MERCER: Yes. It's relatively easy to make 4 claims on labels, and that's why I referred to the increased 5 scrutiny that the national brands get from the federal 6 government, from their competitors, from their customers and 7 from consumers. 8 And so when we make claims on labels, we have to 9 live up to them, because we make a whole large number of 10 other products that have the Prestone brand name on it. If 11 we let consumers down with one product, they're going to 12 remember for our other products, so we do have to be able to 13 deliver performance. 14 CHAIRMAN LLOYD: Mr. Calhoun. 15 BOARD MEMBER CALHOUN: I guess I'd like to go back 16 to the issue that I raised earlier, and that pertains to the 17 concentration of the various products. In listening to you 18 talk a few moments ago, it seems to me that what you're 19 really seeking can be accomplished by the innovative 20 provisions that are already in the regulation. Is that a 21 fair assessment? 22 MR. MERCER: It is possible, but at the current 23 time I can only say that it is possible that we could. I do 24 not have any evidence to definitively say that we could. It 25 is possible. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 BOARD MEMBER CALHOUN: I guess I'd like to add one 2 other thing to this. You know, this board has considered 3 consumer product regulations in the past and they routinely 4 review the progress made, and I feel certain that if a 5 problem existed and certain companies were going to go out 6 of business or something of that type, that that would be 7 brought back to this board for reconsideration. And so I 8 guess this isn't doomsday, I guess that's what I'm saying. 9 MR. MERCER: I think what we're talking about, 10 we've successfully formulated to meet the current standards. 11 In fact our product is underneath the regulated amount. We 12 have less VOC than we could put in under the current 13 regulations. We formulate for efficacy, rather than to meet 14 the regulations. We have an efficacious product at the 15 current level of VOC. 16 We feel that it is possible that we could deliver, 17 by some work, and maybe some a considerable amount of work, 18 deliver a product that could deliver efficacious performance 19 at some lower level of VOC. 20 We do not feel that we can deliver such a product 21 at the one percent or lower level of VOC and that's -- 22 BOARD MEMBER CALHOUN: Have you tried? 23 MR. MERCER: When we do our product formulation, 24 we do extensive testing under various levels of product, of 25 VOC, yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 BOARD MEMBER CALHOUN: Thank you. 2 CHAIRMAN LLOYD: Any question of staff? 3 MR. RATCLIFF: Let me make a comment. 4 In listening to this entire discussion, it seems 5 to me it almost underlines what one of the basic concerns 6 the industry has, and that is that the question of whether 7 or not the proposal is based on information which leads to 8 the conclusion. In that part of the discussion is what is 9 the product, is the product something that takes off rain 10 spots or is the product a product that takes off a bug 11 smear. Is the product one which prevents the formation of 12 debris on the windshield or is it one which just deals with 13 the wiping motion. 14 And I think the dilution issue is part of that, 15 and I think what we're saying is that the very problems that 16 the board is having in this discussion of trying to see how 17 this fits is the same problem that we have. 18 And I think that one of the things that we've done 19 in approaching what the board is -- what the staff is 20 suggesting, is looked at the objective and felt that there 21 are ways of getting there. 22 The problem is that as you look at it there needs 23 to be a definition of, we think, of the premium product, 24 because there are people who may not be satisfied with the 25 cheaper product, who may want more for whatever good reasons PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 they may have. 2 And we feel that the products that I think both of 3 these companies have invested in are products which are 4 designed to deal with that market, not the market of the guy 5 who wants to come in and wet down his windshield. 6 It's that problem I think that we're wrestling 7 with, and hopefully we can continue working with the staff 8 to reach the resolution. 9 Thank you. 10 CHAIRMAN LLOYD: I'd just like to also address the 11 issue that again you're being forced to have increasingly 12 stricter controls on that and clearly the staff has brought 13 before the board many issues where you're looking at the 14 emissions from the car, both evaporative VOC and tailpipe 15 VOC, and clearly if you look at as a system we have to look 16 at those issues as well. 17 Maybe staff could comment on the percentage 18 reduction that we're looking for for this part of the car, 19 compared to say evap or things there. I don't know whether 20 you have any data or rough data. I'm not looking for 21 percentage of -- 22 MR. SCHEIBLE: Through the -- from the start of 23 the auto program to the original evap standards in the '90s, 24 we got about a 90 percent control with LEV 2 and all the 25 other evap work we have like a 98 percent reduction and the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 evaporation of gasoline from the vehicles. 2 At one percent it's probably about a 90 percent 3 reduction over typical levels and if you go back and you 4 take a 35 percent VOC being allowed previously and used by 5 those people for freeze protection, we're at 97 percent or 6 so. So we're in the same ballpark in terms of overall. 7 Again, it's really not a competition between what 8 percent reduction, it's to get as close to zero as you can, 9 and the fact that over 50 percent of the sales volumes of 10 products currently complies with the one percent without a 11 regulation and the customers find that in California to be 12 acceptable in the marketplace convinces us that the product 13 is already there, from a customer general satisfaction. 14 BOARD MEMBER C.H. FRIEDMAN: Did I just hear you 15 say that over 95 percent of what is now being sold is 16 compliant? 17 MR. SCHEIBLE: No. About 50 percent by volume of 18 what is now being sold complies with the one percent. 19 BOARD MEMBER C.H. FRIEDMAN: So the other 50 20 percent that would have to comply will account for these 21 huge reductions? 22 MR. SCHEIBLE: That's correct. 23 BOARD MEMBER C.H. FRIEDMAN: In emissions. 24 MR. SCHEIBLE: And some of those products are 25 close to one percent and others are much closer to ten PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 percent. 2 BOARD MEMBER C.H. FRIEDMAN: Has staff taken a 3 typical car, if there is such a thing, and put in -- 4 compared compliant with noncompliant windshield washer 5 fluids and gone out somewhere where there's a lot of bugs 6 and tar and seen -- I mean, frankly -- 7 MR. SCHEIBLE: I'm sure we have, but not as a 8 scientific experiment, just in our everyday lives over 9 hundreds of thousands of miles of driving. 10 BOARD MEMBER C.H. FRIEDMAN: I hate to deprive the 11 consuming public here of superior product if it's truly 12 superior for those niche uses. It seems to me that is 13 arguably an innovative product. It's a product that might 14 come in under one of our exemptions or something for 15 specialized use with particular kind of labeling or however 16 it would be appropriately handled. 17 On the other hand, I hate to have ten percent 18 emissions or VOCs or whatever, or 35 percent or whatever 19 current limits are, in stuff that's used by me in Southern 20 California driving to and from work where there's rain and a 21 little bit of dust, and I don't have a lot of bugs and I 22 don't need that stuff and yet I'm contributing to worsening 23 the air that we breathe. 24 So I'm really, as we all are, struggling here. 25 CHAIRMAN LLOYD: I think the key one both PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 gentleman mentioned is that there is the likelihood of 2 encountering some basically organic, some oils, tars and 3 what not, then obviously the higher VOC is going to solve 4 the problem more quickly. If you've just got typical dust 5 and what not, water is going to do as well as anything else 6 on the inorganic side. But predicting the frequency of 7 that, of course, is what you encounter in terms of tars, I 8 think that's an issue. 9 Mr. Kenny. 10 MR. KENNY: The only thing I was going to add is 11 that the innovative products provisions that we do in the 12 consumer products regulations are designed specifically to 13 address exactly the issues that you've raised, Professor 14 Friedman. If in fact the company believes it has a product 15 which is innovative, which does need to have a higher VOC 16 content, there is an opportunity for the company to come in, 17 to talk with us, demonstrate that, and then it can market 18 that particular product. 19 MR. MERCER: Just to echo Mr. Kenny's comments, we 20 have not felt to date the need to avail ourselves of the 21 innovative product consideration, because our product does 22 meet the current standards and provides a efficacious 23 performance. There's really to date no reason why we would 24 attempt to do such a thing. 25 CHAIRMAN LLOYD: Yes, Ms. D'Adamo. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 BOARD MEMBER D'ADAMO: Just on that point, 2 Mr. Kenny, could innovative products, could that category be 3 used just for certain areas of the state? 4 MR. KENNY: It probably could be. I can't think 5 of a reason. I mean, I'd have to go back and look at the 6 specific language. And I'm looking out of the corner of my 7 eye at legal. 8 MR. JENNE: In general the way it works is the way 9 the innovative product provision works is that if you have a 10 product that is higher VOC and you can prove through 11 consumer testing or whatever that consumers will use less of 12 it to accomplish the same result, and therefore there will 13 be less overall emissions than some complying product, then 14 you can get the innovative product exemption and you can 15 make your higher VOC product. 16 I can't think of why, but usually that's just how 17 consumers would use the product, and it wouldn't be 18 particularly probably different in different areas of the 19 state, so there wouldn't usually be any reason for that to 20 seek a regional exemption, because once they got the 21 innovative product use exemption, it's good all through the 22 state. 23 MR. MERCER: Are you finished? 24 I think from a practical marketing perspective, it 25 would be very difficult to be able to market that such that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 you limited sales to certain regions of the State of 2 California, and I think it would also be very difficult to 3 enforce such an innovative product exemption. 4 So I think that if we were going to try to do 5 something, we would try to do it for the entire State of 6 California. 7 CHAIRMAN LLOYD: Thank you both very much. I 8 think you did a good job of describing some of the 9 challenges, particularly at the premium end of what you're 10 faced with. 11 Thank you. 12 I think Mr. Brewer and then Mr. Raymond and then 13 Mr. Graham. 14 MR. BREWER: Mr. Chairman, members of the board, 15 my name is Chip Brewer. I'm director of worldwide 16 government relations for SC Johnson and Son Incorporated. 17 We are a global manufacturer of household products. And one 18 of our manufacturing plants is located in Fresno, 19 California. 20 I will be brief, Mr. Chairman, in my oral remarks. 21 And I have a written statement that I will submit. My oral 22 remarks are to make just three points. 23 First, SC Johnson does not make windshield washer 24 fluid. 25 (Laughter.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 BOARD MEMBER RIORDAN: Aren't you glad? 2 CHAIRMAN LLOYD: You have an opportunity to make 3 an impact. 4 MR. BREWER: However, and very seriously, we are 5 very much impacted by the proposed VOC limits before you 6 today, and we will have to reformulate products in no fewer 7 than seven categories in order to comply with this 8 regulation. These products include many of our major 9 brands, Windex glass cleaner, Pledge furniture polish, 10 Fantastic general purpose cleaner, Raid insecticide, and 11 Glade air freshener. 12 Nevertheless, we support the VOC limits being 13 proposed in these categories. This was not always the case. 14 And as we moved through this process, we had serious 15 objections to several of the initial proposals as they 16 emerged over the summer, as staff well knows. 17 However, through an intense series of public 18 workshops and meetings, I think staff has arrived at a 19 responsible set of proposals, and in the categories 20 affecting SC Johnson, and I went to commend the Air 21 Resources Board's management and staff for their diligence 22 in working through within a very limited time frame imposed 23 by the litigation the many technical and commercial issues 24 to an appropriate resolution. 25 Second, Mr. Chairman, we do have reservations PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 about the cost effectiveness of these proposals. Even 2 assuming the estimates presented by staff, the cost per 3 pound of the emissions reductions are in several categories 4 quite high, and we think this is because in virtually all 5 these consumer product categories before you today, 6 virtually all of the ones before you today, had been 7 subjected to review, regulation and reformulation before, 8 some even twice, and I think the value of returning to these 9 categories is therefore diminished, and I would hope that 10 this will be the last time that these categories will be 11 reregulated. 12 My third point is now that the Mid-term Measures 13 II is completed, SC Johnson strongly encourages the board 14 and the stationary source division to develop amendments to 15 the alternative control plan, the ACP, regulation which 16 applies to consumer products as well and which complements 17 the table of standards. SC Johnson has already implemented 18 an ACP. Our ACP has provided us flexibility, but more 19 importantly, from your perspective, it has delivered over 20 the past four years nearly 3.5 million pounds of excess 21 emissions reductions to the benefit of the California 22 environment. 23 Yet in spite of this outstanding success and the 24 ACP's proven benefits to both product manufacturers and 25 California air quality, only three companies, SC Johnson PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 being one of them, have to date have utilized the ACP. We 2 believe this is because the current ACP process is overly 3 cumbersome and administratively burdensome for both your 4 staff and manufacturers and frankly it's not attractive 5 enough to manufacturers in terms of the marketability of the 6 surplus emissions reduction credits which are earned. 7 Now that staff and industry have four years' 8 experience in implementing the ACP, we believe it is time to 9 move forward in the year 2000 with revisions to make the ACP 10 simpler for staff to administer and more beneficial for plan 11 participants. And amending the ACP process would present an 12 opportunity, we believe, for a meaningful win-win for the 13 Air Resources Board and industry. 14 I was therefore disappointed to see earlier that 15 the ACP was not listed as a future activity in Paul Milkey's 16 presentation, and I hope that this can be reconsidered. 17 Thank you, Mr. Chairman. That concludes my 18 comments. And I appreciate the opportunity to appear before 19 the board. 20 CHAIRMAN LLOYD: Can I ask staff to comment on the 21 last issue on the ACP. 22 MR. VENTURINI: Mr. Chairman, Mr. Brewer is 23 correct, we have had about four years of experience, and it 24 is probably time to take a look at the ACP to see what we 25 learned and to see how we can improve on it and possibly PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 make it a little more flexible. 2 I spoke to Mr. Brewer earlier and indicated that 3 we'll be willing to start discussions on looking at the ACP. 4 CHAIRMAN LLOYD: Thank you. 5 Any questions from the board? 6 Thank you very much. 7 MR. BREWER: If I might just conclude, I'm happy 8 to hear that and I believe CSMA and the rest of industry 9 already have a little subcommittee that we have put together 10 and we're reading to get to work on that. 11 Thank you. 12 CHAIRMAN LLOYD: Thank you. 13 Next speaker is Mr. Raymond. 14 MR. GRAHAM: I'm not Mr. Raymond, but I will be 15 speaking for him. My name is Bob Graham, the last speaker. 16 CHAIRMAN LLOYD: You're combining presentations 17 here? 18 MR. GRAHAM: Yes, I am, sir. 19 Chairman of the board, and board members, my name 20 is Bob Graham. I'm technical director of the specialty 21 group of the consumer division of Sherwin Williams, which is 22 the reason I don't have a business card, I can't fit it all 23 on there yet. 24 Reorganization is a wonderful thing. 25 But my company is in a unique position in these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 situations we're looking at today. We produce products for 2 virtually almost every category that is being proposed for 3 regulation today. 4 And as a result of this, and between this 5 regulation and the aerosol coatings regulation, my staff has 6 been stretched quite a bit on a time management basis in 7 dealing with all of these regulations. 8 And I just wanted to mention the fact that because 9 of prioritization issues and what we need to be doing and 10 what we're going to be required to do first, we may need to 11 abandon some categories in California, at least for the near 12 term, in the interest of efficiencies and getting the major 13 work done. 14 However, the amendments that are proposed by the 15 staff may mitigate that issue to some reasonable degree. 16 This regulation, this Mid-term Measures II, has 17 probably been the most difficult of all the consumer product 18 regulations, and in this case largely due to the 19 reregulation of so many categories within it. 20 While we meet the emission reductions required, 21 and I believe we're ahead of schedule in the rulemaking, I 22 think we are, as you've heard before, approaching the point 23 of no return in the reformulation of these products. We are 24 pushing the limits of technology in lowering VOC contents, 25 which is so essential to the performance of so many of these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 products, and it's becoming cost prohibitive, to be honest 2 with you, and it's also gotten to the point where, as you've 3 heard from many other people, product efficacy is being 4 rather seriously affected. That is an issue, because we do 5 want to maintain our validity with our consumers. 