MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD HEARING ROOM CALIFORNIA AIR RESOURCES BOARD 2020 L STREET SACRAMENTO, CALIFORNIA THURSDAY, DECEMBER 12, 1996 9:40 A.M. Nadine J. Parks Shorthand Reporter PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii MEMBERS PRESENT John D. Dunlap, III, Chairman Joseph Calhoun Lynne Edgerton M. Patricia Hilligoss Jack Parnell Barbara Riordan Ron Roberts James W. Silva Doug Vagim Staff Present and Participating: Mike Kenny, Executive Officer Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer Kathleen Walsh, Chief Counsel, Office of Legal Affairs Jim Schoning, Ombudsman Lynn Terry, Assistant Executive Officer Andrew Panson, Air Pollution Specialist, Office of Air Quality and Transportation Planning Cynthia Marvin, Staff, OAQTP Bob Cross, Chief, Mobile Source Control Division Steve Albu, Chief, Engineering Studies Branch, MSCD Allen Lyons, Manager, Advanced Engineering Section, MSCD Michael McCarthy, Staff, MSCD Michael Terris, Staff Counsel, Office of Legal Affairs Dr. John Holmes, Chief, Research Division Bob Barham, Assistant Chief, RD Manjit Ahuja, RD Karlyn Black, RD Patricia Hutchens, Clerk of the Board Wendy Grandchamp, Secretary Bill Valdez, Administrative Services PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii I N D E X PAGE Proceedings 1 Call to Order 1 Pledge of Allegiance Led by Mrs. Riordan 1 Roll Call 1, 2 Opening Remarks by Chairman Dunlap 2 AGENDA ITEMS: 96-10-1 Public Meeting to Consider Report on the Proposed Federal Ozone and Particulate Matter Standards Introductory Remarks by Chairman Dunlap 2 Staff Presentation: Mike Kenny Executive Officer 4 Cynthia Marvin Staff Office of Air Quality and Transportation Planning 6 Ken Biggos Associate Director Region IX, U.S. EPA 30 Al Zemsky Communications Office Region IX, U.S. EPA 36 Questions/Comments 37 Direction to Staff by Chairman 46, 47 Continued Questions/Comments 47 Direction to Mr. Kenny by Chairman 53 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv INDEX, continued. . . PAGE AGENDA ITEMS: 96-10-1 Continued Questions/Comments 53 Statement by Chairman Dunlap re Supervisor Vagim's Retirement from the Board 59 Presentation of Letter from Governor Wilson 60 Presentation of Letter from Secretary Strock 61 Presentation of Board Resolution 63 Statement by Supervisor Vagim 66 96-10-2 Public Hearing to Consider Technical Status and Proposed Revisions to Malfunction and Diagnostic System Requirements for 1994 and Subsequent Model Year Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles and Engines OBD II Introductory Remarks by Chairman Dunlap 68 Staff Presentation: Mike Kenny Executive Officer 69 Michael McCarthy Staff Mobile Source Control Division 70 Questions/Comments 86 PUBLIC COMMENTS: Steve Douglas AAMA 92 Questions/Comments 95 Continuation of Presentation by Mr. Douglas 96 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v INDEX, continued. . . PAGE AGENDA ITEMS: 96-10-2 Questions/Comments 98 Frank Krich Chrysler 105 Greg Dana AIAM 108 Questions/Comments 109 Continuation of Presentation by Mr. Dana 109 Questions/Comments 113 John Valencia California Automotive Wholesalers Association 120 Questions/Comments 125 Paul Haluza MEMA 136 Jack Heyler Automotive Service Councils of California 141 Questions/Comments 147 David Ferris General Motors 148 Questions/Comments 155 John Trajnowski Ford Motor Company 156 Jim Schoning Ombudsman 160 Submission of Written Comments Into Record 161 Record officially closed by Chairman to await 15-day comment period 162 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi INDEX, continued. . . PAGE AGENDA ITEMS: 96-10-2 Disclosure of Ex Parte Communications 163 Questions/Comments 165 Direction to Staff 172, 173 Motion by Calhoun to Adopt Resolution 96-60 with amendments 173 Board Action 174 Luncheon Recess 175 Afternoon Session 176 96-10-3 Research Proposals John Holmes, Ph.D. Chief Research Division 176 Questions/Comments 179 Motion by Hilligoss to Adopt Resolutions 96-61 through 64 184 Board Action 184 Open Comment Period Raymond Buttacavoli General Motors Sacramento 185 Questions/Comments 189 Adjournment 198 Certificate of Reporter 199 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 P R O C E E D I N G S 2 --o0o-- 3 CHAIRMAN DUNLAP: Will this, the December meeting 4 of the California Air Resources Board come to order. I have 5 asked Supervisor Riordan to lead us in the Pledge of 6 Allegiance; so, if I could ask the audience to rise with us. 7 MRS. RIORDAN: Would you join me in our pledge to 8 the flag? 9 (Thereupon, all in attendance recited the 10 Pledge of Allegiance.) 11 CHAIRMAN DUNLAP: Thank you, Barbara. 12 Pat, could I ask you to call the roll, please. 13 MS. HUTCHENS: Calhoun? 14 MR. CALHOUN: Here. 15 MS. HUTCHENS: Edgerton? 16 MS. EDGERTON: Here. 17 MS. HUTCHENS: Hilligoss? 18 MAYOR HILLIGOSS: Here. 19 MS. HUTCHENS: Parnell? 20 MR. PARNELL: Here. 21 MS. HUTCHENS: Riordan? 22 MRS. RIORDAN: Here. 23 MS. HUTCHENS: Roberts? 24 SUPERVISOR ROBERTS: Here. 25 MS. HUTCHENS: Silva? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 SUPERVISOR SILVA: Here. 2 MS. HUTCHENS: Vagim? 3 Chairman Dunlap. 4 CHAIRMAN DUNLAP: Here. Thank you. 5 The first item on the agenda today is 96-10-1, a 6 public meeting to consider a report on the proposed Federal 7 ozone and particulate matter standards. 8 Before we get into that item, though, I would like 9 to remind those in the audience who would like to present 10 testimony to the Board to please see the Board's Clerk; and, 11 if you have written copies, to provide 20 copies to her. 12 This item is a report on the proposed revisions to 13 the Federal air quality standards for ozone and particulate 14 matter, and I knew there was a lot of interest in the 15 proposal in California and across the nation -- from what 16 we've been reading and hearing about discussions by a 17 variety of interested parties. 18 The U.S. EPA formally announced its proposal just 19 two weeks ago. So, I want to thank staff for their efforts 20 to brief the Board as soon as possible. 21 The U.S. EPA has had the responsibility to review 22 its standards to ensure that they reflect the latest and 23 best science. Air quality standards, of course, are 24 required to be health-based so the focus of the standard- 25 setting process is clear. I expect that staff's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 presentation will elaborate on the standard-setting process 2 as well as the other half of the picture, which is how and 3 when new standards would be met. 4 The "how and when" question is distinct from the 5 standard-setting process. The key difference is that while 6 standards themselves are based solely on public health 7 consideration, approaches for achieving those standards must 8 take into account practical and economic considerations. 9 I believe California is well-positioned to respond 10 to changes in these Federal standards. This Board's own 11 State ozone and particulate matter standards have been more 12 health-protective than the Federal standard for a number of 13 years. 14 California has not viewed the current Federal 15 standards as the ultimate public-health goal. California's 16 air quality programs are well ahead of those in other States 17 because of the tougher challenges we face here. We already 18 have the cleanest motor vehicle fuels and industries in the 19 nation. 20 Many of our ozone-control strategies also reduce 21 particulate emissions; so, we will have a clear head start 22 in addressing proposed standards for fine particulate 23 matter. 24 The new technologies envisioned in our approved 25 ozone SIP will enable California to continue on the path PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 toward healthful air quality. To the extent that Federal 2 standards are tightened, other States will have to do more. 3 But they will also benefit from this Board's successful in 4 our push for new national emissions standards. 5 U.S. EPA's initiatives for cleaner trucks and 6 off-road equipment will provide benefits in terms of both 7 ozone and particulate matter, and I believe it's important 8 to acknowledge both where we have been and where we are 9 going as we assess the implications of new Federal air 10 quality standards. 11 So, with that, I would like to introduce Mr. 12 Kenny, the Board's Executive Officer, and ask him to 13 introduce this item and begin the staff's presentation. 14 Mike? 15 MR. KENNY: Thank you, Mr. Chairman, members of 16 the Board. U.S. EPA's proposed new air quality standards 17 and their implications are the major air issues being 18 discussed across the nation today. I've received many 19 questions about the proposed standard, and I'm sure that the 20 Board members also have been asked similar questions. 21 Today, staff will describe the U.S. EPA proposal 22 and present our preliminary review of the implications for 23 California. I think it's clear that California's situation 24 is different than other areas of the country because of our 25 long-standing program and comprehensive ozone SIP. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 I've asked staff to focus on a preliminary 2 assessment of what the new Federal standards in terms of 3 future air quality planning requirements. For example, the 4 timeliness for the process will be a key planning issue. We 5 want a planning process that ensures both smooth integration 6 with current efforts and steady progress towards achieving 7 health-based air quality standards. 8 As staff will discuss, the most complex issue is 9 the proposed new standard for fine particulate. In our July 10 Board presentation on particulate matter, we provided some 11 background on PM10 and current planning requirements. I 12 hope that presentation help set the stage for today's 13 discussion. 14 Now that U.S. EPA has made its proposal, we can 15 provide more information about the implications of the new 16 standards for fine particulate. 17 Before I introduce Cynthia Marvin of the Air 18 Quality staff, what I'd like to do is really also mention 19 that U.S. EPA has sent representatives here also today at 20 our request. And we requested U.S. EPA to come over and 21 talk about the new standards themselves. 22 So, from U.S. EPA, Ken Biggos and Al Zemsky are 23 present. And with that, I guess I'll turn it over to 24 Cynthia Marvin. 25 Cynthia? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 MS. MARVIN: Good morning, Chairman Dunlap and 2 members of the Board. We're here to present a report on the 3 Federal standards for ozone and particulate matter that U.S. 4 EPA proposed two weeks ago. 5 I'll begin by describing the process for reviewing 6 ambient air quality standards and U.S. EPA's recent 7 proposals, followed by the process for developing policies 8 to implement the new standards. 9 Next, I'll identify the timing for finalizing the 10 standards and implementation policies and the schedule for 11 planning and attainment. 12 Finally, I'll present the staff's initial 13 assessment of the implications of the proposals for 14 California. 15 Before we proceed, I'd like to review what we mean 16 by an ambient air quality standard. Primary ambient air 17 quality standards are public health goals. They define a 18 limit on the level of air pollution which is necessary to 19 protect public health. 20 Ambient air quality standards in and of themselves 21 do not reduce air pollution emissions; that's how they are 22 different from emission limits and other control 23 requirements that may be needed to meet the public health 24 goals embodied in air quality standards. 25 Secondary standards are set to protect public PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 welfare; that is, to protect against adverse effects, such 2 as damage to crops, wildlife, and property, as well as 3 visibility impairment. 4 U.S. EPA has proposed revisions to the secondary 5 standards as well, but we'll focus on the primary, or 6 health-based, standards today, because they are the driving 7 force in terms of control strategies. In addition to the 8 national ambient air quality standards set by U.S. EPA, 9 California also has State air quality standards set 10 independently by this Board. 11 There are two distinct efforts related to the 12 standard-setting process. U.S. EPA's first responsibility 13 is to determine where to set the level of the standard in 14 order to ensure adequate protection of public health. The 15 second, equally important, effort is to address 16 implementation issues -- how and when do we get there, 17 considering technical feasibility and costs. 18 This is where issues, such as time frames for 19 attainment, targets for progress, and control requirements 20 come into play. Before talking about U.S. EPA's latest 21 review of its standards, I'll provide a brief background on 22 the history of the national standards. 23 The first national standards were set in 1971 for 24 six pollutants, including photochemical oxidants and 25 particulate matter, which at that time was measured as total PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 suspended particulates, or TSP. 2 In 1979, U.S. EPA replaced the oxidant standard 3 with the current ozone standard. In '93, U.S. EPA decided 4 not to revise that standard. 5 The particulate matter standard has been revised 6 once, in 1987, when the agency changed the particulate 7 indicator from TSP to PM10, or particulate matter less than 8 10 microns in diameter, and then set PM10 standards at their 9 current levels. 10 Why U.S. EPA reviewing the standards at this time? 11 The Federal Clean Air Act requires the agency to review its 12 ambient air quality standards at least every five years and 13 revise them as appropriate. 14 In 1994, the American Lung Association sued U.S. 15 EPA over the agency's failure to review the particulate 16 matter standards on schedule. Under a court order, U.S. EPA 17 must finalize its review by June 28th of 1997 for both 18 particulate matter and ozone. There is also substantial new 19 scientific evidence not available when the current standards 20 were originally set. 21 What is the process that U.S. EPA uses to review 22 its air quality standards? U.S. EPA first considers the 23 latest peer-reviewed scientific studies on the health and 24 environmental effects of a pollutant. An independent 25 scientific review panel, the Clean Air Scientific Advisory PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 Committee, or CASAC, evaluates U.S. EPA's staff proposals 2 and makes recommendations as to the adequacy of existing 3 standards. 4 The advisory committee is made up of scientific 5 and health experts from academia, industry, and government. 6 Based on its review of the scientific studies and input from 7 the advisory committee, U.S. EPA then makes formal proposals 8 to keep or change its standards. 9 What are the Scientific Advisory Committee's 10 primary findings for this current review? The comittee 11 agrees with U.S. EPA's assessment that the current ozone and 12 particulate matter standards do not provide adequate health 13 protection. CASAC reached consensus that a new PM2.5 14 standard should be established. CASAC also acknowledged the 15 need to move ahead a targeted research program to address 16 unanswered questions and to obtain long-term PM2.5 17 monitoring data. 18 I'll talk more about the relationship between 19 PM2.5 and PM10 in a moment. 20 What kinds of health studies are considered in 21 reviewing air quality standards? One type is community 22 health, or epidemiological studies. These kinds of studies 23 look at specific health effects associated with air 24 pollution. The effects evaluated include death rates, 25 hospital visits, and absences from work or school. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 Factors other than air pollution that might affect 2 the outcome are controlled for through study design and 3 statistical methods. These kinds of factors might include 4 smoking or extreme weather conditions. 5 To interpret epidemiological studies, scientists 6 look at a variety of criteria that help determine whether a 7 causal relationship exists. These include the consistency, 8 specificity, and strength of an association as well as 9 evidence that a stronger response occurs at higher exposure 10 levels. Epidemiological studies look at both short- and 11 long-term exposures. 12 Other types of studies are human clinical exposure 13 studies and laboratory animal studies. These two types of 14 studies examine the health effects of exposure to controlled 15 levels of air pollution. 16 What do the latest ozone health studies show? 17 U.S. EPA's scientists relied upon human health studies which 18 showed harmful effects from ozone at the level of the 19 current standard. These include respiratory effects, such 20 as damage to healthy lungs and aggravated asthma. 21 Current ozone levels also lead to an increase in 22 hospital admissions and emergency room visits. 23 What do the latest particulate matter health 24 studies show? U.S. EPA scientists relied again on human 25 health studies which found adverse effects associated with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 particulate matter exposures at levels below the current 2 standard. 3 Premature deaths are associated with both short- 4 and long-term particulate exposures. Studies also found 5 more asthma attacks, increased bronchitis symptoms and other 6 respiratory problems as well as decreased lung function. 7 Now that we've discussed some of the health 8 studies that U.S. EPA looked at in its review of the 9 standards, we can go over what U.S. EPA is trying to 10 accomplish with its proposal. 11 U.S. EPA indicates that, for ozone, it wants to 12 revise the standard to better address eight-hour exposures. 13 This change has more significance in areas outside 14 California. In this State, monitoring data show a strong 15 relationship between eight-hour averages and one-hour 16 averages. And we'll go into this point in detail in a few 17 minutes. 18 The major change for California would be the 19 addition of a new standard for PM2.5, which is a component 20 of PM10. The fine particles are primarily formed from 21 combustion processes and chemical reactions that occur in 22 the atmosphere. 23 The last element of the proposal relates to the 24 current 24-hour PM10 standard. U.S. EPA proposes to leave 25 the level unchanged, but to redefine the number of allowable PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 exceedances. 2 Before we go on to the specifics of U.S. EPA's 3 proposal, let's briefly review the elements of an air 4 quality standard. First, there is the pollutant, or 5 indicator; in this case, ozone, PM10, and PM2.5. 6 Second, there is the averaging time, which can be 7 one hour, several hours, or 24 hours to protect against 8 short-term exposures, or up to one year to protect against 9 long-term exposures. 10 Third, there is the level of the standard. This 11 is the concentration of a pollutant which is not to be 12 exceeded over a given averaging time. 13 Finally, there is the form of the standard which, 14 in essence, defines how many exceedances of the standard are 15 allowed before an area is said to violate the standard. 16 Another aspect is how monitoring data from 17 different sites in a region are used. For example, U.S. EPA 18 is proposing to average the levels of PM2.5 across several 19 monitors, rather than only at a particular site as is now 20 done. 21 Let's begin with a proposal for the ozone 22 standard. For ozone, U.S. EPA has proposed changing the 23 averaging time from one hour to eight hours and revising the 24 level of the standard from 0.12 parts per million down to 25 0.08 parts per million. In addition, U.S. EPA has proposed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 to relax the form to allow more exceedances. 2 What has U.S. EPA proposed for the particulate 3 matter standards? The agency does not plan to change the 4 annual PM10, keeping the level at 50 micrograms per cubic 5 meter. 6 The agency also plans to retain the 24-hour PM10 7 standard at its current level 150 micrograms, but relax the 8 form to allow more exceedances. 9 As I mentioned earlier, U.S. EPA has also proposed 10 adding both a 24-hour and an annual PM2.5 standard to 11 protect against fine particulate matter exposures. The 12 proposed 24-hour standard would be set at 50 micrograms per 13 cubic meter with the annual standard at 15. The annual 14 PM2.5 standard would be averaged across multiple monitors 15 within an area. 16 In addition to these specific proposed ozone and 17 particulate matter standards, U.S. EPA is also soliciting 18 comment on alternative standards. These alternatives range 19 from more health protective to less health protective than 20 the standards proposed by the agency. 21 Now, let's move on to the implementation piece of 22 picture. What are some of the key implementation issues? 23 The timing of requirements related to the new standards is 24 the biggest single issue for California, given the nature of 25 our air quality problem, the status of our control program, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 and the prospects for new control technologies. I will talk 2 more about U.S. EPA's proposals regarding timing in just a 3 few moments. 4 To the extent that U.S. EPA adopts a standard more 5 stringent than the current standard, additional time is 6 clearly needed for attainment of the new standard. Many 7 technical and policy questions must be answered before 8 acceptable time frames are established. The same applies 9 for issues related to targets for interim progress and 10 specific control requirements. 11 How is U.S. EPA developing the new implementation 12 policies? U.S. EPA created a subcommittee in August of 13 1995, under the Federal Advisory Committee Act, or FACA, to 14 make recommendations to the agency on issues related to 15 implementation of the new standards. 16 The FACA subcommittee is advisory in capacity, and 17 U.S. EPA will make the ultimate decision on its policies. 18 U.S. EPA is developing these implementation policies in 19 three phrases, starting with a transition policy. 20 What is this transition policy? The primary goal 21 of the transition policy is to guide the changeover to the 22 new standards. The transition policy would apply from the 23 time new standards are final until new attainment plans are 24 submitted by States and approved by U.S. EPA. 25 The transition policy is based on the principle of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 no backsliding. The key element of this policy is to ensure 2 the continued implementation of existing air quality plans 3 and control strategies so that air quality improvements 4 proceed while States work to address the new requirements. 5 What implement issues is the FACA subcommittee 6 considering? The list of issues covers a few key areas. 7 The first is transport. This continues to be a major issue 8 among States, especially in the East and Midwest; however, 9 California's interests are focused on transport within the 10 State and, in a few cases, international transport from 11 Mexico. 12 From an intrastate perspective, California has 13 addressed transport with strong technical analyses. We 14 expect to continue this approach in the future. With the 15 new eight-hour ozone standard, some rural areas in 16 California may be brought into the planning process as a 17 result of transport from upwind urban areas. The relative 18 responsibility for achieving the standards would need to be 19 addressed in the planning process. 20 The FACA subcommittee is also discussing the need 21 for firm attainment dates. There are diverse points of view 22 as to the need to establish both interim progress 23 requirements and specific attainment dates as currently 24 required by the Clean Air Act. 25 The need for mandatory controls is another issue PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 being debated. However, given the types of controls already 2 in place here, this issue is much more limited in scope in 3 California than in other parts of the country. 4 Finally, the opportunity to integrate 5 implementation of ozone and particulate matter standards is 6 being discussed. There is broad support for this approach, 7 with the recognition that it would not apply in all cases. 8 Let's look into the FACA subcommittee concepts on 9 transport in more detail. The FACA work group on this 10 subject proposes to address regional and interstate 11 transport by defining areas of violation, AOVs, and areas of 12 influence, or AOIs. 13 An area of violation would be an area with poor 14 air quality that violates the standards, what we currently 15 call a nonattainment area. The AOV designation does not 16 address the issue of who contributes to the violations. 17 An AOI would be an area with pollution sources 18 that contribute to an area of violation. A basic principle 19 is that an area of violation is included within the broader 20 area of influence. This concept generally parallels 21 California's approach to transport, in which we identify 22 upwind areas which contribute to pollution in downwind 23 areas. However, this concept, like others I've mentioned, 24 was developed primarily with the needs of other States in 25 mind. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 Timing will be a key factor in determining the 2 impact of new standards on California. In the next segment 3 of the presentation, I'll summarize the schedule for 4 finalizing the standards, completing the implementation 5 policies, and attaining the standards. 6 First, the standards themselves: U.S. EPA will 7 accept public comment on the proposed standards and 8 transition policy until February 18th, 1997. By court 9 order, U.S. EPA must finalize its decision by June 28th next 10 year. 11 Once the standards promulgated, Congress may 12 review the action under the new Small Business Regulatory 13 Enforcement and Fairness Act. Mr. Ken Biggos from U.S. EPA 14 will explain this process after my presentation. 15 What about the timing for developing the 16 associated policies to implement the standards? U.S. EPA 17 will finalize the interim implementation policy, or 18 transition policy, along with the new standards in June. 19 The remaining implementation issues will be 20 addressed in two phases. Criteria for designating 21 nonattainment areas and the schedule for attainment are due 22 in mid-1998, followed by the specific planning and control 23 requirements in mid-1999. 24 For California, new planning requirements will be 25 folded into the ongoing process of implementing of our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 existing State Implementation Plan. The SIP calls for PM10 2 attainment by 2006 and ozone attainment by 20100. 3 U.S. EPA expects to designate new ozone 4 nonattainment areas in 1999. We would then need to revisit 5 the ozone SIP around 2000 to ensure that the strategies 6 provide for attainment in any newly designated areas by the 7 applicable deadline. 8 For PM2.5, U.S. EPA intends to use the maximum 9 time allowed by law for designations so States can collect 10 additional monitoring data. PM2.5 designations would be 11 done in 2000, and attainment plans for the pollutant would 12 follow in 2002. Thus, attainment would be expected in the 13 2005 to 2010 time frame. 14 I've covered U.S. EPA's proposals and the timing. 15 Now, we'll turn to the most important question: What are 16 the implications for California? 17 We've identified four key areas of impacts that 18 we're prepared to discuss now -- the implications for public 19 health, the potential nonattainment areas, the effect on our 20 current plans and programs, and how California's situation 21 compares to other States. 22 We'll look first at ozone, then particulate 23 matter. How would the proposed ozone standard affect public 24 health in California? We first need to acknowledge that the 25 proposal may provide substantial health benefits to other PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 States that experience prolonged ozone exposure at levels 2 just below the current Federal standard. It makes sense 3 that an eight-hour ozone standard may be more directly 4 relevant for areas with low peak exposures, just as a 5 one-hour standard is most protective for areas with high 6 one-hour peaks. 7 Since most people inn California live in urban 8 areas, which tend to experience high one-hour peaks for 9 ozone, the proposed eight-hour Federal standard may not 10 offer any additional health protection beyond the current 11 standard. 12 Overall, we believe that the eight-hour ozone 13 standard in form proposed by U.S. EPA is essentially 14 equivalent to the current one-hour Federal standard in 15 California. 16 We looked at three criteria: the number and 17 severity of health effects expected when the standard is 18 just attained, using EPA's data; the relationship between 19 peak one-hour ozone values and eight-hour averages, and the 20 time needed to attain. 21 The current one-hour State standard of 0.09 parts 22 per million ozone would continue to be more health 23 protective than U.S. EPA's proposed revision to the Federal 24 standard. Since the relationship between one- and 25 eight-hour ozone values is key to the implications for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 California, the next slide provides an illustration. 2 The pattern of ozone levels over the course of a 3 day at typical urban sites in the State looks much like the 4 graph displayed here. We show data from a monitor in Los 5 Angeles as an example. 6 The point here is not the specific peak and 7 average levels, but the relationship between the two. It is 8 common to have a one-hour peak that is substantially higher 9 than the eight-hour average, particularly in West Coast 10 cities. 11 An eight-hour standard would clearly have to be 12 lower than the current Federal one-hour standard of .12 13 parts per million just to be equivalent. 14 Further inland in California and in other States, 15 there are areas with a much flatter profile where the one- 16 and eight-hour values are closer together. These areas 17 could expect greater benefits from the proposed ozone 18 standard. 19 What areas in California may violate the proposed 20 eight-hour ozone standard? The existing SIP areas would 21 stay nonattainment. Santa Barbara and Imperial County, 22 which are currently designated nonattainment, but with a 23 less severe problem, would remain so, and the Bay Area would 24 likely return to nonattainment status. 25 In addition, pollution from California's urban PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 centers could also cause some rural areas in the Mountain 2 Counties and the upper Sacramento Valley to violate the new 3 standard. 4 How would the proposal affect current ozone plans 5 and control programs? The ozone SIP that this Board adopted 6 in '94, and U.S. EPA approved just recently in September, 7 will significantly reduce ozone precursor emissions 8 statewide, providing benefits in any new nonattainment areas 9 as well as the six SIP areas. 10 The switch to an eight-hour standard would not 11 intrinsically change the kinds of control strategies needed 12 for attainment. We would need to consider rural communities 13 downwind of urban areas in the overall plan, particularly 14 the appropriate responsibility for control and the time 15 needed for attainment. 16 Let's move on to the implications for California 17 of the proposed particulate matter standards. What would 18 U.S. EPA's proposed suite of particulate matter standards 19 mean for public health in California? 20 The combination of Federal PM10 and 2.5 standards 21 would clearly be more health protective than the current 22 Federal standards. However, we believe even the proposed 23 revisions to the Federal standards would remain less 24 protective for California than the current State air quality 25 standards. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 To understand the potential impact of fine 2 particulate standards, it's helpful to review the 3 differences between PM2.5 and PM10 in California. 4 First, the difference in sources: PM2.5, or the 5 fine fraction, is generally formed by combustion processes. 6 This includes fuel combustion in motor vehicles, power 7 generation in industrial operations, wood burning in 8 residential fireplaces and wood stoves, agricultural 9 burning, and forest management burning. 10 PM10 includes both the smaller PM2.5 and the 11 larger particles, or coarse fraction, up to 10 microns in 12 diameter. Coarse particulate matter is essentially the dust 13 generated by motor vehicles traveling on roads, construction 14 and farming activities that disturb the soil, and crushing 15 and grinding operations to support mining. 