MEETING

STATE OF CALIFORNIA

AIR RESOURCES BOARD

CAL/EPA HEADQUARTERS

BYRON SHER AUDITORIUM

SECOND FLOOR

1001 I STREET

SACRAMENTO, CALIFORNIA 95814

THURSDAY, JUNE 26, 2014

9:04 A.M.

TIFFANY C. KRAFT, CSR

CERTIFIED SHORTHAND REPORTER

LICENSE NUMBER 12277

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APPEARANCES

BOARD MEMBERS

Ms. Mary Nichols, Chairperson

Dr. John Balmes

Mr. Hector De La Torre

Mr. John Eisenhut

Supervisor John Gioia

Mayor Judy Mitchell

Mrs. Barbara Riordan

Supervisor Ron Roberts

Supervisor Phil Serna

Dr. Alex Sherriffs

STAFF

Mr. Richard Corey, Executive Officer

Dr. Alberto Ayala, Deputy Executive Officer

Ms. Edie Chang, Deputy Executive Officer

Ms. Lynn Terry, Deputy Executive Officer

Ms. Ellen Peter, Chief Counsel

Ms. La Ronda Bowen, Ombudsman

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APPEARANCES (CONTINUED)

STAFF

Mr. Aaron Hilliard, Air Resources Engineer, Alternative 

Strategies Section, Mobile Source Control Division

Mr. Tung Le, Manager, Regulatory Assistance Section, 

Stationary Source Division

Ms Lisa Macumber, Innovative Strategies Branch, MSCD

Ms. Cynthia Marvin, Chief, SSD

Mr. David Quiros, Air Resources Engineer, Freight 

Emissions Assessment and Research Branch, Monitoring and 

Laboratory Division

Mr. Scott Rowland, Chief, Incentives and Technology 

Advancement Branch, MSCD

Mr. Erik White, Division Chief, MSCD

ALSO PRESENT

Mr. James Barba, Next Generation

Mr. Will Barrett, American Lung Association

Mr. Max Baumhefner, NRDC

Mr. John Clements, Motiv Power Systems

Mr. Steve Douglas, Alliance of Automobile MFGS

Mr. John Dunlap, Nissan

Mr. Rob Elam, Propel Fuels

Mr. Anthony Fournier, BAAQMD

Ms. Jillian Franzoia, CalCAP

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APPEARANCES (CONTINUED)

ALSO PRESENT

Ms. Veronica Garcia, Tune In Tune Up

Mr. Larry Greene, Sac Metro AQMD

Mr. Tony Gonzalez, Global Automakers

Mr. Jaime Hall, CALSTART

Mr. Henry Hogo, SCAQMD

Ms. Bonnie Holmes-Gen, ALA

Mr. Tom Knox, Valley CAN

Ms. Jerilyn Lopez Mendoza, Southern Californai Gas/SDPGE

Mr. Edward Lovelace, XL Hybrids

Mr. Bill Magavern, Coalition for Clean Air

Mr. Jim McKinney, CEC

Ms. Carishma Menon, Natural Resources Defenses Counsel

Mr. Jose Marin, Tune In Tune Up

Mr. Ed Pike, Energy Solutions

Mr. David Reichmuth, Union of Concerned Scientists

Mr. Seyed Sadriden, South Coast AQMD

Ms. Rosemary Shahan, CARS

Mr. Aaron Tilton, Blue Castle Holdings

Ms. Eileen Tutt, Cal ETC

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INDEX

PAGE

Item 14-5-1

Chairperson Nichols 7

Motion 8

Vote 8

Item 14-5-2

Chairperson Nichols 8

Executive Officer Corey 9

Staff Presentation 10

Item 14-5-3

Chairperson Nichols 28

Executive Officer Corey 29

Staff Presentation 31

Mr. Sadredin 44

Mr. Hogo 53

Mr. Barba 57

Mr. Knox 59

Mr. Magavern 61

Ms. Shahan 63

Ms. Menon 65

Mr. Marin 67

Ms. Garcia 68

Mr. Barrett 69

Motion 78

Vote 78

Item 14-5-4

Chairperson Nichols 78

Executive Officer Corey 80

Staff 87

Mr. Fournier 111

Mr. Hogo 114

Mr. Greene 115

Mr. Clements 117

Mr. Pike 119

Mr. Reichmuth 121

Ms. Mendoza 123

Mr. Magavern 126

Mr. Lovelace 127

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INDEX CONTINUED

PAGE

Mr. Hall 129

Mr. Elam 132

Mr. Baumhefner 133

Ms. Holmes-Gen 135

Mr. Gonzalez 138

Ms. Tutt 140

Mr. Dunlap 143

Mr. Douglas 143

Mr. Sadredin 146

Motion 168

Vote 169

Item 14-5-5

Chairperson Nichols 169

Executive Officer Corey 170

Staff Presentation 170

Public Comment 189

Mr. Tilton

Adjournment 191 

Reporter's Certificate 192 

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PROCEEDINGS

CHAIRPERSON NICHOLS: Good morning, everyone. 