6 As we approach the new millennium, I believe that 7 we need to become a little more creative and possibly 8 productive in setting regulations, not that we haven't been 9 in the past, but I think there is some room for improvement. 10 You've already heard a plea by other members of 11 the industry that we may need to revitalize such programs as 12 the ACP, possibly the innovative products concept. 13 And the other issue that is of critical 14 importance, I believe, is relative reactivity, and is being 15 used in your automotive fuel regulation right now, and that 16 ought to be utilized in some way, shape or form for consumer 17 products and aerosol paints, which is on the agenda, by the 18 way, coming up soon. 19 As always, the staff has worked with us in a very 20 very professional manner. And we disagree from time to 21 time, but by all accounts, and everything I've experienced, 22 a good deal, a great deal of communication and dialogue has 23 been maintained with the staff. 24 So it's to conclude, we do not oppose any of the 25 limits or issues set forth in the categories that Sherwin PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 Williams is involved with, and we're involved again in most 2 of the categories before us today. 3 And we urge the board to ask the staff to increase 4 their work on the ACP and relative reactivity in the future. 5 And thank you very much. That concludes my 6 comments. 7 CHAIRMAN LLOYD: Thank you very much. 8 Questions from the board? 9 MR. GRAHAM: Thank you. 10 CHAIRMAN LLOYD: Thank you very much indeed. 11 So I think that concludes the public testimony, 12 unless there's anyone else at this stage. 13 Mr. Kenny, are there any other written comments 14 that need to be submitted to the record? 15 MR. KENNY: Yes. 16 MS. BROOKS: Yes, we do. I'm Jeannette Brooks. 17 We had a couple of letters from Clorox, and Clorox 18 expressed gratitude that we're now proposing the four 19 percent VOC limit for the general purpose cleaners. We made 20 that proposal today. They indicated it would be a technical 21 challenge to meet the limit, and they asked that we not 22 revisit their category again. 23 (Laughter.) 24 MS. BROOKS: And they have also provided in their 25 letter information on product category definition for future PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 reference. 2 And we appreciate their support of our proposed 3 limit and their comments regarding future reference to the 4 category definition. 5 We also got a couple of letters from 220 6 Laboratories and Schwarzkopf and DEP on hair mousse. Both 7 commenters expressed concern that the proposed six percent 8 VOC limit for hair mousse would prevent them from making 9 products that foam after they're dispensed. They recommend 10 that we drop the proposed VOC limit or set a higher VOC 11 limit for post-foaming hair mousses. 12 In general, as you've heard, industry has agreed 13 to the proposed six percent VOC limit for hair mousse that 14 we proposed. 15 We believe it's feasible to reformulate these 16 post-foaming mousse products to meet the proposed limit, 17 since our survey also includes a similar product that 18 complies and there is an overall 27 percent complying market 19 share for the category. We are also allowing three years 20 for compliance. 21 We received a letter from the Los Angeles -- 22 BOARD MEMBER C.H. FRIEDMAN: Can I, before we move 23 on, can I just ask one question on that. Is that like Edge 24 shaving cream? 25 MS. BROOKS: Yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 BOARD MEMBER C.H. FRIEDMAN: It's the sort of 2 thing, the gel? 3 MS. BROOKS: It comes out as a gel and then foams. 4 BOARD MEMBER C.H. FRIEDMAN: So you're treating 5 them -- 6 MS. BROOKS: They're in the same category with 7 this limit, yes. 8 BOARD MEMBER C.H. FRIEDMAN: Thank you. 9 MS. BROOKS: We also received a comment from the 10 Los Angeles County Sanitation Districts, the wastewater 11 treatment plants apparently are experiencing increased 12 perchloroethylene levels, which they believe may be due to 13 improper disposal of engine degreasers. They recommend that 14 we include a no new use provision for perchloroethylene. 15 The proposed VOC limits for engine degreasers were 16 designed to be achievable without the use of perc. We have 17 expanded, as you heard, the reporting requirements for 18 perchlorethylene and methylene chloride, so that we can 19 track their usage in consumer products. 20 The Air Resources Board staff is also developing a 21 airborne toxic control measure to limit the use of 22 perchloroethylene in engine degreasers and also looking at 23 other automotive product categories. 24 Another letter was received from McLaughlin 25 Gormley King Company. This is a raw materials supplier. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 And they requested that we raise the proposed limit for 2 crawling bug and flying bug insecticides due to impacts on 3 product performance. They also expressed concern that 4 crawling bug insecticides were recently regulated by ARB. 5 We have reached agreement on our proposed limits 6 with all marketers of these products. We are also providing 7 four to five years of compliance -- for compliance. 8 Another letter was from the Automotive Aftermarket 9 Industry Association. This commenter requested that we not 10 pursue future regulations of the automotive product 11 categories. They also expressed concerns with proposed 12 limits for tire sealants and inflators and windshield washer 13 fluids. 14 Regarding the windshield washer fluid, they 15 expressed safety concerns with the low VOC products. 16 We have general agreement with the industry on our 17 proposed limit for tire sealants and inflators and the staff 18 report includes an extensive discussion on the potential 19 safety concerns. 20 We have discovered no evidence of safety issues 21 from visibility problems with low VOC windshield washer 22 fluids. 23 Another letter was signed by Larry Chasit and it 24 was from the law firm of Beverage and Dymond law firm. The 25 commenter expressed concern about the proposed six percent PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 limit for hair mousse and asked that we monitor the progress 2 of complying with the limit. 3 As we stated in our presentation, we will conduct 4 technology assessments for limits to determine 5 manufacturers' progress as the effective date for the limit 6 approaches. 7 Another letter was received from Resilient Floor 8 Covering Institute and they were supporting our proposal to 9 exclude floor seam sealers from the construction panel and 10 floor covering adhesive and sealant and caulking compound 11 categories. 12 We received another letter from the US EPA Region 13 9, and they are also supporting our proposed regulation, 14 since it will help us to meet our SIP commitments. 15 That is all. 16 CHAIRMAN LLOYD: Thank you very much. 17 Any other comments, Mr. Kenny? 18 MR. KENNY: The only other comments I have is that 19 I do want to thank the industry. Essentially this has been 20 a very collaborative and very cooperative negotiation, and 21 we have reached a point where what we're bringing to you 22 today is in great part something that we have substantial 23 consensus on. 24 With that said, though, I do want to recommend to 25 the board that they adopt the regulation as proposed by the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 staff with the amendments that we have offered. 2 CHAIRMAN LLOYD: Again, I'd like to reiterate your 3 comments vis-a-vis the willingness of industry to work with 4 staff in a serious way, recognizing there's some major 5 challenges here. I think it's very much appreciated. 6 Again, reiterate the comments, positive comments, to the 7 staff from the industry. I think it's great to hear those 8 sort of comments and I know you worked long and hard, as 9 usual, on this issue here to bring to the board regulations 10 which try to incorporate the maximum input we can from the 11 industry without compromising where we need to go. 12 I will now close the record on this agenda item. 13 However, the record will be reopened when the 14 15-day notice of public availability is issued. Written or 15 oral comments received after this hearing date, but before 16 the 15-day notice is issued will be accepted as part of the 17 official record on this agenda item. 18 When the record is reopened for the 15-day period, 19 the public may submit written comments on the proposed 20 changes, which will be considered and responded to in the 21 statement of reasons for the regulation. 22 Again, just a reminder to the board members of our 23 policy concerning ex parte communications. While we may 24 communicate off the record with outside persons regarding 25 board rulemaking, we must disclose the names of our contacts PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 and the nature of the contacts on the record. This 2 requirement applies specifically to communications which 3 take place after notice of the board hearing has been 4 published. 5 Are there any communications which you need to 6 disclose? 7 None. 8 Now we will take a minute to look at the 9 resolution before the board, resolution No. 99-34, 10 containing the staff recommendations and the modifications 11 thereof. 12 Open for any further discussion or motion. 13 Mr. McKinnon. 14 Sorry. 15 BOARD MEMBER PATRICK: I would like to make a 16 comment. Did I hear someone else speaking at the same time? 17 BOARD MEMBER McKINNON: Go ahead. 18 BOARD MEMBER PATRICK: I consider myself somewhat 19 of an expert of bugs on windshields. I live in Bakersfield, 20 and when I am driving throughout the San Joaquin Valley and 21 in the agricultural areas, I encounter more than one 22 splattered bug along the way. And I wish I had my car with 23 me, I wish I hadn't used public transportation to get here, 24 because my car has Prestone bug wash in it, so we could have 25 all gone out there and seen a display, although, quite PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 frankly, in the summer heat, once they have splattered, 2 they're dry and so, you know, I'm not certain about this 3 get-them-quick-before-they dry, because it's impossible. 4 FROM THE AUDIENCE: Especially the big ones. 5 BOARD MEMBER PATRICK: Especially the big ones, 6 right. 7 I think my one comment about what I considered to 8 be a very good product is that when I bought it, I didn't 9 realize that I was polluting. And I passed up a lot of 10 other products to buy a name product and I should have 11 looked harder to find some of these other products to find 12 one that was more, shall I say, ecologically friendly. 13 And so even though I know it's an outstanding 14 product, I have tremendous confidence in these companies 15 that they can do what all the other companies have done and 16 are doing and must do in the future to meet the requirements 17 of this board. And I believe that they can do it just like 18 all the other folks have done. 19 And so even though the bugs are not going to go 20 away in an agricultural area, I do think that there will be 21 products and are products that we can use that are more 22 ecologically friendly. 23 So I will make the motion on the resolution, and 24 have tremendous confidence in all of these product 25 manufacturers that they're going to meet the limits. They PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 have done it in the past, and they will do it in the future. 2 And I particularly appreciate the response that 3 they have had to the process and to working so hard with 4 staff, because these are not easy things and they certainly 5 would prefer that these things do not come forward. 6 On the other hand, it's just a part of what we 7 have to do. We have to make certain that we look at every 8 single category all the way from diesel engines to hair 9 mousse. And, quite frankly, I'm more concerned about the 10 hair mousse than I am about the bugs. 11 (Laughter.) 12 BOARD MEMBER PATRICK: I would like to make the 13 motion on the recommendation, and if there's anybody here 14 who knows a whole lot about hair mousse, I'd like to see you 15 at the break. 16 CHAIRMAN LLOYD: If we see you with a wig next 17 time, we'll know it doesn't work. 18 Mr. McKinnon. 19 BOARD MEMBER McKINNON: Mr. Chairman, I was just 20 going to move the motion, so I'd like to second the motion. 21 CHAIRMAN LLOYD: Any further discussion? 22 All in favor say aye. 23 (Ayes.) 24 CHAIRMAN LLOYD: Against? 25 (No response.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 CHAIRMAN LLOYD: Thank you. Passed unanimously. 2 I think at this stage we're looking for the next 3 item, which staff has estimated about one hour, but 4 calibrating them so far that's an hour and a half or two 5 hours, so maybe what we should do is take a break for lunch 6 rather than breaking on the item. Let's reassemble at 1:00 7 o'clock. 8 Thank you. 9 (Thereupon the lunch recess was taken.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 A F T E R N O O N S E S S I O N 2 CHAIRMAN LLOYD: I'd like to restart the meeting 3 with agenda item 99-8-2, and that's a public meeting to 4 consider approval of the San Joaquin Valley Unified Air 5 Pollution Control District's California Clean Air Act 6 Triennial Progress Report and Plan Revision for 1995-97. 7 As we recognize, the air quality planning process 8 is important, inasmuch as it identifies strategies and sets 9 the pace to ensure steady progress towards the health-based 10 air quality standards. 11 In the plan before us, the goal is California's 12 own state ozone standard. 13 The ozone problem in San Joaquin Valley, as we 14 recognize as being quite persistent, showing significantly 15 less improvement than other urban areas of California over 16 the last decade. We have a number of efforts underway to 17 better understand the reason for this trend, including an 18 intensive ozone field study in summer 2000 and the joint 19 inventory improvement effort with the San Joaquin Valley. 20 Again, these are both major research efforts 21 centered in the Valley to help get better scientific tools 22 as we move ahead on some of the regulatory aspects there. 23 It's pretty clear that we need to continue to 24 pursue all technically feasible and cost-effective emission 25 reductions from mobile and stationary sources. Obviously PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 the board's focus is on zero and near zero emission 2 technology for mobile source and consumer products is as 3 critical in the San Joaquin Valley as it is in fact for Los 4 Angeles. 5 I think this plan review provides us an 6 opportunity to assure that the air district also meets its 7 obligations to adopt and implement all feasible measures for 8 the stationary and air resources under its control. 9 I think I would like to ask Mr. Kenny to introduce 10 the item and begin staff presentation. 11 MR. KENNY: Thank you, Mr. Chairman and members of 12 the board. 13 The 1997 triennial plan adopted by the San Joaquin 14 Valley documents the area's progress in meeting the 15 requirements of the California Clean Air Act. 16 The staff looked at the information in this plan 17 and subsequent district actions to assess the area's 18 rulemaking progress and compliance with the all feasible 19 measures provisions of the state act. 20 The district has been very proactive on voluntary 21 programs to reduce emissions from mobile sources through 22 incentives and we commend them for their initiative in this 23 area. 24 On the stationary source side the district has 25 made progress in adopting or amending rules to fulfill PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 commitments in its 1994 California Clean Air Act plan. 2 The district relied on many of these same 3 commitments in its 1994 State Implementation Plan for the 4 federal ozone standard. 5 The new measures adopted to date will reduce ozone 6 precursors by over 27 tons per day within the next few 7 years. This is a good start, but the district has fallen 8 behind on its plan commitments and on meeting the all 9 feasible measures requirement. 10 We believe the district can get back on track with 11 adoption of the remaining SIP commitments by the end of the 12 year 2000, followed by steady progress thereafter to upgrade 13 its rules to meet the all feasible measures criteria. 14 The air quality benefits of these actions will 15 likely be needed in the Valley's revised ozone SIP which we 16 expect US EPA will require in 2001. 17 Because the area did not attain the federal ozone 18 standards in 1999 as scheduled, the 2001 SIP will be 19 required. 20 The district has the opportunity to secure 21 significant emission reductions next year with two key 22 actions on architectural coatings and organic solvent 23 degreasing. 24 We are poised to help the San Joaquin Valley 25 district in this effort. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 This board will be presented with a proposal for a 2 statewide suggested control measure for architectural 3 coatings in April of the year 2000. That should set the 4 standard for the district's rulemaking. 5 I'm also asking staff to provide assistance to the 6 Valley in upgrading its degreasing rules to a level of 7 control comparable to other districts in the state. This 8 would also support the use of aqueous solvents. 9 We are recommending that you conditionally approve 10 the San Joaquin Valley's 1997 triennial plan revisions with 11 specific requirements for district action to ensure steady 12 progress. 13 We believe it's both appropriate and necessary for 14 the board to clearly define its expectations of the district 15 in the near term to secure full approval of this plan. 16 And staff's presentation will discuss the specific 17 conditions that we are recommending. 18 I'd like to now ask Ms. Tina Suarez-Murias to make 19 the staff presentation. 20 Tina. 21 MS. SUAREZ-MURIAS: Thank you, Mr. Kenny. 22 Good afternoon, Chairman Lloyd and members of the 23 board. 