16 Windblown dust is also a source in some desert 17 areas. The tiny particles of rubber that wear off our 18 vehicle tires and brakes also contribute to coarse 19 particulate matter. 20 What is the relationship between PM2.5 levels and 21 PM10 levels in California? This is a critical question in 22 evaluating the effects of U.S. EPA's proposal. 23 The relative proportion of fine and coarse 24 particles varies across the State by both geographic area 25 and the season. Over the course of a year, about half of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 the total PM10 pollution in urban areas is made up of PM2.5 2 particles. But on a daily basis, the PM2.5 component may 3 vary from less than one-fourth to well over three-fourths of 4 the total PM10 levels. 5 To further complicate matters, the times of 6 highest PM10 levels do not necessarily coincide with the 7 times of highest coarse particulate levels. 8 What is California doing to better understand 9 PM2.5, so we'll be ready to address the new standards? We 10 will be expanding our PM2.5 monitoring network, already the 11 largest in the country, to fully characterize the nature of 12 PM2.5 pollution statewide. 13 Ongoing technical studies that focus on both PM10 14 and PM2.5 pollution will provide additional data. The 15 California regional PM10 air quality study, underway in the 16 San Joaquin Valley since 1991, is generating a wealth of 17 information on particulate matter. Another extensive 18 technical study is the PM10 technical enhancement program 19 recently conducted in the South Coast to improve the 20 technical basis for the South Coast PM10 plan. 21 ARB has supported these two studies and others 22 that improve our understanding of particulate matter 23 pollution. In fact, later today, the Board will consider 24 two research proposals to investigate how the size and 25 concentration of particulates affect health. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 Based on what we know today about particulate 2 matter in California, what areas may violate the proposed 3 Federal standards? 4 Monitoring data from the last three years indicate 5 that the South Coast, the San Joaquin Valley, and Calexico 6 in Imperial County are all likely to violate the proposed 7 PM2.5 standards. Based on limited PM2.5 monitoring data or 8 extrapolation from PM10 data, other fine particulate 9 nonattainment areas may include urban areas like Sacramento, 10 the Bay Area, Ventura, and San Diego, some mountain 11 communities that burn wood for heat, and Owens Valley in 12 Inyo County. 13 Since the PM2.5 monitoring network in California 14 is limited, we won't have a complete picture of which areas 15 would be affected by the new fine particulate standards 16 until we can establish more monitoring sites. 17 What about PM10? U.S. EPA has proposed to leave 18 the annual PM10 standard unchanged and relax the form of the 19 24-hour standard, so no new areas would be affected. In 20 fact, some existing areas may meet the standards under the 21 proposed approach. 22 How would the proposed particulate matter 23 standards affect the current plans and programs in 24 California? The PM10 nonattainment areas in California 25 either have or are developing air quality plans for the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 current PM10 standards. These plans would continue to 2 stand. 3 Both the PM10 attainment plans and the 1994 4 California SIP for ozone will greatly reduce emissions of 5 PM2.5 precursors. So, even before the PM2.5 planning 6 process officially starts, we already have many programs in 7 place to reduce PM2.5 levels in California. 8 To determine if California will need any 9 additional controls for PM2.5 attainment, we need to rely on 10 the results of current and planned technical studies. 11 Now, let's focus on the potential impacts on the 12 two most comprehensive plans prepared to demonstrate 13 attainment. How would the proposed standards affect the San 14 Joaquin Valley's PM10 plan? 15 The district staff is developing an attainment 16 plan for the current Federal PM10 standards now and expects 17 to bring that plan to their Board in May. The draft PM10 18 plan contains several strategies that would reduce fine 19 particulate levels as well. These include federalizing NOx 20 controls for oil operations west of Interstate 5 and 21 measures to increase the effectiveness of voluntary no burn 22 days for residential fireplaces. 23 The district staff do not expect any significant 24 changes to the PM10 control strategies as a result of U.S. 25 EPA's proposed standards. For fine particulates, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 district staff have begun to evaluate the potential impacts. 2 San Joaquin is fortunate to have a rich database of 3 monitoring information and results from the regional PM10 4 study that will help characterize the PM2.5 problem and 5 guide attainment planning in the future. 6 What about the South Coast 1997 air quality 7 management plan that this Board will consider next month? 8 The multipollutant plan contains a chapter on the new 9 standards. The district anticipates that additional 10 emission reductions will be needed in the future to meet 11 PM2.5 standards. But since the plan was written and 12 approved prior to U.S. EPA's proposal for the new standards, 13 the district board has asked staff to report back on the 14 implications of the proposal in January, and to make 15 quarterly reports thereafter. 16 The South Coast committed to revisit the air 17 quality management plan in 2000 when the next triennial 18 review is required for State planning purposes. If you'll 19 recall, U.S. EPA expects that revised ozone plans will be 20 due that same year, followed by PM2.5 attainment plans in 21 2002; so, the timing works well. 22 To begin our look at how the proposed standards 23 may affect sources in California, we need to step back and 24 consider what State and local programs are already in place 25 to reduce ozone and particulate matter emissions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 Local district rules for stationary and area 2 sources require the most advanced controls in the nation for 3 ozone forming hydrocarbons, plus the oxides of nitrogen and 4 sulfur that also contribute to particulate formation. 5 Recognizing the severity of the State's pollution 6 problem, the California Clean Air Act provided for a higher 7 degree of control on existing major sources than required 8 under Federal law. Large industrial and commercial sources 9 in California are equipped with the best available retrofit 10 control technology, or BARCT. This requirement is enforced 11 through the district's long-standing permitting programs. 12 Of course, ARB's cleaner burning gasoline and 13 clean diesel fuels, combined with the low- and zero-emission 14 vehicle programs, are significantly reducing precursors of 15 both ozone and fine particulate matter in the State. 16 This Board's existing standards for diesel 17 engines, combined with the cleaner engines expected after 18 2000 as a result of our recent agreements with manufacturers 19 and U.S. EPA, will continue to cut both directly emitted 20 particulates and PM2.5 precursors. 21 ARB's regulations are also effectively reducing 22 volatile emissions from the consumer products we use every 23 day, with further benefits expected as additional standards 24 come on line. 25 In addition, integrated pest management and other PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 strategies are encouraging less polluting methods to deal 2 with agricultural and structural pests in California. 3 Since most of the discussion on the proposed 4 standards has been focusing on PM2.5, it's useful to look at 5 the significant sources from a national perspective to see 6 how California stacks up. 7 This slide shows the four largest categories of 8 NOx sources, which together account for over 90 percent of 9 NOx emissions nationwide. For the largest emission sources, 10 coal and fuel oil fired power plants and boilers, California 11 has virtually no sources. We certainly have plenty of 12 sources in the second category of emissions -- cars and 13 trucks -- but those vehicles and their fuels are 14 significantly cleaner than in other States. 15 California does have natural gas fired power 16 plants, boilers, and heaters, the number three category 17 nationally. But, as I mentioned on the previous slide, the 18 State's industries are subject to BARCT, or best available 19 retrofit control technology -- once again, making them the 20 cleanest in the country. 21 Finally, for off-road equipment, California has 22 the cleaner fuels and engines -- at least for those engines 23 under State control. 24 With all of the measures already on the books in 25 California, we expect statewide NOx emissions to drop by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 over 30 percent between 1990 and 2005. New SIP measures, 2 particularly those for on- and off-road diesel engines in 3 trucks, farm and construction equipment, locomotives, and 4 marine vessels, will lower NOx levels even further, aiding 5 our air quality efforts for both ozone and fine 6 particulates. 7 So, how does California's situation differ from 8 other States overall? Since California's businesses, 9 vehicles, and fuels are the cleanest in the country, tighter 10 national air quality standards may have an equalizing 11 effect. Other States may have to catch up and implement 12 controls already in place here, and Californians will enjoy 13 early health benefits from reductions in fine particulate 14 pollution resulting from our State and local air quality 15 programs. 16 To wrap up this presentation, I'll just quickly 17 review the main conclusions. New Federal air quality 18 standards must be based on the science of the health 19 studies. The implementation process will consider timing 20 issues, particularly the pace of technology development and 21 economic concerns about how quickly we can achieve the 22 public health goals. 23 This State has a head start on reducing fine 24 particulate matter due to our strong control programs. 25 Everything that U.S. EPA has proposed reaffirms the need to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 continue steady progress on our exiting clean air plans, 2 especially the ozone SIP. 3 Finally, California well-positioned to respond to 4 any proposed changes to the Federal air quality standards. 5 That concludes my presentation. Now, I'd like to 6 briefly introduce Mr. Ken Biggos, who's the Associate 7 Director of U.S. EPA's Region IX Air Division. 8 MR. BIGGOS: Good morning, Chairman Dunlap, 9 members of the Board. I'm happy to be here today to talk 10 about EPA's proposed revisions to the national ambient air 11 quality standards for PM and ozone. 12 I thought, in my brief presentation, that I would 13 cover six areas quickly -- the scientific review process 14 that was used in establishing the standards, health effects 15 of ozone and PM, health benefits of the proposed standards, 16 when costs are considered in the process, and talk about the 17 Small Business Regulatory Enforcement and Fairness Act of 18 1996, and the congressional review process that will be 19 involved in this proposed regulation when it's finalized, 20 and ways to comment on the proposal. 21 EPA -- the Clean Air Act requires EPA to establish 22 standards that are protective of public health and welfare. 23 These standards are based on health effects data, not costs 24 or other factors. 25 What I'd like to do is talk a little bit about the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 proposed ozone standard and the scientific review process 2 that was used in establishing that standard. EPA reviewed 3 185 relevant studies in determining whether revisions to the 4 standards are appropriate. These studies indicate that 5 ozone levels at and below the current standard cause 6 significant health effects in children and other susceptible 7 groups which make up over one-third of our population. 8 The peer review process and independent scientific 9 panel unanimously recommended that EPA eliminate the current 10 one-hour standard and replace it with an eight-hour 11 standard. EPA is proposing the most stringent level 12 recommended by any members of the independent scientific 13 review board. There were eight individuals on the board who 14 made specific recommendations for numerical values for the 15 new standard. 16 In looking at the health effects of ozone, the 17 populations at risk include children that play outdoors, 18 outdoor workers, individuals with respiratory disease, and 19 healthy persons who are highly sensitive to ozone exposure. 20 And the health effects of concern include reduced 21 lung function, difficulty in breathing, shortness of breath, 22 moderate to severe coughs and chest pains, increased 23 respiratory problems requiring hospital admissions, and 24 repeated exposures could lead to irreversible changes in and 25 premature aging of the lungs which could lead to illnesses, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 such as bronchitis and emphysema. 2 Now, looking at the estimated health benefits of 3 the proposed ozone standard as it's appearing in the Federal 4 Register, for children, it's been anticipated a reduction of 5 1.5 to 2 million fewer incidences of significant decreases 6 of lung function, reductions of 200 to 400,000 fewer 7 incidences of moderate to severe coughs and chest pains, and 8 significantly fewer incidences of lung inflammation. 9 In addition, there is anticipated fewer 10 hospitalizations and emergency visits for asthmatics. 11 In turning to the PM standard, I'd like to talk 12 for a minute about the process that was used and the science 13 that was used in reviewing the literature and reports that 14 are available on PM. 15 The peer review, independent scientific panel 16 identified 86 studies as being the most relevant analysis in 17 this area. 67 of 86 indicated that PM levels at or below 18 the current standard cause significant numbers of premature 19 deaths and serious illness. 20 Those most affected comprise one-third of the 21 population, and include children who suffer decreased lung 22 function and increased lung symptoms, and seniors, and those 23 suffering from lung and heart ailments, who suffer premature 24 deaths and hospital admissions. 19 of the 21 peer review 25 independent scientific panel recommended setting the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 standard for PM5 -- PM2.5 now. 11 of the 21 panel members 2 expressed opinions on the level of protection of the PM 3 standards. 4 EPA is proposing PM2.5 standards that are 5 consistent with the most protective of those members' 6 recommendations. 7 In looking at the health effects of particulate 8 matter, first and foremost is the increase in premature 9 deaths, aggravation of respiratory and cardiovascular 10 illnesses, including the need for added hospitalizations; 11 lung function -- symptomatic effects, such as symptoms 12 associated with chronic bronchitis and changes to lung 13 structure and defense mechanisms. 14 In looking at the health benefits of the proposed 15 standard, it's been estimated that there will be roughly 16 20,000 fewer premature deaths, especially in the elderly and 17 those with existing heart and lung diseases; 9,000 fewer 18 respiratory related hospital admissions; over one-quarter of 19 a million fewer incidences each year of symptoms, such as 20 aggravated coughing and difficult or painful breathing, 21 which can result in school absences and limits on children's 22 normal activities; and over a quarter of a million fewer 23 days of aggravated asthma each year, which can result in 24 increased use of medication and the need for medical 25 treatment; also, a reduction of 60,000 fewer cases of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 chronic bronchitis each year. 2 As I mentioned previously, costs are not 3 considered in establishing the standards. Costs are taken 4 into account in the length of time for attaining the clean 5 air standards and also devising emission control strategies 6 to achieve the national ambient air quality standards. EPA 7 is committed to developing implementation strategies that 8 minimize cost. 9 I'd like to talk just for a minute on the Small 10 Business Regulatory Enforcement Fairness Act of 1996, or 11 SBREFA. It was signed by the President on March 29th, 1996, 12 and it establishes programs and policies to assist small 13 entities to comply with regulatory requirements. 14 Also, under subpart (e), it establishes a 15 streamlined opportunity for Congress to review and 16 potentially disapprove rules. Major rules are subject to 17 this process, and no major rule may take effect any earlier 18 than 60 days after its submission to Congress or its 19 publication in the Federal Register, whichever is later. 20 A major rule is a rule that would either have an 21 annual effect on the economy of $100 million or more, would 22 be a major increase or increase costs or prices to 23 consumers, industries, governments, or have significant 24 adverse effects on competition, employment, investment, 25 productivity, innovation, and the U.S. firms' abilities to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 compete with foreign counterparts. 2 Clearly, this rule meets the first criteria. For 3 major rules, Congress has 60 days to review and disapprove 4 the rule, and that's part of the 60-day process that I 5 mentioned previously. 6 If a rule is disapproved by Congress, the 7 President veto that legislation disapproving the rule, and 8 that would be subject to a congressional override of two- 9 thirds, which is our current requirements for any 10 legislation. 11 The last thing I'd like to mention real quickly 12 is, attached with the packages we brought today is a one- 13 page handout, which is also describes opportunities for 14 comment on the proposed package. We set up a lot of 15 different processes to accept comments on the package. 16 As was mentioned by your staff, the comment period 17 closes on February 18th, 1997. We have just established a 18 toll free telephone line for accepting comments, which is 19 open seven days, 24 hours a day. We have also set up five 20 e-mail boxes for accepting comments. And lastly, we're 21 still taking comments in the conventional form, which would 22 be the written format. But we're allowing also comments to 23 be submitted in WordPerfect 5.1 format and in disk format. 24 And we will also accept those and enter those into the 25 record. And just in closing, I'd like to say, in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 conclusion, and in looking at the recommendations from your 2 staff and the comments of your staff about California's 3 position, obviously California has always been the leader in 4 air quality. 5 And I think, given the fact that we do have the 6 SIP approved, the 1994 SIP, California's indeed in a good 7 position to move out and to come into compliance when and if 8 these proposed standards take effect. 9 Thank you. If you have any questions, I'd be 10 happy to answer them. 11 CHAIRMAN DUNLAP: Thank you, Mr. Biggos. I 12 appreciate those comments and that overview. Could I ask 13 you maybe to take a seat over there with our staff, because 14 we're probably going to have some questions. 15 I'm going to get to my Board members. I'd like to 16 recognize Mr. Zemsky. Hello, Al, good to have you with us. 17 Anything you want to add to it? Al is with the 18 communications office at U.S. EPA. 19 MR. ZEMSKY: Thank you, Mr. Chairman. Just to say 20 that we are very interested in a very inclusive public 21 involvement process. And although we don't have the dates 22 yet or the locations yet for the public hearings -- and 23 there may not even be a hearing in California; we don't 24 know-- we certainly do want to get as much involvement 25 through our toll free line and -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 CHAIRMAN DUNLAP: Right. 2 MR. ZEMSKY: -- from the e-mail lines. 3 CHAIRMAN DUNLAP: On that point, I talked to Mary 4 Nichols a week or so ago about the possibility of having one 5 of the hearings in California. 6 She indicated she didn't think they were going to 7 get that far West. But if you all in Region IX would 8 impress upon her, we certainly would appreciate if one could 9 be held here in California; again, a reminder of that, I'd 10 appreciate it. 11 But with that, why don't I query my colleagues on 12 the Board to see if they have any questions of staff or U.S. 13 EPA about process, about the opportunity to comment or 14 provide input. 15 Ms. Edgerton. 16 MS. EDGERTON: Thank you for the clear 17 presentation, and it's wonderful to learn that California is 18 well-positioned to respond to this new challenge. 19 One of the questions which I have been asked 20 repeatedly in the last few weeks by various representatives 21 of California business is, with respect to the type of 22 research -- health effects research which supports the ozone 23 proposal -- ozone standard proposal -- versus the type of 24 research, health effects research, which supports the 25 particulates 2.5 standard in particular, it is my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 understanding that the U.S. EPA has used equally valid but 2 different types of health effects research to support the 3 two separate proposals. 4 In the ozone instance, it is my understanding that 5 it is clinical data. And in the particulate standard 6 proposal, it is my understanding that it is epidemiological 7 data. Can each or both agencies elaborate on the foundation 8 for each of these standards with respect to the health data 9 which has been presented, so that I can answer -- so I can 10 be sure I'm answering the questions correctly when I'm asked 11 by California business? 12 Thank you. 13 MS. TERRY: Mr. Biggos is not a health effects 14 expert, so we will give him an opportunity to comment, but 15 we also have to be aware that we didn't ask him here today 16 as the health effects expert on this subject. And the same 17 applies to some extent for our presentation today. 18 Clearly, our focus has been on implementation 19 issues. But the short answer is that, yes, in terms of the 20 particulate proposals, the reliance is on epidemiological 21 studies. And that is why we tried to present a very general 22 overview about what are some of the issues related to 23 epidemiological studies because, clearly, that will be a 24 focus of the debate in terms of the health issue and the 25 adequacy of health protection with the proposals. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 If you have some specific questions about the epi 2 studies, we do have Karlyn Black here. I'd be happy to turn 3 the microphone over to her. 4 CHAIRMAN DUNLAP: While she's -- maybe I can add 5 onto something Lynne said. It seems that some members of 6 the business community are concerned about the science, and 7 making sure that it is complete, and thorough, and the peer 8 review process is one that has taken place, and has been -- 9 there's been a clear discussion about how complete and how 10 solid is the science. 11 And so, that's something I think that U.S. EPA and 12 the various advisory committees are going to need to take on 13 head-on and respond to; and to a certain extent, defend and 14 identify where there are holes. 15 And so, we've asked here -- Mr. Kenny's asked his 16 staff to look at the science and make sure they can respond. 17 But there certainly is a hunger for air quality policy 18 makers to be able to deal with that question. 19 Please, if you'd introduce yourself. 20 MS. BLACK: Certainly. Chairman Dunlap and 21 members of the Board, I'm Karlyn Black. I work in our 22 Research Division, and I have background and expertise, if 23 you will, in particulate matter. I work in our biological 24 or health effects section. And you ask a very good 25 question, a very, very opportunistic question in terms of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 supporting and setting the stage for some of the other items 2 you'll see on your agenda today, which is basically health 3 effects research. 4 Your question was a good one. You're correct. 5 The majority, or at least initially, the ozone information 6 was epidemiologic. And then, of course, it moved into the 7 clinical and animal science kind of studies. 8 Primarily, as a function of our ability to have 9 been able to study ozone over the last 20 years, we've had 10 enough time and enough resources to expand into and do the 11 clinical studies and the animal studies that really help 12 nail down some of these questions. 13 In the particulate matter arena, we have not had 14 the resources until most recently, and we've been very 15 involved in addressing the ozone issue. We are now just 16 getting in the position to switch into the particulate 17 matter arena. So, fundamentally, what you start with in 18 terms of looking at the health science, you start with 19 studies like epidemiology studies which give you the broad 20 base and kind of point you in the right direction. They 21 give you the tools you need in terms of focusing your 22 effort. 23 The next stage is to go into the clinical and the 24 animal studies that will give you the specifics, the 25 details, going to answer the questions on mechanisms. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 that's very much where we are now. We are now shifting into 2 doing the clinical studies, doing the animal studies that 3 will answer some of these questions about PM. But we 4 haven't had a chance to do that yet. 5 So, that's -- that's why, when EPA had taken an 6 extensive look at the scientific literature that's there, 7 that's why we have -- based on the fundamental question -- 8 the differences and the kinds of studies that were 9 discussed. 10 MS. EDGERTON: Just one followup. Thank you very 11 much. I think we're very fortunate to have you on our 12 staff. I know I've asked you a lot of questions about these 13 issues as the years have -- I mean through the last year. 14 I know I can look it up, and I will be looking it 15 up over the next few years, but -- referring to a lot of the 16 700-page U.S. EPA documents. But perhaps you can tease out 17 of the two proposals again for me the numbers of reports, 18 the epidemiological support -- how many of those hundred or 19 85 are particulate epidemiological studies that support the 20 need for the new particulate study, and how many are over 21 there on the ozone side, just so I can be sure I'm quoting 22 the right thing when I'm talking with people. 23 Do you have that? 24 MS. BLACK: In terms of the overall numbers for 25 particulate? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 MS. EDGERTON: Yes. How many studies? 2 MS. BLACK: Our EPA folks may be able to nail 3 those numbers down for you more tightly. But I can tell you 4 the vast majority of those studies for the particulate 5 matter analysis were epidemiology studies. It relied very 6 heavily on several quite well-designed and extensive 7 epidemiology studies in terms of coming up with a large part 8 of the conclusions that they did. 9 But I really don't -- I can't speak to the 10 overall mind set, if you will, or the strategy behind EPA's 11 review of the particulate health literature. 12 I do know that we are severely lacking in the 13 scientific and the health community the animal studies and 14 the clinical studies that will allow us to nail down, if you 15 will, or fine tune some of the efforts we need to pursue in 16 the particulate matter arena. 17 MS. EDGERTON: But, as I understand, you feel 18 confident with the epidemiological studies? 19 MS. BLACK: I feel confident with -- 20 MS. EDGERTON: In terms of the progression. 21 MS. BLACK: -- the direction of the epidemiology 22 studies are pointing us. Keep in mind, they can't give us 23 all the answers. And they are pointing us in the direction 24 of, first of all, the fundamental are (sic) that our -- our 25 current Federal standards for particulate matter are not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 stringent enough. They do not protect public health 2 adequately. 3 So, certainly, a move in the direction -- 4 CHAIRMAN DUNLAP: Right. 5 MS. BLACK: -- to reduce that is warranted. 6 CHAIRMAN DUNLAP: Okay. 7 MS. MARVIN: If I might just step in there and 8 give Lynne an answer to your question. 9 EPA, in their press release and the other 10 materials, say that they relied on 185 studies, human health 11 studies, for the ozone standard, and 86 for the particulate 12 matter standard. 13 CHAIRMAN DUNLAP: Any questions on the -- yeah, 14 Supervisor Vagim. 15 SUPERVISOR VAGIM: Well, a question to the 16 gentleman from Region IX. 17 CHAIRMAN DUNLAP: Mr. Biggos. 18 SUPERVISOR VAGIM: I just want to make sure I got 19 something clear. When you said the panel of experts, health 20 experts, came up with their number of setting the standard, 21 EPA took the most stringent number. 22 Is that what I heard you say? 23 MR. BIGGOS: Uh-huh. That's correct. 24 SUPERVISOR VAGIM: So, there must have been some 25 recommendations of other numbers from the experts? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 MR. BIGGOS: Well, I think -- for example, on 2 ozone, it was -- the numbers that were recommended were 3 either .08 or .09. I think it was pretty evenly split. I 4 think there was a total of six recommendations, and I think 5 two experts recommended .08; one, .08 or .09; two 6 recommended .09; and I think a third .09 or .1. I think 7 that was the split between -- as I understand, there were 8 six formal recommendations for numerical standards. Uh-huh. 9 SUPERVISOR VAGIM: And the reason EPA took the 10 most stringent was all the health effects pointed to that or 11 something else? 12 MR. BIGGOS: Well, I think based on the health 13 effects and looking at again giving the most protection to 14 public health, and with -- I guess being on the conservative 15 side, also. 16 SUPERVISOR VAGIM: Thank you. 17 CHAIRMAN DUNLAP: Any other questions on the right 18 side over here? All right. 19 We'll go to Supervisor Silva. We'll go to the 20 left side. 21 SUPERVISOR SILVA: Yes. You know, we get so many 22 reports, and surveys that have been taken, and research 23 that's been done that sometimes it's difficult, you know, to 24 get a handle on everything. 25 And what I've done in the past is, if there's an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 area that I know someone that would probably be considered 2 an expert, then I give him my report and have them read it 3 and make comments on it. 4 And one has to do with the health effects on 5 short-term exposure. And more people die on days with high 6 PM10 particulate matter levels than die on days with low 7 PM10. 8 Well, if a person -- and I talked to a lung doctor 9 on this, and he said that if a person has that weak of 10 lungs, they're usually -- they expire in a hospital, and the 11 filter is aired -- 12 CHAIRMAN DUNLAP: The air is filtered, right? 13 SUPERVISOR SILVA: -- the air is filtered. And it 14 would almost be like saying that more people die on a full 15 moon. And could this be explained? 16 (Thereupon, a remark was made outside the 17 earshot of the court reporter.) 18 CHAIRMAN DUNLAP: No. I don't think the tidal 19 emphasis was what the Supervisor had in mind. Staff, can 20 you comment on that at all? 21 MS. BLACK: I can provide a little information. 22 There are some concerns about that. And what you're really 23 talking about, Supervisor Silva, is the whole question of 24 exposure. And that's another area of research we're 25 expanding into and trying to get a better handle on when it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 comes to particulate matter. 2 There is no question that outdoor or ambient 3 particulate concentrations often vary both in level and 4 composition from those that are found indoors. We have 5 things like recirculating air systems and what have you. 6 But we have done some studies, and we do have 7 folks who are more expert than I at our indoor air pollution 8 exposure group -- which I'm not sure any of them are with me 9 today to help me with that question. 10 But there are studies that show that there is 11 pretty good equilibration between outdoor and indoor 12 particles, especially the fine particles. So, while you 13 raise a good question, I would have to honestly say that not 14 all the health scientists would be in agreement with that 15 particular statement. Because there is a concern that the 16 overall exposure, including the very fine particles, might 17 be very similar for persons inside, indoors. 