The June 26th, 2014, public meeting of the Air Resources 

Board will come to order. 

Before we take the roll, we normally say the 

Pledge of Allegiance. I'll ask you all to please rise, 

and Mr. Eisenhut is going to lead us this morning. 

(Thereupon the Pledge of Allegiance was

Recited in unison.)

CHAIRPERSON NICHOLS: All right. Madam Clerk, 

would you please call the roll? 

BOARD CLERK JENSEN: Dr. Balmes? 

BOARD MEMBER BALMES: Here. 

BOARD CLERK JENSEN: Ms. Berg? 

Mr. De La Torre? 

Mr. Eisenhut? 

BOARD MEMBER EISENHUT: Here. 

BOARD CLERK JENSEN: Supervisor Gioia? 

BOARD MEMBER GIOIA: Here. 

BOARD CLERK JENSEN: Mayor Mitchell? 

BOARD MEMBER MITCHELL: Here. 

BOARD CLERK JENSEN: Mrs. Riordan? 

BOARD MEMBER RIORDAN: Here. 

BOARD CLERK JENSEN: Supervisor Roberts? 

BOARD MEMBER ROBERTS: Here. 

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BOARD CLERK JENSEN: Supervisor Serna? 

BOARD MEMBER SERNA: Here. 

BOARD CLERK JENSEN: Dr. Sherriffs? 

BOARD MEMBER SHERRIFFS: Here. 

BOARD CLERK JENSEN: Professor Sperling? 

Chairman Nichols? 

CHAIRPERSON NICHOLS: Here. 

BOARD CLERK JENSEN: Madam Chairman, we have a 

quorum. 

CHAIRPERSON NICHOLS: Thank you very much. 

A couple of announcements, before we get started. 

First of all, for anybody who is not familiar 

with our proceedings, if you wish to testify on any item, 

we ask that you fill out a request to speak card. They're 

available in the lobby outside the boardroom and that you 

turn it into the Clerk over here or Board assistant prior 

to the item that's being called. 

We do impose a three-minute time limit, although 

that can be shortened if things get to be out of hand. 

But we don't expect that's going to be a problem today. 

We do ask you to summarize your testimony and put 

it in your own words rather than reading it, just because 

we will receive the written testimony anyhow and it's 

easier for the Board and easier for you to keep to your 

time if you can go straight to your main points. 

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For safety reasons, please observe where the 

exits are around the room. And if we are required to 

evacuate, which would happen if there was a fire alarm 

sounded, we will go down the stairs and out of the 

building until we get an all-clear signal to come back and 

resume the hearing. 

Now, before we begin this morning with our 

regular agenda, we have to take a few minutes to observe a 

very important occasion other than the World Cup that's 

happening today, which is the retirement of the Board's 

Liaison of the last 14 years, Charlyn Frazier. We had an 

opportunity last night to toast her a little bit. But 

it's also important I think that we observe the occasion 

in a more public fashion. Because while many of you may 

not have worked with her, if you've ever communicated with 

the Board members or set up a meeting with the Board, you 

cannot have failed to meet Charlyn. She has made an 

incredible contribution to our overall well being. And we 

can't let this occasion go by without noting it. 

Charlyn's job is to be the interface between the 

public and the Board members. And it's an amazingly busy 

job. As the Board has actually grown during her time in 

office as well, the number of meetings she has to 

schedule, the volume of activity partly as a result of AB 

32 and the Board's seemingly ever-expanding 

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responsibilities has made her job a really challenging 

one. 

And while doing all of this with quite amazing 

aplomb and juggling all these various needs, she's managed 

to keep the Board members well fed during Board meetings, 

make our lives brighter with flowers that that she scours 

the farmers market for and just in general to be a fixture 

of our activities. 