24 I apologize, I have a little bit of a cold today, 25 so if my voice gives out, I'll ask Dean Saito, my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 supervisor, to continue for me. 2 My presentation today focuses on the air quality 3 challenges, progress and opportunities in San Joaquin Valley 4 in response to the area's most recent plan under the 5 California Clean Air Act. 6 This plan has an important role since it is the 7 framework for actions that are needed to achieve the state 8 ozone standard in the Valley. 9 I'll begin with the status of air quality in the 10 San Joaquin Valley. 11 Next we'll cover the Valley's ozone plans, 12 including ARB staff's evaluation of this triennial progress 13 report and plan revision. 14 Then I'll summarize and respond to comments 15 submitted yesterday by the Valley district on our staff 16 evaluation. 17 I will finish with our conclusions and 18 recommendations for your action today. 19 To give you a broader perspective on air quality 20 in the Valley, I'd like to touch on the three pollutants 21 that have required the most action. The trends are distinct 22 for each pollutant. 23 Ozone levels in the San Joaquin Valley have 24 remained nearly static over the last 20 years with marginal 25 net improvement. The Valley currently ranks fourth on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 list of the nation's smoggiest areas. 2 I'll discuss the ozone trends in more detail 3 shortly. 4 Particulate matter levels have decreased more 5 noticeably. The area's coming closer to attaining the 6 federal standards for inhalable particles, or PM 10, but it 7 still remains well above the state PM 10 standards and the 8 federal PM 2.5 standards. 9 The ozone strategies that we'll discuss today will 10 also help reduce particulate matter formation. 11 The good news is the district attained both the 12 federal and state carbon monoxide standards in the past 13 three years. 14 Now back to ozone. 15 This graph depicts the gradual progress made in 16 reducing peak ozone levels in the San Joaquin Valley over 17 the past two decades including preliminary data from the 18 1999 ozone season. 19 The graph contrasts the Valley with the same data 20 for the South Coast. Both areas show the effect of 21 year-to-year weather variations as well. The dashed lines 22 indicate how much farther we must go to achieve the 23 health-based federal and state one-hour standards. 24 Each point on the trend line shows the highest 25 ozone measurement at any monitor in that year. The San PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 Joaquin Valley has typically recorded ozone peaks between 15 2 and 20 parts per hundred million since 1980. Peak ozone 3 measurements in the Valley show a net drop of about 25 4 percent between 1980 and 1999, but the pace of progress is 5 slow. 6 San Joaquin is not alone. Its northern neighbor, 7 the Sacramento Valley, has also seen distinctly slower 8 progress than Los Angeles. We are working to understand the 9 reasons for the different ozone trends in the inland 10 regions. 11 If we look at a different statistic for the San 12 Joaquin Valley, we can see more progress in the 1990s. The 13 light colored bars in the front of this chart show the 14 number of days on which at least one monitor exceeded the 15 federal one-hour standard. The days over the state standard 16 are the darker bars in back. There's a slow downward trend. 17 Because examining just the three-year window in a triennial 18 planning cycle is not adequate to establish a trend, we went 19 back to the 1980 data. 20 Additional emissions reductions are clearly needed 21 to bring healthful air to the residents in the San Joaquin 22 Valley on all days. 23 Let's look more closely at two factors that impact 24 ozone levels, emissions of precursor gases and pollution 25 transport. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 Emissions of ozone precursors have declined 2 significantly in response to controls on both stationary 3 sources under local jurisdiction and on mobile sources under 4 federal and state regulation. 5 With the constant turnover of the fleet to even 6 cleaner vehicles and equipment, we expect mobile source 7 emissions to decrease well into the future. 8 One of the challenges in the Valley is to ensure 9 that the decline in emissions from stationary and area 10 sources keeps pace with the mobile sector. This progress is 11 possible for all sectors with continued technology 12 advancement, including reliance on zero and near zero 13 emission technology. 14 Local, state and federal agencies need to pursue 15 all technically feasible and cost-effective reductions from 16 mobile and stationary sources. 17 To improve the basis for future clean air plans 18 and control strategies, staff from the ARB and the San 19 Joaquin Valley district established a joint work group last 20 fall. The group's goal was to complete these improvements 21 to the emission inventory by spring 2000. 22 Emission sources within the Valley are not the 23 only contributors to ozone formation. 24 Transport of ozone and its precursors into and out 25 of the San Joaquin Valley also impacts the ozone levels in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 the Valley and neighboring areas. The arrows on the map 2 show that the Valley receives pollution from the San 3 Francisco Bay Area and Sacramento. The Valley also exports 4 ozone to six neighboring air basins. The areas that receive 5 transport from San Joaquin Valley include, this is some of 6 them, mountain counties, central coast and the southeastern 7 desert. 8 Learning more about the formation and movement of 9 ozone will help us understand how emission reductions in 10 each area affect ozone within the area and downwind. 11 The pink rectangle on the map is the modeling 12 domain for the Central California Ozone Study or CCOS. 13 Measurements made within this area will be used to enhance 14 and expand our existing model of ozone formation in most of 15 Central and Northern California. 16 The Central California Ozone Study is being 17 designed and supported by a public-private partnership 18 composed of ARB, other state and federal agencies, local air 19 districts and private industries. 20 The cornerstone of the ozone study is the summer 21 2000 field program. During the ozone season meteorological 22 and emissions data will be collected continuously with 23 intensive monitoring on about 20 days during predicted high 24 ozone episodes. This data will be used to improve existing 25 ozone models and to assess transported versus locally PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 generated ozone. 2 The study will enable a development of attainment 3 demonstrations for the state ozone standard, as well the 4 federal eight-hour ozone standard. 5 Now that we've seen an overview of air quality in 6 the San Joaquin Valley, in particular the status of ozone 7 levels, I'll review the plans of the San Joaquin district 8 for reducing ozone. 9 Simply put, clean air plans define the strategy 10 for attaining health standards in areas violating the 11 standards. They are based on monitoring data emissions 12 inventory and air quality modeling. 13 California plans typically rely on a combination 14 of existing control measures and new commitments to achieve 15 the emission reductions needed for attainment and progress. 16 These commitments can be to adopt and approve new rules for 17 previously uncontrolled sources or to strengthen the 18 existing rules through amendments. 19 The federal Clean Air Act establishes specific 20 deadlines for attainment of the one-hour standard, and 21 requires states and local districts to prepare state 22 implementation plans, or SIPS. 23 The California Clean Air Act focuses on steady 24 progress through implementation of all feasible measures to 25 attain the state standard as expeditiously as practical. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 The strategy is documented in plans that must be 2 reviewed and updated every three years. 3 In 1991 the newly formed San Joaquin Vally Unified 4 Air Pollution Control District prepared its first plan under 5 the California Clean Air Act. 6 In 1994 the district prepared a combined document 7 containing both the ozone SIP and the California Clean Air 8 Act Triennial Progress Report and Plan Revision. 9 The plans jointly committed to adopt 17 measures 10 before the start of 1997. 11 To obtain additional emission reductions to meet 12 the state standard, California Clean Air Act plan also 13 committed to develop 16 additional measures for adoption by 14 the end of 1998. 15 ARB and US EPA approved the ozone SIP, and ARB 16 found that the 1994 ozone SIPs for all of the affected 17 districts combined with any state-only strategies satisfied 18 the Clean Air Act, the California Clean Air Act requirements 19 as well. 20 In December of 1998, the district's governing 21 board approved the 1997 triennial update to the California 22 Clean Air plan. This update delayed the rulemaking schedule 23 for 22 commitments from the 1994 plan, which had not yet 24 been adopted. It also removed the 1994 commitments for 25 three measures which were found to not be effective. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 Although this board item is about the California 2 Clean Air plan, pending federal actions will affect this 3 plan and the next update as well. 4 The attainment deadline for the federal ozone 5 standards is currently 1999 for the San Joaquin Valley. 6 Because the area violated the standard each year 7 from 1997 to 1999, it will not attain on time and is not 8 eligible for an extension. 9 The Clean Air Act requires areas that do not 10 attain to be bumped up to the next higher ozone 11 classification. 12 For San Joaquin this means a change from serious 13 to severe. 14 US EPA expects to complete this action in 2000. 15 The severe classification brings stricter 16 requirements with it, including tighter requirements for new 17 stationary sources, as well as additional time to attain. 18 San Joaquin will also have to revise its ozone SIP 19 to reassess attainment and add more controls. The district 20 has anticipated the bump-up and expects to prepare a SIP 21 revision in 2001. 22 The district's 2001 clean air plan will be a 23 comprehensive update to address both SIP and the California 24 Clean Air Act requirements. 25 To return to the purpose of today's review, I'd PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 like to summarize ARB's role in reviewing the district's 2 California Clean Air Act plan. 3 We evaluate the plan against the requirements for 4 expeditious progress by looking at the district's rulemaking 5 on prior plan commitments. 6 We perform an intensive review of the district's 7 rules, in comparison to the rules in other districts, to see 8 if the Valley's implementing all feasible measures. 9 The third main element to assess is reduction to 10 population exposure. Population exposure is a complex 11 statistic, designed to indicate the ozone exposure that a 12 typical person in the San Joaquin Valley would experience. 13 The level of ozone, together with the number of hours over 14 the state standard, are primary factors. 15 The calculated population exposure is not affected 16 by the number of people living in the Valley. 17 The obvious question from this graph is why the 18 large increase in the late 1980s. In the summer of '87 and 19 '88, the Valley experienced many more hours of ozone levels 20 above the state standard than in other years. 21 If you'll recall the earlier ozone graphs, we saw 22 higher peak levels and more days over the standard in this 23 time frame as well. 24 Since this exposure statistic uses three-year 25 averages, it shows a hump rather than a sharp peak. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 The California Clean Air Act requires the 2 district's reduced population exposure to ozone above the 3 state standard from a 1987 baseline, a 40 percent reduction 4 by 1997 and a 50 percent reduction by 2000. 5 In the Valley the level had dropped to about -- in 6 the Valley in 1987 the measure was about 370 parts per 7 hundred million hours. In 1997 the level had dropped to 8 about 150. If the level stays below 185 in 2000, the 9 district will continue to meet this legal benchmark. 10 You can see that using 1987 as the baseline helps 11 the Valley to meet this requirement. 12 The next criteria for review is expeditious 13 progress based on rulemaking. 14 To date, the district has adopted eight measures 15 that were commitments for both California Clean Air Act and 16 federal SIP purposes. Although only five of the measures 17 were actually adopted during the triennial period, 1995 18 through 1997, three more measures were adopted in 1998. All 19 eight are included here for the total of 27 tons of 20 reduction of NOx and VOC combined. 21 In the 1997 triennial update, the district commits 22 to finish adoption of the remaining seven measures that are 23 also SIP commitments by the year 2000. Since adoption of 24 the triennial update last year, the district has reevaluated 25 its rulemaking schedule and expects that some of these seven PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 rules may now be delayed until 2001. We do not believe that 2 it is appropriate to further delay these measures beyond 3 2000. 4 The district carried over its commitments for an 5 additional 15 measures and the plan now anticipates adoption 6 of 14 of these measures between 2001 and 2006. 7 We believe the district needs to establish a more 8 ambitious adoption schedule for the measures, with the 9 greatest emission reduction potential. 10 The transportation strategies and the previous 11 plan are largely continued, although the district has 12 shifted the emphasis from mandatory measures, like employer 13 trip reduction, now prohibited by state law, to voluntary 14 incentive programs, to accelerate the introduction of clean 15 vehicles. 16 Like other districts in California, the San 17 Joaquin Valley cannot show a five percent reduction in ozone 18 precursor emissions per year called for in the California 19 Clean Air Act. Instead the act allows these areas to 20 implement all feasible control measures. 21 Based on our independent evaluation of the 1997 22 triennial update, we conclude that the plan does not include 23 district commitments to adopt and implement all feasible 24 measures. 25 The district will need to commit to upgrade PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 existing rules, and adopt new rules for uncontrolled sources 2 to meet this requirement. 3 We should note that the district hired a 4 consultant to review 13 source categories to assess whether 5 they met the all feasible criteria and if there were 6 opportunities for additional emission reductions. 7 The district shared the results of this review 8 with us in July. Although we looked at the consultant's 9 report, our conclusions on all feasible measures are based 10 on our own analysis and comparison with other districts' 11 rules. 12 All together, we identified 14 control measures 13 that do not meet the all feasible measures criteria, either 14 there is no rule for the source category or the emission 15 limits in an existing San Joaquin rule are not as stringent 16 as in other areas. 17 All of the district prohibitory rules must also be 18 adopted at BARCT level, the best available retrofit control 19 technology. Because technology can change over time, 20 revisiting and upgrading existing measures when needed is 21 part of the all feasible measures requirement. 22 One of the reasons that rules are not at BARCT 23 level is because the district has low cost-effectiveness 24 thresholds, compared with other districts. 25 Mobile sources are the dominant source of ozone PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 precursors throughout California. 2 ARB and US EPA have extensive programs to reduce 3 these emissions and both agencies are continuing to push the 4 envelope on zero and near zero emission technology. 5 At the state level, we've also increased our 6 efforts and funding for incentive programs to accelerate the 7 fleet turnover to cleaner vehicles. The state provided $25 8 million for the Carl Moyer incentive program last year and 9 another $19 million this year to be used statewide to reduce 10 heavy-duty engine emissions. 11 Like the state, the district has increased its 12 focus on incentive programs. The heavy-duty vehicle 13 emission reduction program provides a cost-effective 14 approach to reduce diesel emissions, by supporting the 15 incremental cost to switch to alternative fuels, which are 16 retrofit or replace older diesel engines with cleaner 17 burning engines. 18 Typical sources using these funds are trucks, 19 transit buses, and other fleet vehicles. 20 The Moyer program also funds light-duty 21 alternative fuel vehicles purchases and transportation 22 control measure projects, such as bike lane construction, 23 traffic signalization and employee transit subsidies. 24 The district has also implemented an aggressive 25 outreach program to the eight transportation planning PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 agencies in the Valley to pressure them to use available 2 federal funds on projects with true air quality benefits. 3 I'd like to focus on the cost-effective threshold 4 issues that inhibits the Valley's ability to use the most 5 effective and meet the all feasible measures criteria. 6 This table shows the cost effective limits that 7 other districts use. The ranges you see in this table are 8 four different air districts in the middle row and the South 9 Coast Air Quality Management District. 10 It is clear that the San Joaquin Valley's current 11 thresholds for existing sources are well below other 12 comparable districts. 13 For new sources, cost effectiveness is also a 14 concern. Other districts use cost effectiveness margins 15 almost twice as high as the San Joaquin Valley. When a 16 permittee avoids using the best available technology solely 17 because the cost effectiveness exceeds $9,800 per ton of 18 NOx, the forgone reductions can be considerable. Those 19 reductions are lost for the lifetime of the equipment or 20 longer if it was replaced in kind. 21 The San Joaquin Valley district needs to revise 22 its cost-effectiveness thresholds for both new and existing 23 sources and to revise these upwards to be more in line with 24 those of other districts. 