18 SUPERVISOR SILVA: Okay. Well, I would actually 19 like to see the studies on this, if we could, at a later 20 date. 21 MS. BLACK: We can certainly put something 22 together, speak with our Research Division and put something 23 together in terms of indoor air. 24 CHAIRMAN DUNLAP: Yeah. If I might follow up on 25 that point, I'll ask staff, perhaps working with U.S. EPA, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 to get some kind of summary, themes perhaps, of those 185 2 and 86, whatever the proper number is, of studies, so they 3 can be properly characterized to the Board. 4 If I might -- unless there are other questions 5 right now -- okay. Ron, go ahead, and I'll follow. 6 SUPERVISOR ROBERTS: I don't know if it's 7 appropriate now, I wanted to share some of the questions 8 that came out of my putting this question to our local air 9 resources board. 10 CHAIRMAN DUNLAP: Sure. 11 SUPERVISOR ROBERTS: Or our air pollution control 12 board, excuse me. 13 With respect to the ozone standard, there were 14 basically two issues that were raised. One, that apparently 15 there were five alternatives that were reviewed; and without 16 there being significant differences in those alternatives 17 and without considering the uncertainty in the data, that 18 there is a question about changing the standard at this 19 time. 20 Secondly, there was a feeling that the methods 21 used to simulate the air pollution concentrations in the 22 risk assessments were overly simplistic. 23 With respect to the particulate matter, I heard 24 you say there were 85 studies that related to particulate 25 matter. But at least what we understood is that very few of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 those were based on PM2.5, and most of those were -- the 2 conclusions were extrapolations from PM10 studies, and that 3 also gives us some concern. 4 I don't know if you want to address any or all of 5 those issues. 6 MR. BIGGOS: I can only address the last one. 7 Most of the data that is currently available does pertain to 8 PM10, not to PM2.5. And you're quite right, it was an 9 extrapolation of the conclusion based on those data. 10 However, the evidence was compelling enough. One 11 of the comments we've gotten back from Administrator Browner 12 is a very strong message that gives a great deal of comfort 13 on the part of the administration in proposing these 14 standards based on the scientific evidence, based on the 15 three years of review by the scientific panels; that these 16 final determinations in the proposal are based on hard 17 evidence. 18 I can't give you any more scientific background 19 than that. 20 SUPERVISOR ROBERTS: That seems to conflict with 21 what you're saying, though. I mean the evidence doesn't 22 sound quite as hard as we're -- 23 MR. BIGGOS: Well, in the material that we 24 provided today, you asked for some more specifics on 25 scientific evidence and research. They list out the studies PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 and some of the conclusions, and this might answer some of 2 your direct questions that I don't have the ability to 3 respond to directly. 4 But certainly, if you want more information and 5 how to respond to the questions coming your way as a 6 representative of this Board, we'd be happy to provide 7 whatever we have in the way of evidence to support you in 8 that. 9 SUPERVISOR ROBERTS: Thank you. 10 CHAIRMAN DUNLAP: Yes, Mr. Parnell. 11 MR. PARNELL: Maybe a statement more than a 12 question, but perhaps there's a question in it. Each of 13 these -- even though California's standards are more severe 14 by and large than the changes that you've made, I guess the 15 question that lingers in mind -- not with respect to ozone 16 as much as with respect to PM10 or PM2.5 -- is that, 17 ultimately, the standards -- and we talk about health 18 effects and all of these things -- ultimately, some thing or 19 some one is going to have to be allocated responsibility for 20 changing or improving. 21 And I guess my question or my statement is, let's 22 be careful, or do you know enough about the whole issue of 23 PM2.5 -- or PM10 for that matter -- to appropriately 24 allocate responsibility to those who may ultimately be 25 regulated against? I don't think we do. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 CHAIRMAN DUNLAP: Well, yeah. I mean that's the 2 core point. Jack, if I might respond in part to that. 3 There obviously is a connection between any kind of new 4 health-based standard and implementation measures that one 5 would take, as Jack pointed out, to comply with those 6 standards to make progress towards them. And that is 7 something that we're going to be very actively involved in, 8 the Federal, State, and locals, talking about any type of 9 control plan development, making sure that we have adequate 10 time. 11 Now, I had some sense of comfort based upon the 12 time line. I don't have it right before me. But perhaps, 13 if you could, I'd ask staff to cover that plan development 14 time line again that you talked about, and what -- how many 15 months, how many years away we're talking about. And that 16 will give us all in the regulatory arena opportunity to 17 properly -- not just frame the debate about control 18 measures, but deal with it and have process, and input, and 19 be able to make some progress. 20 Can you, Lynn, perhaps, can you cover that for a 21 moment or re-cover it? 22 MS. TERRY: I'll have Cynthia cover that one. 23 MS. MARVIN: Okay. For ozone, U.S. EPA's 24 envisioning that any revisions to the ozone plans, including 25 strategies for new areas that might be brought into the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 process, would be due approximately in the year 2000. 2 For fine particulate matter, the date is extended 3 a little bit to give States time to collect additional 4 monitoring data, both to do the area designations and to 5 better define the problem. So, those fine particulate plans 6 would be due in 2002. Attainment would follow several years 7 thereafter. 8 CHAIRMAN DUNLAP: All right. And the PM10 9 planning activity now is going to come to a head when? 10 MS. MARVIN: Well, for PM10, because we're not 11 expecting any new areas and the PM10 plans for serious 12 areas, most notably for South Coast and San Joaquin, are due 13 next year, we're envisioning that those plans would be 14 submitted and there would be no need to make any significant 15 changes to those plans. 16 CHAIRMAN DUNLAP: Okay. 17 MS. MARVIN: If EPA goes forward with the PM10 18 standards as proposed. 19 CHAIRMAN DUNLAP: Yeah. All right. 20 MS. TERRY: And if I could add just one comment on 21 the issue of PM10 versus 2.5, we are moving ahead with PM10 22 plans in California, and they clearly have a PM2.5 23 component. 24 So, from a control strategy standpoint, there's 25 nothing new about the concept of looking at PM2.5 sources. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 It's an integral part of PM10 plans. 2 Secondly, in terms of the health studies, while 3 there are two very critical recent epidemiological studies 4 for PM2.5 that focus on 2.5, there are numerous studies on 5 PM10, and PM10 includes 2.5. 6 And the weight of evidence is what will be a key 7 part of the debate in terms of evaluating whether there is a 8 need for a combination of standards that address the fine 9 component of PM10, and that somewhat coarser component in 10 that PM10 to 2.5 range. 11 So, what EPA is proposing is not a dramatic 12 change, but it's rather a different way of looking at how 13 you come up with the adequate public health protection, and 14 ensure that you look at both components of PM10, because 15 there clearly are two different components that are 16 chemically, physically distinct -- the coarse versus the 17 fine fraction. 18 So, it's somewhat inaccurate to say that there are 19 only a very limited number of 2.5 studies. 20 CHAIRMAN DUNLAP: Right. Okay. Mr. Zemsky, the 21 comment period is open till when on these new proposed 22 standards? 23 MR. ZEMSKY: Through February 18th. And in answer 24 to Mr. Parnell's question, implementation is also up for 25 public comment. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 CHAIRMAN DUNLAP: Right. 2 MR. ZEMSKY: There were five proposals that were 3 published or will be published. So, we certainly are eager 4 to hear comments on implementation as well. 5 CHAIRMAN DUNLAP: Sure. Well, on that point, let 6 me ask Mr. Kenny to arrange for two forums -- one in the 7 north in Sacramento, one in the South -- perhaps even at our 8 El Monte facility, whereby we'll get a notice out and invite 9 people to come and comment to us, so that we might prepare 10 our comments that we would forward to the Federal 11 Government. 12 I'd like to have a pretty broad reach of people 13 invited, and I'd like to invite U.S. EPA to be there with 14 us, particularly if we're not going to get a hearing in 15 California. I think it will be meaningful. 16 Also, I would -- and I think it's been said. My 17 colleagues on the Board have reflected it very well. There 18 is a need -- I think I said a "hunger" -- for us to know 19 more about the health effects research specifically. I know 20 the staff here has some expertise. I appreciate that very 21 much. 22 But there seems to be some people, particularly in 23 the business community, that have said the science somehow 24 may be lacking or flawed. And it's important that that be 25 dealt with head-on. You have to do that, or the proposed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 standards just are not going to be credible. 2 So, we certainly would need you all to provide the 3 leadership in that area and work with us and other States to 4 be able to get the word out about the health effects work, 5 the science, that's been done. and where there are holes. 6 I think those issues can be dealt with proactively 7 with some of the States involved. I certainly think 8 California would be willing to fill some holes as we have 9 done at different times. 10 Also, on that point -- and let me follow up, and 11 then I'll be happy to let you comment. On the economics, 12 one thing you need to know about California -- and I know 13 you do, being located in San Francisco -- we've just bounced 14 back from a very difficult recession in California. We have 15 had -- as a matter of fact, I heard the Governor say it: 16 We've just replaced within the last six months the last few 17 thousand jobs that were lost in California because of the 18 recession. 19 So, we are now past recovery and are working to 20 grow the California economy. That's something that's 21 important. We suffered here in this State. 22 And we want to make sure that we are as 23 predictable as we can be, as regulators, as to what we would 24 expect the business community to do to help us meet these 25 health-based standards. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 So, to the extent that implementation discussions 2 can progress, perhaps separately -- probably best done 3 separately from the public health debate and issues. But 4 they need to progress as well, because there's a lot of 5 uncertainty and a lot of worry. And we appreciate -- I 6 certainly appreciate your comments about the leadership 7 California has shown. 8 That has come with some cost. We've asked the 9 businesses to do a lot in this State, and we want to make 10 sure that we have the problem defined before we ask them to 11 undertake a more aggressive control program. But we want to 12 protect public health. That's what this Board is about, and 13 we just need to understand as many of these issues as we can 14 before we move forward. 15 So, I think, if my Board member colleagues support 16 those forums, they'd be an opportunity for us to get some 17 comments. I know that the different regions -- I know, 18 Patty, your region in particular's concerned about their 19 attainment status and what it might mean for controls there. 20 South Coast also has some challenges, too. 21 So, with that, Mike, I'll ask you to proceed and 22 get those together, and make sure we have enough leadtime 23 relative to the 60-day -- or it's greater than a 60-day 24 comment period, so we can package our comments. 25 Lynne, did you have something you wanted to add? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 MS. EDGERTON: Well, I think you've expressed our 2 concerns, at least my concerns, very, very well, Mr. 3 Chairman. And thank you for scheduling this timely review. 4 Just to remind that most of the members of this 5 Board sitting here were here when we adopted the 1994 State 6 Implementation Plan, and we are still bearing the scars of 7 that as are, you know, the others who participated in it. 8 And, as the Chairman pointed out, we are on our 9 way to a very -- to clean air and we're on our way to 10 restoring the high quality of life that we value in Southern 11 California. 12 And along those lines, I would just like to say 13 that I was delighted this morning -- speaking of winning the 14 battle -- in California, I was delighted to see in the L. A. 15 Times the ad for the electric vehicle. (Displaying ad.) 16 Here we are, the electric car is here. This is from the Los 17 Angeles Times. And the folks we have to thank for this are 18 Governor Wilson, for his tremendous belief in the high 19 quality of life for all of us; Secretary Strock, Jackie 20 Schafer, Jan Sharpless, Chairman Dunlap, and all of you, and 21 GM, GM, and GM. 22 So, thank you. 23 CHAIRMAN DUNLAP: All right. Any other comments 24 before I move on this item? 25 Jim, did you have anything you wanted to add? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 SUPERVISOR SILVA: No. I was just going to say 2 that I really appreciate the staff report. I know that 3 we're looking at the El Toro Marine facility in Southern 4 California as re-use for an international airport. And many 5 of the scientists that went before us over this last 20-hour 6 hearing that we had referred to PM10 quite a bit. 7 CHAIRMAN DUNLAP: Did they? All right. We have 8 no witnesses today. 9 Mr. Biggos, did you want to add anything? 10 MR. BIGGOS: Just a few comments I guess. 11 CHAIRMAN DUNLAP: Sure. 12 MR. BIGGOS: In terms of I understand your 13 questions about the scientific studies, we'll be happy to 14 work with our headquarters office in North Carolina and work 15 with your staff -- 16 CHAIRMAN DUNLAP: Okay. 17 MR. BIGGOS: -- to answer some of your questions. 18 And, again, in terms of the strategies, we are committed to 19 working with you and the State of California to come up with 20 the most innovative and cost-effective strategies possible 21 to meet the standards. 22 CHAIRMAN DUNLAP: Right. And Ms. Nichols 23 reflected that when I met with her last week. And I 24 appreciate the sensitivity there. And the more work that 25 you can do, the more access you can have to some of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 business groups and trade associations that have expressed 2 some concerns, I think it is important. Because you need to 3 demystify the process, because we don't want people worried 4 or scared about what these standards could mean economically 5 to them. 6 We want them to understand the specifics. Thank 7 you very much. 8 Staff, excellent presentation. I appreciate the 9 slide show. I would ask that you replicate that and give 10 each of my Board member colleagues a handful, so that they 11 can hand out to the folks that are making inquiries of them. 12 That would be okay, I think, Lynne, you and some of the 13 others would like to have that. 14 All right. Mr. Kenny, we'll move on the item. 15 Any last comment or two that you had before we go on? 16 MR. KENNY: Only that we will be back with a 17 similar type of item next month when we review the South 18 Coast AQMP for PM10. 19 So, we thought it was important to give you at 20 least a sense today of what's happening in the PM2.5 and 21 ozone arena with regards to the new proposals. 22 And next month, we'll sort of segue off that a bit 23 to something that's related, but not quite the same. 24 CHAIRMAN DUNLAP: Okay. All right. Very good. 25 Then, we will close this item and move to the next. Is our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 court reporter okay? 2 (Thereupon, the reporter replied in the 3 affirmative.) 4 CHAIRMAN DUNLAP: All right. While we're asking 5 staff to take their places for OBD II, we'd like to take 6 care of a more pleasant item of business. 7 If I could ask Supervisor Roberts and Ms. Edgerton 8 to go to the podium and queue up, and I'll ask Mayor 9 Hilligoss. Could I ask you to read a resolution in a 10 moment? 11 We'll have you go there as well. 12 MAYOR HILLIGOSS: All those big words? 13 CHAIRMAN DUNLAP: All those big words. And, 14 Supervisor Vagim, if we could have you join Ron. Ron, could 15 I have you go first, followed by Lynne, and then Patty? 16 And, Doug, we'd ask you just to smile and listen to all the 17 kind things we're going to say about you. 18 Before I have Ron begin, I'd like to make a 19 comment. Once again, I have the task of bidding farewell to 20 a fellow Board member colleague. This time, it is 21 Supervisor Vagim. Doug has been on the Board since early 22 1994. 23 In addition to serving on this Board, he has also 24 been the Chairman of the San Joaquin Valley study policy 25 committee. And this committee is responsible for the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 overall policy guidance for the study. It establishes goals 2 and objectives, approves contract work, and is responsible 3 for an extensive budget, some $13 million. 4 Several times, Doug has been a member of a group 5 who has appeared before Congress to lobby for funding. His 6 leadership will be missed on this committee as well as on 7 the Board. I have appreciated very much getting the 8 opportunity to work with Doug, because he represents the 9 very best of citizen politicians. 10 He is someone that has put in a lot of time, has 11 thrown himself into the work, has learned all that he can 12 about environmental issues and air quality in particular, 13 and has always been candid to me and to anyone that cares to 14 listen to his opinions or views about environmental 15 protection. And he is going to be greatly missed. 16 So, with that, Doug, we have some others that want 17 to say some kind words; so, just enjoy the moment. Ron? 18 SUPERVISOR SILVA: Thank you, Mr. Chairman. I 19 have a commendation here from the Governor, Governor Pete 20 Wilson, and I'd like to read that. 21 "I want to take this opportunity to 22 thank you for your outstanding service to 23 the State of California as a member of the 24 California Air Resources Board. Since your 25 appointment to the Board more than two years PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 ago, you have demonstrated a commendable level 2 off professionalism and dedication. You've 3 contributed significantly to the effectiveness 4 of ARB and have earned the respect and 5 appreciation of all who have had the pleasure 6 of working with you. 7 "Your service to the people of California 8 has been of the highest caliber, and you should 9 take great pride in knowing that your efforts will 10 continue to benefit the citizens of California for 11 years to come. 12 "Thank you again for your service on the 13 California Air Resources Board. Please accept my 14 very best wishes for every continued success in 15 the years head." Signed, "Sincerely, Pete Wilson, 16 Governor of California." 17 CHAIRMAN DUNLAP: Thank you, Ron. 18 (Applause.) 19 CHAIRMAN DUNLAP: Ms. Edgerton. You have 20 something from Secretary Strock, I believe. 21 MS. EDGERTON: Yes, I do, to Supervisor Doug 22 Vagim. 23 "Dear Doug, 24 "On behalf of the California Environmental 25 Protection Agency, I wish to extend my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 gratitude for your years of service on the Air 2 Resources Board. Your participation on the 3 Board has provided a valuable district 4 perspective in assisting the Board in its role 5 of making complex and far-reaching regulatory 6 decisions. 7 "In addition, your dedication as Chairman 8 of the San Joaquin Study Policy Committee has 9 been greatly appreciated, and your leadership 10 will be missed. I wish you the best in your 11 future endeavors, and hope that you will continue 12 to be an active advocate for improved air quality. 13 "Sincerely, James M. Strock." 14 CHAIRMAN DUNLAP: Thanks, Lynne. 15 (Applause.) 16 MS. EDGERTON: I'd like to add one word 17 personally. The citizens of California will miss you, and 18 they will miss the benefits of your wise decisions. And 19 that's all very real. 20 But for those of us who sit on the Board, it's 21 less abstract and more personal, and we will miss you 22 personally. 23 CHAIRMAN DUNLAP: Thanks, Lynne. 24 All right. Mayor Hilligoss. She has the task of 25 reading an artfully done resolution, which this Board has PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 become known for, with some help from our staff. 2 And, Patty, I checked the language out. I think 3 that I could handle it, so I know you can, but it's quite 4 lengthy. 5 MAYOR HILLIGOSS: Yes, it is. 6 "State of California, Air Resources Board 7 Resolution 96-65. 8 "WHEREAS, Doug Vagim has diligently and 9 effectively represented the San Joaquin Valley 10 Unified Air Pollution Control District on the 11 Air Resources Board since the District was 12 granted a permanent seat in 1994; 13 "WHEREAS, the establishment of the San 14 Joaquin Valley Unified District as a key 15 player in State air pollution policy would not 16 have been possible without Doug's consensus- 17 building efforts and tireless leadership; 18 "WHEREAS, Doug contributed his valuable 19 economic expertise and bottom line consciousness 20 as a small business owner to numerous Board 21 proceedings where cost-effectiveness was a 22 primary regulatory consideration; 23 "WHEREAS, Doug's ability to focus on each 24 vital component in a multifaceted program assisted 25 the Board immensely in refining existing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 regulatory programs and developing new 2 initiatives, including its ground-breaking 3 electric vehicle program; 4 "WHEREAS, as Chairman of the San Joaquin 5 Valley Air Quality Study Policy Committee, Doug 6 has contributed his overriding concern for 7 setting firm goals and objectives and his 8 tireless attention to the detail of this study, 9 which will significantly augment our understanding 10 of the dynamics of ozone and PM formation in the 11 Valley and pave the way for effective control 12 efforts; 13 "WHEREAS, Doug's participation in fund 14 raising efforts for the San Joaquin Valley air 15 quality study, together with his careful 16 scrutiny of study expenditures, will help ensure 17 the study's successful completion; 18 "WHEREAS, Doug's intellectual honesty, quick 19 understanding, and probing inquisitiveness have 20 had a positive impact on the Board proceedings 21 and have won him the respect of the Board and 22 staff alike; 23 "WHEREAS, Doug demonstrated his commitment 24 to rail transit in the San Joaquin Valley by 25 taking Amtrak to commute to Sacramento meetings PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 on more than one occasion, and by successfully 2 convincing his fellow San Joaquin Valley 3 stakeholders to join him in doing so, if only 4 on one occasion; 5 "WHEREAS, Doug demonstrated his dedication 6 to the cause of clean air by volunteering his 7 car to be a guinea pig in the cleaner burning 8 gasoline test program; 9 "WHEREAS, Doug is leaving the Air Resources 10 Board to return to his family and numerous civic 11 and business activities in Fresno; 12 "NOW, THEREFORE, BE IT RESOLVED, that the 13 Board commends Doug Vagim for his logical 14 perspective on air pollution issues and his 15 unstinting efforts to improve air quality for 16 his community and for all Californians. 17 "Executed at Sacramento, California, on 18 this 12th day of December, 1996." 19 And it's signed by all of us. 20 (Applause.) 21 MAYOR HILLIGOSS: And the only thing, we're going 22 to miss your really wonderful questions, because you 23 certainly have acumen for that. The only thing I have 24 against it is that you still claim that San Joaquin Valley 25 has dirty air because of the Bay Area. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 (Laughter.) 2 SUPERVISOR VAGIM: Well, thank you. I appreciate 3 this. If I could, I will just spend about a moment. I'm 4 not used to getting praise heaped upon me, but thank you 5 very much. You all did a very find job, and Patty, you had 6 the toughest task today to read through that. 7 I just want to say that any one of us who comes 8 and sits here are but a moment for what the lifeline of this 9 agency is, again the backbone of clean air in California and 10 the world. And compare my stint for three years or a little 11 less than three years with the longevity of Dr. Boston and 12 Mr. Lagarias is really a blip on the radar charts compared 13 to their time line. 14 But yet, I had the fortunate opportunity to be 15 here when they were here. And with all of you I've learned 16 some things that I will take for the rest of my life, and 17 that is what this is all about, and how we went through and 18 implemented -- from the automobile to the stationary, to the 19 policy from the D.C. relationship to California, and what 20 California means to the rest of the nation and to the world. 21 When we were first introduced to I'd say the more 22 ominous effects of what California Air Resources Board was 23 to the San Joaquin Valley -- they appear more in reports 24 about Kern County, and some of the reports were that it was 25 the Texas of California, and et cetera, et cetera -- and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 then we started looking at -- and, of course, the pressure 2 was for California to form a unified basin district. And, 3 of course, an AQMD was on the horizon. 4 We took the lead and jumped ahead and formed a 5 unified authority, which was permissible under the Health 6 and Safety Code. And I'm proud that we were able to pull it 7 off, because we pulled local control together and kept it as 8 a local control agency. It is, I believe, an outstanding 9 agency that has brought a lot of commitment to cleaning up 10 the air in the San Joaquin Valley, and being a real partner 11 with all the other districts and the ARB in accomplishing 12 that task. 13 And I'm proud that I've had some opportunities to 14 be part of what I call monumental efforts on the California 15 SIP and the low-emission vehicle program and, of course, the 16 zero-emission vehicle program that's just coming out of the 17 box now, so to speak, and getting on the road. And I hope 18 much success for that and much success for you all this 19 agency. 20 Thank you very much. 21 CHAIRMAN DUNLAP: Thank you. 22 (Standing ovation.) 23 CHAIRMAN DUNLAP: All right. Thank you. And 24 thank you to the audience for your indulgence to allow us to 25 recognize our colleague. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 With that, why don't we move into the next item. 2 Again, I'd like to remind those of you in the audience who 3 would like to present testimony to the Board on any of 4 today's items to please sign up with the Clerk of the Board. 5 The next item is 96-10-2, a public hearing to 6 consider technical status and proposed revisions to 7 malfunction and diagnostic system requirements for 1994 and 8 subsequent model year passenger cars, light-duty trucks, and 9 medium-duty vehicles and engines. 10 The malfunction and diagnostic requirements known 11 as OBD II were originally adopted in September of 1989. 12 These requirements were phased in during the 1994-95 model 13 years. Manufacturers are currently in the second year of 14 implementing these systems across all models, all product 15 lines in that light-duty/medium-duty category. 16 The staff and manufacturers have gained 17 considerable experience with these systems during this 18 implementation process and have found that the systems are 19 working well to detect emission related problems. 20 Based on detailed discussions with vehicle 21 manufacturers, the staff is proposing amendments to clarify 22 and adjust certain requirements to further increase the 23 effectiveness and reliability of these systems. 24 The staff will also summarize manufacturers' 25 progress in meeting enhanced monitoring system requirements PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 scheduled to take effect between the 1998 and 2002 model 2 years, and will propose some amendments to these 3 requirements. 4 Lastly, the staff has proposed new monitoring and 5 service information access requirements to further ensure 6 that emission-related malfunctions are detected and 7 efficiently repaired. 8 At this point, I'd like to ask Mr. Kenny to 9 introduce the item and begin the staff's presentation on OBD 10 II. Mr. Kenny. 11 MR. KENNY: Thank you, Mr. Chair and members of 12 the Board. 13 The OBD II requirements call for a stringent and 14 comprehensive on-board monitoring system to detect almost 15 every emissions-related malfunction that can occur in 16 vehicles. These systems play a vital role in fully 17 realizing the benefits of the low-emission vehicle program 18 and other emission control regulations by ensuring that 19 vehicles remain clean throughout their useful lives. 20 To accomplish this task, the Board has relied on 21 requirements that are considered to be very technology 22 forcing. As such, the staff has been instructed to report 23 back to the Board on a regular basis to provide updates on 24 manufacturers' progress and to propose modifications deemed 25 necessary as a result. This is the fourth such update since PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 the regulation was adopted in 1989. 2 As these updates continue, so has the progress. 3 as you have heard, vehicle manufacturers are equipping all 4 vehicles subject to the requirements with OBD II systems. 5 The feedback to date shows that the systems are working as 6 intended. Nevertheless, the staff and manufacturers have 7 identified areas in which the requirements can be adjusted 8 to further improve system performance and reliability. 9 Staff has also proposed amendments to address 10 manufacturer resource concerns regarding soon to be 11 implemented monitoring system enhancements and service 12 information needs of the service repair industry. 13 Staff is also proposing that OBD II systems 14 monitor two new areas of malfunction that have been 15 identified as significant sources of emissions. 16 I'll now turn the presentation over to Michael 17 McCarthy of our Mobile Source Control Division, and he will 18 provide you with more details. 19 Michael? 20 MR. MC CARTHY: Thank you, Mr. Kenny. Good 21 morning, Chairman Dunlap and members of the Board. 22 Today, I'm going to present a biennial review of 23 the on-board diagnostics II program. Today's presentation 24 will include background information and the current 25 implementation status of on-board diagnostics II as well as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 the proposed revisions for current monitoring strategies, 2 service information requirements, and tampering protection 3 requirements. 4 On-board diagnostics, or OBD systems, reduce the 5 amount of time between the occurrence of a malfunction 6 causing high emissions and its detection. These systems 7 also assist service technicians in diagnosing and repairing 8 emission-related malfunctions. 9 California first adopted an OBD requirement in 10 1985 for 1988 and later model year vehicles. These systems, 11 known as OBD I systems, were only required to monitor the 12 input components to the vehicle on-board computer, the fuel 13 delivery system, and the exhaust gas recirculation system. 14 California expanded on this system with the 15 adoption of the OBD II regulation in 1989 for 1994 and later 16 model year vehicles. OBD II requires monitoring of nearly 17 all emission-related components and specifies the 18 performance criteria to be used for determining if a 19 component or system is malfunctioning. 20 In general, the systems must identify a 21 malfunction before tailpipe emission levels exceed one and a 22 half times the applicable emission standard. OBD II also 23 requires valuable diagnostic information to be made 24 available to service technicians, which will help them 25 identify and repair emission-related problems. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 If a malfunction is detected by the OBD II system, 2 a light known as the malfunction indicator light, or MIL, is 3 illuminated on the vehicle's instrument panel. 