So the Board members, as usual, have signed a 

Resolution for Charlyn. And I'm not going to read it all 

because some of it is sort of inside jokes, which she 

probably wouldn't appreciate sharing, but I'm going to 

mention a couple of things about Charlyn that perhaps not 

everybody knows, one of which is that she didn't actually 

start her career in State service with ARB. She began at 

the Department of Health Services. And before that, she 

had a number of years of experience -- I'm not going to 

say how many -- in the private sector, including working 

at KTLA Channel 5 in Los Angeles, which may explain some 

of her flare for the dramatic. We can't really say. 

But she is very well known within the Board for 

having undertaken a new hobby in recent years of running 

and having become a passionate marathoner and someone who 

really sets an example for all of us in terms of being 

able to stay fit and active at any point in your life. So 

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for that alone, Charlyn, you have been an inspiration. 

I'm going to ask you to come up. I think we have 

the actual Resolution somewhere, do we not? Yes, we do. 

Okay. So we can give it to you. 

And then before we let you go, Supervisor 

Roberts, who seems to have won the contest for the person 

who's known you the longest on this Board -- there was a 

little competition last night. Mrs. Riordan I think might 

be equal. We won't resolve that one. 

Anyway, Supervisor Roberts has also brought along 

something that he wishes to present. 

Charlyn, let me just give you this Resolution on 

behalf of all of us and wish you every success. 

(Applause)

BOARD MEMBER ROBERTS: Thank you. As only one of 

two who have been here longer than Charlyn, in spite of 

that, we've all been trained by her in terms of what to 

expect and how to do it and where we need to be. When my 

colleagues on the Board of Supervisors heard that one 

person was doing all of this work and had kept me out 

trouble for 20 years here, they felt that it would be 

appropriate for us to do something. 

We have a Proclamation that mirrors some of the 

things that Mary has alluded to in our Board proclamation 

that also talks about the wonderful lunches and the superb 

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delicatessens that Charlyn has sought out over the years 

to make sure we're well fed. I suspect that's kept us in 

far better mood and far more productive in every way. 

It also alludes to what she is planning on doing 

in here retirement, tending to her cats and her cow, 

Patty, and of course her running, of which she will have 

more time. I'll have more to say about that in just a 

minute. 

But the Board in San Diego, County Board of 

Supervisors throughout the county of San Diego has 

proclaimed this to be Charlyn Frazier Day in honor of her 

service. 

(Applause)

BOARD MEMBER ROBERTS: This would normally make 

you immune from traffic tickets in San Diego. We'll get 

you a pass for when you're down there. 

But even more importantly, because of your 

running, there is somebody in San Diego that heard about 

your late start in your career but your accomplishments 

and marathon and several half marathons, numerous 5 Ks and 

10 Ks. And he was very impressed and wanted me to pass 

this on. It says, "To Charlyn. Thank you for all your 

support. Best wishes. And now you have even more time to 

run. Run to win." And it's signed by Meb Keflezighi. 

Meb is the first American winner of the Boston marathon 

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about half a century ago. So this is for you. 

(Applause)

CHAIRPERSON NICHOLS: Would you like to say a few 

words? 

MS. FRAZIER: I'd had an opportunity to say a few 

words to the Board and staff last night. We had a festive 

event. I really don't think it's goodbye. I think I've 

said this before that I'm sure I'll be back. It will be 

hard to stay away from Board meetings. It's been 15 

years. I figure I've been to at least 150 Board meetings. 

I didn't think of it that way. 

But for some reason in the middle of the night 

last night, when I'm awake, I don't think I'm retiring. 

It's June and summer break and it's time to take a 

vacation. I want to go to summer camp and get out and get 

some fresh air and take up some crafts. 

CHAIRPERSON NICHOLS: You're welcome back any 

time, Charlyn. 

MS. FRAZIER: Thank you all so much. This is 

really a treasure. 

(Applause)

CHAIRPERSON NICHOLS: An important milestone. 

Let me now move onto the regular calendar. We 

have first a consent item on the approval of the 8-Hour 

Ozone State Implementation Plan Inventory Submittal. 

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And I need to ask if anyone has signed up to 

speak on this or if anyone wishes to take it off of 

consent? There seems to be a conference going on over 

here. So sorry. 

Madam Clerk, we're on the consent item. Did you 

receive anything? No. No comments. Okay. No nobody 

wishes to take it off. 

May I have a motion? 

BOARD MEMBER RIORDAN: Move approval. 

BOARD MEMBER EISENHUT: Second. 