25 ARB staff is prepared to assist with this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 endeavor. 2 Yesterday we received a comment letter from the 3 San Joaquin Valley Unified Air Pollution Control District. 4 The district emphasized that the large contribution from 5 mobile sources and highlighted the previous emission 6 reductions achieved from stationary sources. 7 We agree that stationary sources have achieved 8 significant emission reductions. We note that all 9 technically feasible controls continue to be needed on ozone 10 sources, both mobile and stationary. 11 The district also raised an issue about the 12 discussion in the staff report on the state and federal 13 mobile source control program, pointing out that this 14 discussion looks forward all the way out to 2010. In 15 contrast, the discussion of the district's stationary source 16 activities focuses on the 1995 to '97 period covered by the 17 triennial update. 18 The review period for the district plan is 19 proscribed in state law. 20 However, since the district adopted three 21 significant rules subsequent to this period in 1998, we 22 included the benefits of those measures in our analysis. 23 The discussion of the mobile source program in the 24 staff report was not required. We included it in 25 recognition of the need for substantial emission reductions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 from this sector as well. The district noted that the staff 2 report mentioned a comparison of a district rule to a 3 federal Reasonably Available Control Technology, or RACT, 4 requirement, rather than the all feasible measure standard 5 required by law. The district is correct. 6 For practical purposes RACT and all feasible were 7 the same on the specific category in question. 8 The district asked to consolidate its bump-up SIP 9 with its next triennial update. Based on their expectation, 10 the SIP revision will be due in 2001. We support this 11 request. 12 The district also stressed that both ARB and US 13 EPA need to continue adopting new controls. We agree and 14 look forward to the district's support when we bring new 15 measures before this board. 16 Finally, the district asserts that the 1997 17 triennial plan should receive full approval. 18 We disagree and will discuss this further in our 19 recommendations. 20 From our review of the 1997 triennial plan we 21 reached the following conclusions and recommendations. 22 ARB and San Joaquin Valley districts have a number 23 of technical issues to follow up on together. The first 24 step is underway. Improvements to the emission inventory 25 will give both ARB and the district information about the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 relative mix of stationary and mobile sources. It will help 2 us target those stationary source categories with the 3 greatest potential for emission reductions. 4 For the SIP revision in 2001, we will use the new 5 inventory to reevaluate the ozone model and the 1994 SIP 6 attainment demonstration. 7 The results of the field program from the Central 8 California Ozone Study will allow us to better characterize 9 transport and specific mix of ozone precursors in the 10 valley. 11 Ongoing work on the San Joaquin inventory, ARB's 12 new models for on-road vehicles and off-road equipment, will 13 provide important information for both the air quality 14 models and for understanding the ozone trends in the Valley. 15 To summarize, the district has made progress in 16 reducing emissions. 17 The district adopted eight new rules for 18 stationary sources since the 1994 plans that will reduce 19 emissions by 27 tons per day in the 2001 time frame. 20 The district has been very proactive on its local 21 mobile source program. 22 At the same time, the district can and needs to do 23 more, specifically, by accelerating the pace of its 24 rulemaking, raising the cost-effectiveness threshold, and 25 upgrading its rules to meet the all feasible standard PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 established by other air districts in California. 2 We believe the plan warrants a conditional 3 approval, because it represent progress, but clearly does 4 not meet the requirements of the California Clean Air Act 5 without further district action. 6 We note that six of the 1997 triennial updates 7 submitted by other air districts received conditional 8 approval from the board for similar reasons. 9 These conditions included provisions for those 10 districts to also develop specific rules to meet the all 11 feasible measures requirement. 12 The timing for determining whether or not a 13 district has fulfilled the conditions is generally upon 14 district action to address the specific conditions or during 15 consideration of the next triennial update. 16 Therefore, we recommend that the Air Resources 17 Board approve the San Joaquin Valley's 1997 triennial update 18 under the California Clean Air Act with the following 19 conditions. 20 First, that the district adopts the remaining SIP 21 Clean Air Act measures, plus an organics solvents rule 22 currently under federal sanctions clock by the year-end 23 2000. 24 Second, that the district prioritize 18 control 25 measures and adopt at least four of these per year in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 next planning cycle from 2001 to 2003. 2 For the 26 measures associated with the first two 3 conditions we recommend that the district be able to drop a 4 measure from this list if the district demonstrates that the 5 measure is not technically feasible, not cost effective or 6 the emission inventory does not justify rulemaking action. 7 The third condition is that the district revise 8 its cost-effectiveness thresholds to allow it to adopt and 9 implement all feasible measures. 10 Fourth, that the district include the projected 11 emission reductions and dates for adoption and 12 implementation of each commitment in the next triennial 13 plan. 14 Finally, that the district submit annual progress 15 reports as currently required by state law. 16 This concludes the staff presentation and we'd be 17 pleased to answer any questions you may have. 18 CHAIRMAN LLOYD: Thank you very much. 19 Any questions from the board? 20 We have one person to testify, our partner in the 21 effort to clean up the air, Dave Crow, executive director 22 and air pollution control officer with the San Joaquin 23 Valley district. 24 A latecomer, Cathy, I think is going too. 25 MR. CROW: May I go first? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 CHAIRMAN LLOYD: Yes. 2 MR. CROW: Thank you, Chairman Lloyd, members of 3 the board, staff. 4 First, let me tell you that we very much 5 appreciate the effort that your staff put into the 6 evaluation of our plan. We think it is a very comprehensive 7 review and I think they have done an excellent job of citing 8 for you the rather intractable problems that we face in the 9 San Joaquin Valley, and the progress we've made. And I 10 think for all of our benefits they've highlighted a number 11 of things that remain on our to-do list. 12 And what I'd like to spend a little bit of time 13 talking about is how we intend at the staff level to proceed 14 to abide by and bring to fruition the comments and the 15 recommendations that you just received from your own staff. 16 I would comment up front that we do concur with 17 the analysis and we agree that we will move forward with the 18 measures that have been cited in the report. 19 I also would like to point out to your attention 20 that you recently received a letter from us, and I would 21 point out on page four that we spoke to our desire that your 22 approval be unconditioned, and we laid out in that our 23 justification, and I'll share that reasoning with you very 24 briefly. 25 Our report has been pending evaluation by your PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 staff for quite an extended period. That gave us the mutual 2 opportunity to look at all feasible control measures and, as 3 was noted by your staff, we had the opportunity to retain a 4 consultant to undertake that evaluation. 5 We had very productive conversations with your 6 staff regarding how to proceed on those feasible control 7 measures. 8 That was different than the six previous district 9 plans that you had looked at, that you also gave conditional 10 approval to, and we thought that perhaps that effort had 11 removed the need for a conditional approval. 12 With subsequent conversations with your staff just 13 over the last couple of days, we realize what they just 14 shared with you is that you also have a need on an ongoing 15 basis to evaluate not only what we at the district staff 16 level recommend to our board and the actions our board 17 undertakes over the next couple of years to fulfill what is 18 contained in your evaluation of our '94 triennial report. 19 So at this point based on those conversations we 20 would be grateful and accepting and understanding of the 21 conditional acceptance of the plan that has been noted. 22 I think one of the other things that I want to 23 cite, without exploring the details of where we do concur on 24 all feasible control measures, BARCT measures, and on the 25 very aggressive agenda that our district will face and then PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 in good collaboration with your staff and moving forward 2 with the next federal SIP round that we have, and that's to 3 talk about the role that mobile sources play in San Joaquin 4 Valley. 5 We are a rapidly urbanizing area. We are a huge 6 area. We're 25,000 square miles with the largest geographic 7 air base in the nation. 8 We also have very different and very challenging 9 topography and meteorology. 10 We, in many respects, are rather a perfect area to 11 create ground level ozone to trap particulate matter. We 12 recognize that, and in addressing that our board in 13 collaboration with the Air Resources Board and the federal 14 government has been very aggressive in procuring major 15 dollars to develop science, science that is fundamentally 16 and foremost beneficial to us in California, but it is also 17 transferable to the rest of the nation. 18 We led the way in a pioneering ozone study that 19 addressed the transport couples to a greater degree than we 20 had ever previously understood and we're just now in the 21 process of beginning a state-of-the-art PM study of the San 22 Joaquin Valley surrounding areas. 23 That is key to a better understanding of the types 24 of rules that will be effective upon adoption for addressing 25 both ozone and PM. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 Our board has also appreciated the role that 2 mobile sources play in our Valley. And while they don't 3 have direct legal responsibility or authority to move in 4 that area, they have been very aggressive with voluntary 5 programs and when we say voluntary, that means incentives 6 and that means dollars. 7 Your staff report pointed out that we have a very 8 effective heavy-duty vehicle program. We have committed 9 just in about the last 18 months millions of dollars, 10 approaching $13 million, in fact, to expedite the transition 11 of vehicles to cleaner technology. 12 We believe that program, coupled with state 13 responsibilities like Smog Check, vapor recovery and a 14 number of other very successful efforts that the state has 15 been involved in, are really going to be critical to ongoing 16 success in the San Joaquin Valley. 17 And I think our board is evidence of a commitment 18 to moving aggressively in that area and committing 19 substantial dollars to that program, and we look forward to 20 continued leadership of the California Air Resources Board 21 and pressing for improved technologies, both on the fuel 22 side, as well as on the tailpipe side, because we are very 23 dependent upon your efforts for success in our Valley. 24 So with that I would conclude and be happy to take 25 questions, but I think that we all can appreciate the very PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 important challenge that we face in the San Joaquin Valley. 2 These are tough problems, they are tough solutions, and 3 we've got to move together in a very productive, 4 collaborating fashion. 5 And we're proud that over the years that we have 6 been able to rely upon the Air Resources Board and staff to 7 give us assistance and guidance. 8 CHAIRMAN LLOYD: Thank you very much, David. 9 Questions, comment? 10 Yes, Supervisor Patrick. 11 BOARD MEMBER PATRICK: Yes. I'm just wondering if 12 you would be willing to comment on an issue that has been 13 brought up before our board, and that is the automotive 14 coatings. We've talked a little bit about the architectural 15 coatings and how ARB is going to be helping us with that and 16 talked a little bit about how difficult for some things it 17 is to have different regulations for all the different 18 districts. And I know that one of the ones that has been of 19 some concern to us has been automotive coatings and I'm 20 wondering if you can speak to that. 21 MR. CROW: Yes. Right now each of the many 22 districts in California has authority and a responsibility 23 to promulgate requirements in automotive and architectural 24 coatings. 25 And we have moved forward with some success in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 that area. 2 Given our serious, soon to be severe, federal 3 ozone status, we must move in the most aggressive manner to 4 achieve reductions in those areas. 5 And the thought occurs to us, and I think we noted 6 in the letter, that the state Air Resources Board has had a 7 great deal of success in consumer products, as well as 8 automobile fuel formulations. 9 It might be time that we collectively take a good 10 hard look at the most appropriate and expeditious way to go 11 about achieving reductions from architectural and automotive 12 coatings. 13 A little bit of history. Going back a few years 14 ago we looked at the phenomenon of portable equipment. By 15 its very nature I tried to pawn it off on DMV, because it 16 has wheels on it, but that didn't fly. 17 But by its very nature it moves about the State of 18 California, and as a consequence we elevated that discussion 19 to all districts in California through CAPCOA and with your 20 staff to look to a rational, less confusing and more 21 emission restrictive approach to addressing emissions from 22 those types of equipment. 23 And we have had some success in that regard. 24 It might be time that we have similar 25 conversations with your staff and with CAPCOA over PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 architectural coatings and automotive finishes. 2 The reason I would suggest that is two points. 3 One, I think it would be an effort ultimately 4 appreciated by the industry. California is a large market 5 in these types of products. Yet when we fragment that 6 market with a variety of requirements it diminishes their 7 enthusiasm for intensive research and development to come to 8 the best formulations. 9 Secondly, from a compliance and enforcement 10 perspective, it would simplify the task and probably make 11 local district's efforts more productive from an enforcement 12 perspective, so that if you're in the possession of certain 13 compounds, you made a prima facie case that you would be in 14 violation. 15 We are experiencing some difficulty, particularly 16 in the automotive coating fields now where we have asked the 17 Air Resources Board to involve your staff here in looking at 18 what we're finding in our Valley and, it turns out, 19 elsewhere in California. 20 So it just may be time for a good hard look at how 21 we might increase our collaboration and consolidate some 22 rulemaking authority in that area. 23 Part of our concern is that where compounds are 24 presently prohibited, but they are allowed to be used, we 25 may be setting up a scenario where our present is some of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 those other districts' future. If there's a propensity for 2 those materials to be used in areas that don't presently 3 have a serious or severe classification, it could bode 4 poorly for their future attainment status. 5 So I think that it is something we would 6 recommend. There may not, at this juncture, be unanimity 7 among other districts in California that that would be an 8 approach worth taking, but I think through your executive 9 officer and staff perhaps ought to initiate those 10 conversations. 11 Mike may not agree. 12 MR. KENNY: Actually, if I can just say a couple 13 words. 14 I think the suggestion made by Mr. Crow is an 15 excellent one. We think that in fact architectural coatings 16 are a very significant emissions source in the state. We do 17 recognize at this level we do not have state authority to 18 regulate architectural coatings. 19 We also recognize that the industry has been very 20 active in resisting architectural coating requirements at 21 the local level. It's why we are going to bring to you in 22 April of next year a suggested control measure for 23 architectural coatings with the fairly comprehensive 24 environmental impact report associated with it, so that we 25 can collaborate and cooperate with the districts to assist PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 them in adopting that type of measure at the local level. 2 In terms of an approach in which the state would 3 have authority, it is something we would need to work with 4 CAPCOA on. And Dave is correct, some of districts would 5 resist that, so it's obviously something we probably need to 6 talk more about. 7 CHAIRMAN LLOYD: Thanks. 8 Ms. D'Adamo. 9 BOARD MEMBER D'ADAMO: Yes. Dave, you did a 10 really good job, as did staff, pointing out some of the 11 great challenges that the district has before it, and I 12 think that in a nutshell what you're looking at is teamwork. 13 And it can't just be the district on its own. It's got to 14 be control measures imposed by ARB on the mobile source 15 side, for example. 16 And I'm just sitting here thinking that one of the 17 reasons that as a Valley resident, one of reasons that I 18 think that that incentive program has had such great success 19 in the Valley is because you have the public behind you on 20 it. That's something that residents in the Valley would 21 rather engage in incentive-based program than be regulated. 