4 OBD II is an important element of the State 5 Implementation Plan. Baseline calculations for the fleet 6 average in the year 2010 utilize the emission reductions 7 expected from vehicles equipped with OBD II systems. In 8 1989, these emission reductions were calculated to be 125 9 tons per day each for both hydrocarbons and oxides of 10 nitrogen. 11 The next item in today's discussion is the current 12 implementation status of the OBD II program. Manufacturers 13 began to phase in OBD II systems in their 1994 and 1995 14 model years, with full implementation on all light- and 15 medium-duty vehicles in the 1996 model year. Additionally, 16 virtually all 1997 model year vehicles have been certified, 17 and most are already available for sale in California. 18 While this means that OBD II equipped vehicles on 19 the road are only one to three years old, staff has already 20 received a significant amount of feedback on how the systems 21 are working. These comments and experiences have come from 22 a variety of sources, including manufacturers' development 23 fleets and assembly plants, in-house ARB test programs, J.D. 24 Powers and other quality rating associations, automotive 25 magazines, and internet news groups. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 Overall, most of the feedback has been positive. 2 Early experiences indicate the systems are working as 3 intended; that is, they correctly identify emission-related 4 malfunctions. 5 Because of the relatively low mileage of most of 6 the OBD II equipped vehicles, the majority of malfunctions 7 identified so far have been traced back to assembly line or 8 quality control problems. These include misrouted hoses, 9 loose electrical connections, and sensors broken upon 10 installation. 11 Some manufacturers have even indicated that OBD II 12 systems have done much to improve initial vehicle quality. 13 While the vast majority of these detected problems are 14 indeed actual component malfunctions, some manufacturers 15 have also experienced false malfunctions indications. 16 Generally, the manufacturers have moved swiftly to correct 17 these problems by issuing field fixes, which include 18 instructions too service technicians on how to correct the 19 problem. 20 Moving on to the focus of today's presentation -- 21 proposed regulatory revisions to the existing requirements: 22 Given the feedback and comments received on OBD II 23 systems so far, staff and industry have worked together to 24 develop revisions to the current requirements to further 25 facilitate implementation and to address other issues where PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 more experience has been gained. 2 Staff has also developed new monitoring 3 requirements for thermostats and positive crankcase 4 ventilation systems, two items for which monitoring has not 5 previously been required. 6 The staff has received data showing that the 7 current catalyst monitoring requirements can be met even on 8 ultra-low-emission vehicle applications. However, as the 9 deadlines rapidly approach for finalizing vehicle 10 calibrations for the 1998 model year, some manufacturers 11 have asked for additional leadtime. 12 Significant advances have been made in catalyst 13 technology as manufacturers have sought new ways to meet the 14 low-emission vehicle program requirements. And, as a 15 result, catalyst configurations that were considered optimal 16 for monitoring only a few years ago are no longer ideal for 17 monitoring. 18 Additionally, manufacturers have presented staff 19 with data demonstrating that higher variability exists in 20 catalyst monitoring systems compared to other monitors, and 21 this translates to some uncertainty as to the exact tailpipe 22 emission level when a malfunction is detected. 23 In some cases, a malfunction may be detected 24 before emissions actually exceed the standard; while, in 25 other cases, a malfunction may be detected too late. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 Lastly, manufacturers have indicated that the 2 catalyst may actually be monitored more frequently on the 3 road if they can calibrate over a broader area of engine 4 speed and load conditions. 5 After careful consideration of the industry's 6 concerns regarding catalyst monitoring, staff has worked 7 with the manufacturers to develop mutually acceptable 8 solutions. The first is an extension of the current three 9 year phase-in to a five year phase-in, ending in 2002, to 10 provide manufacturers with additional leadtime for low- 11 emission vehicles. 12 Secondly, to address the concern of increased 13 variability, staff is proposing to increase the current 14 malfunction criterion of 1.5 times the emission standard to 15 1.75 times the emission standard. 16 While the average vehicle will still indicate a 17 malfunction before emissions exceed 1.5 times the standard, 18 this will provide manufacturers with an extra safety margin 19 to avoid indicating a catalyst malfunction too early. 20 Lastly, the staff proposes to allow the use of the 21 ARB developed unified cycle as a substitute driving cycle 22 for demonstration of the OBD II monitors. This cycle was 23 developed by ARB staff to more closely represent today's 24 in-use driving patterns and does include a broader range of 25 engine speed and load conditions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 Staff is also proposing revisions to the misfire 2 monitoring requirements. As manufacturers move forward in 3 implementing enhanced misfire monitoring systems for the 4 1997 model year, a few concerns have arisen during 5 development and from the feedback received from the OBD II 6 vehicles currently on the road. 7 One problem that has troubled several 8 manufacturers is the occurrence of sporadic bursts of 9 misfire. These bursts may be caused by abnormal driving 10 conditions or by temporary fuel quality conditions. While 11 in most cases the vehicle's actually misfiring, there is 12 nothing a service technician can do to correct the 13 situation. 14 The industry has also asked for additional 15 leadtime to facilitate implementation of the enhanced 16 misfire detection systems across their entire product line 17 with their existing resources. 18 While most manufacturers appear to be able to meet 19 the current phase-in schedule, the staff believes industry's 20 request for two years of additional leadtime is merited and 21 appropriate to ensure a successful introduction of the 22 enhanced misfire monitor. 23 Likewise, the staff is proposing revisions to the 24 misfire monitor requirements to reduce the sensitivity to 25 sporadic bursts, or nonrepeatable misfire events. This will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 provide manufacturers with additional monitoring time to 2 verify that a fault exists before alerting the driver, and 3 minimize unnecessary repair visits when there is no fixable 4 malfunction. 5 Further, staff is proposing additional relief for 6 engines with more than eight cylinders, which have proven to 7 be more problematic than some of the smaller, more common 8 engines. 9 The first new requirement that staff is proposing 10 is for the thermostat. The thermostat is typically a 11 nonelectronic valve installed in the engine cooling system 12 that cycles open and closed based on the temperature of the 13 engine. When the engine is cold, the thermostat limits the 14 flow of coolant around the engine to promote a rapid 15 warm-up. Once the engine reaches a warmed-up temperature, 16 the thermostat cycles open and closed to keep the engine at 17 a stabilized temperature. 18 However, when a thermostat malfunctions, the 19 performance and emissions of a vehicle can be affected. 20 Thermostats that open too soon or are stuck open will 21 provide too much cooling to the engine and delay warm-up. 22 This can increase emissions due to extended operation in 23 open loop fuel control and due to fuel enrichment and 24 ignition timing modifications made during cold engine 25 operation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 Additionally, a faulty thermostat that prevents or 2 delays engine warm-up could disable several OBD II monitors 3 with no indication of a problem. 4 As such, staff is proposing a new requirement for 5 manufacturers to monitor the thermostat and verify that the 6 engine reaches a warmed-up temperature in a reasonable 7 amount of time. Like one manufacturer currently does on all 8 of its vehicles, most manufacturers are expected to meet the 9 requirement by modeling the engine coolant temperature in 10 the on-board computer and then comparing it to the actual 11 temperature after a specified amount of time. Phase-in of 12 the new monitor would begin in the 2000 model year with 13 full implementation by 2002. 14 The second new monitoring requirement proposed by 15 staff is for the positive crankcase ventilation, or PCV, 16 system. The PCV system captures fugitive crankcase 17 emissions in the engine and routes them back into the intake 18 air supply. A typical PCV system consists of two hoses and 19 a mechanical valve. 20 Even though the system is relatively simple, some 21 failures, such as disconnected or broken hoses, can cause a 22 substantial emission increase. Emission models indicate an 23 average per vehicle emission increase of 1.2 grams per mile 24 hydrocarbons, which is more than 15 times the LEV standard. 25 Thus, even a failure rate of only 1 percent of all PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 vehicles would increase the 2003 fleet average by nearly 20 2 percent. 3 Accordingly, staff is proposing a new monitoring 4 requirement for the PCV system. Manufacturers would be 5 required to detect disconnections in the system that prevent 6 vapors from being recycled to the engine. Optionally, 7 manufacturers may satisfy a portion of the requirement by 8 meeting system design guidelines governing the type of 9 materials used and the manner in which the hoses and PCV 10 valve are fastened. 11 Meeting the guidelines will greatly reduce the 12 frequency of malfunctions that significantly increase 13 emissions. Phase-in percentages of 30, 60, and 100 percent 14 would be required during the 2002 through 2004 model years. 15 The next topic in the presentations is revisions 16 to the service information requirements in the OBD II 17 regulation. 18 Detecting a malfunction and alerting the driver to 19 the problem is only half of the OBD solution. To realize 20 any emission benefit, the malfunction must also be repaired. 21 Thus, an important part of the OBD II regulation covers 22 service information to assist technicians in the repair of 23 vehicles. 24 To improve upon the current requirements, staff is 25 proposing a new requirement for manufacturers to provide PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 service information in a standardized format. This format 2 developed by the Society of Automotive Engineers, and known 3 as J2008, organizes the information contained the service 4 manuals into an electronic format. 5 Requiring all manufacturers to put the information 6 in this format will provide technicians with quicker access 7 to complete diagnostic and repair information, further 8 facilitating emission-related repairs. 9 Another step the staff is taking is standardized 10 electronic access to the vehicle's software calibration 11 identification number. This number identifies the software 12 installed in the on-board computer. A technician can then 13 verify that the vehicle has a valid and the most appropriate 14 software calibration installed during repair visits or 15 inspection and maintenance smog checks. 16 This number can also be cross-referenced to other 17 vehicle parameters to identify proper service procedures, 18 and offers an additional security measure for inspection and 19 maintenance programs. 20 The next item in today's presentation is revisions 21 to the current tampering protection requirements. 22 From the time the OBD II requirements were first 23 adopted, they have contained requirements to guard against 24 system tampering. The intent of these requirements has been 25 to prevent on-board computer alterations that diminish the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 effectiveness of the OBD II system. Future plans for 2 California inspection and maintenance programs demand 3 complete trust in the OBD II system and, thus, safeguards 4 were put in place to protect the system integrity. 5 Vehicle manufacturers have expressed several 6 concerns regarding the tampering requirements, including 7 questioning the need for such requirements, given the 8 security measures they already employ to protect proprietary 9 information. Further, they have stated that the enhanced 10 requirements are too costly and restrictive to implement. 11 The aftermarket industry has also expressed strong 12 concerns regarding the current tamper resistance 13 requirements, citing their belief that the requirements 14 violate the Clean Air Act and allow manufacturers to further 15 limit access to the on-board computers by anyone other than 16 franchised dealers. 17 This industry has also expressed their belief that 18 access to calibration information is necessary for the 19 development of aftermarket parts. Lawsuits on these issues 20 have been filed against the ARB and the U.S. EPA. 21 Because of the difficulties encountered in 22 reaching agreement on specific and enforceable requirements, 23 the staff is proposing to remove all requirements for 24 reprogrammable units. Vehicle manufacturers are anticipated 25 to implement adequate tamper resistance provisions on their PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 own, and the ARB still reserves authority under Section 2 27156 of the Vehicle Code to address tampering if it becomes 3 a problem in the future. 4 In place of tamper resistance requirements, the 5 staff has proposed a new requirement for verification of the 6 software in the vehicle computer. Both the vehicle 7 manufacturers and the aftermarket have agreed as to the 8 reasonableness of this approach. 9 Under the new requirement, manufacturers would 10 support a standardized command that would initiate a self- 11 check of the on-board computer. This could be used in an 12 I&M program to verify that the software, either OEM or 13 aftermarket, is valid and has not been corrupted or 14 otherwise damaged. 15 While the revisions staff is proposing today 16 should alleviate most of the aftermarket manufacturers' 17 concerns, the aftermarket still contends that certification 18 of vehicles with computer protections -- whether voluntary 19 or required -- violates the Clean Air Act. 20 However, in the Federal waiver decision regarding 21 the OBD II regulation, EPA concluded that the existing 22 requirements do not violate the Clean Air Act and, like the 23 ARB, EPA recognized that the Clean Air Act does not prohibit 24 manufacturers from implementing measures to protect 25 proprietary information, including the software in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 on-board computer. 2 In accordance with the requirements of the Clean 3 Air Act, OBD II systems provide service technicians with 4 access to the output of the diagnostic system to aid them in 5 diagnosing and repairing vehicles. 6 Although the staff has reached agreement with the 7 manufacturers in the many different areas of the OBD II 8 regulation, two issues remain to be discussed. 9 Currently, manufacturers are allowed to exclude 10 certain system monitors on all alternate fuel vehicles until 11 the 1999 model year. However, as the manufacturers will 12 explain more detail, they are now requesting more leadtime 13 to accommodate existing resources. 14 While the staff would like to have alternate fuel 15 vehicles comply as soon as possible, the manufacturers' 16 request also appears to be reasonable. 17 Likewise, manufacturers have asked for an 18 extension of the existing deficiency provisions. The 19 current requirements allow manufacturers to certify a 20 vehicle with one deficiency through the 2000 model year, and 21 none thereafter. 22 As manufacturers will detail further, they feel an 23 extension of this provision is merited beyond the 2000 model 24 year due to the complexities involved with OBD II systems. 25 While the staff seeks to have fully compliant PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 (sic) systems as soon as possible, the staff again believes 2 that an extension of the provisions is reasonable. However, 3 because these issues involve workload and policy rather than 4 pure technical issues, the staff believes they would best be 5 decided by the Board in today's public meeting. 6 In summary, the OBD II program is working as 7 intended. Today's proposed revisions address several issues 8 to facilitate implementation and ensure the continued 9 success of the program, as well as make sure that the 10 systems work as effectively as possible. 11 Today's revisions also significantly bolster ARB's 12 commitment to improving the availability of service 13 information to technicians to ensure that, once detected 14 these malfunctions can be accurately and efficiently 15 repaired. 16 Lastly, the potential for OBD II to supplement or 17 even replace the current I&M program in the future continues 18 to look promising. 19 Thank you. This concludes the staff's 20 presentation. 21 CHAIRMAN DUNLAP: Certainly hit that last point 22 well. I appreciate that. Any less smog check pain that we 23 could feel would be welcome. 24 We have eight witnesses that have signed up, or 25 seven it looks like. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 Mr. Kenny, before we go to the witness list, 2 anything you want to add to the staff presentation? 3 MR. KENNY: No, not at all. 4 CHAIRMAN DUNLAP: Okay. Any Board members? 5 Supervisor Roberts, you have a question before we go to the 6 witnesses? 7 SUPERVISOR ROBERTS: Mr. Chairman, I have an ex 8 parte contact statement that I'd like to -- 9 CHAIRMAN DUNLAP: Okay. On that point, do you 10 want -- Kathleen, would you like us to take those now or do 11 you want us to wait till later? 12 MS. WALSH: Why don't you go ahead and wait till 13 later -- 14 CHAIRMAN DUNLAP: Okay. 15 MS. WALSH: -- when you normally do that, and take 16 them from all of the Board. 17 CHAIRMAN DUNLAP: Ron, we'll wait until right 18 before we go to a vote, if that's okay. 19 SUPERVISOR ROBERTS: That's fine. 20 CHAIRMAN DUNLAP: Okay. 21 SUPERVISOR ROBERTS: I wasn't sure when the 22 appropriate time was. 23 CHAIRMAN DUNLAP: All right. We appreciate your 24 conscience on that matter on reporting those contacts. 25 Okay. Why don't we go into the witness list, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 then. Mr. Calhoun, before we do that? 2 MR. CALHOUN: Before we go to the witnesses, may I 3 ask the staff a couple of questions? 4 Would it be a fair characterization of your 5 proposal today by saying that one of the objectives that you 6 intend to accomplish by the proposal is to minimize false 7 MILs along with increasing the manufacturers' chances of 8 complying with the regulation? 9 MR. ALBU: Yes, definitely. 10 MR. CALHOUN: Okay. One of my concerns has been 11 and continues to be false MILs. And I guess when the staff 12 mentioned the fact that ultimately they'd like to see OBD 13 used as part of the I&M program. That's one of the reasons 14 why I am very concerned about false MILs. 15 And during the course of your presentation, when 16 you were discussing misfires, you mentioned the fact that 17 sporadic misfires have occurred, and there is no practical 18 way -- I believe that's what you said -- you said sporadic 19 bursts or misfires can trigger detection of a fault when 20 actual misfires occur, but no fixable program exists. And 21 these sporadic misfires can be caused by bad fuel or 22 something else. 23 What does one do about that in the real world if 24 that occurs? 25 MR. ALBU: I think that the vehicle manufacturers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 are vitally concerned about that issue as well. What has 2 happened so far is that they have issued field fixes for the 3 vehicles that are affected. There's only a few 4 manufacturers so far that seem to be affected by this. And 5 those manufacturers have either modified their software 6 already for the '97 model year or are about to, or have 7 issued field fixes for those vehicles that do come in. 8 There are not a lot of them, but there are a few. 9 And, as I say, those are being addressed rapidly by the 10 manufacturers themselves. 11 MR. CALHOUN: What does an individual do about it? 12 You know, if he's in the field and this happens to his 13 particular vehicle and he's subject to inspection? He has a 14 false -- as has been indicated, there's a false MIL, and 15 there's no practical way around it, at least in my view. 16 MR. CROSS: Joe, I think that there are two 17 things. In the field, as with any new system that's being 18 introduced, there are glitches here and there, as you might 19 expect. And what you would do would be to reprogram the 20 problem systems to take care of the problem. 21 In other words, you would change the window of 22 detection to a broader window, for example, or something 23 like that to create a situation where the consumer right now 24 does not have to deal with false MILs. 25 In the longer term, the staff proposal, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 specifically for catalyst monitoring -- or for misfire, I'm 2 sorry, addresses that by changing the monitoring 3 requirements so that they don't trigger the MIL on the first 4 occurrence. They run through various verification checks to 5 make sure that this isn't a burst-type event. 6 So, I think the staff proposal already moves in 7 the -- strongly in the direction of preventing false MILs 8 with the concurrence of the manufacturers. The real issue I 9 think is what you do with the person who it right now. And 10 the answer is, you reprogram the system typically take care 11 of it. 12 MR. CALHOUN: I recognize that the staff proposal 13 will address the future vehicles. But I'd be more concerned 14 about those that are occurring in the field. 15 MR. CROSS: Okay. 16 MR. CALHOUN: I have another. Let me move on. 17 CHAIRMAN DUNLAP: Well, I was going to say, we're 18 going to hear, Joe, in a bit from Chrysler, and GM, and 19 AAMA, and some others. You can put that question to them 20 and see how they feel it's progressing and whether it's been 21 accommodated in the staff proposal. 22 You have another point? 23 MR. CALHOUN: Yes, I have another question I'd 24 like to ask. 25 On page 57 of the staff report, there's a new -- I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 think it's page 57 -- a new requirement being proposed, and 2 we've talked something a little bit in the past about this. 3 On page 57, subsection (1.10), where we talk about 4 implementing new emission control systems. Under the 5 current proposal, the industry would be required to -- if it 6 wanted to implement new emission control equipment or 7 system, they would have to come in and discuss it with the 8 staff. 9 And it presupposes that approval would be required 10 by the staff in order to use; is that correct? 11 MR. ALBU: Yes. I think that's a fair 12 distillation of what's said there. Our view is that 13 advanced emission control systems, if they're really new, 14 are certainly worth investigating. But if they can't be 15 monitored and end up failing at high mileage, it doesn't 16 help us much if that advanced control system can't be 17 detected when it fails. 18 So, our view is that we need to discuss -- with 19 any potential product that is new, we need to understand if 20 it can be monitored properly on the vehicle before we can -- 21 MR. CALHOUN: What happens in those cases where 22 the proposed technology that they would like to use is very 23 effective, but there's no way to monitor the effectiveness 24 of it? 25 MR. ALBU: We haven't seen that yet. But if it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 does come up, I would say that we would be inclined to 2 disallow it. 3 As I say, if we can't detect a good performing 4 component at high mileage when it fails, then we haven't 5 done a lot for air quality by using it in the first place. 6 MR. CALHOUN: But suppose they can prove that it 7 is very effective in terms of reducing emissions? 8 MR. ALBU: If it can be shown to be very durable, 9 cannot fail, perhaps then we could give an exemption. But 10 that would be a difficult finding perhaps, but is one that 11 potentially, theoretically could happen, I suppose. 12 MR. CALHOUN: Okay. All right. I guess I'd be 13 interested in hearing the industry's comments regarding 14 that. 15 MR. CROSS: Just very quickly. The way Steve and 16 you laid it out, though, he's encouraging the manufacturers 17 to come in, when they think about introducing stuff and talk 18 to staff, to prevent a situation where we end up at the end 19 of a development program saying, no, we can't certify it. 20 CHAIRMAN DUNLAP: Right. 21 MR. CROSS: The whole idea is to work together 22 with the industry to get to the decision point where we can, 23 in fact, certify effective technology. I think what Steve 24 is saying is if a manufacturer ignores its OBD obligation 25 and comes to us at the eleventh hour with a system that it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 claims works very well, is pretty durable, but they don't 2 know how to monitor it and asks us to certify it, we're 3 going to have a problem doing it that. 4 MR. ALBU: We had a situation, for example, with 5 the hydrocarbon traps, where for a long -- fairly long 6 period of time, we didn't have a way that we were aware of 7 that that could be monitored. 8 However, BMW, for example, came to us with a 9 proposal that we think looks effective. And therefore, we 10 think that the use of that device in their system makes 11 sense. 12 MR. CALHOUN: Okay. Thank you. 13 CHAIRMAN DUNLAP: Okay. Why don't we get into the 14 witness list then. I'll call forward -- what I'm going to 15 do is I'll call the witnesses forward. As you're queuing 16 up, we'll give the court reporter a few minute break. 17 Steve Douglas, Frank Krich from Chrysler, Greg 18 Dana, AIAM; John Valencia, California Auto Wholesalers 19 Association; Paul Haluza, MEMA and eight other associations; 20 Jack Heyler, Auto Service Councils; Dave Ferris from GM, and 21 John Trajnowski from Ford, if I could get you to move 22 forward and go into those reserved seats in the front or 23 close to it, we'll get you lined up. 24 All right. Let's take just a couple minutes while 25 you're putting your thoughts together. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 (Thereupon, a brief recess was taken.) 2 CHAIRMAN DUNLAP: Okay. We'll have the first 3 witness come forward. 4 Mr. Douglas. 5 One thing I will ask, particularly the auto 6 industry representatives, is that you're welcome, it's a 7 pleasure to have you here. But this issue it seems, as 8 staff's presented it, can be distilled in four or five key 9 issues here. 10 And so, I would be grateful if you all, as you 11 provide your testimony, indicate if you agree with your 12 brethren in the industry or not, so we can kind of sort 13 through it. Okay? All right. Thank you. 14 MR. DOUGLAS: Thank you, Chairman Dunlap. 15 I am Steven Douglas with the American Automobile 16 Manufacturers Association. And over the last year, our 17 association, our member companies -- Chrysler, Ford, and 18 General Motors -- and your staff have worked diligently to 19 overcome the obstacles facing one of the most 20 technologically advanced regulations ever adopted by the 21 Board. Of course, I'm referring to the on-board diagnostics 22 II regulation. 23 While these discussions were sometimes difficult, 24 we finally reached a point of consensus on almost all issues 25 that balances the many interdependent demands of vehicle PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 design, development, and production with the requirements to 2 monitor, control, and maintain the vehicles' emission 3 control systems. 4 That's not to say now that on-board diagnostics II 5 is guaranteed to succeed. We still have many concerns about 6 meeting some of the more challenging requirements, 7 specifically full range misfire monitoring and LEV catalyst 8 monitoring across the entire product line. 9 What we have accomplished, though, is to establish 10 a foundation for a successful program. We now have to go 11 back to the design facilities, and laboratories, and 12 factories, and highways and implement the new requirements 13 of this regulation. 14 Before we move on, though, we'd like to reiterate 15 the importance of the final two changes that we have 16 requested, changes to the alternate fuel vehicle 17 requirements and to the deficiency policy. 18 These two issues affect the potential success of 19 OBD II as well as the future of alternate fuel vehicles in 20 California. For your convenience and to expedite my 21 testimony today, we've supplied the proposed changes and 22 provided more detailed justification in separate 23 correspondence to the Board. 24 CHAIRMAN DUNLAP: Mr. Douglas, is that it for now? 25 Or are you halfway through, or -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 MR. DOUGLAS: I'm halfway through. 2 CHAIRMAN DUNLAP: Okay. What I was going to get 3 at is I wanted the two specific additional changes. I 4 wanted you to cover -- 5 MR. DOUGLAS: Okay. And that's exactly what I'm 6 going to do. 7 CHAIRMAN DUNLAP: Okay. 8 MR. DOUGLAS: Alternate fuel vehicles: Alternate 9 fuel vehicles represent a very small percentage of new 10 vehicle sales in California. 11 In fact, in 1996, alternate fuel vehicles 12 represented far less than one percent of the new vehicle 13 sales by domestic automobile manufacturers. 14 While we believe that alt. fuel vehicles may have 15 a very promising future, they still represent just a tiny 16 fraction of the market, and manufacturers are appropriately 17 and prudently devoting their resources in OBD design and 18 development to conventional gasoline powered vehicles. 19 As we noted in separate correspondence, some 20 monitors employing gasoline vehicles will require new or 21 modified strategies on alternate fuel vehicles. 22 Furthermore, even monitors from gasoline OBD II systems that 23 can be employed without modification require extensive 24 testing and validation to ensure they function properly in 25 the alternate fuel environment. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 In order to ensure that OBD II requirements will 2 not impede the availability of alt. fuel vehicles in 3 California, we're asking that you extend the Executive 4 Officer's authority to waive specific monitoring 5 requirements for which monitoring may not be reliable on 6 alt. fuel vehicles through the 2004 model year. 7 CHAIRMAN DUNLAP: All right. Okay. And, as 8 currently provided for, what's the time frame? 9 MR. DOUGLAS: 1998. 10 CHAIRMAN DUNLAP: So, you want us to go from '98 11 to 2000 and -- 12 MR. DOUGLAS: '04. 13 CHAIRMAN DUNLAP: -- '04. Okay. All right. 14 That's issue number one of your two, right? 15 MR. DOUGLAS: Right. The next issue is deficiency 16 policy. 17 CHAIRMAN DUNLAP: All right. Can I interrupt you 18 there for a second? 19 Staff, you'd indicated in the staff presentation 20 to us, you know, you thought the Board ought to engage on 21 this point and come up with striking the right balance, 22 right? 23 Do you take any exception with his assertion, you 24 know, relatively small numbers -- we know that -- that the 25 diagnostic challenges are different and require more time? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 I mean, is that something you generally agree with? I'm not 2 asking you the year, but -- 3 (Staff were seen nodding by the reporter.) 4 MR. CROSS: We're all nodding. 5 CHAIRMAN DUNLAP: Okay. All right. So, more time 6 is likely to be warranted, the specifics of the date we'll 7 discuss here at the Board level. Is that staff's position? 8 Okay. 9 MR. CROSS: Yes. And I think the points that he 10 made about small volume and appropriately spending the 11 resources on the larger volume lines, we concur with. 12 CHAIRMAN DUNLAP: All right. And your members, 13 Chrysler, Ford, GM, are all in lock step on that point? 14 MR. DOUGLAS: Yes. 15 CHAIRMAN DUNLAP: Good. All right. Okay. Point 16 No. 2. 17 MR. DOUGLAS: Deficiency policy. 18 CHAIRMAN DUNLAP: All right. 19 MR. DOUGLAS: Anyone that is familiar with 20 computers or computer industry recognizes that last-minute 21 bugs are not uncommon. The fact that such incredibly 22 complex equipment can be designed, developed, and produced 23 at a low cost with such few significant flaws is nothing 24 short of amazing. 