22 And you really have gone a long way through the 23 district with ARB support to get that program up and running 24 as a model. 25 And I think that this might -- this plan may PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 present some opportunities for similar approaches in other 2 areas that the district needs to face. 3 This is an area where there's been tremendous 4 growth, and we don't expect that it's going to slow down any 5 time soon, and to an extent your hands are tied. 6 So I think that it would be quite helpful to maybe 7 bring staff down to the Valley at your next meeting or 8 meeting after that, maybe to do a report similar to what we 9 received just today, for example, on the cost benefit, 10 cost-effectiveness thresholds. 11 I don't know that many of the stakeholder groups 12 in the Valley are aware of the fact that there may be other 13 much more stringent requirements if they were elsewhere and 14 I think that if they could receive a briefing of that nature 15 and on some of the other points that it might help to bring 16 the public support and the stakeholder support around on 17 tinkering with some of the strategies that you have. 18 MR. CROW: I can't pass up the segue. I think it 19 would be very desirable to have the staff report, the CARB 20 staff report, presented at our citizens advisory committee, 21 but also at our earliest mutual convenience to our full 22 governing board, because it does summarize within about an 23 hour's time frame the challenge that we face meeting the 24 federal standard and subsequently the state standard. 25 The other thing that Ms. D'Adamo mentioned, but I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 didn't, but it's in our letter, is the cost effectiveness. 2 This is an issue of longstanding discussion between CARB 3 staff and us going back to 1994 and the CARB audit that we 4 requested. And we have, believe it or not, diligently been 5 pursuing another means to rational and realistically adjust 6 those cost-effectiveness figures to the extent that our 7 board had appointed a subcommittee and we participated in 8 the California EPA process where they brought in eminent 9 economists to talk about these figures. 10 Their eminence must have gone right over my head, 11 because we weren't able to immediately distill a better 12 approach. 13 I think what we've outlined in this letter is a 14 means and a methodology that we can arrive at through 15 working with the stakeholders in the Valley and ultimately 16 with our board to arrive at a different figure based on 17 logic that would be apparent to all, so that for purposes of 18 BARCT we can apply a cost effectiveness in a more productive 19 manner. 20 The other key to the Valley situation is our 21 mandate is stationary sources. We run chronic double digit 22 unemployment in the Valley. It's important that we improve 23 the environment, because without improvements in the 24 environment, the economy is going to continue to suffer. 25 And I think we've reached good understanding of that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 phenomenon. 2 And Ms. D'Adamo also mentioned we've been working 3 with councils of government and planning agencies to have 4 them utilize some of considerable CMAQ dollars in the 5 federal government that are available to them toward air 6 quality benefits. 7 Because of their concern and ours about impacts on 8 human health as well as the economic consequences of being 9 classified severe nonattainment under federal law are rather 10 profound and have a stifling effect on the job retention and 11 bringing in new employment. 12 BOARD MEMBER D'ADAMO: Just one other comment too. 13 I know I'm not the only one here real concerned 14 about the bump-up that's about to happen, and I am pleased 15 to see that staff has agreed with your request that the, for 16 lack of -- I've forgotten exactly what the term is, but the 17 US EPA's plan to bump up the air district, that that plan 18 would be consolidated with the next review. 19 I think that it would be helpful in terms of, you 20 know, just reducing manpower needed and paperwork, 21 et cetera. 22 But I just want to make sure I do understand, you 23 are agreeing that you will be able to prioritize the 18 some 24 odd rules and that you will be able to meet the requirement 25 for additional rules a year, so that it would complement PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 that approach that US EPA is about to require to bump up. 2 MR. CROW: Yes. Clearly with the consultant's 3 report that's been done, with some of guidance documents 4 that are imminent from CARB, we're committing to move with 5 four rules per year towards the board over the next 6 three-year period of time. We will have to prioritize them 7 because we need to go for the most significant tonnages of 8 reduction in order to achieve the federal standard. But 9 it's ambitious, but, yes, we believe we can deliver that. 10 CHAIRMAN LLOYD: What is the status of the 11 deployment of the Moyer funds? 12 MR. CROW: We need more money. I'm happy to say 13 that the allocation that we began with in July we had 14 basically committed that and more by September, so we have 15 written to Mr. Kenny asking to negotiate the Department of 16 Finance an advance of our current allocation to us. 17 And I would add that we're not just utilizing the 18 Moyer money. We have committed substantial dollars of our 19 $4 DMV allocation, which your report noted, and we have also 20 had some success in working with transportation planning 21 agencies and commitments of their CMAQ dollars to the 22 heavy-duty program. 23 And I will tell you that's like the toughest money 24 to come by, but we have had some success. 25 And some of the jurisdictions that have not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 contributed directly to our heavy-duty program committed of 2 their own volition to spend that money in ways that we would 3 recommend locally. And some have done very well, others are 4 still working on that. 5 CHAIRMAN LLOYD: Thank you very much. 6 Any other comments, questions? 7 Thank you very much, Dave. 8 MR. CROW: Thank you. 9 CHAIRMAN LLOYD: Last witness is Cathy Reheis with 10 Western States Petroleum Association. 11 MS. REHEIS: Good afternoon, Mr. Chairman, members 12 of the board. I'll keep my comments brief. 13 For the record my name is Cathy Reheis, and I 14 represent the Western States Petroleum Association. 15 And I personally have special interest in the San 16 Joaquin Valley. I lived in Bakersfield for about 12 years 17 and just recently moved up to Sacramento. 18 But I have clients that produce crude oil as a 19 stationary source. They refine it as a stationary source, 20 and then they also produce the fuel that fuels the mobile 21 source sites. So I can tell you, my job there is never a 22 dull moment. I have both sides to deal with. 23 Obviously, we're dealing with your board and your 24 staff on some very important fuels issues and we're really 25 not here to talk about those today, although they were the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 mobile source piece was noted in the staff report, but I 2 will make just a few comments on the San Joaquin Valley's 3 district's authority over some of these issues and where we 4 see ourselves going. 5 I won't belabor the issue that San Joaquin Valley 6 is a very complex problem. We all know that. No one really 7 disputes the fact that there are pieces of this plan that 8 are not going to deliver the results that we had 9 anticipated. 10 I certainly am a big supporter of measuring 11 progress against plan, and that's really what you're 12 outlining here, is an opportunity to go back and look at 13 some things that we did in the past and said we were going 14 to do in the past, and make sure that they still make sense. 15 I think that's a real good and healthy exercise. 16 We need to continue to reevaluate and redesign the plan as 17 we go forward. 18 It always seems we find ourselves that the best 19 information is like right around the corner. And we never 20 get to take advantage of it when we have to make the really 21 hard decisions. And so that's a dilemma we all have to 22 realize and live with and appreciate. 23 But there will be new information. Dave noted the 24 San Joaquin Valley air study. We've all been very involved 25 in that. We've now been joined by our Bay Area partners PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 very seriously in looking at the eight-hour ozone standard 2 with the PM study. And I think again that will yield some 3 good results. 4 As I read through the staff report there were two 5 things that gave me some discomfort, although when that 6 occurs I always call my friends at the ARB and at the 7 district and they always put me at ease, and so I'm feeling 8 much better, but the two issues are really ones that Dave 9 pointed out, all feasible measures and cost effectiveness. 10 And one could read the staff report and get a 11 sense that when you look at other districts we should sort 12 of do, a fait accompli, one size fits all here, and I just 13 want to note and take caution with that philosophy. And I'm 14 not suggesting that that's the philosophy in the staff 15 report. 16 But I think there are such complex issues 17 associated with feasible measures and cost-effectiveness 18 thresholds that it really takes some strategic thought as we 19 go to the list and start picking off other control measures. 20 We need to make sure they're really the right ones, the 21 right tonnage, they're on target and they're really getting 22 the goal that we want to get. 23 Two of the rules that were mentioned in the staff 24 report, the portable engine rule, and also I believe it was 25 the heavy oil tank rule, I forget the number, but those are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 two rules that were pointed out and again gave me a bit of 2 uncomfort that -- I mean the portable engine rule was touted 3 as a very big success, between the district, all of the 4 districts, CAPCOA and the Air Resources Board, and before we 5 would suggest to go back and adopt district rules in that 6 area, I think we really need to sit down and take a look at 7 that and if we're not getting the emission reductions out of 8 the state program that we had envisioned, we're certainly 9 willing to look at that. 10 But that was something that I wasn't aware of and 11 I think we will spend some time with. 12 The other issue is the heavy oil tank rule. And 13 the reason that was not adopted is we entered into a very 14 serious partnership with the ARB and the district funded by 15 the Department of Energy called the HOT study, Heavy Oil 16 Tank study. Basically it's a study that looks at the 17 methodology on measuring emissions off of tanks that contain 18 very heavy oil that looks like molasses. Most of you have 19 seen it, you turn it over, it doesn't move. So it's not 20 light oil like might be in some of the other districts. 21 And therefore one needs to look closely if those 22 emissions that you think you're going to get, even though 23 you put them in the plan and committed to them, are really 24 there. 25 What the study is showing is perhaps that they are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 not there and what we were going to be requested to do is 2 spend $11 million to control some very large amount of small 3 tanks throughout the Valley when, in essence, the tonnage we 4 thought we would get was really not there. 5 So again when we're looking at feasibility and 6 we're looking at cost effectiveness, I just think we need to 7 take care and really look at those things seriously before 8 we go to the list and just start picking off the control 9 measures. 10 So if we're going to squeeze the turnip let's 11 squeeze the right one. All of these things that we do from 12 here on out are going to be very costly, costly to us, 13 they're going to be costly to the State of California, and 14 so I'm again I just want to just note that we're here just 15 registering some caution as we go forward. 16 The other issue I just want to note briefly is 17 it's really important to step back and look at how the SIPs 18 are working and whether they are working. 19 And we've been very interested in working with the 20 ARB on a retrospective SIP analysis, and we're doing this 21 sort of through the San Joaquin Valley air study and it's 22 just an opportunity. And the ARB has been very gracious to 23 indulge us for a day on November 9th to walk us through 24 their thought process. They've spent a lot of time looking 25 at the SIPs, why they're not working, is it the models, is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 it the emissions inventory, what is it that we're not doing 2 right. 3 And we're very excited about that. We're very 4 interested. We'll have some folks there to listen to this 5 and we want to work in conjunction with the board and CARB 6 staff and district staff as we step back and look at the 7 SIPs very seriously, as we're sort of at this threshold with 8 the Valley, Dee Dee, as you noted, being bumped up, that's 9 going to be a very very serious concern for all of us and 10 how we deal with that collectively is going to be good. 11 I think the partnership between the Valley and the 12 ARB and the industry is very strong and very good and we're 13 very interested in continuing to work on that. 14 CHAIRMAN LLOYD: We appreciate your cautious 15 support. That's very helpful. 16 And also working with us in the technical studies, 17 I think it's great that WSPA is involved with that program. 18 You're right, I think we're all excited about getting 19 results in those areas. So it's very helpful. 20 MS. REHEIS: Thank you. 21 CHAIRMAN LLOYD: Any comments or questions? 22 Thanks very much, Cathy. 23 And sorry for misstating you when I indicated I 24 thought we would be through by 12:00 on the other item. 25 Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 I guess that's all the testimony we have at this 2 time. 3 Do we have any written comments that need to be 4 addressed? 5 MS. MARVIN: We have one letter from Barbara 6 Goodwin, the executive director of the Council of Fresno 7 County Government. She raises three key points. 8 First, she points out that the federal 9 requirements for transportation conformity place a special 10 onus on transportation agencies and that's to ensure 11 expeditious implementation of any transportation control 12 measures that are identified in the SIP. 13 What she asked us to do in this letter is to 14 clarify which of the mobile source strategies that we 15 discuss in the staff report really are a transportation 16 control measure that's subject to that requirement and which 17 are additional mobile source programs. 18 And this is something that we'd be happy to work 19 with the Fresno COG and the other transportation agencies to 20 be sure that the next SIP revision does clearly define which 21 category those belong in. 22 Next she raises the point that the Fresno COG has 23 recently added a consideration of the cost effectiveness 24 from an air quality perspective to their funding criteria 25 for transportation air quality related projects. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 We commend them on this. This is a good step 2 forward. 3 But she also notes that it's -- or basically they 4 take issue with the pieces of the ARB staff report that 5 would seem to suggest that the COGs are not doing enough or 6 perhaps not doing as much as they could on the air quality 7 side. 8 What she notes is that all of the actions that the 9 Fresno COG has taken in expending this transportation money 10 is consistent with federal law and federal regulations. 11 And we certainly agree with that. We actually 12 note that in the staff report. 13 Our intention to raise some of these issues was 14 really to encourage the transportation agencies to make air 15 quality a higher priority in funding these projects, not to 16 assert that the way they were doing it now was inappropriate 17 under federal law. So it was meant there as a push and an 18 encouragement, not as a criticism. 19 Thank you. 20 CHAIRMAN LLOYD: Any other comment, Mr. Kenny? 21 MR. KENNY: No. 22 CHAIRMAN LLOYD: Again, this is not a regulatory 23 item, there's no need to officially close the record. 24 However, we do have a resolution before the board, so take a 25 moment to review that and then looking for a motion and a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 second. 2 BOARD MEMBER PATRICK: Mr. Chairman, I just wanted 3 to make a comment about Barbara Goodwin's letter. 4 And apparently she would like to work with ARB 5 staff on some of these issues, and I know this has been an 6 ongoing issue with our air district and just a few of the 7 COGs and I'm wondering if perhaps this might be an 8 invitation for you to attend a meeting where all the COGs 9 are getting together and maybe a chance to praise those COGs 10 that are really getting a lot of bang for their buck. 11 I know this is something that our board has 12 directed Mr. Crow to do, and he's taken a tremendous amount 13 of leadership and probably a tremendous amount of flack from 14 a few of our COGs about this, and I think that this would be 15 an opportunity for you to really once again reiterate the 16 district's position, which is we need to absolutely get as 17 much bang for our buck as we can out of these CMAQ dollars 18 and so forth that are being spent through the COGs. 19 So hopefully this will be an invitation for you to 20 address all of the COGs, because I don't think it could 21 hurt. Some of them are doing a fabulous job and others are 22 not doing so well. I won't say which ones are which, of 23 course, because I'm so gracious. 24 But, anyway, let's take that as an invitation to 25 address all of them, because that's an issue, and to have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 you back us up in our effort and Mr. Crow up in his effort I 2 think would be really appreciated. 3 MS. MARVIN: We'll welcome that opportunity and 4 look at it as a new way of working with the COGs and 5 supporting the district in those efforts. 6 BOARD MEMBER PATRICK: Great. Thank you very 7 much. 8 At our last board, Mr. Chairman, we did indicate 9 that we had an open invitation for shortly after the first 10 of the year for ARB staff to come and talk to our board and 11 I think all of this that has been said today needs to be 12 brought up to our board once again. Staff has brought it up 13 in various forms, but I think it's important for you folks 14 to come and once again present this to our board, because it 15 truly is something that we really need to move forward. 16 And I think what I like most about your report is 17 that it presents the successes of the district and the 18 things that we've worked really hard on, and it also very 19 clearly delineates what the challenges are for our district. 20 And so I personally have no objection to anything 21 that's in here. I think it's accurate and I think it needs 22 to be said, and it's appropriate for it to be said, and 23 especially the working in partnership between the district 24 and ARB to move us forward, because, as Mrs. Reheis was 25 pointing out, we have so many challenges that are unique to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 our district. 2 And so I really welcome working with this staff 3 and being a liaison, if you will, between this staff and our 4 board to make certain that we are as supportive as we can of 5 our staff moving forward on all of this. 6 And with that, I'd like to make the motion on the 7 resolution. 8 BOARD MEMBER FRIEDMAN: I'll second it. 9 CHAIRMAN LLOYD: All in favor say aye. 10 (Ayes.) 11 CHAIRMAN LLOYD: Unanimous. 12 Thank you. 13 Thank you, staff. Excellent presentation. 14 Take a moment before we move on to the next item. 15 (Thereupon a short recess was taken.) 16 CHAIRMAN LLOYD: I'd like to restart on the next 17 item, which is 99-8-3, public hearing to consider amendments 18 to the air toxics hot spots fee regulation for fiscal year 19 1999-2000. 20 Again, we recognize the hot spots program applies 21 to a wide variety of facilities that emit toxic air 22 contaminants, and the program is a key component of our 23 efforts to identify sources of air toxics emissions and the 24 first step towards reducing public health risk. 25 Mr. Kenny, would you like to proceed with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 staff report? 2 MR. KENNY: Yes. Thank you, Mr. Chairman and 3 members of the board. 4 Today staff will present their recommendations for 5 amending the hot spots program fee regulation for fiscal 6 year 1999-2000. 7 Overall state program costs would be reduced by 8 five percent. 9 The proposed amendments continue to use the same 10 method for allocating fees among the districts as used last 11 year. 12 Staff is proposing the fees for the larger 13 facilities stay at the same level as in fiscal year 1998 and 14 '99. 15 Fees for the industry wide facilities, that is the 16 numerous and small sources such as dry cleaners and gasoline 17 stations, are also to be unchanged from last year. 18 While per facilities fees would be unchanged, the 19 five percent reduction occurs because some facilities have 20 dropped out. 21 With that I'd like to introduce Ms. Caroline Lozo, 22 who will make the staff presentation. 23 MS. LOZO: Thank you, Mr. Kenny. 24 Good afternoon, Chairman Lloyd and members of the 25 board. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 We're here today to present the staff's 2 recommendations for amending the air toxic hot spots fee 3 regulation for fiscal year 1999-2000. 4 Each year we come before the board to present 5 amendments to the fee regulation to include the most current 6 program data. 7 The fee regulation recovers the state's costs to 8 implement the air toxic hot spots program. 9 Our agenda today begins with a brief overview of 10 the ARB's air toxics program. 11 I'll then provide some background information on 12 the air toxic hot spots program. 13 And finally I will present the staff's proposed 14 amendments to the fee regulation this year. 15 Let me begin with an overview of the ARB's toxics 16 programs. 17 In the 1980s, two new laws passed by the 18 California Legislature specifically targeted air toxics. 19 Assembly Bill 1807 established the toxic air 20 contaminant identification and control program. The toxic 21 air contaminant program is a two-phased process which 22 includes risk assessment followed by risk management. 23 In the first phase a substance is formally 24 identified as a toxic air contaminant, based on an 25 assessment of health effects and public exposure. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 Potential toxic air contaminants are evaluated 2 through our comprehensive toxics program that includes 3 emission inventories, monitoring and research. 4 After the formal identification of the toxic air 5 contaminant, the risk management phase begins. If 6 appropriate, staff will then develop a control measure. 7 Assembly Bill 2588 established the air toxic hot 8 spots program. The hot spots program was designed to 9 evaluate the air toxics emissions of individual facilities 10 and to make the public aware of those facilities that may 11 pose a significant public health risk. 12 I'll explain more about the hot spots program in a 13 few minutes. 14 The ARB has recently begun to focus attention on 15 community health issues. Over the next few years we plan to 16 continue to work toward the protection of public health by 17 refining our assessment of exposures and risks at the 18 statewide, regional and neighborhood level. 19 We strive to keep the public informed and educated 20 on air toxics issues through public hearings and extensive 21 mail lists and our comprehensive Web site on the Internet. 22 The air toxics program has resulted in major 23 benefits for the State of California. We have substantially 24 increased our knowledge of air toxics and their health 25 effects, having evaluated and formally listed over almost PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 200 substances as toxic air contaminants. 2 We have developed extensive ambient air and indoor 3 air monitoring programs that support our exposure and risk 4 assessment efforts. 5 We have developed a comprehensive statewide air 6 toxics emission inventory. 7 We have developed eight air toxics control 8 measures which have resulted in emission reductions. 9 Finally, we have developed tools to help us better 10 assess toxics risks. These include the development of 11 source test methods, electronic inventory, and risk 12 assessments software and emission factor database software, 13 and risk assessment guidelines currently being developed by 14 the Office of Environmental Health Hazard Assessment, or 15 OEHHA. 16 I'd like to focus now on the air toxic hot spots 17 program. Let me begin with a brief overview of the program 18 requirements. 19 As I mentioned previously, the hot spots program 20 was designed to evaluate the air toxics emissions of 21 individual facilities and to make the public aware of those 22 facilities that may pose a significant public health risk. 23 This has been a strong incentive for sources to 24 reduce their risk. 25 The hot spots program requires all facilities to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 inventory their air toxics emissions and report that 2 information to their local air district and to the ARB. 3 The air toxic emission inventory currently 4 contains information for over 8,000 sources. 5 Emission inventories must be updated every four 6 years pursuant to legislation. 7 Based on the inventory data, facilities are 8 prioritized by the local district to determine if a health 9 risk assessment must be completed. 10 Districts calculate a prioritization score based 11 primarily on emissions and the potency of the substances 12 emitted. Those facilities that have a high prioritization 13 score are required to perform a comprehensive health risk 14 assessment. 15 To date, over 800 health risk assessments have 16 been prepared and submitted for review. 17 Those facilities whose emissions are found to 18 present a significant public health risk are required to 19 notify the public of their risk. 20 To date, 85 facilities have notified the public of 21 their risk. 22 The notification requirement is generally the 23 motivation necessary for facilities to reduce their air 24 toxics emissions and risk. 25 Finally, in some cases facilities must then reduce PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 their risk below the level of significance. 2 To date, 15 facilities have prepared risk 3 reduction plans. 4 The ARB, OEHHA and the 35 air districts work 5 together to implement the air toxic hot spots program 6 statewide. 7 The ARB's responsibilities include maintaining the 8 toxics emission inventory database and the air toxics 9 emissions factor database, collecting and validating 10 additional emissions data, developing source test methods, 11 assisting small businesses in developing risk reduction 12 plans and preparing the fee regulation. 13 The Office of Environment Health Hazard 14 Assessment, or OEHHA, reviews and provides comments on 15 facilities' site specific health risk assessments. The 16 OEHHA staff also is developing new risk assessment 17 guidelines, which include newly identified cancer potencies 18 and noncancer acute and chronic exposure levels used in 19 assessing risks. 20 The local air districts review and approve toxics 21 emissions inventory plans and reports. Based on the 22 inventory data, district staffs prioritize facilities to 23 determine if a risk assessment is required. 24 The district must review the data in the risk 25 assessment. Districts are required to establish public PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 notification procedures. 2 If a facility develops a plan to reduce emissions, 3 the district reviews the plan extensively before approving 4 it. 5 The ARB, OEHHA and the districts together develop 6 risk assessment guidelines to assist small businesses, such 7 as auto body shops, gasoline service stations and dry 8 cleaners. 9 California has seen many benefits through the 10 implementation of the hot spots program. California has 11 developed one of the few comprehensive statewide air toxics 12 emissions inventory databases in the United States, which is 13 available to the public. 14 Hundreds of facilities have been identified as 15 posing a public health risk through the process of the 16 facilities evaluating the quantities of toxic substances 17 they emit and the health impacts of those substances. 18 Substantial reductions in emissions and risk have 19 occurred after facilities determine the quantity of their 20 air toxics emissions and the risk impacts. Many of these 21 reductions have been voluntary. Other facilities reduced 22 emissions in order to avoid public notification requirements 23 for high-risk facilities. 24 While we've made great strides in this program, 25 there's still thousands of small facilities that must be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 evaluated to determine if their air toxics emissions pose a 2 significant public health risk. 3 In addition, the program requires ongoing 4 monitoring of former and potential medium to high risk 5 facilities, as well as ensuring newly identified facilities 6 meet program requirements. 7 I'd now like to discuss the fee regulation and the 8 staff's proposal to amend the regulation for fiscal year 9 1999-2000. 10 The Hot Spots Information and Assessment Act 11 requires that the ARB adopt a regulation to recover the 12 state's costs, both ARB and OEHHA, to implement the program. 13 The fee regulation allocates the state's costs 14 among the 35 districts and requires each district to recover 15 these allocations through facility fees from facilities 16 subject to the program. 17 The fee regulation also authorizes districts to 18 adopt fee rules or schedules to recover their costs, and the 19 allocated state costs of facilities' total fee is composed 20 of the state portion and the district portion. The majority 21 of districts adopted their own regulation to recover those 22 fees. 23 Districts may request that the ARB adopt their 24 district rule for them. 25 This year five districts have requested that the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 ARB adopt their district fee schedules. 2 I'll discuss the districts' regulations later in 3 the presentation. 4 I'll now focus on the state fee regulation and the 5 proposal that staff is recommending today. 6 First, we are proposing to use the same method to 7 allocate the state program cost to the districts as was used 8 for the last two fiscal years. This method uses the number 9 of facilities in the program in each district and the 10 facilities' respective risks to determine how much each 11 district must collect in state costs. 12 Facilities are assigned to one of seven fee 13 categories, according to their assigned risk. These fee 14 categories and the dollar amount per category remain 15 unchanged from last year's regulation. 16 Any change in a district's allocation of state 17 costs is a result of either a change in the number of 18 facilities subject to the program in that district or a 19 change in the risk information that district has submitted 20 for its facilities. 21 Facility risk information is based on information 22 submitted by the districts by July 1st, 1999. 23 It is important to keep in mind that this 24 regulation does not actually affect fees to individual 25 facilities. It assigns facilities two categories with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 specific dollar amounts that are used to calculate the 2 district's allocation of state costs. 3 However, as a practical matter, most districts use 4 the category amounts to recover fees from the individual 5 facilities in order to recover state costs. 6 The fee method assigns facilities with high risks 7 to categories with higher costs. Intermediate risk 8 facilities are assigned to lower cost categories. 9 Facilities with low risks are exempted from fees. These 10 fees together comprise the total amount a district owes the 11 state. 12 There are several types of facilities in the fee 13 program. Larger facilities that emit a greater amount of 14 toxic pollutants are assigned a fee based on the amount of 15 risk they pose on the public. These facilities are assigned 16 state fees ranging from $67 to $6363. The highest risk 17 facilities are assigned a higher fee. For example, 18 facilities that pose a risk of greater than 100 cancer cases 19 per million would be assessed a fee of $6363. Facilities 20 may qualify for lower fees based on two provisions in the 21 fee regulation. 22 In the first provision, businesses which are 23 considered small business under a specified definition 24 qualify for a fee cap set at $300. 25 Facilities which fall into a class called PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 industry-wide facilities are primarily small businesses for 2 which an emission inventory report was prepared by the air 3 district. Examples of these facilities includes gas 4 stations, dry cleaners, and auto body shops. These 5 facilities are assigned a flat fee of $35. 6 Based on the staff's proposal, this table lists 7 the ten districts with the largest share of state costs. 8 These districts together comprise 90 percent of the total 9 state costs. Allocations for the other 25 districts make up 10 the remainder of the total state costs. The full table of 11 what each district is allocated in state costs is located in 12 Table 2 of the staff report on page 505 of the board book, 13 and is also attached to the back of your copy of the slides. 14 As a consequence of our proposal to freeze 15 facility fees at last year's rate, the state will recover 16 $1.2 million for fiscal year 1999-2000. 17 This represents less than one percent of the 18 overall ARB budget. 19 This $1.2 million budget represents a five 20 percent, or $63,000, reduction below the state's program 21 costs for last year. This reduction is due to fewer 22 facilities in the program or to reductions in risk for some 23 facilities, which would put those facilities in a lower fee 24 category. 25 The largest amount we can collect is set by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 legislation at 1.35 million. Therefore, we will be 2 operating at $150,000 below the legislative cap. 3 As I've already mentioned, districts normally 4 adopt their own district fee regulations at the local level. 5 However, districts can request that the ARB adopt their 6 district rule for them. 7 We are proposing to adopt fee rules for the five 8 districts listed on the screen. These rules are based on 9 the district's board-approved costs and the ARB has no input 10 into these costs. The individual district costs can be 11 found for all districts in Table 3 of the staff report, 12 which is on page 506 of the board book. And that is also 13 attached to the back of your copy of the slides. 14 Let me review the proposals we're making today. 15 We are proposing to use the same fee allocation 16 method as in past years. 17 We are proposing to keep the dollar amounts per 18 facility fee categories at the same level as last year. 19 As a result, we're proposing a state program cost 20 of $1.2 million, a reduction of five percent from last year. 21 And we're proposing to adopt district fee 22 schedules for five districts. 23 We recommend that the board adopt the staff's 24 proposal for amending the fee regulation for fiscal year 25 1999-2000. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 That concludes my presentation of the staff's 2 proposal. 3 We did receive one comment letter on the proposal, 4 and I can summarize that comment at this time if you'd like. 5 CHAIRMAN LLOYD: Go ahead. 6 MS. LOZO During the 45-day comment period, and as 7 of October 28th, 1999, we have received one letter. 8 We received a letter from the Metal Finishing 9 Association of Southern California. 10 They state that they would like to see the state 11 budget for the hot spots program be reduced further, and the 12 flat feet for industry-wide facilities raised from $35 to 13 $80 in order to reduce the highest fees for the metal 14 plating and finishing facilities. 15 In response to the Metal Finishing Association's 16 letter I'd like to offer the following. 17 These facilities work with very toxic metals, such 18 as nickle and hexavalent chromium. In fact, hexavalent 19 chromium is the second most potent carcinogen identified by 20 the state. 21 Many of the metal finishing facilities have toxic 22 emissions resulting in very high public health risks. 23 As a result, some of these facilities pay the 24 higher fees in the hot spots program. 