25 The automobile industry's no different. Today's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 vehicle control systems incorporate complex computer 2 technology and must operate in uncontrolled environments, 3 including bad roads, extreme temperatures, and the like. 4 Yet every day, we're challenged to -- with pushing 5 technology to the outer limits, and testing it, and 6 incorporating it into products that will meet the needs of 7 our customers and the requirements of government 8 regulations, all the while maintaining reasonable prices and 9 meeting a wealth of customer demands. 10 It's no wonder then that last-minute problems 11 occasionally occur, particularly OBD regulations, which 12 require very complex software with literally tens of 13 thousands of lines of computer code to come together with 14 complicated hardware in a communication network. 15 These three elements, the software, the hardware, 16 and the communications between those, must combine 17 flawlessly to implement a successful design. 18 The deficiency policy recognizes that last-minute 19 glitches do occur, and that sometimes these glitches cannot 20 be resolved prior to the start of production even though the 21 manufacturers have made an honest, good-faith effort to meet 22 the requirements. 23 Last-minute glitches are even more likely, given 24 the extent with which technology must be advanced to meet 25 requirements, such as full range misfire and LEV catalyst PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 monitoring. 2 Consequently, we request modifications to the 3 deficiency policy. However, as with the alt. fuel vehicle 4 requirements, we're not requesting a blanket approval to 5 deviate from requirements. We simply ask that you allow the 6 Executive Officer to exercise his or her good judgment and 7 extend waivers for the deficiency policy. 8 I did attach detailed regulatory language in 9 separate correspondence, which I've referred to earlier, 10 which you have and I believe the staff has as well. 11 That's the deficiency. 12 CHAIRMAN DUNLAP: Can I get a word on deficiencies 13 for a minute? Mr. Douglas, I don't know if you know any 14 specific -- could you give a specific example where a 15 deficiency has been -- a provision has been invoked? You 16 don't have to mention the manufacturer, but if you'd 17 generally give us the example, it would help me. 18 MR. DOUGLAS: I'd be prefer to either pass that 19 off to the individual manufacturers or to the staff. 20 CHAIRMAN DUNLAP: Have us do it? Okay. Mr. Albu 21 or Mr. Cross, can you kind of explain? Give me an example, 22 a real world example of how that worked? They're allowed 23 one, correct? 24 MR. ALBU: Right. And up through 1996, 25 manufacturers were allowed two. Then, starting in 1997, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 they were allowed one -- 2 CHAIRMAN DUNLAP: Okay. 3 MR. ALBU: -- up through the year 2000. And what 4 happens is, if a monitoring system basically complies with 5 our requirements in most respects, but has some minor 6 problem, then we will allow them to just simply have a 7 deficiency without assessing a fine. 8 CHAIRMAN DUNLAP: All right. Could that problem 9 be within the realm of what Mr. Calhoun asked earlier? 10 MR. ALBU: Yes. 11 CHAIRMAN DUNLAP: The area that he queried about? 12 MR. ALBU: Yes. 13 CHAIRMAN DUNLAP: Okay. 14 MR. ALBU: For example, Ford Motor Company had 15 some instances where, during cold start, they found that the 16 valve train system in some of their cars may have an issue 17 such that they might get a sporadic burst and misfire, but 18 yet it's something that can't necessarily be fixed by a 19 technician. 20 As such, they have modified their strategy so they 21 have a delay in the implementation of misfire monitoring 22 until they get pass that point. And now they're seeking to 23 fix that basic issue. 24 So, that's just one example where they've put 25 forth a good-faith effort. They've implemented it. And we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 don't feel it's proper to assign a punitive deficiency in 2 that case. We're going to just make it a noncost 3 deficiency. 4 CHAIRMAN DUNLAP: Well, it seems to me that the 5 current deficiency provision framework is such that it's 6 kept pressure on -- what we would consider to be righteous 7 pressure on the industry to have systems that work properly, 8 et cetera. 9 Does the suggestion that AAMA's making now about 10 having -- I want to make sure I properly characterize it -- 11 more of an additional deficiency; does that worry you, 12 staff? I mean, do you think it has the ability to threaten 13 the program in some way? What's your reaction to that 14 suggestion? 15 MR. ALBU: I think that the suggestion, based on 16 the amount of software involved and still the fact that they 17 have additional technology forcing requirements facing them, 18 I think that it's a reasonable request. 19 I think what it provides is what I would call a 20 healthy level of fear with the engineers, not an excessive 21 one. 22 CHAIRMAN DUNLAP: Okay. 23 MR. ALBU: So, if they do have a glitch, they do 24 have a means of addressing it without a punitive action on 25 our part. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 CHAIRMAN DUNLAP: Let me get crass for a minute, 2 Mr. Cackette. What are we giving up here if we go along 3 with this suggestion? 4 MR. CACKETTE: Actually, that was exactly the 5 comment I was going to make. 6 Deficiencies, or waiver, or exemptions can sort of 7 have two effects. One is they can be used when they're 8 really needed, or they can be used as a -- 9 CHAIRMAN DUNLAP: Which has been the case thus 10 far. 11 MR. CACKETTE: So far, that's been the case. 12 CHAIRMAN DUNLAP: Okay. 13 MR. CACKETTE: Or they can be used as a way of 14 relaxing the stringency of the standard. We have not seen 15 the manufacturers go in and basically count on deficiencies 16 to reduce their burden or reduce their costs. They do seem 17 to be using them when there's a problem, a real problem, and 18 only one that's not anticipated. So, we would not expect, 19 and our evidence to date -- 20 CHAIRMAN DUNLAP: Sure. 21 MR. CACKETTE: -- does not suggest that everyone 22 will have one deficiency. Most people will not use 23 deficiencies; it will be there for the exception. And I 24 think that's why we don't think it will have any adverse 25 effect on the rule. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 The policy issue, and the reason we brought it to 2 you was it's a question of -- 3 CHAIRMAN DUNLAP: All right. 4 MR. CACKETTE: -- whether we should have a 5 regulation with a continuing waiver forever, or cut it off 6 at some point. 7 CHAIRMAN DUNLAP: Okay. What I'd like, Mr. 8 Douglas, for you to do is before we finish the witness list, 9 I'd like you to come back up and give us your specific 10 language proposal for the deficiency provision as you would 11 like to see it written, so we can discuss it. 12 MR. DOUGLAS: Okay. 13 CHAIRMAN DUNLAP: Staff, is that all right? 14 (Thereupon, members of the staff were seen 15 nodding their heads.) 16 CHAIRMAN DUNLAP: All right. Anything else? 17 MR. DOUGLAS: That's -- well, I would like to 18 commend the staff on their hard work over the last year. 19 We've certainly worked together in good faith, and I think 20 they've done a fine job. 21 CHAIRMAN DUNLAP: Okay. I appreciate that. So, 22 if you'd write that up and come back -- and also, for the 23 automakers that are planning to testify, I would be grateful 24 if you wouldn't retread this ground, unless you feel you 25 need to. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 Okay. 2 MR. DOUGLAS: One additional thing, Chairman 3 Dunlap. 4 CHAIRMAN DUNLAP: You've done well so far. 5 Don't -- so, what else -- 6 (Laughter.) 7 CHAIRMAN DUNLAP: -- do you propose? 8 MR. DOUGLAS: No, I'd like to submit the exact 9 language. 10 CHAIRMAN DUNLAP: Is it in your written comments? 11 MR. DOUGLAS: It is in my written comments. It's 12 an attachment. 13 CHAIRMAN DUNLAP: I will dig it out then. Thank 14 you. 15 Okay. 16 MR. PARNELL: Question? 17 CHAIRMAN DUNLAP: Yes, Mr. Parnell. 18 MR. PARNELL: I don't know if it's appropriate, 19 but it seems to me, with respect to the alternatively fueled 20 vehicles, that if there was -- absent relaxation -- would it 21 do anything to the enthusiasm of the manufacturers to 22 produce such vehicles? 23 MR. DOUGLAS: Well, I believe that any 24 requirements that you place on them -- like I said, they're 25 a very small percentage of the market out here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 MR. PARNELL: I understand. 2 MR. DOUGLAS: And any additional burden you place 3 on them, while it's not the determining factor is certainly 4 a factor in offering the vehicles. 5 CHAIRMAN DUNLAP: Right. 6 MR. PARNELL: Well, let me ask the staff then. 7 Alternatively fueled vehicles, it is thought today, are real 8 contributors to cleaner air; is that correct? 9 MR. CROSS: Again, we're all nodding. 10 MR. PARNELL: Okay. 11 CHAIRMAN DUNLAP: Well, on that point, it's 12 important -- I mean, alternatively fueled vehicles, people 13 perceive them as clean air and, as Jack said, important for 14 clean air improvement. 15 So,we don't want to see any lagging in making sure 16 that the OBD systems, you know, we want to make sure we're 17 getting that air quality benefit. Because if we lose that, 18 then you lose certainly, you know, a marketing edge for 19 those vehicles to be able to enter the market and to be 20 acceptable for the environmental protection remedy. 21 MR. DOUGLAS: Absolutely. We understand that 22 concern. And again, first of all, we're asking for the 23 Executive Officer to have the authority to waive specific 24 requirements. 25 CHAIRMAN DUNLAP: Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 MR. DOUGLAS: We're not asking for blanket -- 2 MR. CROSS: So, the system would be on these 3 vehicles. It's a matter of -- if there's something that the 4 alternative fuel causes, we could waive that particular 5 problem. 6 CHAIRMAN DUNLAP: Right. Okay. All right. I'll 7 look for that language. Thank you. 8 All right. Next witness is Mr. -- is it Krich? 9 Krich? (Pronouncing) 10 MR. KRICH: That's right. Krich (Pronouncing). 11 CHAIRMAN DUNLAP: Okay. 12 MR. KRICH: Thank you. 13 Good morning. My name is Frank Krich, and I'm a 14 regulatory planning specialist for Chrysler Corporation. 15 I'll make my point brief, since we fully support the staff's 16 position and AAMA's previous comments. 17 Chrysler appreciates this opportunity to comment 18 on California's proposed modifications to its on-board 19 diagnostics regulation. Comments are being made in addition 20 to and support of AAMA's position on this issue. 21 During this past year, Chrysler initiated an open 22 dialogue with the ARB staff to better understand, recognize, 23 and address the goals contained in the regulation. Through 24 intense efforts and discussions by all parties, a common 25 understanding of critical issues and concerns was reached. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 The end result of these understandings is before 2 you today; and, while difficult, contains goals that we can 3 obtain. We very much appreciate the effort of the staff. 4 The staff has proposed adjustments to phase-in 5 implementation schedules, as Mr. McCarthy addressed, and 6 clarification of a number of monitoring criteria. 7 What we believe is that the resulting additional 8 leadtime and flexibility will help assure the goals OBD II 9 have a reasonable chance of success. And again, we fully 10 support all the staff's proposal, and will continue to 11 strive to meet the challenges contained in the reg. 12 Now, with that, like I said, the other two issues, 13 the selective OBD monitor on alt. fuel vehicles and 14 additional deficiencies, I'll -- my written comments address 15 those issues, and I won't get into that right now. 16 I do want to add -- in the question that you had 17 regarding new technology, we, Chrysler -- I mean, while we 18 appreciate the staff's position on this issue, you know, 19 there could be something coming up, and I'm crystal balling 20 this, but, you know, who knows what will come up in the 21 years to come. But it would be nice that, if something came 22 up that, you know, we can get it on the vehicle and get some 23 in-use experience, in-use experience is very valuable to us. 24 And so, we're saying to you, it would be nice of we could 25 get this out there even if we don't have the monitor PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 developed as of yet -- or maybe in some cases, they may not 2 be able to -- may not be able to develop a monitor. So, I 3 would like the Board to consider, you know, some approach 4 like that, where maybe there's a sequence -- this gets out, 5 and either the monitor follows or, in some cases, we can 6 prove that it's -- that monitoring is not required, which 7 the staff has already talked about. 8 CHAIRMAN DUNLAP: Now, that concern would be 9 provided for in an appeal to the Executive Officer in the 10 deficiency area, correct, Mr. Cross? 11 MR. CROSS: (Nodding head.) 12 CHAIRMAN DUNLAP: All right. And so, you want an 13 indication from us that the spirit of that concern is shared 14 by this organization, right? Okay. 15 I think they can all nod their heads and tell you. 16 MR. CROSS: Yeah, we nodded again. 17 (Laughter.) 18 MR. KRICH: All right. With that, I have no 19 additional comments, and I will answer your questions if you 20 have any. 21 CHAIRMAN DUNLAP: All right. Very good. Any 22 questions of our friend from Chrysler? All right. Thank 23 you very much. 24 MR. KRICH: Thank you. 25 CHAIRMAN DUNLAP: I couldn't help but notice you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 didn't have your jacket on. Are we too warm for you from 2 Michigan? 3 MR. KRICH: I was warm before. 4 CHAIRMAN DUNLAP: All right. Mr. Dana from AIAM. 5 Good morning, Greg. 6 MR. DANA: Good morning, Chairman Dunlap. I will 7 try to be brief and summarize what I have to say here today. 8 Good morning. I am Gregory Dana. I'm Vice 9 President and Technical Director of the Association of 10 International Automobile Manufacturers. We do appreciate 11 the opportunity to speak today. 12 The OBD II regs, as you've already heard, are very 13 much technology forcing regulations, probably the most ever 14 put on us by the ARB. And I'd like to express my 15 appreciation for the ongoing reviews by the staff and by the 16 Board of these requirements, because they've really been 17 critical for allowing us to build viable systems. 18 We appreciate the staff's willingness to modify 19 the requirements when it became clear that implementation 20 was not feasible, and we believe that same attitude will be 21 really essential over the next few years. 22 I will not go into -- or I should say there's one 23 thing that wasn't in my written statement that was a gross 24 omission. We strongly support the changes that the Board 25 are making -- that the staff is proposing today. Those will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 be very helpful in terms of our meeting the requirements of 2 OBD II. 3 We do have a couple points to raise, which I'll go 4 into. At your request, I'll not be talking more about 5 deficiencies. We agree with the statements already made on 6 deficiencies, and hope that that can be extended. 7 The staff had out on the table some supplemental 8 changes to the regulations. I assume these are being taken 9 care of today. Those handle two of my issues -- really the 10 small volume manufacturers and some increased flexibility 11 for the phase-in. So, if those are in -- 12 CHAIRMAN DUNLAP: On that point, was that 13 reflected in the staff presentation and in the resolution 14 that we're likely to -- 15 MR. CROSS: Yes. They were omissions in our mind; 16 when we saw the testimony, they were omissions in the 17 original proposal. So, this covers those omissions. 18 CHAIRMAN DUNLAP: Okay. 19 MR. CROSS: In response to their testimony. 20 CHAIRMAN DUNLAP: All right. 21 MR. DANA: That covers two points of my comments. 22 One thing I would like to raise -- a number of 23 AIAM's members, which have only a few engine families across 24 their entire product line, may not have situations 25 adequately covered by deficiencies or this increased PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 flexibility on the extension of the phase-in requirements. 2 And particularly troubling in this area is the 3 full range misfire. And it gets to a case where if an 4 engine is being phased out of production in the near future, 5 trying to develop a system to do full range monitoring is 6 just not cost-effective. 7 And what we'd like to suggest is that there ought 8 to be a way to deal with these cases, again, if you call it 9 a special deficiency or a way for the manufacturer to talk 10 to the staff about this; so that, if an engine is being 11 phased out, there's not an inordinate cost to try to develop 12 a system that just isn't cost-effective for a one- or 13 two-year period. 14 CHAIRMAN DUNLAP: This is the J2008 issue? 15 MR. DANA: No. That is not the J2008 issue. 16 CHAIRMAN DUNLAP: Okay. 17 MR. DANA: This is one where a manufacturer might 18 have an older designed engine, he might be able to put on 19 the best super-duper electronic package before it misfires. 20 It still might not work, just because the engine is a fairly 21 old design. 22 And if that engine is being phased out, you know, 23 a year or two after the misfire requirements come in, we'd 24 like to see an exemption for that engine. And, in fact, the 25 My last point is J2008. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 CHAIRMAN DUNLAP: All right. 2 MR. DANA: Let me get to that. The staff has 3 recommended that this be a required format for information. 4 The staff I know has received comments from the SAE 5 committee developing J2008, written comments. 6 We oppose this requirement, mainly because -- not 7 because J2008 is a flawed idea -- it's a good idea, and 8 we're all working hard to implement it -- but because the 9 framework or this conceptual framework for service 10 information is just -- is very far from being finished. 11 The committee members who've been working on J2008 12 for many years share the same vision as the ARB staff. But, 13 as you'll see in their comments, those most familiar with 14 J2008 and the state of its development urge the Board not to 15 mandate its use in the 2002 model year, because it is not 16 ready. 17 As I mentioned, it's a conceptual framework for 18 structuring service information. In its current draft form, 19 it's undergoing substantial revisions and it's not likely to 20 be completed for at least two years. 21 Once it is complete and only then, can database 22 construction and coding, authoring, and presentation 23 software be developed. So, the delivery platform for J2008 24 cannot be developed until it's finished. Any company who 25 creates these parts prior to the development of this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 requirement would incur the expense of rewriting most of 2 this effort. 3 It is important that the Board understand that 4 imposing the substantial requirement on vehicle 5 manufacturers to reorganize their service information into 6 the J2008 format will not by itself reach the goals of both 7 the Board and the J2008 committee. 8 The Board has envisioned a system whereby a 9 technician inputs into a computer the make and model of a 10 vehicle and a fault code. And then he would receive the 11 specific diagnosis and repair information applicable to that 12 vehicle. 13 While some manufacturers' systems do allow this 14 process, they are currently not based on the 2008 -- J2008 15 structure, nor the systems used by the aftermarket service 16 vendors. 17 Let me try to explain this to you as best I can. 18 There are manufacturers working towardS J2008 right I know. 19 I think I can say the Big Three are, and many of my larger 20 manufacturers are doing so. 21 But under the current state of things, they will 22 develop a J2008 coding for their service information, but 23 the delivery platform for that will be manufacturer 24 specific. In other words, there is no delivery platform 25 that is J2008 compliant (sic) right now. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 So, you will not have anything much better than 2 you currently have on the marketplace today. Many 3 manufacturers have CD Rom based service information systems, 4 which allow you to input fault codes and get diagnosis. So, 5 you really won't have the system everybody hopes to have 6 someday, which is a J2008 compliant system with a J2008 7 compliant delivery platform. 8 CHAIRMAN DUNLAP: Right. 9 MR. DANA: Which means everybody is the same. 10 CHAIRMAN DUNLAP: Let me ask you. So, you'd like 11 to see an exemption of the small volume manufacturers. 12 MR. DANA: No. Actually, I think there's an 13 exemption for the small volume manufacturers in the rule. 14 CHAIRMAN DUNLAP: You don't want to see it at all. 15 MR. DANA: I don't want to see a mandate for it. 16 The largest manufacturers are moving in that direction and 17 will be implementing J2008 coded information. 18 CHAIRMAN DUNLAP: I think in that time frame. The 19 delivery platforms aren't ready yet and won't be ready yet. 20 MR. DANA: What I'm concerned about is you're also 21 going to imposing on other manufacturers who aren't as far 22 along as the big manufacturers, and we're not talking small 23 volume here (sic). I have about 20 manufacturers I 24 represent. The system is just not ready yet. 25 CHAIRMAN DUNLAP: Greg, let me -- if I might PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 interrupt you there. Let me ask staff a question. 2 As I received my briefing and listened to the 3 presentation here today, the standardized service 4 information is a good concept. It's something that we want 5 people to have. 6 Now, explain in layperson's terms what this means 7 when one's dealing with the service issue at a dealer or at 8 an independent shop. 9 MR. ALBU: I think the -- 10 CHAIRMAN DUNLAP: I mean we're not going to have a 11 guy there with 15 big books, right, flipping the pages; 12 we're going to have somebody that gets on a computer and is 13 going to be able to call it up, right? It's going to be the 14 same information? 15 MR. ALBU: Right. Exactly. 16 CHAIRMAN DUNLAP: From service center to service 17 center, right? 18 MR. ALBU: Right. The independent repair people, 19 they tend to service more than one make of vehicle. 20 Therefore, they have to have quite a bit of service 21 information at their disposal. 22 CHAIRMAN DUNLAP: Okay. So, in this -- Mr. Dana, 23 in this information age, where we, as a regulatory body, are 24 increasingly asked to provide better information, more 25 simply, and the same information to everybody -- even in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 remote locations, even people that aren't tracking directly 2 what this Board does -- we're asked to do that. 3 The manufacturers, the people that are selling a 4 product that's going to have to be serviced and dealt with 5 over time, you don't think it's a good idea because of cost? 6 Am I hearing you say -- 7 MR. DANA: No, I agree with -- 8 CHAIRMAN DUNLAP: Well, give me a responsible 9 public policy argument were I to exempt this from occurring, 10 or we should. 11 MR. DANA: Until J2008 is finished -- and it's not 12 finished yet. 13 CHAIRMAN DUNLAP: Okay. And J2008 is a process, 14 what, SAE process? 15 MR. LYONS: It's a recommended practice for the 16 service information format that will be standard. 17 CHAIRMAN DUNLAP: Okay. And we work through SAE* 18 for a variety of things, and this is just another -- 19 MR. DANA: Well, it's currently a draft technical 20 report and not a recommended practice. 21 CHAIRMAN DUNLAP: Okay. 22 MR. DANA: Because it's not finished. 23 CHAIRMAN DUNLAP: All right. You're saying we 24 ought to wait until this advisory process gets done? 25 MR. DANA: It's a conception. J2008 is a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 conceptual format for the information. Okay? Once you have 2 that finished, you then have to have what's called a 3 delivery platform. 4 CHAIRMAN DUNLAP: When's it going to be finished? 5 MR. DANA: The committee says probably in two 6 years. Once you have that finished, you're going to have to 7 have somehow a delivery platform for that information. 8 Having that information in that code alone is not 9 sufficient. It's not there yet. 10 And until you finish J2008, you can't build that 11 delivery platform. You can't get to that goal that I share 12 with you, which is to have universal -- everything the same, 13 so that the aftermarket, and dealers, and everybody can do-- 14 have one system to look at to get all this information. 15 You have to wait until 2008 is finished to build 16 that delivery platform. 17 CHAIRMAN DUNLAP: Okay. Got it. 18 MR. DANA: That's the problem. 19 CHAIRMAN DUNLAP: Staff, do we ever move on 20 anything earlier than the SAE process? 21 MR. ALBU: Yes, we have. Greg is right that the 22 current status of the document is a draft format. 23 Generally, we reference a number of SAE standards in the 24 regulation right now. And generally, the ARB requirement 25 has been the impetus for that standard to be formalized. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 CHAIRMAN DUNLAP: Mr. Dana, would you agree with 2 that? 3 MR. DANA: I agree, and it's being driven in J2008 4 right now. 5 CHAIRMAN DUNLAP: Okay. 6 MR. DANA: It's a very complex. 7 CHAIRMAN DUNLAP: Understood. Understand the 8 complexity. Anything else you want to say on this point? 9 MR. DANA: No, that about finishes it. 10 Oh, there is one point. Again, my recommendation 11 is that the market be able to move this -- if we don't 12 mandate it right now, if the Board continues to support some 13 sort of mandate for J2008, I'd at least ask that it not be 14 across the board in 2002, but allow some sort of a phase-in, 15 because I know that some of my members who are working 16 towards J2008 aren't in a position to have it all completed 17 in 2002. 18 CHAIRMAN DUNLAP: Right. And by the way, one 19 thing. I should exhibit some sensitivity to the aftermarket 20 service centers and the dealers, how they'd like to be able 21 to control servicing the vehicles that they sell directly 22 under their label or logo. And I'm respectful of that. I 23 know there's some tension there. And I don't want to turn a 24 blind eye to that. 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 MR. DANA: We share the same goal -- 2 CHAIRMAN DUNLAP: And I'm not sure that's the core 3 issue here, but I want to be sensitive to that. 4 MR. DANA: We share the same goal of getting it 5 out there when it's done and when it's right. 6 CHAIRMAN DUNLAP: Okay. 7 MR. DANA: I guess my point is and the tension is 8 that we keep hearing that we should be out there doing it 9 for no cost or reasonable cost. And that's another issue. 10 CHAIRMAN DUNLAP: Right. 11 MR. DANA: And we don't think that's possible. 12 CHAIRMAN DUNLAP: Before you depart, Mr. Calhoun 13 has a question. 14 MR. CALHOUN: Don't you think, Dana, that there's 15 some people anticipating; they know that the draft of the 16 SAE document -- don't you think people are already working 17 to come up with a delivery platform for that? 18 MR. DANA: People are. But you can't do the 19 platform until you have J2008 finished. That's the problem. 20 People are working on it. 21 MR. CALHOUN: I understand that. I understand 22 that. Okay. 23 MR. DANA: People are working hard on J2008 and on 24 the encoding the information. 25 MR. CALHOUN: And let me ask one other question in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 connection with your suggestion that there be a phase-in. 2 Would staff like to comment on that at all? 3 MR. ALBU: I guess it's my opinion that given that 4 there's two years left to finish this document, another 5 three years for implementation, we think that's plenty. We 6 think the service industry has been long waiting for this 7 kind of information. We think that the independent 8 providers like Mitchell, All Data, and so forth will have a 9 program ready to go. As soon as this thing is approved, it 10 will be available to the aftermarket. 11 We think we've waited long enough, honestly. 12 MR. CALHOUN: Specifically about the phase-in. 13 MR. ALBU: Right. As I say, I think in 2002, 14 having it fully phased-in at that point is most appropriate. 15 We don't think further delay is necessary. 16 MR. LYONS: There's also some concern on our part 17 in the 2002 model year, whenever -- if we do go to a 18 phase-in, whenever that would start, some confusion in the 19 service industry where they -- some information is available 20 in the electronic format and some is not. We think it may 21 be better to pick a date to start clean, where all 22 information will be available that can be used on the system 23 that independent technicians go out and buy. 24 MR. ALBU: I think also there will be testimony 25 following from the independent who will probably support PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 this phase-in as early as possible, if not sooner. 2 MRS. RIORDAN: Are there any other questions from 3 the Board members? Then we thank you very much. 4 Let me call on Mr. John Valencia. 5 MR. VALENCIA: Madam Chair, members of the Board, 6 John Valencia, representing the California Automotive 7 Wholesalers Association. 8 We're a trade association and business association 9 of some 1500 businesses in California, auto parts stores, 10 wholesale distributorships, and aftermarket parts design and 11 manufacturing companies. 12 Some household names that are part of our 13 association are Borg Warner, Standard Motor Parts, Inc., 14 Phram. But by and large, we're nearly 1500 small and medium 15 size business in California in the aftermarket. 16 And, as staff has said, we are very supportive of 17 some of the directions that are being taken; in fact, the 18 vast majority of the report before you. We do have, 19 however, several issues. 20 Apropos of the comments made earlier this morning 21 regarding economic recovery, we think that there are three 22 issues in this report that would be a real setback for the 23 California automotive aftermarket. And before I proceed, 24 let me just add one other thing. 25 You heard mention in the report earlier of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 litigation that's been brought against this agency. I want 2 to make it known that we are not a party to that litigation. 3 We certainly considered it. We've looked at the issues. 4 And some of what I have to say will sound very familiar to 5 you, because it is at the core of some of that litigation. 6 First and foremost, ladies and gentlemen, we think 7 that you have to revisit, revise the statement of no fiscal 8 impact in the report that's been presented to you. The 9 regulations that are proposed to you have a decided negative 10 impact on the California automotive aftermarket. 11 The Government Code, if I may, says that an agency 12 that purports to adopt regulations and determines that they 13 have no fiscal impact has to enter into the record facts, 14 evidence, documents, or testimony that supports a no cost 15 impact determination. 16 Actually, what we think you should have been 17 provided was what else the Government Code requires when 18 there is a fiscal impact. We think you should have been 19 presented identification of the types of businesses 20 affected, a description of the projected impact on those 21 businesses -- those businesses being the automotive 22 aftermarket in California -- and remedial suggestions either 23 from staff or from the industry. 24 You'll find those requirements at Government Code 25 Section 11346.5 and following. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 What are those three steps? Well, the record 2 says, in discussing the economic impact of the regulations, 3 that the regulations are directed primarily at automotive 4 manufacturers. And we agree. And we agree that what's part 5 and parcel in the report is that the automotive aftermarket 6 and the impact on the aftermarket's been largely overlooked. 7 In one sentence at page 32 and 33 of the staff 8 report, the amendments should benefit independent service 9 establishments within the State by providing for better 10 access and improved content of emission-related service and 11 diagnostic information. We think eventually that could be 12 true; but, as staff mentioned earlier, it's not happening 13 fast enough to suit us. 14 We do not think that you are in a position to 15 adopt the regulations without a revision of that cost 16 determination. We do not think that the facts support an 17 adoption of the regs as having no impact on a vast array of 18 businesses in California. 