25 However, we do not feel that these fees are an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 unjust burden. Metal finishing facilities represent 2 approximately four percent of the facilities paying the 3 fees, and account for about six percent of the total fees 4 collected. 5 In addition, raising fees for the thousands of 6 industry-wide facilities may be a burden to that group. 7 Industry-wide facilities are small businesses such as gas 8 stations, dry cleaners and auto body shops. Many operate 9 with low profit margins and are subject to many additional 10 fees from various county and state agencies. Fees for 11 industry-wide facilities have been raised twice in the last 12 three years, so we believe keeping the fees for this group 13 at last year's level is appropriate. 14 We also do not believe it is appropriate to reduce 15 the state budget further. As tasks have been completed, the 16 state has moved aggressively to reduce the program costs in 17 the past. In fact, state costs have been reduced over 77 18 percent since the peak in fiscal year 1993-94. We are now 19 at a maintenance level. Any further reductions would impact 20 the state's ability to maintain an effective program. 21 This concludes staff's response to the comment 22 letter. 23 CHAIRMAN LLOYD: Thank you very much. 24 Ms. Ombudsman, would you address the process and 25 see if anything came up in the overall staff preparation for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 this work. 2 OMBUDSMAN TSCHOGL: Mr. Chairman and members of 3 the board, the staff has done an outstanding job of reaching 4 out to stakeholders in the development process here. 5 Staff worked with the Stakeholders Working Group, 6 the Office of Environmental Health Hazard Assessment and 7 local air districts toward this end. 8 This Stakeholder Working Group is made up of 9 approximately 90 industry and environmental representatives, 10 including the service station, automotive painting and 11 repair, dry cleaning, refining, chemical manufacturing and 12 aerospace industries. 13 Staff invited the Stakeholders Working Group to 14 review and comment on the development of the regulation 15 through a teleconference conducted on June 2nd, 1999. 16 Approximately five people participated. 17 Staff also communicated with interested parties in 18 several informal one-on-one telephone calls. 19 Two workshops on the item were held in Sacramento 20 on June 9th and September 28th, 1999, with invitations being 21 mailed out to all of the aforementioned people and 22 stakeholders on an 8,000-plus person mailing list. 23 Opportunity for public input into the regulation 24 development was provided at each of the workshops. 25 Participants in these workshops included the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 Western States Petroleum Association, the Sacramento 2 Regional Sanitation District, the Metal Finishing 3 Association of Southern California, OEHHA and several air 4 districts. 5 On August 31st, 1999, staff mailed out notices to 6 the 8,000 invitees announcing this hearing and the 7 availability of the staff report. 8 Additionally, the staff report was mailed to the 9 Stakeholders Working Group and the local air districts, 10 along with the board hearing announcement. 11 Staff currently maintains a page on our Web site 12 posting information regarding the development of the fee 13 regulation. Between May and August the Web page was viewed 14 at least 58 times per month by the public. 15 As you can see, the staff did an outstanding job 16 reaching out to all of the stakeholders and affected parties 17 and involving them in inclusive, deliberative and meaningful 18 public process. 19 And I have no concerns. 20 CHAIRMAN LLOYD: Thank you very much. 21 I guess we've got no written presentation, no 22 witness here to testify. 23 Any other written comments besides the one you 24 addressed? 25 MS. LOZO No. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 CHAIRMAN LLOYD: Thank you. 2 I guess since all the testimony and written 3 submissions and staff comments for this item have been 4 entered into the record and the board has not granted an 5 extension on the comment period, I'm officially closing the 6 record on this portion of the agenda item, No. 99-8-3. 7 Written or oral comments received after the 8 comment period has been closed will not be accepted as part 9 of the official report on this agenda item. 10 Are there any ex parte communications that the 11 board would like to divulge? 12 No. 13 Again, I guess if we've reviewed the resolution, 14 maybe we can proceed with a motion. 15 Question, sorry. 16 BOARD MEMBER McKINNON: No. 17 Actually as a worker that worked in some of these 18 places where this program identifies, I'm really proud to be 19 part of this kind of a program. I'm sure that it not only 20 saves lives in communities, it saves lives of workers. 21 And I would like to move the motion. 22 BOARD MEMBER RIORDAN: I'll second the motion. 23 And just respond by saying that I agree with you 24 and I also want to thank the staff for the response they 25 made to the metal finishing industry, because I hear from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 the other side who represents the small, little dry 2 cleaners, and they are struggling as well. So I mean 3 everybody is out there struggling. But I agree with your 4 assessment and I'm delighted to say that you've held the 5 fees at the same level as last year. 6 CHAIRMAN LLOYD: Thank you very much. 7 You second, so all in favor say aye. 8 (Ayes.) 9 CHAIRMAN LLOYD: Unanimous. 10 Thank you. I guess we'll just take a moment while 11 we change over staff and we'll proceed rapidly with the last 12 item. 13 (Pause in proceedings.) 14 CHAIRMAN LLOYD: We'd like to proceed with the 15 last item, please. 16 The next item on the agenda today is 99-8-4, 17 public meeting to consider status report on the Air 18 Resources Board heavy-duty vehicle smoke inspection program. 19 And this pertains to the status of the board's 20 heavy-duty vehicle smog inspection program which is updated 21 in December of 1997. 22 As I understand, this program consists of two 23 components, random roadside inspections and periodic fleet 24 inspections, both of which uses Society of Automotive 25 Engineers, or SAE, smoke testing procedure to check these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 trucks and buses for excess smoke emissions. 2 At this point I'd like to ask Mr. Kenny to proceed 3 with the staff presentation. 4 MR. KENNY: Thank you, Mr. Chairman and members of 5 the board. 6 Emissions of particulate matter, oxides of 7 nitrogen and hydrocarbons found in the exhaust of heavy-duty 8 vehicles contribute greatly to the state's inability to meet 9 its ambient air quality standards. 10 While each generation of new diesel engines meet 11 increasingly stricter emissions standards, inadequate 12 maintenance practices and tampering of emission controls 13 systems produce the heavy black smoke that pours from the 14 stacks of some heavy-duty vehicles. 15 In fact, the Air Resources Board receives hundreds 16 of public complaints regarding smoking diesels and buses -- 17 excuse me, smoking diesel trucks and buses annually. 18 In December of 1997 the Air Resources Board 19 adopted a set of regulations that updated the board's 20 existing heavy-duty vehicle smoke inspection program. The 21 initial program, like the current program, consisted of a 22 random roadside inspection element and a periodic fleet 23 inspection component. Both parts of the program had been 24 dormant for several years because the staff had been 25 directed by the board to work on reformulated fuels issues. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 Following the adoption of the updated regulations, 2 both elements were reinstated in the summer of 1998. 3 And at this point I'd like to ask Ms. Elizabeth 4 Miller to make the staff presentation. 5 MS. MILLER: Thank you, Mr. Kenny. 6 Good afternoon, Chairman Lloyd and members of the 7 board, and welcome to the new members. 8 This afternoon we would like to give you an 9 overview of one of the board's programs, the heavy-duty 10 vehicle smoke inspection program. 11 The packet you received contains a copy of the 12 slides we have assembled, and these slides contain the 13 facts, the figures, dates and statistics about the program. 14 In an attempt to keep the presentation short and 15 lively, I will highlight the most relevant and interesting 16 statistics and then open the floor to questions. 17 While the presentation will include a survey on 18 the current topics and issues that affect the current 19 administration of the program, I'll first look at the nature 20 of the problem that gives rise to the smoke inspection 21 program, and then talk about the two-part history of the 22 board's administration of the program. 23 The problem or fundamental basis for this program 24 lies in the makeup of the on-road vehicle fleet and the 25 disproportionate amount of emissions contributed by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 heavy-duty vehicles. 2 As I've shown in this slide, heavy-duty diesel 3 vehicles make up only two percent of the fleet, but emit 65 4 percent of the on-road fleet's particulates into the air. 5 They're also responsible for 30 percent of the NOx 6 emissions. 7 Last year the board identified diesel exhaust 8 particulates as a toxic air contaminant. 9 If you've ever driven behind an excessively 10 smoking truck or bus, you've encountered the second part of 11 the problem. It looks bad, it smells worse, and it's bad 12 for your health. 13 The people of California agree, as Mr. Kenny noted 14 earlier, the most frequent complaint heard by the Air 15 Resources Board is about smoking trucks and buses. 16 In response, a law was passed in 1988 that 17 required the board to develop a heavy-duty vehicle smoke 18 mitigation program. 19 The result was a set of regulations adopted in 20 1990 that put California's first heavy-duty vehicle roadside 21 smoke inspections in place. 22 Simply stated, these inspections test the smoke 23 capacity of trucks and buses at random roadside locations 24 and Highway Patrol way stations throughout the state. 25 If the smoke was too dark, that is to say 40 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 percent opacity for newer engines, or 55 percent opacity for 2 engines older than model year 1991, the owners were issued a 3 citation, required to repair the engine, set it back to the 4 manufacturer's specifications and pay a penalty. These 5 roadside inspections were initially enforced from November 6 of 1991 to October of 1993. At that point the staff was 7 redirected by the board to work on clean fuel issues. 8 While the roadside inspections target all 9 heavy-duty vehicles traveling in California, it's literally 10 impossible to test all of these vehicles. 11 A law was passed in 1990 that required the board 12 to develop regulations that would cover California-based 13 fleet vehicles. 14 The periodic fleet smoke inspection regulations 15 adopted in 1992, completed the board's heavy-duty vehicle 16 smoke inspection program. 17 This component required that owners of heavy-duty 18 fleets test their vehicles for excessive smoke once each 19 year. These initial regulations were never formally 20 enforced. However, a number of California fleets 21 voluntarily performed inspections. 22 As is the case with many ground-breaking 23 regulations, and, despite the staff's outreach efforts, the 24 regulated community fought the roadside inspection program. 25 The validity of the test was called into question PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 and the Air Resources Board's administrative law judge was 2 swamped with over 1100 citation appeals. 3 In response, the Society of Automotive Engineers, 4 or SAE, assembled a committee in 1992 with membership from 5 the Air Resources Board staff and US EPA, trucking 6 associations, engine manufacturers and smoke meter 7 manufacturers to develop an acceptable opacity test 8 procedure and smoke meter specifications. 9 The procedure, known as SAE J1667, was adopted in 10 1996. 11 In the meantime a new law was passed in California 12 that required consistency and repeatability in smoke testing 13 and required that the board guarantee that no false failures 14 occur in the program, unless the false failure was remedied 15 without cost to the owner. 16 The law further recommended that the adoption of 17 SAE J1667 into the board's regulations would satisfy these 18 requirements. 19 The SAE's adoption of the J1667 recommended 20 practice heralded the reemergence of the smoke inspection 21 program. 22 The board adopted an updated set of regulations in 23 December of 1997 that incorporated the SAE J1667 protocol. 24 Enforcement of the roadside inspections resumed on June 1st, 25 1998. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 At this point I'd like to show a short video that 2 demonstrates the operation of the program's smoke test. 3 (Video shown.) 4 MS. MILLER: That is a passer. 5 The updated roadside program retained the penalty 6 schedule established in the initial regulations. The first 7 citation has an $800 penalty attached and requires that the 8 engine be repaired and retested. 9 If the repairs and retest results are demonstrated 10 to the ARB within 45 days, the first $500 are waived. 11 Subsequent citations within a 12-month period 12 require repairs and retesting and carry an $1800 penalty. 13 The 1997 regulations added a notice of violation 14 or fix-it ticket category for older engines that only 15 marginally exceed the opacity standards. This notice of 16 violation requires repairs, but carries no monetary penalty 17 if the repairs are made promptly. 18 As with the initial regulations, school buses are 19 exempt from the initial $300 portion of the penalty for 20 their first citation within a year. 21 The updated regulations governing the periodic 22 fleet inspections were adopted at the same time, also 23 incorporating the SAE J1667 procedure and adding a four-year 24 rolling exemption for new engines. 25 Enforcement of the fleet inspections commenced on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 July 1st, 1998, but offered fleet owners a 15-month phase-in 2 period which ended October 1st of this year. 3 The two-elements smoke inspection program is an 4 effective and cost effective means to NOx and PM 10 5 reductions. 6 Also for fuel savings. 7 And at a little over a dollar per pound of 8 emissions reduced, it stacks up favorably against such 9 programs as Smog Check, whose cost effectiveness lies in the 10 $2 to $5 per pound range. 11 During the last year and a half, the Air Resources 12 Board inspectors have been busy and have performed close to 13 30,000 roadside smoke inspections. 14 In contrast to the initial roadside inspections, 15 the rate of vehicles failing the test has dropped from 22 16 percent in 1993 to eight and a half percent today. 17 On another positive note, slightly more than two 18 percent of the citations have been appealed, as opposed to 19 the 14 percent appeal rate in the initial program, which 20 seems to indicate that the program has been better accepted 21 by the industry. 22 Since the end of the phase-in period on October 23 1st, the staff has begun a compliance assistance audit 24 program for fleets subject to the fleet inspection component 25 of the program. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 The staff is constantly working to keep the 2 regulated community informed about the program, its 3 requirements and its benefits. 4 Our particular interest is the June 1999 letter 5 that was sent to more than 28,000 fleet owners and managers 6 that gave them a heads-up to the end of the phase-in period 7 of the periodic fleet inspections on October 1st. 8 The letter generated hundreds of telephone 9 inquiries, which gave the staff an additional opportunity to 10 educate the fleet owners and managers. 11 The staff maintains a comprehensive Internet site 12 that contains text versions of our brochures, fact sheets 13 and the regulations. 14 The staff is currently producing an updated video 15 for the program. 16 The Air Resources Board participates in the 17 California Council on Diesel Education and Technology, or 18 CCDET, partnership with community colleges and industry to 19 supply low-cost training on the proper administration of the 20 SAE J1667 test procedure and smoke-related engine repairs. 21 Since the commitment of the periodic fleet 22 inspections, over 100 private smoke test facilities have 23 sprung up to meet the smoke testing demand. 24 This training is crucial to assure that the test 25 is performed properly and the low cost allows these new PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 small businesses the opportunity to participate. 2 We now have a few words on video from Ken Pekarek 3 of the San Joaquin Delta College about the CCDET program. 4 (Video played.) 5 MS. MILLER: As more and more -- now I'll 6 highlight some of the activities related to the program. 7 As more and more states adopt heavy-duty vehicle 8 smoke inspection programs, the need for consistency between 9 the various program has become apparent, the US EPA 10 published guidance based on the board's program to promote 11 this consistency. 12 The American Trucking Association and the Engine 13 Manufacturers Association teamed up in support of heavy-duty 14 vehicle inspection and maintenance with a campaign entitled 15 on the road to clean air. 16 The campaign, which promoted good maintenance and 17 anti-tampering practices, was released in May of 1997 and 18 included a video, a pamphlet and a number of public service 19 announcements. 20 The staff has recently expanded its enforcement 21 efforts to include inspections at the Mexican border with 22 approximately 2200 commercial trucks crossing into 23 California each day at Otay Mesa, these inspections provide 24 a good opportunity to make sure that these vehicles don't 25 contribute to California's air quality problems. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 During roadside inspections, the staff also 2 inspects heavy-duty diesel vehicles for illegal use of 3 tax-exempt dyed diesel fuel. 4 The staff is currently involved in a joint project 5 with the American Trucking Association Foundation to study 6 the effectiveness in reducing smoke of various engine 7 repairs, with the goal of making recommendations to 8 consumers on effective repair strategies. 9 A question often posed by vehicle owners is what 10 do you use the citation money for. 11 The penalty funds are recirculated back into the 12 regulated industry in the form of research for clean diesel 13 technologies, incentive programs, and other clean air 14 programs. 15 In an effort to give the public a means to 16 participate in eradicating vehicular smoke emissions, the 17 staff maintains a toll-free smoking vehicle complaint line. 18 Reported vehicle owners are sent a courtesy letter and 19 almost half of the owners contacted responded they have made 20 the necessary repairs. 21 I hope that this overview has given you a sense of 22 the work that the staff continues to do to overcome this 23 visible and unhealthful air quality problem. 24 To summarize, I'll repeat that the on-road 25 heavy-duty fleet emits a disproportionate contribution of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 NOx and particulates. 2 The Air Resources Board smoke inspection program 3 has both a roadside and a fleet component to tackle this 4 problem. 5 The program is effective and cost effective and 6 the ARB has become the national and international leader in 7 mitigating excessive smoke emissions. 8 To conclude our presentation we have a short video 9 testimonial regarding the benefits of the board's smoke 10 inspection program from Pius Eberle, who owns Bell Turbo 11 Sales and Service and another from Pat Strohmeyer, the 12 safety manager of Reeves Trucking Company. 13 (Video shown.) 14 MS. MILLER: I'd like to thank you for this 15 opportunity to come before you and tell you about our 16 program. 17 We'd be pleased to answer any questions you have 18 at this time. 19 CHAIRMAN LLOYD: Yes, Mr. Calhoun. 20 BOARD MEMBER CALHOUN: Yes, I note that you 21 referred to the enforcement at the Mexican border. Are you 22 actually enforcing the law there or are you warning people? 23 MR. JACOBS: Mr. Calhoun, at the Mexican border we 24 actually are issuing citations. It's the result of Senate 25 Bill 270, Steve Peace, from Chula Vista, and we're required PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 to actually conduct enforcement along the Mexican border 2 crossing. 3 BOARD MEMBER CALHOUN: What happens to the 4 citation? 5 MR. JACOBS: We are vigorously enforcing those 6 citations and take the same corrective action that we do 7 against any California-based or out-of-state-based trucker. 8 And the compliance rate has increased dramatically. 9 I'm sorry. I'm Paul Jacobs, chief of mobile 10 source enforcement. 11 BOARD MEMBER C.H. FRIEDMAN: You collect the money 12 in pesos or dollars? 13 MR. JACOBS: They do pay their fines and actually 14 we have had, Professor Friedman, we've had some of the 15 trucking companies down in Mexico look at the exchange rate 16 and they have made payment in pesos and in dollars, but they 17 always wait until they have a favorable exchange rate, based 18 on the way their economy fluctuates down there. 19 So we've had that experience somewhat. 20 BOARD MEMBER C.H. FRIEDMAN: When did that 21 commence approximately? 22 MR. JACOBS: We started formal enforcement down 23 there just this year, based on legislation that was enacted 24 last year. But we've been doing inspections down there on 25 an educational basis for a number of years. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 BOARD MEMBER C.H. FRIEDMAN: I'm glad, because 2 NAFTA opened the floodgates and an awful lot more polluting 3 vehicles were coming through. It was visibly polluting. 4 And I've seen less of it, living down there, and driving 5 those main arteries. 6 MR. JACOBS: We've seen the failure rate drop 7 dramatically at the Otay Mesa crossing and we're preparing 8 to also implement staff on a full-time basis out in 9 Calexico, which is in Imperial County, and will with the 10 California Highway Patrol place inspectors at the other 11 border crossings, such as Tecate and so forth. Want to keep 12 a close eye on those beer trucks, make sure they're 13 compliant. And at other crossings along the border as well. 14 BOARD MEMBER C.H. FRIEDMAN: Thank you. 15 MR. JACOBS: Thank you. 16 CHAIRMAN LLOYD: Yes. 17 BOARD MEMBER CALHOUN: I guess I'd like to cite 18 one other observation and go back and review a little 19 history, and let you know that, maybe remind you of the fact 20 that this is the second heavy-duty diesel inspection program 21 that the State of California has operated. 22 I can recall, I believe it was in the mid '60s 23 when the old Motor Vehicle Pollution Control Board had a 24 diesel inspection program that was done in conjunction with 25 the work that the California Highway Patrol was doing. They PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 stopped the vehicles and weighed them and they also 2 inspected the vehicle for smoke emissions on heavy-duty 3 diesel. 4 MR. JACOBS: And actually the Highway Patrol, 5 Mr. Calhoun, still does on a periodic basis pull over 6 vehicles and they will cite them under two provisions of the 7 Vehicle Code. And it still does occur to a degree, but 8 we're the main enforcement arm at this point of emissions. 9 CHAIRMAN LLOYD: I notice you used a smoke meter 10 there to characterize the exceedances or otherwise. 11 Are you aware of anybody operating smoke meters 12 which don't comply with the SAE regulation? 13 MR. JACOBS: Chairman Lloyd, not to my knowledge. 14 We have declarations from now six smoke meter manufacturers 15 that state they fully comply with the SAE J1667 16 specifications. The more recent declaration we received was 17 this week from a German-based company called Maha, and other 18 than that, we have declarations from Bosch Corporation, Red 19 Mountain, Telonic Berkeley, CalTest and Wager. 20 CHAIRMAN LLOYD: Thank you. 21 MR. KENNY: If I could make one comment. 22 Although it wasn't mentioned by either Paul, Don 23 or Elizabeth, there is actually one other significant factor 24 to this, which I think is really a credit to both the board 25 and to Paul, Don and Elizabeth, and that's that if sort of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 one of the things we've seen basically recently is the 2 NESCOM states, New England states, they have copied this 3 program almost verbatim, and that program is now being 4 implemented throughout New England, essentially in exactly 5 the form that it was developed here in California. 6 And that really is a credit to the board itself 7 and also to the staff here who have actually developed that 8 program. 9 So I just wanted to mention that because the 10 people who have actually put all the time and effort into 11 it, Paul, Don and Elizabeth, didn't mention it. 12 BOARD MEMBER C.H. FRIEDMAN: Did we trademark it 13 and license it free? 14 MR. KENNY: We should have. 15 BOARD MEMBER CALHOUN: That's not unusual for 16 NESCOM. They seem to adopt everything. 17 MR. JACOBS: As a matter of fact when I was 18 leaving my office to come over I was on the phone with the 19 Ohio EPA and they are adopting it as well. They have asked 20 for our assistance. 21 And they have asked specifically for Mike 22 Robertson, who actually is our chairman of CCDET program, 23 the training program, to go back and provide training. 24 CHAIRMAN LLOYD: Good. 25 I also think it's a real tribute to staff the fact PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 that we don't have anybody representing the CTA here 2 speaking on this particular subject, against it. 3 MR. JACOBS: Five years ago we would have had them 4 lined up. 5 CHAIRMAN LLOYD: Any other discussion on this 6 item? 7 I guess with that, any more comments from staff at 8 all? 9 Since this is not a regulatory item, I guess it's 10 not necessary to officially close the record, and we don't 11 need a resolution. 12 I guess we have no other items? 13 Open comment period. Anybody signed up for open 14 comment period? 15 With that -- 16 MR. JACOBS: Excuse me, Chairman Lloyd. 17 Mike Robertson from the College of Alameda did 18 travel up today from Oakland. He would just like to make, I 19 know we're pressed for time, just make a really short 20 statement about his experience, because he's the one that is 21 our training leader and we do have a -- we believe the 22 world's finest training program for these diesel 23 technicians, and this will only take a couple of minutes, if 24 you could. 25 CHAIRMAN LLOYD: Thank you. Thank you for coming. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 MR. ROBERTSON: As I said, my name is Mike 2 Robertson. I'm from CCDET, which is California Council on 3 Diesel Education and Technology. We're the educational 4 section of the CCDET, which is comprised of industry, 5 government, as well as an educational section of it. 6 For the stenographer I left some notes. 7 CCDET is a California Council on Diesel Education 8 and Technology. CCDET is combined of the three entities, 9 education, government and industry, dedicated to the 10 reduction of diesel and truck, bus exhaust pollution, 11 through education. 12 Community colleges are an essential part of the 13 educational process of CCDET; the Air Resources Board, the 14 mobile source operation division, is the government section 15 of CCDET; and the diesel is the bus, truck, industry, the 16 third part of CCDET. It includes the manufacturers of smoke 17 meters and other interested parties. 18 The three parties of CCDET have worked together 19 bringing the information and instruction to the public to 20 reduce the heavy-duty diesel emission through classes and 21 seminars. 22 The target audience of CCDET is working people in 23 the heavy-duty diesel industry. 24 One of CCDET's classes is teaching a snap idle 25 acceleration test for heavy-duty vehicles, prescribed by the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 SAE J1667 and the regulations and policies of the ARB. 2 The snap acceleration test was developed by the 3 United Nations in 1950 to reduce air pollution created by 4 diesel military equipment in various countries. Many 5 countries still require this test and have developed and 6 implemented a civilian version of the test. The United 7 States is the SAE J1667. 8 I've also traveled to Japan in which this 9 particular one is done also. 10 We've been contacted by Jerusalem, we've had 11 students that have gone in through Europe as well as Greece, 12 and so forth and other countries and you see a very 13 comparable test. That's what gave us the idea to go back 14 and research where it actually came from. 15 Black smoke from heavy-duty exhaust is wasted and 16 unburned fuel. Incorrect mixtures, plugged air cleaners, 17 over-fueling, improper adjustments of the injectors will 18 result in decreased mileage, and an increase in operational 19 costs, the increase in emissions and diesel exhaust. 20 The decreasing the exhaust smoke improves the 21 mileage, reduces the operating cost and decreases pollution. 22 Excessive heavy-duty diesel smoke is unhealthy, 23 costly, bad advertisement for the companies of the vehicles. 24 Commercial vehicles comply with the law set forth 25 in California Health and Safety Code section 44011.6 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 established by the Senate Bill 1997, 1988, the ARB -- excuse 2 me, the Assembly Bill 584 in '93 when their fleets had to 3 maintain and adjust to the prescribed factory 4 specifications. 5 It is unfair to blame the major amount of 6 pollution on heavy-duty vehicles that make up two percent of 7 commercial vehicles. The greatest amount of heavy-duty 8 pollution comes from a small fraction of the heavy-duty 9 gross polluters. Most of industry complies. However, it is 10 the gross polluters that need to be corrected. 11 I can always tell when the ARB is around, because 12 the heavy-duty smoke from our diesels that operate on our 13 highways greatly reduces at that time. 14 I also get a very high demand for people that want 15 to come in and see the correct way to implement the test and 16 also how to avoid the fines in the first place, how to 17 comply. 18 So become very good working neighbors. 19 The ARB heavy-duty inspection program is expected 20 to bring a reduction in today's diesel hydrocarbons, and the 21 attached benefits, added benefits to complying industries 22 are the lower operating costs, fuel savings and being a 23 better neighbor. 24 I should say that people that have participated in 25 the program often come back and they show us what a great PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 profit they have all of a sudden after shifting over into. 2 The added benefits have been the donations into our 3 community college programs, which have done this training, 4 and we are working quite well with industry on being a 5 working partner in this, as well as with the mobile source 6 division. We have been very happy do work with them. 7 The commercial industry vehicles move the 8 necessities of our world. We do not want to dismantle the 9 heavy-duty industry, but we are working with industry and 10 government to correct the heavy-duty diesel vehicle 11 pollutions that are excessive. 12 The best way to ensure that people will comply 13 with the law is through education. Through education, we'll 14 all breathe easier with less pollution. 15 I'm happy to answer any questions about CCDET. 16 CHAIRMAN LLOYD: Thank you very much. 17 Any questions, comments? 18 BOARD MEMBER C.H. FRIEDMAN: Well done. 19 MR. ROBERTSON: I've added on there on the fourth 20 page, the third page, rather, you'll see a summary of what's 21 happened in my program alone, and I'm only one of six of the 22 CCDET District. 23 The college was one of the four initial colleges. 24 The CCDET program has been running for nine years. We have 25 trained at my college 422 students have successfully PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 completed the CCDET program, 47 of them between '98 and '99. 2 120 businesses have been served. 98 percent of 3 the students are actively working in the heavy-duty 4 industry. Ten to 20 percent of the students open up a 5 business that tests diesel vehicles for smoke compliance, 60 6 to 70 percent of them work in the repair shops doing the 7 testing, and 30 to 40 percent for private industry that does 8 their own testing. 9 We're doing very well. 10 CHAIRMAN LLOYD: Just one question. 11 No, Matt first. 12 BOARD MEMBER McKINNON: Yeah. I know this is a 13 real loaded question, but I think it's good to have this 14 discussion in government at all levels. What's your view of 15 apprenticeship programs? 16 MR. ROBERSTON: We sit on the JAC apprenticeship. 17 And we also have to adjust our programs to the California 18 Department of Apprenticeship standards. 19 I believe the apprenticeship program is the heart 20 of the industry's future. Without investing into the 21 apprenticeship program, you will not be able to produce the 22 technicians, nor the mechanics or engineers that go on to 23 the future to keep the world running. 24 I happen to be very pro apprenticeship program, 25 but then again I've been teaching the apprenticeship program PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 for 27 years. 2 BOARD MEMBER McKINNON: Thanks. 3 CHAIRMAN LLOYD: Have you got any suggestions for 4 maybe how the ARB can be more effective in catching some of 5 these high emitters or -- 6 MR. ROBERTSON: I've done research projects which 7 I'll ride along and monitor, assess the ARB on what they're 8 doing in the compliance in which they're doing. The only 9 thing that I can say is that they do an excellent job and 10 they're professional about doing it. 11 CHAIRMAN LLOYD: How do these -- you're saying 12 when ARB is around there's less smoke. How do you know 13 that? Have you quantified that? 14 MR. ROBERSTON: I'm sorry I cannot. There have 15 not been scientific measurements, but we can -- we do have 16 raw data on film that we have run, and you can take a look 17 on the film and once again it becomes very difficult because 18 you don't have a double blind or taking a look at something 19 if you're running a test and taking a look at another that 20 it's an open run once, so that becomes difficult. But we do 21 have raw data which would easily show the reduction of the 22 smoke at various different days. 23 CHAIRMAN LLOYD: Question maybe for Tom in this 24 case. 25 Does in fact 2000 actually take into account the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 high-emitting heavy-duty vehicles, gross emitters? 2 MR. CACKETTE: Yes, it does. And so did the 3 previous version of the model. 4 MR. ROBERSTON: The best part about it is what it 5 does is that it's getting the high polluters educated, they 6 get right into line with the other ones, the reduction is 7 there, the increase in profits, the lower the operating 8 costs. This is a total win-win situation, but sometimes we 9 bring them dragging, kicking and screaming. 10 And, yes, I have talked with the California 11 Truckers' Association and I believe very much in trucking. 12 CHAIRMAN LLOYD: Have you been effective in 13 talking with them? 14 MR. ROBERSTON: (Laughs.) 15 (Laughter.) 16 MR. ROBERSTON: I'm sorry. Sometimes. 17 BOARD MEMBER C.H. FRIEDMAN: I'd like to know how 18 the reporter is going to record that. 19 (Laughter.) 20 CHAIRMAN LLOYD: We appreciate your honesty. 21 MR. ROBERSTON: Thank you for the opportunity. 22 CHAIRMAN LLOYD: Thank you very much. 23 Well, with that, that jovial note, I think that 24 we'll bring this meeting to a close. Thank you all very 25 much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 (Thereupon the meeting was adjourned 2 at 3:20 p.m.) 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 I, JANET H. NICOL, a Certified Shorthand Reporter 4 of the State of California, do hereby certify that I am a 5 disinterested person herein; that I reported the foregoing 6 meeting in shorthand writing; that I thereafter caused my 7 shorthand writing to be transcribed into typewriting. 8 I further certify that I am not of counsel or 9 attorney for any of the parties to said meeting, or in any 10 way interested in the outcome of said meeting. 11 IN WITNESS WHEREOF, I have hereunto set my hand 12 this 4th day of November 1999. 13 14 15 16 Janet H. Nicol 17 Certified Shorthand Reporter License Number 9764 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345