19 We're part of a coalition in the aftermarket in 20 California of some 10,000 service, repair, manufacture, and 21 design companies that are active in California. 22 Let me give you two examples in the form of the 23 specific actions that we're asking you to take. At the 24 recommendation on Section 1968.1(k)(6.0), you've heard 25 discussed already the adoption of that regulation, as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 proposed, would create a grave -- what we consider to be a 2 grave information gap between the automotive aftermarket and 3 the original equipment manufacturers in delaying until 2002 4 the availability of the information that is available now. 5 You've heard discussed earlier in the presentation 6 and present in your report ample evidence that OBD equipment 7 exists in vehicles in California today, since the '94 model 8 year. We don't see the substantiation or the argument for a 9 delay. We think staff's correct. The earlier, the better. 10 The earlier, the better. To delay overlooks the seven years 11 between now and then and our ability to reengineer, 12 redesign, remanufacture, distribute equipment that's going 13 to help OBD II do what it's supposed to do, and that's 14 improve emissions reductions and eventually link up with 15 more effective IM inspections and smog check. And Lord help 16 you when you get into smog check. 17 The third item and the other specific action that 18 we'd ask you to take would be to change proposed Section 19 1968.1(d), the tampering protection provisions. We actually 20 are very supportive of the elimination of the reprogramming 21 language. 22 However, what remains in that language is 23 excessive manufacturer control over access to procedures and 24 specialized tools for systems that aren't at risk of being 25 reprogrammed. It's permissive. If the Executive Officer, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 at the application of the manufacturer, says that the 2 exemption may be agreed to in that section, then and only 3 then will nonspecialized equipment and nonspecialized 4 procedures be available to deal with those mechanisms. 5 In fact, if they're not at risk of reprogramming, 6 then there should be a mandatory nonspecialized equipment, 7 nonspecialized procedure availability to access the 8 equipment. 9 That, in short and in summary, represents our 10 position. You'll see that with three points, we're largely 11 and overwhelmingly supportive of the report, but we think 12 that there are three very critical issues that mitigate 13 against the adoption of the regulations as proposed. The 14 cost impact must be reversed. There's simply no way that 15 the facts support no impact on the automotive aftermarket, 16 and the two specific regulatory changes that we've 17 requested. 18 If there are any questions, I'd be happy to 19 respond to them. 20 MRS. RIORDAN: Thank you, Mr. Valencia. Why don't 21 you just stay there until -- I'd like to have the staff 22 respond, then I'd like to have the Board members ask their 23 questions, 24 So, perhaps if there's a staff response to some of 25 the points that Mr. Valencia has raised? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 MR. TERRIS: On the cost impact, first, I'd like 2 to say that the status quo right now is under the Federal 3 Information Rule. And that requires that the manufacturers 4 provide materials not in the electronic form but in 5 documentary form to the service industry. 6 So, the regulations basically will make it more 7 effective and efficient for in the future when electronic 8 formatting is permissible and capable of being done. And, 9 therefore, the impacts will only be positive and not be 10 negative. 11 I'll go to the third point, because that's also a 12 legal point. Basically, what the request is, is for the ARB 13 to attempt to prohibit manufacturers from protecting 14 proprietary information. We don't believe that we have the 15 authority require such a prohibition. 16 First, there is nothing in the Health and Safety 17 Code or elsewhere requiring -- allowing the ARB to prohibit 18 such information, prohibit such efforts to protect 19 proprietary information. 20 If, in fact, we attempted to develop a regulation 21 that did so, we would, in effect, be requiring the 22 disclosure of such information without the manufacturer's 23 consent, and that would basically fly against the entire 24 regulatory, the statutory structure in California to protect 25 proprietary information without consent. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 MRS. RIORDAN: How about the second point that he 2 raised? 3 MR. LYONS: Okay. First, I think it is important 4 to note that Mr. Valencia's concerns may be with the 5 regulation today. But really, all of our proposals on the 6 table today actually further the access to service 7 information, and we are backing off in some of the 8 requirements for tamper resistance. 9 So, in terms of the proposals in front of you 10 today, we can accurately say that there's no negative cost 11 impact, because they're all going in a direction that Mr. 12 Valencia is asking for. 13 On the issue of nonreprogrammable vehicles, I 14 guess we -- there's two reasons why a vehicle may be 15 tampered with. One is to increase the performance of the 16 vehicle in terms of its acceleration or something like that. 17 But the other issue of great concern to us with respect to 18 tampering is the issue of basically rendering an OBD II 19 system either less capable or not capable at all. 20 I think the manufacturers testified about the 21 lengthy number of software lines that comprise the OBD II 22 system, and how really a mistake or an error in one line of 23 code can cause the OBD II system to not be as effective. 24 But, by the same token, if a tamperer is capable 25 of opening up the system, per se, and going to that specific PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 line of code and making a purposeful change, then you 2 basically have the same effect. 3 So, I think that even on these nonreprogrammable 4 vehicles, that may not be a popular item for the people who 5 make performance chips, we do still have a concern about 6 tampering. If anything, perhaps the provision in the 7 regulation right now that exempts the applications that 8 aren't likely to be tampered with for that reason, maybe t 9 hat provision should be changed and a concern of the OBD II 10 type of tampering, which can really, you know, render the 11 OBD II system inoperative, and which would upgrade impact if 12 we had an I&M program based on OBD II in the future. 13 CHAIRMAN DUNLAP: Mr. Kenny, did you want to? 14 MR. KENNY: I had a couple of comments I wanted to 15 make. It seems to me that, when we think back to when the 16 original provisions were put into the regulation to anti- 17 tampering that affect the aftermarket, there was a number of 18 people who testified at that time about that. 19 And the Board went forward and did that, because 20 it was the right thing to do at that time. But 21 subsequently, information has become available that shows 22 that there were at least some concerns that we needed to 23 look into. 24 And, as we've done that, we have determined that, 25 in fact, there are some modifications to the regulation that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 are appropriate. What I hear the witness saying, though, is 2 that we're not going far enough or fast enough for the 3 witness. 4 But, at the same time, what we need to do is 5 really sort of what we have been doing -- look at the 6 information that's available to us and approach this issue 7 in a reasonable and flexible fashion, such that we can 8 achieve the emission reductions that we need to achieve; and 9 yet, at the same time, maintain a regulation that works for 10 all the industry. And that's what we try to do. 11 CHAIRMAN DUNLAP: Okay. 12 Now, of your three issues, sir, I guess two have 13 been handled, and the third, this anti -- 14 MRS. RIORDAN: And they just finished the third. 15 CHAIRMAN DUNLAP: The third issue. The anti- 16 tampering the third? Okay. 17 MRS. RIORDAN: The Board has not had a chance to 18 ask any questions. 19 CHAIRMAN DUNLAP: Any questions of the witness? 20 MS. EDGERTON: May I? 21 CHAIRMAN DUNLAP: Yes, Ms. Edgerton. 22 MS. EDGERTON: Is it Mr. Valencia? 23 MR. VALENCIA: Yes, ma'am. 24 MS. EDGERTON: Thank you. Having heard the 25 comments of our legal staff -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 MR. VALENCIA: Yes, ma'am. 2 MS. EDGERTON: -- and our capable other staff on 3 the motor vehicle side, do you agree that, given the status 4 quo -- the already disadvantaged aftermarket anyway, but 5 we're not making it worse from the status quo? 6 MR. VALENCIA: No. We would not agree with that. 7 I think I've made the points that delay is -- I think the 8 last staff member captured our position precisely. 9 Delay for the aftermarket in this State will mean 10 that we will not be available to help with the eventual 11 implementation, however dramatic that may sound, we'll not 12 be available to the extent that we are now to help with 13 cleaning up air and the eventual linkage with the I&M. 14 If you look at the radius of this building, before 15 you get to a manufacturer/dealer repair facility, parts 16 supply facility, you'll run into a dozen or more 17 independents. They are a critical backbone to what this 18 Board is attempting to achieve, even with this set of 19 revisions to long-standing regulation. 20 And again, I'd remind you that we endorse them 21 overwhelmingly. We're asking for a review of two and a 22 reassessment of cost impact. 23 Let me take the comment that staff made with 24 regard to pushing the envelope on statutory authority. I so 25 rarely argue for State agencies to do that, that it's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 awkward and unusual for me to say, try it, test the envelope 2 on the extent of the statutory authority. 3 And if you look at the specific recommendation 4 that we have, it's not black and white. It doesn't go from 5 preservation of proprietary information to mandatory 6 disclosure. The stopping point is a check stop with the 7 Executive Officer or some alternative. But we think that 8 that represents fairly decent middle ground. 9 As to the second substantive point that we have 10 made with regard to information availability -- I don't know 11 how else to express it. I mean, the sooner that 12 standardized information becomes available, we believe that 13 it is available in an electronic format. And I think you'll 14 hear other speakers who are directly within the service 15 industry end of the aftermarket speak to that very point. 16 But it's there now. There's no reason that we can 17 think logically to delay it from now until 2002 that 18 mandate, as it were, when you've got OBD equipment out there 19 now, '94 models and later, and the information generally 20 available. 21 So, we maintain our position fairly steadfast, 22 certainly as to the economic impact assessment. And in 23 terms of considering the specific items that have been 24 presented to you, we think that the case is not made for a 25 delay to 2002. And we think that with regard to tampering, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 our proposal represents a fair middle ground. 2 CHAIRMAN DUNLAP: Yes, Mr. Calhoun. 3 MR. CALHOUN: Mr. Valencia -- 4 MR. VALENCIA: Yes, sir. 5 MR. CALHOUN: -- you mentioned the fact that the 6 service implementation is out there or it isn't out there? 7 Does this concern information that's needed to 8 repair the vehicles already out in the field? 9 MR. VALENCIA: In crypt format -- 10 MR. CALHOUN: So, it's just a cumbersome process 11 that one has to go through in order to get it. 12 MR. VALENCIA: You heard the mention of 15 13 manuals. 14 MR. CALHOUN: I understand that. 15 MR. VALENCIA: It's that many and more. 16 MR. CALHOUN: So, what the staff is proposing 17 would solve that problem. 18 MR. VALENCIA: Eventually. 19 MR. CALHOUN: So, it's going to take time for this 20 to happen. 21 MR. VALENCIA: But if the technology is there, if 22 we believe that it is -- you know, like standardized 23 electronic format -- and I think that there are other 24 speakers who can speak far more learnedly than I can on 25 that, what's the purpose of the delay? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 MR. CALHOUN: Well, they've already said that we 2 need a standardized procedure for doing this, and they're in 3 the process of trying to use the SAE practice -- 4 MR. VALENCIA: Pardon me. Mr. Calhoun, you heard 5 earlier the debate as to whether or not in draft form the 6 SAE information is available, manufacturers -- hopefully, I 7 correctly state it -- but they concede that it's there, but 8 in draft form. Staff says that it's there and routinely 9 incorporated into your requirements. We see that. 10 Consider this. To try and put it into plaintiff's 11 English, and that's my bent, you know, as simple as 12 possible, if eventually the information ultimately is only 13 in 2002, but the date is advanced to 1997, what's the harm? 14 If the information becomes available earlier and is on-line 15 in 1997, you don't have to meet again to adopt that 16 regulation. It's a fairly simple matter. That's our 17 position. 18 CHAIRMAN DUNLAP: Okay. Fine. 19 MS. EDGERTON: I have a point of information. I 20 apologize for maybe not understanding this. I've been 21 trying to follow it. But I better make sure I understand 22 it. 23 I thought I heard staff say that you would be 24 comfortable staying with the 2002; is that correct? 25 MR. ALBU: That's correct. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 MS. EDGERTON: So, what delay -- are you objecting 2 to a delay past 2002? 3 MR. VALENCIA: Certainly, that would -- yes. That 4 was an item that was alluded to by a prior speaker. So, any 5 delay beyond that, we'd certainly object to. And staff 6 earlier mentioned that if there were an acceleration that 7 was possible in the adoption of the date associated with the 8 potential availability of the information, we'd ask for 9 that. 10 MS. EDGERTON: So, Mr. Valencia, if I understand 11 correctly, your principal argument is that a subsequent cost 12 reassessment -- or a reassessment of the cost impact would 13 be required if we were to modify the proposal and have it 14 take effect after 2002. 15 MR. VALENCIA: No. The two are not solely linked. 16 That's not the sole point that I'm making. 17 The issues that you're presenting have -- and the 18 impact is discussed generally throughout the report, service 19 information, tampering, and all that -- who have to react to 20 that are not simply -- if original equipment related service 21 dealers, parts developers, parts designers, and 22 distributors. There is the entire industry of the 23 aftermarket that does not have initial access to what has 24 been described as proprietary information. 25 So, in adopting this proposed set of changes, to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 overlook our role in having to react to the changes, means 2 that there's not a cost assessment, a fair cost assessment 3 of what it could mean to California businesses. 4 MS. EDGERTON: You're saying both levels. 5 MR. VALENCIA: Yes, ma'am. 6 MS. EDGERTON: You're saying the 2002, you say 7 there's not a sufficient cost assessment and not a 8 sufficient cost assessment if we were to extend it. 9 MR. VALENCIA: That's right. 10 MS. EDGERTON: Either way. 11 MR. VALENCIA: Yes, ma'am. 12 MS. EDGERTON: But that it's worse if it's beyond 13 2002. 14 MR. VALENCIA: Absolutely. 15 CHAIRMAN DUNLAP: All right. Mr. Kenny. 16 MR. KENNY: I was just going to try to summarize 17 for Ms. Edgerton what I think the witness was proposing. 18 And that was, with regard to the first issue that he raised, 19 he was essentially alleging that the staff had not complied 20 with the Government Code as we're required to do under the 21 Administrative Procedures Act. 22 And specifically, what he was saying is that we 23 hadn't properly addressed the no fiscal impact analysis. We 24 disagree with that assessment. We disagree with that 25 analysis that he's offering, because we basically look at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 this as -- the modifications that are being proposed by the 2 staff move off the status quo in a way that essentially 3 makes the market for accessible. 4 Therefore, there is not a fiscal impact, because 5 we are providing for a better market for the industry. 6 On his second point, he was arguing that counter 7 to what Mr. Dana previously argued -- where Mr. Dana was 8 saying that the 2002 date was too soon, he's argued that the 9 2002 date is too far. 10 We think the 2002 date is the appropriate date. 11 It provides for reasonable flexibility and reasonable phase- 12 in of the appropriate requirement. 13 And then lastly, with regard to the anti-tampering 14 issue that he's raised, what he really is asking for is that 15 we compel the manufacturers to provide some of their 16 proprietary information. Clearly, that would present some 17 legal problems that I think that we're unwilling to stretch 18 the envelope, as he says, to take a chance on that. 19 CHAIRMAN DUNLAP: Thank you, Mr. Kenny. 20 Any other questions of the witness? Mr. Valencia, 21 thank you. 22 MR. VALENCIA: Thank you, Mr. Chairman. 23 CHAIRMAN DUNLAP: Okay. Mr. Paul Haluza, MEMA, 24 and eight other associations, followed by Jack Heyler from 25 the Auto Services Council of California. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 MR. HALUZA: Good afternoon. 2 CHAIRMAN DUNLAP: Good afternoon. 3 MR. HALUZA: Mr. Chairman, Joe Calhoun, and 4 members of the Board, and some new members, new faces I see. 5 And I want to wish Supervisor Vagim full success in his 6 retirement from this job anyway. I'm sure he'll be in the 7 public light elsewise. 8 As I said, my name is Paul Haluza, and I'm Vice 9 President of Government Relations for the Motor and 10 Equipment Manufacturers Association. 11 However, my role this morning is -- or this 12 afternoon, pardon me -- is to present a brief statement on 13 behalf of nine independent aftermarket associations, and 14 these are the Automotive Engine Rebuilders Association, the 15 Auto International Association, Automotive Parts and 16 Accessories Association, Automotive Service Association, 17 Automotive Service Industry Association, Automotive 18 Warehouse Distributors Association, the Motor and Equipment 19 Manufacturers Association, and the Specialty Equipment 20 Market Association. 21 And I am accompanied today by Marc Fleischaker of 22 Arent, Fox and general counsel to MEMA and Russ Deane of 23 Trainum, Snowden & Deane, general counsel for AIA/SEMA. 24 Collectively, these associations represent 25 businesses from all sectors of the independent aftermarket, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 from parts manufacturers, rebuilders, distributors, jobbers, 2 and retailers, installers, and service garages. 3 Together, we represent about $150 billion in 4 service and automotive replacement parts annually. But not 5 only is the independent aftermarket a significant factor inn 6 the national economy, but with over 11 percent of the light- 7 duty vehicles in California, our role here is equally 8 important. 9 Some of the groups may have individual statements 10 on other parts of the proposal before you today, but my role 11 is strictly to address in this joint statement the changes 12 on the tampering protection contained in 1968.1(d). 13 The aftermarket associations strongly support the 14 staff recommendation to eliminate anti-tampering 15 requirements applicable to electronic reprogrammable 16 vehicles with OBD II. We urge the Board to adopt the staff 17 recommendation. And from what I've heard, it sounds like 18 it's fairly moving forward. 19 It is our belief that the staff recommendation to 20 eliminate the anti-tampering requirements is appropriate 21 because the 1990 amendments to the Clean Air Act mandated 22 that OBD systems be free of the type of security measures 23 previously contemplated by CARB. 24 Our position, often stated to CARB, was confirmed 25 when, in 1994, the U.S. EPA removed any Federal requirements PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 for tampering protection in its OBD regulations. 2 Further, we would argue that the concerns 3 previously cited over the likelihood for electronic 4 tampering were exaggerated and never supported by 5 identifiable real world data. 6 All of the parties involved share the goal of 7 preventing tampering and consumer IM fraud. Accomplishing 8 this goal, however, need not result in eliminating 9 competition for legal and effective vehicle repairs and 10 parts manufacturing. 11 It is our long-held belief that the U.S. Clean Air 12 Act, Section 203, and California Code (sic), Section 27156 13 provide meaningful and adequate protection to enforce 14 tampering violations. For this reason, we believe that all 15 of Section 19668.1(d) could and should be eliminated. 16 While we commend CARB and its professional staff 17 for moving to eliminate anti-tampering requirements in the 18 current regulations, the aftermarket continues to be 19 concerned about the rationale for its intended action By 20 leaving anti-tampering protection to each manufacturer's 21 discretion, CARB will turn a blind eye to system designs and 22 features that will likely lock the aftermarket out from the 23 opportunity to design or rebuild OBD-compatible automotive 24 parts and the ability to provide the moore advanced vehicle 25 service often needed for these vehicles. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 Though we strongly support the deletion of anti- 2 tampering requirements in the regulation, the aftermarket 3 continues to take the position that California must take 4 affirmative steps not to grant certification to vehicles 5 which contain any anti-tampering protection which would 6 prevent or restrict access to the OBD data or system in 7 violation of Section 202 of the U.S. Clean Air Act. 8 The aftermarket continues too seek greater levels 9 of cooperation from all parties to meet the U.S. Clean Air 10 Act's requirement concerning system access and information 11 availability. And we will continue to work with vehicle 12 manufacturers and the regulators in an effort to resolve 13 these issues. 14 In addition to eliminating the anti-tampering 15 requirements, there are other positive changes proposed 16 today regarding the availability of service information that 17 make the California requirement consistent with Federal 18 requirements. 19 In their justification for these changes, the 20 staff recognizes the need for environmental benefits from 21 proper repairs of a failing or failed emission control 22 system. We would agree and would argue that properly 23 maintained vehicles are the most cost-effective means for 24 reducing emissions from vehicles on the highways. 25 However, this goal is more likely achievable as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 long as we maintain a competitive marketplace that provides 2 car owners with the opportunity to select where they have 3 their vehicles repaired and what parts they can use. 4 When consumers have competitive choices, costs for 5 repairs are kept down, and there is a better chance for 6 public cooperation, which is critical to the success of the 7 California's vehicle inspection/maintenance program. 8 OBD regulations should therefore be tailored to 9 keep the marketplace open and free from obstructing the 10 independent aftermarket's opportunity to compete. 11 Even if the Board is not prepared at this time to 12 adopt other portions of the proposed OBD II changes, we 13 encourage the Board to bifurcate the anti-tampering 14 provisions from the remainder of the rule and send those 15 directly to the Office of Administrative Law for prompt 16 adoption. 17 If there has been no opposition -- and I haven't 18 heard any so far -- to these proposed changes. Therefore, 19 the prompt finalization of these changes is appropriate. 20 I appreciate the opportunity to present the views 21 of the nine associations. But in closing, I would just like 22 to mention a personal remark, and that is to say, we 23 appreciate the efforts of the staff -- particularly in El 24 Monte -- for recognizing these issues. They are significant 25 issues. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 I think that there are differences of opinion on 2 the definition of law, but certainly they have been very 3 cooperative and very friendly, and very workable with us. 4 And I do appreciate their efforts. 5 CHAIRMAN DUNLAP: Well, I'm told that's a 6 particularly meaningful comment, given some historical 7 discussions. So, thank you. 8 MR. HALUZA: Sometimes they think that we want to 9 wage war with them, but -- 10 CHAIRMAN DUNLAP: Right. But we'll take a pause 11 for a just a moment and savor that comment. 12 (Laughter.) 13 Any questions of our witness? All right. 14 Appreciate it, sir, thank you. 15 (Thereupon, there was a brief pause in the 16 proceedings to allow the court reporter to 17 replenish her paper.) 18 CHAIRMAN DUNLAP: We'll ask Mr. Heyler to come 19 forward while our court reporter changes her paper. 20 (Thereupon, there was a brief pause in the 21 proceedings.) 22 CHAIRMAN DUNLAP: Mr. Heyler from the Auto Service 23 Councils of California. Good afternoon. 24 MR. HEYLER: Thank you, Chairman Dunlap. I am 25 Jack Heyler. I'm a diagnostics consultant to Automotive PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 Service Councils of California, and also a wounded veteran 2 of every I&M or retrofit program in California, as soon as 3 the PCV retrofit in the early sixties. 4 CHAIRMAN DUNLAP: Well, then you ought to 5 appreciate my comment at the end at that last point that 6 staff made. 7 MR. HEYLER: We have made peace quite a few years 8 ago, and I think very productively. And I want to commend 9 the staff for their cooperation in resolving a lot of 10 problems, very difficult ones. 11 I also should mention that we were part of the 12 same coalition that Mr. Valencia mentioned on the trade 13 association. So, we do represent a lot of employers and 14 employees in California. 15 I have some overheads. You'll see that I'm not 16 terribly computer literate. And I mention that because I 17 had the occasion a few years ago to run J2008 in a 18 demonstration format on a PC at the SAE International 19 Congress in Detroit. 20 And if I can do it, I think it can be done by 21 anybody. 22 But the main point is that I&M programs succeed or 23 fail on motorist convenience and repair industry support, 24 not for public demand for air quality improvement and now 25 how well they're designed technologically to achieve the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 goal, although both of those conditions are important. 2 To succeed -- and I speak from experience -- they 3 must minimize negatives such as reprogramming "ping-pong," 4 ping pong where a motorist or a person's vehicle is being 5 tested in an I&M program, starts to bounce back and forth 6 and between testers and test lanes, referees, repair shops, 7 and dealerships, and reprogramming is required. This will 8 have a larger impact than any previous ping-pong situation 9 that I can envision. And I've seen ping-pong literally 10 cause the failure of some previous programs. 11 Which facilities are included and which are 12 excluded by program design and the lack of ability to 13 compete -- that is, by independent shops -- for I&M tests 14 and repairs will determine the effect -- ping-pong. 15 Independents' access to reprogramming capability 16 at reasonable cost is critical to avoid a repeat of the 17 ping-pong problems that have damaged or defeated past I&M 18 programs. 19 For years, independent shops have had an uphill 20 battle to get diagnostic capabilities and service 21 information. CARB, Congress, Federal EPA have addressed 22 many key needs. As I said before, staff developing OBD II 23 and getting it implemented has done a remarkable job. 24 But radical advances in automotive electronic 25 technology will leave independents unable to compete PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 effectively in emission test and repair. 2 And here's something that came across e-mail in 3 the last couple of weeks, communication from a dealer to 4 technician responding to a question about the frequency of 5 reprogramming for repair purposes. And in your package, 6 you'll have a little more complete view of this. But to 7 summarize, his comments were, every '95 to '97 car that used 8 to be no problem found -- that is, no code identified or 9 fault found that they can put their finger on through 10 traditional diagnostics now gets a reflash, and reflash 11 simply is reprogramming of the on-board computer 12 If he doesn't find anything, says, "I'll reprogram 13 and ship it." And that often fixes the problem. So, we 14 reflash as part of diagnosis and it very often fixes the 15 car. 16 So, what do we need? We need advanced and 17 comprehensive standards for reprogramming, add "universal" 18 standards, to assure that independents can compete in 19 emission testing and repair in smog check II. 20 Without assured reprogramming capability, few 21 independents will risk the large investment required to test 22 and/or repair in smog check II. And it is a large 23 investment. 24 The mitigation promised in legislation that 25 modified smog check II -- and that is if I&M equipment costs PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 exceeded $10,000. That is dinosaur country. We're talking 2 about very ancient history when we say $10,000. 3 That mitigation has not occurred as promised. So, 4 adoption of the recommendations I will make would be a 5 positive step toward the promised mitigation. 6 So, I would suggest, to avoid a smog check II 7 failure that CARB should promulgate requirements that 8 assure: 9 Number one, that interim availability -- in other 10 words, near term -- reprogramming service is convenient and 11 affordable to independents, who do over 80 percent of 12 emission repairs. That is not the case currently. 13 Number two, I would suggest that development of 14 regulatory standards for universal reprogramming tools and 15 systems be initiated immediately. 16 Why immediately? I might add that the fleet of 17 vehicles is rapidly increasing that are equipped with the 18 reprogrammable computers. They're up into the many millions 19 now and more to come. They'll be coming into the 20 independent repair facilities about the time smog check II 21 kicks off. And I can tell you that the first car I have to 22 tow from my shop, if I'm ever still in business, to a dealer 23 to have it reprogrammed is going to cause me to confer a lot 24 of static on the Legislature. 25 I think that we should look at an alternative, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 this needs to be explored in more detail. But simply, it 2 would be for CARB to require the vehicle manufacturers make 3 available to the diagnostic tool industry the information 4 necessary to design affordable tools that can serve all 5 makes. In other words, one tool giving the proper access to 6 information can be designed to serve all makes for 7 reprogramming. 8 There is one intermediate device called a PC that 9 might be involved, but one tool can serve that purpose. But 10 the information is not being made available to the tool 11 makers to allow them to accomplish this. 12 Also, CARB should assure that all emission test 13 and repair facilities have affordable access to 14 reprogramming software through public media -- that's 15 commonly used media, such as a phone line, download, or CD- 16 ROM, and that needs to be, of course, at a reasonable cost, 17 also. 18 So, to sum up, I'd say that negative public and 19 industry reaction to reprogramming ping-pong -- and there 20 will be a lot of it if we don't act -- will jeopardize the 21 success of smog check II. Millions of vehicles are in or 22 will enter the reprogrammable fleet in the next few years. 23 Leadtimes, as you heard in other areas today, 24 needed to develop and implement a solution require that CARB 25 act to address this problem now. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 Thank you very much. I'll be pleased to answer 2 any questions. 3 CHAIRMAN DUNLAP: Thank you, Mr. Heyler. 4 Appreciate your comments. Questions? 5 MR. CALHOUN: Yes, I have one question, Mr. 6 Heyler. If the Board were to have the authority or were to 7 accede to your request, how do you control the tampering 8 that concerns everyone? 9 You know, if anyone can go out and reprogram a 10 computer, there's always been a concern -- and you've heard 11 this story before, and I've heard your story before, too. 12 MR. HEYLER: I'm sorry, I'm smiling because we've 13 had this discussion. But anyway, I'll go ahead. I'm sorry. 14 Well, first of all, tampering is going to occur no 15 matter what you do. And there's no way that I've heard from 16 anybody that we can eliminate tampering in the system. The 17 best we can do is to have good identification of the on- 18 board program and identification of whether the program has 19 been tampered with or altered in some illegal way. 20 That's the only defense, in my view, against 21 tampering, because the vehicles that are there now have all 22 been reverse engineered within a month or two of their 23 introduction, and programs -- legal or illegal -- have been 24 installed. And that's going to happen. 25 So, what we're talking about is convenient service PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 to the motorist in order to get his vehicle fixed at minimum 2 cost and the minimum amount of time. And that's what saves 3 I&M programs. If you make it inconvenient or costly, you 4 get the industry mad, especially the aftermarket industry, 5 and motorists mad -- well, we've all seen what the 6 Legislature has done in the past. We don't want that to 7 happen. 8 MR. CALHOUN: Thank you. 9 MRS. RIORDAN: Are there any other questions? Are 10 there any other comments? Okay. Thank you very much. 11 MR. HEYLER: Thank you very much. Appreciate your 12 attention. 13 MRS. RIORDAN: Let me now call on Mr. David Ferris 14 from General Motors. 15 MR. FERRIS: Good afternoon. I'm Dave Ferris with 16 General Motors Vehicle Emissions and Fuel Efficiency 17 Department. 18 My comments are quite similar to the previous 19 comments you heard regarding -- from the American Automobile 20 Manufacturers Association. So, I'll try to be -- just give 21 a brief summary. And you suggested earlier regarding 22 deficiencies, you perhaps would like to hear some examples, 23 so I'll try and provide that. 24 First, we appreciate this opportunity to comment 25 on the proposed revisions on CARB Mail Out 96-34, and we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 support the comments of the American Automobile 2 Manufacturers Association presented earlier, and the 3 regulatory changes that they have proposed. 4 Just one mention that Joe Calhoun is absolutely 5 correct in his concern regarding false MILs. We need to be 6 very careful as we implement these OBD II requirements 7 because, if we push too aggressively, we will end up with 8 false MILs. We've experienced that many times now. So, 9 Joe's absolutely on target with that concern. 10 I also want to take the opportunity to say that we 11 sincerely appreciate the extraordinary effort the CARB has 12 made during the past year to understand our concerns 13 regarding OBD II implementation. We support the revisions 14 that the staff has made to address these concerns. 15 We also appreciate the extra time the staff has 16 allowed to implement improvements when a particular 17 diagnostic did not fully meet the staff's expectations 18 during the past year. We're confident this extra time will 19 result in better OBD systems and trust that this policy will 20 continue in future years. 21 Okay. Brief summary of our remaining concerns. 22 First, there certainly are still many uncertainties 23 regarding our ability to meet all of the OBD II requirements 24 on all of our applications within the leadtime allowed and, 25 therefore, we recommend that these requirements be revisited PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 at a future CARB workshop and hearing. 2 Now, regarding deficiencies, there are several 3 reasons why it would be appropriate to expand the allowance 4 for deficiencies. You've heard about the continuing phase- 5 in of the technology challenging requirements and the new 6 requirements that are coming in. 7 You've also heard about the OBD II software being 8 extremely complex and difficult to validate, and that's an 9 easy sentence to say. But I'd like to stop there, focus, 10 emphasize, and elaborate on that point a little bit. 11 Each vehicle has about 100 malfunction codes, over 12 100 algorithms. We also have SAE standards for 13 communication protocols with service tools, I&M readiness 14 flags, et cetera. This effectively results in a multitude 15 of individual requirements. There are about 60,000 lines of 16 software code and 15,000 calibration values for each OBD II 17 application. 18 The OBD II software burden is as great or more 19 than the whole rest of the vehicle control software just for 20 the diagnostics. 21 When you consider all of GM's applications, there 22 are literally millions of opportunities for error; even if 23 we're 99.999 percent accurate, we will still have many 24 errors each year. Remember that we're subject to recall 25 either if we're too sensitive or not sensitive enough; in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 other words, not sensitive to eliminate the MIL before one 2 and a half times the standards, or so sensitive that we end 3 up with excessive false MILs. 4 Essentially, the calibrations must be perfect. 5 So, a single error in any line of calibration can result in 6 false MILs or noncompliance. And another factor is that 7 such errors may not be discovered until very late in the 8 process. 9 Let me give you just a few examples. We have a 10 situation with the '95 model year; the oxygen sensor heater 11 diagnostic where the calibrations work well when ambient 12 temperatures were around 70 degrees Fahrenheit. However, 13 when ambient temperatures fell to around 30 degrees 14 Fahrenheit we had false MILs. We had vehicles at the 15 assembly plant parking lot with the lights on. This 16 problem, you know, resulted in delay of introduction of new 17 models for six to eight weeks until we got that problem 18 dealt with. A simple calibration error. Didn't have 19 sufficient validation time to validate at all temperature 20 extremes. 21 Another example for -- and that was an example of 22 a calibration error. 23 An example of a software error in '96 model year, 24 we had an application where the evaporative system 25 diagnostic -- when the vehicle leaves the factory, functions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 perfectly. It will detect a forty-thousandths leak, inch 2 leak, in the evaporative system and illuminate the MIL as 3 required. However, if the vehicle goes into service and the 4 battery is disconnected during the service process, and then 5 that forty-thousandths leak is not correctly repaired, the 6 battery's reconnected. The vehicle leaves. Now, the 7 software doesn't work properly anymore. It will not detect 8 that forty-thousandths or illuminate the MIL. 9 But, mysteriously, if you have a gross evap. leak, 10 like removing the gas cap, or if you run the dealer service 11 bay diagnostic test, the software will correct itself. Kind 12 of a software bug. No one saw it. We found this one in the 13 field. But the diagnostic software is really not working a 14 hundred percent correctly. 15 Furthermore, once they have been identified, it is 16 essential that these deficiencies be allowed to be carried 17 over in order to provide sufficient leadtime to validate 18 changes to OBD II software or calibrations. Without 19 sufficient time for validation, we risk creating even more 20 software problems. GM has experienced several new software 21 problems that were created by rushing to change software 22 without adequate validation time. 23 One extra year can provide four to five times as 24 much validation testing. For example, for a '97 model year, 25 the staff requested that we improve the diagnostic for our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 throttle position sensor. We rushed it in for '97 model 2 year. A couple of applications had less than three months' 3 time for validation testing, and we had problems that shut 4 down assembly plants for a few weeks until we got those 5 calibration problems corrected. 6 If we had had an extra year, we would have had 15 7 months' time for validation testing instead of less than 8 three months. 9 We really need extensive four-season validation 10 for such software changes. 11 For alternative fuel vehicles, as you've heard t 12 he concerns expressed earlier, we support the AAMA language 13 on that. 14 Finally, we have a new concern about revisions to 15 Section (b)(3.4.3) that the staff proposed this morning. 16 They're clarifying that the purpose for erasing temporary 17 misfire detection fault code, a determination that similar 18 conditions have been encountered requires that the 19 conditions be present for sufficient time for a misfire 20 fault to be detected if the misfire is present. 21 We really need more time to study this issue, but 22 we do not believe that this change is appropriate. We'd 23 like to suggest some discussion between the ARB staff and 24 the U.S. Car emission partnership technical experts during 25 the next few weeks to resolve this concern. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 CHAIRMAN DUNLAP: Okay. On that point, staff, 2 any? You go along with that? 3 MR. ALBU: Yes. Yes, we do. We'll be revisiting 4 it in the 15-day changes. 5 MS. WALSH: They'll have an opportunity to comment 6 during that period. 7 CHAIRMAN DUNLAP: Okay. Make sure, as we get to 8 the resolution here at the end, Kathleen, that we're 9 properly reflective of that. If staff and my Board member 10 colleagues are okay with it, I guess we can accommodate that 11 request. 12 Anything else? 13 MR. FERRIS: Just a couple more points to clarify. 14 The EPA does have service information requirements that do 15 require us to provide reprogramming capability in some form 16 or another to aftermarket service technicians. So that, if 17 they were willing to buy the special GM tool, which has 18 proprietary reprogramming software in it to protect against 19 tampering, then they will be able to reprogram a vehicle 20 with the official GM calibrations just like our dealerships 21 will. 22 So, in summary, GM supports the changes proposed 23 by the staff, with the exception of the one noted, and we 24 also support the specific regulatory language attached to 25 the AAMA comments regarding deficiencies on alternative fuel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 vehicles, and we request that the Board propose these 2 changes today. 3 And this concludes my statement. I'd be happy to 4 answer any questions. 5 CHAIRMAN DUNLAP: Okay. Thank you, Mr. Ferris. 6 Any questions? 7 MR. CALHOUN: I guess I'd like to ask the staff 8 one question. Mr. Ferris mentioned the fact that, as we 9 approach ULEV, they aren't quite sure -- I'm sure the 10 industry as a whole is probably in the same boat -- how they 11 are going to -- whether or not they're going to have 12 difficulties, and suggest that we review this issue again 13 down the road. 14 Is that the staff's plan to come back sometime in 15 the future? 16 MR. ALBU: Definitely. We would plan to come back 17 to the Board in approximately two years again and revisit 18 the ULEV capabilities. 19 MR. CALHOUN: All right. Thank you. 20 CHAIRMAN DUNLAP: Okay. Mr. Ferris, thank you 21 very much. 22 MR. FERRIS: One final point to address the 23 concern earlier that Mr. Calhoun raised regarding false MIL 24 problems in the field and getting them fixed. 25 As soon as we discover such a problem, we issue a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 service bulletin; so, if the light comes on, the vehicle's 2 brought in foor repair. You can read the technical service 3 bulletin, then you'll get essentially a new program 4 installed that's a desensitized calibration to alleviate 5 that problem. 6 CHAIRMAN DUNLAP: Okay. Thank you. 7 The last witness, Mr. Trajnowski from Ford. I 8 hope I did your name justice, sir. And you are the last 9 witness between us and dealing with this issue. 10 (Laughter.) 11 CHAIRMAN DUNLAP: So, if you have anything new to 12 add, make it quick and we'll get down to the business at 13 hand, sir. 14 MR. TRAJNOWSKI: Okay. You're one of the few 15 people that did pronounce my name correctly. 16 CHAIRMAN DUNLAP: I did a stint in Detroit, so 17 maybe that helped. I don't know. 18 MR. TRAJNOWSKI: Good afternoon. My name is John 19 Trajnowski, and I represent Ford Motor Company on on-board 20 diagnostic issues. Ford appreciates this opportunity to 21 comment on these proposed changes to the OBD II regulation. 22 Our detailed comments were previously submitted to 23 the Board members and CARB staff, and we would like them to 24 be included for the record. 25 Ford also supports the comments provided by AAMA. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 Ford strongly supports the changes proposed by CARB staff, 2 and we commend the staff for addressing many of our concerns 3 with the current OBD II requirements. 4 Developing and implementing the vast array of 5 unique OBD II monitoring requirements across our entire 6 product line has proven to be the most technologically 7 challenging effort Ford has ever undertaken in meeting a 8 regulatory requirement. We believe that the changes 9 proposed by CARB staff come a long way toward improving our 10 ability to meet these requirements without compromising the 11 effectiveness of the regulation. 12 As a result, it is essential to Ford that the 13 Board adopt the changes proposed in Mail Out 96-34. 14 However, because of the complexities of these requirements, 15 we are concerned that the existing deficiency allowances in 16 the regulation will not be sufficient, and there's a 17 significant risk that some vehicle applications may be fully 18 compliant (sic) in the future or may not be fully compliant 19 in the future, even though manufacturers have made a 20 diligent effort and expended substantial resources in 21 attempting to fully meet all of the OBD II requirements. 22 An example that Steve Albu used a little earlier 23 regarding deficiencies -- although we certified our entire 24 1996 model year Ford product line with only a few OBD II 25 monitoring deficiencies, we had to later limit the operation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 of the misfire monitor on most of our vehicles due to the -- 2 to an unusually high number of malfunction indicator lights 3 coming on in the field. After which the misfire condition 4 could not be repeated, and thus repaired when the vehicle 5 was returned to the dealership. As a result, we had to use 6 the deficiency provisions for the misfire monitor across 7 most of our product line, and that's being used for both '96 8 and '97. 9 With all of the new OBD II requirements slated for 10 implementation through the turn of the century and beyond, 11 there is no reason to believe that Ford or other 12 manufacturers will be able to fully implement the 13 requirements without experiencing some last-minute glitches 14 or problems in the field that lead to the need for limited 15 relief. 16 As a result, it's essential that the Board revise 17 the OBD II regulation to allow up to two monitoring 18 deficiencies per vehicle without fines through the 2003 19 model year and one deficiency per vehicle without fines 20 thereafter. 21 Ford also urges the Board to revise the OBD II 22 regulations by expending the existing allowance for the 23 Executive Officer to waive specific monitoring requirements 24 for alternative fuel vehicles through the 2004 model year. 25 New monitoring strategies must be developed and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 existing strategies modified, and extensive validation 2 efforts undertaken to ensure that the OBD II monitors will 3 operate properly on alternative fuel vehicles. 4 In light of the extensive OBD II tasks already 5 facing Ford and other manufacturers, we believe that this 6 extension is essential. Given the extremely small volume of 7 vehicles that alt. fuel vehicles represent and the 8 significant task in implementing full monitoring, we believe 9 that requiring full OBD II monitoring would be a major 10 deterrent to the successful introduction of alt. fuel low- 11 emitting -- alternative fuel vehicles into the marketplace. 12 And manufacturers may be forced to restrict model offerings 13 if additional lead time is not provided. 14 To incorporate these two changes, we recommend 15 that the Board adopt the regulatory language proposed both 16 in our written comments as well as AAMA's. And I believe 17 AAMA has provided you those changes. 18 We also recommend that the staff continue to 19 review manufacturers' progress in meeting these 20 requirements, and in continuing on the schedule that we've 21 been on with this review. 22 That's all I have for you today. I'll be happy to 23 answer any questions you may have. 24 CHAIRMAN DUNLAP: Any questions of our friend from 25 Ford? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 All right. Very good. Thank you. 2 MR. TRAJNOWSKI: Thank you. 3 CHAIRMAN DUNLAP: Mr. Schoning, our Ombudsman, 4 would you please address the process prior to today by which 5 this item came before us, and share any concerns or other 6 comments you may have with the Board at this time. 7 MR. SCHONING: Good afternoon, Mr. Chairman and 8 members. This complex and highly technical matter comes to 9 you following a rigorous and a comprehensive effort by staff 10 to advise interested parties of both the scope and the 11 nature of the proposed changes before you. 12 During the course of the past year, staff held 13 numerous meetings and conference calls with manufacturers 14 and automotive service interests to monitor the progress of 15 OBD II implementation, to define areas for further program 16 improvement, and to consider the technical elements you've 17 heard discussed of the existing and proposed OBD II 18 regulations. 19 As part of this process, a formal workshop was 20 held on July 24th in El Monte. Approximately 150 persons 21 attended this workshop from approximately 600 invited to 22 participate through a notice that was mailed on the 3rd of 23 July. 24 A diverse array of participants attended, 25 including numerous representatives from automobile manufacturers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 and automotive trade associations, many of whom you've heard 2 this morning. 3 The workshop with intervening meetings with 4 interested parties was followed by a formal 45-day 5 rulemaking notice that was issued on the 25th of October and 6 sent to, again, approximately 600 interested parties. This 7 formal notice was also posted on ARB's internet web site, 8 and formal written comments have been received from at least 9 eight interested parties. 10 In conclusion, the proposal that is before you 11 today has received extensive public notice, and staff have 12 encouraged and facilitated an ongoing and productive 13 dialogue with interested parties. 14 CHAIRMAN DUNLAP: Okay. Thank you, Mr. Schoning. 15 Does the Board have any questions at this juncture before we 16 get into -- does anyone have any questions of Mr. Schoning 17 about process? 18 Okay. All right. Why don't we then go through 19 what we have for the record, the written submissions thus 20 far? 21 MR. ALBU: We have three comments in that regard. 22 The first one is one from Rolls-Royce. They simply pointed 23 out an omission in the -- in our regulatory language, so 24 that we would need to make small volume implementation of 25 some of these changes consistent with larger volume PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 manufacturers in terms of timing. We have made those 2 changes in the 15-day comments that will be going out. 3 Volvo sent in comments. They simply wanted to 4 reiterate their request for the revisions to be carried 5 through. They proposed a deficiency policy that's been 6 recommended. 7 CHAIRMAN DUNLAP: Is the deficiency policy, is it 8 consistent with what has been discussed today? 9 MR. ALBU: Yes. 10 CHAIRMAN DUNLAP: Okay. 11 MR. ALBU: Yes. And finally, the SAE committee 12 sent us some correspondence reminding us that -- primarily, 13 this is a -- J2008 is a work in progress and we are aware of 14 that. 15 CHAIRMAN DUNLAP: Okay. All right. Very good. 16 Mr. Kenny, do you have anything else to add? 17 MR. KENNY: Nothing further. 18 CHAIRMAN DUNLAP: Okay. Then, what I'll do is 19 close the record on this agenda item; however, the record 20 will be reopened when the 15-day notice of public 21 availability is issued. Written or oral comments received 22 after this hearing date but before the 15-day notice is 23 issued will not be accepted as part of the official record 24 on this agenda item. 25 When the record is reopened for the 15-day PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 comment, the public may submit written comments on the 2 proposed changes which will be considered and responded to 3 in the final statement of reasons for the regulation. 4 Supervisor Roberts, you earlier had indicated a 5 willingness to talk about some ex parte communication, so 6 I'll let you kick it off. 7 But just for the audience's purposes, we have a 8 policy concerning ex parte communications. And before any 9 regulatory item is dealt with, we ask the Board members to 10 disclose them. I want to remind the public they're entirely 11 proper to have such discussions as long as they're covered 12 in public. 13 Supervisor Roberts. 14 SUPERVISOR ROBERTS: Thank you, Mr. Chairman. On 15 November 7th and 8th of this year, I met with 16 representatives of Ford, General Motors, and Chrysler to 17 review progress in complying with the Board low-emission 18 vehicle regulations. 19 Each company, as part of its presentation, 20 provided a status report on its progress in complying with 21 the OBD II regulations, modifications to which we're 22 considering today. In their presentations, all three 23 companies indicated that they've made great progress and are 24 producing complying OBD II systems on all current models. 25 They each expressed some concern that future PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 requirements, including misfire detection and evaporative 2 leak checks, represented a continuing challenge. They also 3 indicated that developing OBD II -- we've got to come up 4 with another name for that -- OBD II systems for ULEVs 5 remain uncertain. 6 they each emphasized the large amount of 7 development effort required to meet these requirements, and 8 the importance of gaining in-field experience and feedback. 9 CHAIRMAN DUNLAP: Okay. And on that, at those 10 meetings, Supervisor Roberts, was one of your Board member 11 colleagues present? 12 SUPERVISOR SILVA: I want the record to show that 13 I, Jim Silva, was also present with Supervisor Roberts when 14 he met with General Motors, Ford, and Chrysler. 15 CHAIRMAN DUNLAP: Okay. Anyone else? 16 SUPERVISOR VAGIM: Mr. Chairman, I, too, did meet 17 with the aforementioned parties and the statement read by 18 Mr. Roberts holds for me, too. 19 CHAIRMAN DUNLAP: Okay. Mr. Calhoun. 20 MR. CALHOUN: Mr. Chairman, I did have incidental 21 contact with Greg Dana of AIAM and Dave Ferris from General 22 Motors. And their discussion with me was essentially the 23 same as their testimony here today. 24 CHAIRMAN DUNLAP: All right. Anything else? 25 SUPERVISOR VAGIM: And we didn't have to say "OBD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 II." 2 CHAIRMAN DUNLAP: Ron took that on. I appreciate 3 that, Supervisor. 4 Okay. If there's nothing else, we have before us 5 a resolution. 6 I'm going to ask Ms. Walsh about that 7 specifically. In this resolution, I don't imagine it is 8 reflective of those four or five areas specifically where 9 the lion's share of the industry comment was focused upon; 10 is that correct? 11 MS. WALSH: Well, the resolution as written would 12 address those issues. It is general enough. And if you 13 determine that you're going to accept the amendments that 14 were presented by the commenters today, we would just 15 indicate on the record that those changes were being adopted 16 as a part of the package, and the resolution would be 17 complete and consistent. 18 CHAIRMAN DUNLAP: All right. There are some 19 specifics, though. Mr. Calhoun and I have been keeping 20 track of some of the specifics. So, what I'll ask my Board 21 member colleagues to do is read the resolution and then 22 we'll get specific in those areas, so at least we have some 23 specific sense of where we stand on some of these key issues 24 that surfaced today. 25 MS. WALSH: Right. Although those specifics PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 would, in fact, be reflected in language for the regulation. 2 That would be an attachment to the resolution. And we do 3 have it in sort of two documents that are before you. That 4 is, the staff supplement of proposed changes to 1968.1 and 5 the specific language changes that were included as an 6 attachment to the AAMA test testimony together, if that's 7 your determination, would establish those principles or 8 pieces. 9 CHAIRMAN DUNLAP: Okay. All right. 10 MR. CALHOUN: May I ask her a question? 11 CHAIRMAN DUNLAP: Go ahead. 12 MR. CALHOUN: The difficulty with the -- I gather, 13 at least I've concluded, what you said was that the 14 proposals that industry discussed here, and we're in 15 agreement with those. You think that they're already 16 reflected in the resolution or with the attachment? 17 MS. WALSH: I'm speaking specifically of the 18 proposals related t the alternative fuel vehicles and 19 deficiencies. And it would be reflected, if it is your 20 desire, by your indication that this language that was 21 proposed by AAMA would be incorporated in the staff's 22 proposed changes. 23 CHAIRMAN DUNLAP: All right. 24 MS. EDGERTON: So, if I understand correctly, when 25 you talk -- several industries have spoken today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 MS. WALSH: Right. That's why I wanted to make 2 sure we were talking about the two proposals related to 3 alternative fuel vehicles and the deficiencies. 4 CHAIRMAN DUNLAP: If it's okay with my colleagues, 5 I'll ask Mr. Calhoun to run through those AAMA 6 recommendations, Joe, and these specific areas of -- I don't 7 know if controversy's the right term -- but in need of 8 definition. 9 MR. CALHOUN: The AAMA has recommended that we 10 make some exceptions for the alternative fuel, and their 11 specific language would, in effect, say this: 12 Vehicles and engines certified to run on 13 alternative fuels shall meet these requirements by the 1996 14 model year. However, manufacturers may request the 15 Executive Officer to waive specific monitoring requirements 16 for which monitoring may not be reliable with respect to the 17 use of alternative fuels through the 2004 model year. 18 That would take care of the alternative fuels 19 issue. And the other one pertains to the deficiencies. 20 And, in effect, what it does is sort of extends the leadtime 21 that the industry has requested for allowing of 22 deficiencies. 23 CHAIRMAN DUNLAP: Okay. Get a little more 24 specific on deficiencies, Joe. 25 MR. CALHOUN: Okay. If you'd like, I'll read the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 proposed language. 2 (Reading) Beginning with the 1997 model year and 3 through the year 2003 model year, the certification 4 provisions set forth in Section (m)(6.1) above shall 5 continue to apply subject to the following limitations: The 6 specified fines shall apply to all monitoring system 7 deficiencies wherein a required monitoring strategy is 8 completely absent from the OBD system; and, two, 9 manufacturers may not carry over monitoring system 10 deficiencies -- this is what AAMA's proposing -- for more 11 than two additional model years, unless it can be 12 demonstrated that a substantial hardware modification would 13 be required to correct these deficiencies, and additional 14 leadtime beyond two years would be necessary to implement 15 the modification, in which case the deficiency may be 16 carried over for a total of three model years. 17 And then add Section (m)(6.3): Beginning with the 18 2004 model year and for each model year thereafter, the 19 certification provisions set forth in Sections (m)(6.1) and 20 (m)(6.2) above shall continue to apply subject to the 21 following limitations: The specified fines shall apply to 22 the second and subsequent identified deficiencies, and 23 manufacturers may not carry over monitoring system 24 deficiencies to future model years. 25 CHAIRMAN DUNLAP: Okay. On that, staff, do you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 have any concerns about that? Okay. 2 I sense Ms. Edgerton has some concerns. Mr. 3 Cackette, why should the Board not have any concerns about 4 that request? 5 MR. CACKETTE: I think the reason that we feel 6 comfortable with it is that we don't expect that it will be 7 used -- that every vehicle or even any majority of vehicles 8 will have the two or the one deficiencies. We think that 9 manufacturers are going to design fully complying vehicles, 10 but there is some probability -- a small but finite 11 probability -- there's going to be some whoopses, some 12 mistakes made along the way. And I think fining someone for 13 that, for a mistake, is not appropriate. Only if there's 14 multiple mistakes or something done, you know, on purpose 15 would the fine apply for that first deficiency or two 16 deficiencies in the interim years. 17 And it's essentially the policy the Board adopted 18 earlier, and I think our experience we have gained suggests 19 that it's not a bad one to continue on into the future. 20 CHAIRMAN DUNLAP: Mr. Calhoun, and then you, 21 Lynne. 22 MR. CALHOUN: I think what Mr. Cackette said is 23 even more significant. And as you enforce the ULEV 24 standards, it's going to be more difficult for the industry. 25 And I think the staff is wise in suggesting the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 recommendations that are being made. 2 MR. CACKETTE: I would just say on what Mr. 3 Calhoun said, when you look at the regulations -- it's kind 4 of like when we put OBD II forward, a phase-in from 1994 to 5 1996, and why do we need to -- why can't they get it right 6 by, you know, 2004. But, as you see today, we've added PCV 7 valves and thermostats. We have different kinds of misfire 8 monitoring changing; at the same time, the standards are 9 changing on -- from TLEV to LEV to ULEV. The evaporative 10 standards are changing from the old procedure to the new 11 procedure. 12 All this is happening at the same time that their 13 car lines are changing. They're introducing new engines, 14 they're introducing new models. We've got a supplemental 15 FTP for off-cycle operation that's occurring. The catalysts 16 are changing for that. 17 I mean, it is, I think, a -- you know, you've got 18 to have some kind of giant chart up there on the wall to 19 figure out what the heck's going on here. And I think, if 20 we didn't have the deficiencies, we'd probably be here 21 hearing arguments. And we probably could not disagree with 22 them that we ought to get some kind of plateau where nothing 23 changes for two or three years. 24 And the deficiencies is a way of having most of 25 the people move forward. We believe most of them will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 succeed and make progress in meeting these requirements, 2 have better systems. But it gives an out for the few that 3 make a mistake. 4 In the alternative, you have to give everybody 5 more time. So, I think it's a far superior way of going 6 than just plain more time. 7 CHAIRMAN DUNLAP: Ms. Edgerton. 8 MS. EDGERTON: I want to thank the Chairman for 9 quite correctly about noticing and being sensitive to my 10 consternation. 11 I do want to reassure you that the consternation 12 was more because my copy of the AAMA remarks did not include 13 a copy of the language, and that I still didn't have the 14 specific language, and I wanted to see the language. And 15 Mr. Calhoun did sign it -- I mean did read it for us. So, 16 it was substantive. 17 However, I will say that I'm very pleased to have 18 heard all the full explanations of what we meant and why 19 we're doing it. And it's made me more confident that I can 20 go forward without having seen the specific language. Thank 21 you. 22 CHAIRMAN DUNLAP: If it'll make you feel better, 23 Mr. Douglas, make sure that Ms. Edgerton always gets the 24 last page. 25 (Laughter.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 CHAIRMAN DUNLAP: Okay. Anything else we want to 2 discuss before the Chair entertains a motion? 3 MR. CROSS: Can the staff speak for just half a 4 second here on this language? This is -- since you have 5 read the specific language into the record, typically, as 6 part of the 15-day process, there may be some minor word- 7 smithing of the language, which is required. And I guess I 8 wanted to make sure that that was or was not okay with the 9 Board before we -- 10 CHAIRMAN DUNLAP: Ms. Walsh. 11 MS. WALSH: That's specifically provided for in 12 the resolution. And I think, in particular, Mr. Cross is 13 referencing the issue that Mr. Ferris raised during his 14 testimony, and we had indicated that -- 15 MR. CROSS: And also this language, the AAMA 16 language. 17 MS. WALSH: We want to be clear that it's not the 18 precise language that's being adopted, rather it's the 19 direction to the staff. 20 CHAIRMAN DUNLAP: Understood. But Supervisor 21 Roberts made a point three or four meetings ago that wasn't 22 lost on me about -- we want to provide the staff with a 23 certain amount of flexibility. You need that. 24 Mr. Kenny, you're entrusted with a lot of 25 administrative authority on behalf of the Board. But at the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 same time, you know, words matter here. And so, you know, I 2 guess we'll call on you, Kathleen, as Chief Counsel, it's 3 important that you make sure that the Board's desire is 4 accurately reflected in any modifications in the 15-day 5 notice period or any flexibility provided for to staff. 6 So, that trust that we give you, Mr. Kenny and 7 your team -- and I know you take it seriously, but it's 8 important that you take it very seriously. Because it would 9 be bad for industry to come back to us, as Board members, 10 and say, "Look it. You know, we think there was some 11 license taken here." 12 So, Mr. Cross, your point is well made. I 13 understand the spirit in which it's offered. But, at the 14 same time, Ms. Walsh, I expect you and Mr. Kenny to be 15 vigilant in how that is applied. 16 MS. WALSH: We will. 17 CHAIRMAN DUNLAP: All right. The Chair would 18 entertain a motion on Resolution 96-60. 19 MR. CALHOUN: Mr. Chairman, I so move. 20 CHAIRMAN DUNLAP: Okay. You so move with those 21 specific -- 22 MR. CALHOUN: Changes. 23 CHAIRMAN DUNLAP: -- changes as outlined in the 24 AAMA -- 25 MR. CALHOUN: That's correct. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 CHAIRMAN DUNLAP: Okay. 2 MRS. RIORDAN: I'll second the motion. 3 CHAIRMAN DUNLAP: Supervisor Riordan seconds. Any 4 discussion? 5 Okay. I guess we'll do a voice vote. All those 6 in favor, say aye? 7 (Ayes.) 8 Any opposed? Very good. Motion carries. 9 What I would like to do at this juncture is take a 10 much needed lunch break. But before I do, I would like to 11 make one announcement. 12 The Governor today appointed a new member to our 13 Board, and there's a press release that has been circulated. 14 I'll ask Mr. Kenny to provide it out there I guess on the 15 table. 16 For those in the audience that are interested, the 17 Governor has appointed William F. Friedman, M.D. to the 18 State Air Resources Board. Dr. Friedman of Los Angeles is 19 the J. H. Nicholson Professor of Pediatrics at UCLA School 20 of Medicine. 21 So, we'll welcome him to our next Board meeting in 22 January. I thought you should be aware of that. 23 So, we will take a break until -- about a half 24 hour or so? Then we'll break until right at 2:00, and then 25 we'll come back. I'll ask staff to be here so we can get PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 moving on that last research agenda item. 2 Okay. Thank you. 3 (Thereupon, the luncheon recess was 4 taken.) 5 --o0o-- 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 176 1 AFTERNOON SESSION 2 --o0o-- 3 CHAIRMAN DUNLAP: I'll introduce the next item, 4 96-10-3, which are four research proposals. We've asked Dr. 5 Holmes to give us a five minute or less run-through of these 6 research proposals, and then we'll entertain -- the Chair 7 will entertain a motion to move these items. 8 Also, Supervisor Silva, I know you're intimate 9 with at least two of these items. And so, any commentary 10 you might have would be appreciated as we discuss these. 11 So, Mr. Kenny, no offense meant, I'll go right to 12 Dr. Holmes, and we'll have John get into this with Mr. 13 Barham. 14 MR. KENNY: None taken. 15 CHAIRMAN DUNLAP: Okay. Dr. Holmes. 16 DR. HOLMES: Mr. Chairman, members of the Board, 17 as the Chairman said, we have four proposals for you. Since 18 there was a discussion earlier today on the question of 19 particulate matter standards and their -- and the health 20 effects of particulate matter. 21 Let me ask your indulgence and move -- do Items 2 22 and 3 first. I know all the members of the Board are 23 interested in these, so let's proceed quickly and see if we 24 can get through this in five minutes. 25 CHAIRMAN DUNLAP: Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 DR. HOLMES: We did have some visuals, but I guess 2 we've got to dispense with those today. 3 CHAIRMAN DUNLAP: Yes. 4 DR. HOLMES: In the interest of time. 5 CHAIRMAN DUNLAP: Well, John. I'm comfortable. I 6 think my colleagues on the Board would be as well if you'd 7 just talk about them with us. Which two would you like to 8 start with you said? 9 DR. HOLMES: Items 2 and 3. 10 CHAIRMAN DUNLAP: Okay. Go ahead. 11 DR. HOLMES: These are the University of 12 California proposals. These are tied to particulate matter 13 health effects that you heard about earlier. 14 The question that we're trying to answer here is 15 what is the mechanism by which PM exposure causes the 16 adverse effects you've heard about -- illness, aggravation 17 of asthma, premature mortality. This has been perhaps the 18 major criticism of the Federal proposal, which is that we 19 don't understand how this happens, even though there is a 20 mountain of new evidence from community-based health studies 21 that establish this link between particulate matter and 22 several very serious health effects. 23 These projects are designed to get at the answer 24 to -- at least some of the answers to this mechanistic 25 question. We have two groups of scientists here who are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 going to work in very close collaboration. These are both 2 world-renowned groups of scientists. They're going to work 3 together to help us resolve this issue. 4 CHAIRMAN DUNLAP: This is UCI? 5 DR. HOLMES: UC Davis and UC Irvine. 6 CHAIRMAN DUNLAP: Okay. 7 DR. HOLMES: The UC Davis group will look at the 8 effects of particle composition and particle concentration 9 on the respiratory tracts of rats. And this is interesting, 10 because for the first time, we're including a range of ages 11 here -- very young rats, fully developed rats, and then some 12 elderly rats -- if that's the right word. 13 CHAIRMAN DUNLAP: Yeah. 14 MR. CACKETTE: Grandpa rats. 15 DR. HOLMES: I want to be politically correct 16 here. Both these projects will be carried out over three 17 years. They're going to be very closely managed by ARB 18 staff, primarily by my colleague here on my left, Dr. Karlyn 19 Black, who has helped the UC folks develop these and ensure 20 that they are closely coordinated and complementary rather 21 than duplicative. 22 CHAIRMAN DUNLAP: And you're going to have regular 23 coordination meetings, John, to make sure that these two 24 research groups get together, and you're going to track very 25 closely the value we're getting, and the progress on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 research, and you'll make sure that you give some 2 information back to the Research Screening Committee? 3 DR. HOLMES: The Screening Committee asked us to 4 manage it very tightly. They asked us to report back on an 5 annual basis, and they asked us to appoint an external 6 advisory committee. We've already started doing that. 7 CHAIRMAN DUNLAP: Okay. Very good. Any questions 8 on the two particulate matter research proposals? All 9 right. 10 Supervisor Silva, you had some questions? 11 SUPERVISOR SILVA: A real comment. I know, as a 12 Board, we're not here to micromanage, and I know that staff 13 can't provide us with all the information that perhaps each 14 one of us would need. But I have met with staff and I'm 15 looking forward actually to a trip down to UCI, which is in 16 my back yard, with a member of our staff, to go over 17 actually what we're buying into. 18 I think that it's very important that I for one 19 get a little education on it. And I've had some questions 20 about the expense, and I'm looking forward to it. 21 CHAIRMAN DUNLAP: Okay. Very good. Dr. Holmes 22 and Mr. Barham have been very supportive in the past of 23 having Board members get to know some of the research teams 24 if we want to. So, that's good. 25 Ms. Edgerton, Dr. Holmes is also expressing a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 desire to perhaps tag along with Jim, or have a separate 2 briefing as well on this one, with UCI. 3 DR. HOLMES: I think we certainly would be very 4 pleased. And I'm sure that the folks at Irvine would, too. 5 CHAIRMAN DUNLAP: Okay. Very good. Let's move to 6 Research Proposal No. 1, John. 7 DR. HOLMES: This is a part of our large field 8 study for the summer of 1997, investigations of formation of 9 ozone aloft, ozone above the inversion layer, which turns 10 out to be a very important development of smog at the 11 surface, which is what we're trying to control. 12 Sonoma Technology has done work for us over the 13 past 15 years or so. Their specialty is airborne monitoring 14 and elaborately equipped aircraft that they can use to fly 15 around the whole Southern California region, which is where 16 this will take place. 17 CHAIRMAN DUNLAP: And this is a co-funded project. 18 We've contributed $225,000 or so and U.S. EPA $150,000? 19 DR. HOLMES: Yes. 20 CHAIRMAN DUNLAP: Okay. Total value of nearly 21 $380,000. 22 Okay. 23 DR. HOLMES: And No. 4 -- 24 CHAIRMAN DUNLAP: Any questions on No. 1 for Dr. 25 Holmes? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 And, John, you've done some work with them as you 2 said, and familiar with their aircraft. And you're framing 3 this round of research a little more focused, correct? 4 DR. HOLMES: Yes. 5 CHAIRMAN DUNLAP: Okay. 6 DR. HOLMES: Exactly. 7 CHAIRMAN DUNLAP: You're not doing anything you've 8 done before. It's new ground, right? 9 DR. HOLMES: This is new ground, and the last 10 major work that we did in the Southern California area was 11 in 1987, and there have been a number of changes since then. 12 So, it's a different air. 13 CHAIRMAN DUNLAP: All right. The fourth item, 14 John, as you mentioned, development of a short averaging 15 time indoor nitrogen dioxide monitor. 16 DR. HOLMES: Yes. It turns out that nitrogen 17 dioxide is perhaps the most ubiquitous indoor air pollutant 18 that we've come across so far. We know it's toxic. The 19 Board established a number of years ago an ambient air 20 quality standard for nitrogen dioxide. But we don't have a 21 good enough database to understand how much of the overall 22 nitrogen dioxide exposure is occurring indoors. 23 In order to get the data to establish this ratio 24 between indoor and outdoor, we need to have extensive 25 monitoring. This project would -- with Battelle would PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 develop a small, light weight, inobtrusive monitor that 2 could be placed in the residences and at other locations 3 where we need to monitor for extended periods of time 4 without driving everybody nuts with noise and inconvenience. 5 So, developing this instrument and getting a few 6 of them to try out on our own will advance the indoor air 7 quality program immensely. 8 CHAIRMAN DUNLAP: Okay. Just as an aside, I found 9 it interesting. John or Bob, you might mention what you did 10 -- the expertise and some of the things that you were able 11 to demonstrate when the Board moved its workforce into this 12 building, and about your concern that you had about this 13 building, as it was reconditioned, about human exposure. 14 If you'd say a word or two about that, Bob, I'd 15 appreciate it. I'm sure my colleagues would enjoy hearing 16 about it. 17 MR. BARHAM: Just briefly. When we first occupied 18 this building, there were a lot of concerns about off- 19 gassing of the new materials that were installed -- 20 particularly the carpeting, wall coverings, painting, things 21 like that. 22 So, we spent, oh, a number of weeks planning, and 23 then with the help of our Administrative Services Division, 24 particularly Teresa over here, we were able to what they 25 call bake out this building. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 We were able to elevate the temperature quite 2 high, upwards in some places of 100 degrees, and then flush 3 it with air for a period of time. And we cycled that I 4 believe about three times like that. 5 So that when we moved into the building, we had a 6 fairly clean environment to move into. In fact, if any of 7 you are interested, we have some materials posted in the 8 Research Division that show the decrease in hydrocarbon 9 concentrations in the building after the bake out. 10 CHAIRMAN DUNLAP: That particular briefing, it's 11 never left me. I've been impressed with the work. John and 12 Bob had a little picture slide show of what they did, and 13 how they did it, and that impressed me. And I've 14 appreciated their perspective on indoor air pollution and 15 desire to know more. 16 Any questions on this item? 17 MAYOR HILLIGOSS: No. I just wanted to say that 18 even though they baked it three times and everything else, I 19 came for a briefing, and I coughed all the way through it. 20 CHAIRMAN DUNLAP: Now, was that early in the time 21 we were in the building? 22 MAYOR HILLIGOSS: Yes. 23 CHAIRMAN DUNLAP: Okay. 24 MR. CALHOUN: I'd like to ask one question 25 pertaining to Items 2 and 3. You indicated that they had PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 been peer reviewed by an expert researcher in the field? 2 Who did that? 3 DR. HOLMES: It was Dr. John Balmes, who's a 4 professor of medicine at UC San Francisco. B-a-l-m-e-s. 5 CHAIRMAN DUNLAP: Any other questions on these 6 items? 7 All right. Mr. Kenny, anything you want to say? 8 Okay. We have before us Resolutions 96-61, 96-62, 96-63, 9 and 96-64. It was in our Board packet, Ms. Hutchens? 10 Dr. Holmes, I appreciate your willing to work 11 swiftly on these items. Sorry about cutting you short with 12 your overview, but I know that the Board copies probably 13 have copies of the slides. If not, we'll provide them to 14 them, if you would. 15 The Chair would entertain a motion on these four 16 resolutions. 17 MAYOR HILLIGOSS: So move. 18 MR. PARNELL: Second. 19 CHAIRMAN DUNLAP: Moved by Mayor Hilligoss, 20 seconded by Mr. Parnell. Any discussion? 21 All right. Then we'll proceed with a voice vote. 22 All those in favor of these four resolutions, say aye? 23 (Ayes.) 24 Any opposed? Okay. Motion carries, it appears 25 unanimously. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 All right. We have at this juncture in our agenda 2 an open period whereby we allow the public an opportunity to 3 comment or discuss anything that they would like within 4 certain bounds. 5 And we've asked Mr. Buttacavoli from General 6 Motors to take a few minutes. And, Ray, we're going to lose 7 some Board members in about five minutes. So, if you would 8 cut to the quick relative to the commercials, and then the 9 rest of us would be willing to listen to you speak to some 10 of the particulars that you'd like to cover. 11 Ray Buttacavoli, General Motors' man in 12 Sacramento. 13 MR. BUTTACAVOLI: Thank you, Mr. Chairman. Good 14 afternoon, members of the Board. I will take your advice 15 and will get right to the reason you asked me here today, 16 and that is to show you a commercial that General Motors has 17 put together for our electric vehicle EV1. 18 Now, before we jump into that in just a minute, I 19 wanted to let you know that the Saturn and its partner Al 20 Rainey and partners out of San Francisco commissioned the 21 company Industrial Light & Magic. Industrial Light & Magic 22 is the same company that did all of the special effects for 23 the Star Wars movies. So, these are the people that put 24 this commercial together. 25 Also, as part of the videotape that we're going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 show, there area five print ads at the end of it. These are 2 ads that are running in national magazines, but only 3 regional editions. 4 I'm going to be very specific. We are only 5 running these ads in the market areas. The four market 6 areas right now for E1 are San Diego, Los Angeles, greater 7 Los Angeles, Phoenix, and Tucson. And this is where we are 8 concentrating all of our effort, all of our marketing 9 effort, and that's the only place you're going to see these 10 ads. 11 Now, I did bring one with me, Variety magazine 12 December 4. And I'll pass this up to you, but this is one 13 you're going to see in the commercial. This is a full page 14 or a two-page ad that is running. 15 CHAIRMAN DUNLAP: All right. 16 MR. BUTTACAVOLI: What you will be seeing is three 17 versions of the commercial. We have one commercial that's a 18 90-second version, a 60-second version, and a 30-second 19 version, and then the five print ads will come up. 20 CHAIRMAN DUNLAP: Who's the actress that does the 21 voice over, Ray? 22 MR. BUTTACAVOLI: The actress is Linda Hunt. 23 CHAIRMAN DUNLAP: Who's an Academy Award winning 24 actress? 25 MR. BUTTACAVOLI: Yes. I can't remember for what PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 movie, but, yes. 2 MR. KENNY: "The Year of Living Dangerously." 3 MR. BUTTACAVOLI: I was informed it was the "The 4 Year of Living Dangerously." 5 CHAIRMAN DUNLAP: "The Year of Living 6 Dangerously." 7 MS. EDGERTON: Is there any way to get a poster of 8 this? I love that. 9 MR. BUTTACAVOLI: I don't know that we have 10 posters of it, but this copy is -- 11 MS. EDGERTON: Up for grabs? 12 MR. BUTTACAVOLI: It's up for grabs. It's all 13 yours. 14 (Thereupon, the commercials were run.) 15 CHAIRMAN DUNLAP: Well, thank you. 16 MR. BUTTACAVOLI: You're welcome. A couple of 17 comments. One is, the videotape that you just saw was put 18 together by Saturn and Al Rainey to preview the media that 19 we were going to run to introduce the EV1. And it was shown 20 at a press conference about a week prior to the introduction 21 of our vehicle, which -- introduction is kind of a funny 22 term. 23 Saturn is a different kind of car company, and 24 they do things a whole lot differently. We didn't really 25 have an introduction date. December 5th, which was just PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 last week, was the date when we started delivering cars. We 2 had been working for about three weeks prior to that 3 preselling the cars. 4 And as of -- on the 5th, we delivered about 5 somewhere around 34, 35 cars. I don't know what the total 6 number is since then, but I do know that Saturn even made 7 one delivery last Sunday at a person's home, not even at a 8 retail facility. 9 So, they're going all out. I want to give you 10 something that we've talked about before, and General Motors 11 really means it. General Motors and its entire Saturn 12 organization intends to make a business out of electric 13 vehicles. We're serious about the product; we're serious 14 about the vehicle. 15 We think electric vehicles are in our future. And 16 I hope you'll agree that after looking at this set of ads, 17 that you'll understand that we do mean business in this. 18 A couple of comments to close with. This set of 19 ads is scheduled to run in a fairly heavy, intense media 20 program for the next 12 weeks in the four market areas. Joe 21 Kennedy, the Vice President of Marketing for Saturn 22 Corporation dubbed his "launch flare," and he went on to 23 say, and I want to quote -- he says, "If you're alive in 24 these markets, you will see one of these ads." 25 That's what we intend to do. We want people to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 see them. We want the interest to come forward. So, with 2 that, I'll entertain any questions that you might have. 3 CHAIRMAN DUNLAP: Sure. Any of the Board members 4 have questions of Ray or any staff, Tom, you guys have 5 anything? 6 MR. PARNELL: I don't have any questions, other 7 than to compliment General Motors for doing what they've 8 done. And the content of the ads is superb, because it 9 makes you not only aware that they're there, but makes you 10 think you may want to have one. 11 You know, I think that there is a concept of 12 saying this is where the future's going, you better come 13 along. And I like that. 14 MR. BUTTACAVOLI: For those of you that don't live 15 in the Los Angeles area or may not have seen it, we ran a 16 full page ad in the Los Angeles Times. I was told it was 17 last Sunday's paper. And it shows a very -- not even a 18 distinct picture of the car from the front end. But the 19 caption at the top is, "Today, it Looks Like We're in the 20 Appliance Business." 21 (Laughter.) 22 MR. BUTTACAVOLI: And that was intended to be with 23 tongue firmly implanted in cheek, and we're trying to do 24 things differently with this vehicle. 25 CHAIRMAN DUNLAP: Yeah, that's terrific. Doug, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 then Lynne. 2 SUPERVISOR VAGIM: Is that an in-house advertising 3 agency, or did you go to your -- one of your standard 4 outside agencies? 5 MR. BUTTACAVOLI: Al Rainey has been Saturn's 6 agency since Saturn started. And they have come up with 7 some of the more creative automobile advertising in the last 8 several years. 9 SUPERVISOR VAGIM: The voice over the print media, 10 is that used for just shows like -- 11 MR. BUTTACAVOLI: Yeah. That was just for this 12 videotape and just for that one press conference. We will 13 not normally use it. What you will get, what you will see 14 is what I passed around. 15 SUPERVISOR VAGIM: Right. 16 MR. BUTTACAVOLI: Was the ad. So, the advantage 17 there is that you'll get to add your own interpretation to 18 the words. Although I think Linda Hunt did a superb job. 19 SUPERVISOR VAGIM: Indeed she did. Yeah. 20 One question. When we were out visiting you 21 folks, there was some discussion about the lease 22 arrangement, and you were just making a decision on what 23 would be equity and what wouldn't be equity. And have you 24 made any more decisions on any of those yet? 25 MR. BUTTACAVOLI: No. I think the thing that Joe PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 Kennedy mentioned to you and the others that were there is 2 worth repeating. We're not as smart as we will be a year 3 from now or two years from now. And we don't profess to 4 know what it's going to be in a year or two. And there's 5 still a lot of decisions to be made. And that's where we're 6 headed. 7 SUPERVISOR VAGIM: That's fair enough. Thank you. 8 CHAIRMAN DUNLAP: I also know Ray lives up here 9 outside of Sacramento, and I know he's anxious to get that 10 vehicle into this marketplace, too. So, you don't need to 11 beat on him about that. Jack, those of us who live up 12 north, he wants it up here as soon as he can get it as well. 13 MR. BUTTACAVOLI: That's right. 14 MS. EDGERTON: I remember when I was at Cal Start, 15 that one of the issues that came up a lot was, how do we 16 make electric vehicles seem romantic? How do you make it 17 seem exciting? 18 And I think these ads really did it. I want to 19 congratulate you. And also, I heard Steven Spielberg did 20 one of them. Is that right? 21 MR. BUTTACAVOLI: Well, Steven Spielberg is 22 associated with the Industrial Light and Magic Company. I 23 think that's his company. They were the ones that did all 24 of the -- 25 CHAIRMAN DUNLAP: Walking toasters. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 MR. BUTTACAVOLI: No, not Spielberg. Excuse me. 2 SUPERVISOR VAGIM: Lucas. George Lucas. 3 MS. EDGERTON: Oh, George Lucas. Of course, he's 4 quite an environmentalist, very much so. 5 MR. BUTTACAVOLI: Spielberg has not been 6 associated with it; Lucas has. 7 MS. EDGERTON: Lucas. And so, that means they 8 were California jobs making the ad, right? 9 MR. BUTTACAVOLI: In fact -- and the ad agency is 10 in San Francisco. 11 MS. EDGERTON: Take note. 12 SUPERVISOR VAGIM: And Lucas is from Modesto, a 13 Valley boy. 14 CHAIRMAN DUNLAP: That's true. 15 MS. EDGERTON: Thank you very much, Ray. 16 CHAIRMAN DUNLAP: That was American Graffiti was 17 his, right? 18 SUPERVISOR VAGIM: Exactly right. 19 MAYOR HILLIGOSS: I think her idea of having a big 20 poster of the last three, I think that would be a great 21 idea. 22 MR. BUTTACAVOLI: Okay. I'll put that on my list 23 of things to do. 24 CHAIRMAN DUNLAP: Also, Ray, I mentioned to David 25 Oswald, our Communications Director, about the possibility PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 of doing a small display somewhere in the building for a 2 short time about your launch, you know, maybe even having 3 some posters or some other things. 4 If you'd talk to him, perhaps we might be able to 5 display your launch prior to one of our meetings or 6 something, so the public could see it. If you could help us 7 with that, I think we'd be willing. 8 SUPERVISOR VAGIM: One question I do have, is it 9 possible -- and they've done this in the past; I don't know 10 if you folks are planning to do it for those markets that 11 don't have it -- for the people who want to show this ad, do 12 you have dubs of that available? 13 MR. BUTTACAVOLI: I'm not sure that we do. I will 14 tell you, one of the concerns is that we don't want to build 15 any enthusiasm in areas where we're not going to have the 16 car for a while. It's a real hazard to build up 17 expectations that you can't fulfill. 18 We want to make it work in Los Angeles, San Diego, 19 and Phoenix, and Tucson. And that is where we're headed 20 right now. And we're approaching it cautiously and slowly. 21 We want to build it up so that we know that all the 22 processes we've put in place are working. 23 In fact, I had to get approval to bring that tape 24 here today. 25 CHAIRMAN DUNLAP: Yeah. Thanks, Ray. And you've PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 made that point before. I think we need to keep reminding 2 ourselves of that. 3 But before you go, could you just take one minute 4 and run through, as best you know -- and I know you're not 5 handling the specifics of this -- of what the lease 6 arrangements are and any price tags associated in Southern 7 Cal and San Diego? It's three years, right? 8 MR. BUTTACAVOLI: It's a three-year lease. 9 And if you live in the South Coast Air Quality 10 Management District -- 11 CHAIRMAN DUNLAP: Those four counties. 12 MR. BUTTACAVOLI: The four counties. The first 13 thing, well, regardless of where you live, because it's a 14 lease, GMAC is the owner of the vehicle. GMAC takes off the 15 Federal tax credit upfront, right off the sticker price. 16 The sticker price on this is 33,995. 17 So, we reduce it by 3400 to begin with, because 18 GMAC gets that tax credit. They frontload that to the 19 customer. 20 In the South Coast and San Diego right now, you 21 would qualify for an additional $5,000 incentive provided by 22 those districts. In one case, South Coast is doing it by 23 themselves; in the case of San Diego, they're doing it in 24 conjunction with the Energy Commission. 25 There's four other air districts that are doing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 that. Then that $5,000 comes off -- is the next step to 2 come off, which then drops your transaction price for the 3 vehicle to about 25,995. 4 And that gives you a lease, a three-year lease 5 payment of about $480 a month. 6 There is also an option in the lease -- 7 CHAIRMAN DUNLAP: And that 480, though, includes 8 all maintenance, and servicing, and all of that? 9 MR. BUTTACAVOLI: Maintenance/service warranty; 10 it's bumper to bumper. There is also an option, because 11 some people would prefer to do it, for a one-time upfront 12 payment. And I don't have that with me right now. I'm 13 trying to remember. I just don't know. 14 The one thing it does not include, it does not 15 include the charger. And that -- one of our other partners, 16 which is Edison EV, has arranged all at the same time that 17 the lease of the vehicle is arranged, they will provide for 18 a normal wall mount charger in a garage with a normal 19 installation. They'll provide that on a lease basis, too. 20 The cost of the charger is about $2,000. 21 CHAIRMAN DUNLAP: $50 a month or so for the rent. 22 MR. BUTTACAVOLI: Right. 23 CHAIRMAN DUNLAP: Okay. 24 MS. EDGERTON: But you don't own anything at the 25 end. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 MR. BUTTACAVOLI: Right now, no. You do not. As 2 with all leases, a lease is merely using and renting the 3 property, and the owner retains the ownership. So, you're 4 not building any equity in it. 5 And if you were, the payments would be higher. 6 MS. EDGERTON: What are some comparable cars that 7 would cost $480 a month to lease from General Motors? 8 MR. BUTTACAVOLI: You'd be up into the Cadillac 9 range for the most part. And part of it depends on -- you'd 10 have to look at the same three-year term. 11 The advantage we have with other cars is we know 12 what kind of a residual value it'll have. With EV1, we 13 guessed. We've had to make some tremendous guesses. No 14 track record on the vehicle, which is part of the reason -- 15 MS. EDGERTON: And do you have to go out and buy 16 new insurance, a regular auto insurance policy, or does the 17 480 include the -- 18 MR. BUTTACAVOLI: No. 19 MS. EDGERTON: -- auto insurance? 20 MR. BUTTACAVOLI: The 480 does not include auto 21 insurance. You would make your own arrangements. Most 22 insurers will just write a policy, a standard policy. Until 23 they have actuarial data to rate it differently, they'll 24 treat it as a regular car. That's what we've been led to 25 believe by most of them. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 MR. CALHOUN: Is there a residual price stated on 2 the lease at all like they do on the other cars? 3 MR. BUTTACAVOLI: I don't -- unfortunately, Joe, I 4 have not seen the lease agreement. Right now, I don 't 5 believe there is. We've not -- that was a question asked 6 earlier by Supervisor Vagim. Are we going to sell it at the 7 end of the lease? 8 Right now, no. Right now, the vehicle comes back 9 to General Motors. There is no option for sale, although we 10 are looking at it. And as we get closer to that point, we 11 will make the decision. And the customer -- our guess is 12 right now, the customer will be offered the first shot at 13 buying the vehicle should they choose to buy it. 14 CHAIRMAN DUNLAP: So, it's possible there could be 15 a modification of some type later? 16 MR. BUTTACAVOLI: Yes. 17 SUPERVISOR VAGIM: But suffice it to say, you're 18 not driving a 33 or $34,000 automobile. You're driving a 19 much more expensive automobile when you look at your cost 20 for actually putting it out on the ground. 21 MR. BUTTACAVOLI: Right. 22 CHAIRMAN DUNLAP: I don't want to drill Ray any 23 more about leases and everything, because he, out of the 24 goodness of his heart, he's come in and gotten approval to 25 show these ads outside the market. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 But I wanted to thank you, Ray, for coming in -- 2 MR. BUTTACAVOLI: Thank you for your time. 3 CHAIRMAN DUNLAP: -- and for your straightforward 4 responses to a lot of different questions. 5 MR. BUTTACAVOLI: And since I am in Sacramento, 6 and if anyone does have any questions, feel free to get in 7 touch with me. We'll be happy to try to accommodate them. 8 CHAIRMAN DUNLAP: Okay. Thank you. 9 Mr. Kenny, I asked you already, I won't do it 10 again. Is there anybody here in the audience that has 11 anything they wish to bring up? 12 If not, then we will adjourn this, the December 13 meeting of the California Air Resources Board. 14 (Thereupon, the meeting was 15 adjourned at 2:30 p.m.) 16 --o0o-- 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 CERTIFICATE OF SHORTHAND REPORTER I, Nadine J. Parks, a shorthand reporter of the State of California, do hereby certify that I am a disinterested person herein; that the foregoing meeting was reported by me in shorthand writing, and thereafter transcribed into typewriting. I further certify that I am not of counsel or attorney for any of the parties to said meeting, nor am I interested in the outcome of said meeting. In witness whereof, I have hereunto set my hand this 23rd day of December , 1996. Nadine J. Parks Shorthand Reporter PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345