CHAIRPERSON NICHOLS: Very good. All in favor, 

please say aye. 

(Unanimous aye vote)

(Board Member De La Torre not present.) 

CHAIRPERSON NICHOLS: Any opposed or abstentions? 

Great. 

Next item is a report on the Air Resources Board 

Mobile Source Measurement Capabilities. This is a report 

that accompanies the wonderful demonstration that we had 

last week out in the street of some of our capacities. 

And we thought that it would be useful for the Board 

members to get a chance to hear a somewhat more formal 

informational report. So this is a more comprehensive 

picture of some of those instruments and methods that you 

saw on display at the showcase last month, including a 

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description of how they're actually used to support our 

regulatory programs. 

I think the Board members appreciate the fact 

that we are using some very sophisticated technologies to 

assess what's going on out there in the real world of cars 

and trucks and to make sure they're as clean as possible. 

These tools are obviously at the heart of what we do, 

including some of our most critical regulations and are 

consistently going to be under scrutiny. And we need to 

make sure that we are utilizing the very best technologies 

and doing them and using the data as well as possible. 

So I'm going to turn it over at this point to Mr. 

Corey to introduce this item. 

EXECUTIVE OFFICER COREY: Thank you, Chairman 

Nichols. 

So today's presentation will describe the 

evolution of our mobile source testing capabilities, 

beginning with the establishment of ARB more than 50 years 

ago. We'll highlight the variety of new measurement tools 

we've developed over the years to meet changing and 

increasingly complex program needs. And we'll conclude 

with a preview of our emissions testing priorities, 

including our plans for expanded testing facilities. 

And David Quiros of our Monitoring and 

Laboratories Division will now give the presentation. 

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David. 

(Thereupon an overhead presentation was 

presented as follows.)

AIR RESOURCES ENGINEER QUIROS: Thank you, Mr. 

Corey. 

Good morning, Chairman Nichols and members of the 

Board. 

In our informational briefing today, we will 

describe how ARB's mobile source measurement capabilities 

have evolved since the early 1960s to support expanding 

regulatory and programmatic needs. 

We will then discuss the major sources of air 

pollutants from vehicles and the tools ARB has developed 

and deployed to measure them. We will conclude with a 

summary of our current testing capabilities and our future 

measurement priorities. 

--o0o--

AIR RESOURCES ENGINEER QUIROS: Last month, a 

number of you had the opportunity to view the mobile 

source measurement showcase as part of our Board meeting. 

The selected exhibits demonstrated some of the mobile 

source measurements that are used today. 

This presentation serves to provide the 

fundamental background behind these measurement tools, and 

in addition, present the chronological development and 

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future direction of ARB's mobile source programs.

--o0o--

AIR RESOURCES ENGINEER QUIROS: In the 1950s, 

Arie Haagen-Smit and other Southern California scientists 

determined that motor vehicles were one of the main 

sources of air pollutants resulting in photochemical smog 

blanketing the region. 

To address this problem, in 1959, the Legislature 

created the California Motor Vehicle Pollution Control 

Board, the predecessor to the ARB, and gave it the 

authority to test vehicle emissions and certify emission 

control devices. This was the beginning of ARB's mobile 

source emission measurement program, which in its early 

years focused on controlling passenger car emissions.

--o0o--

AIR RESOURCES ENGINEER QUIROS: As this slide 

shows, there are many potential sources of air pollution 

associated with vehicles, including fuel composition, 

refueling losses, tailpipe exhaust, brake and tire wear, 

leakage of air conditioning refrigerants, and evaporative 

losses. 

Over the past 50 years, specialized test methods 

and instruments have been developed to measure these 

sources of vehicle emissions, beginning with the most 

obvious source, the internal combustion engine and 

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associated tailpipe exhaust.

--o0o--

AIR RESOURCES ENGINEER QUIROS: Dynamometers were 

first commercially developed for emissions testing 

applications in the 1960s. A dynamometer, or "dyno" for 

short, simulates road loading of an engine or vehicle, 

thus allowing reproducible tests to be conducted in a 

controlled laboratory setting. 

In some cases, the engine is tested outside of 

the vehicle on the engine dyno, while in other cases the 

entire vehicle is tested on a chassis dyno. ARB has used 

both engine and chassis dynamometers to evaluate vehicle 

control technologies, including most notably the three-way 

catalyst and diesel particulate filters.

--o0o--

AIR RESOURCES ENGINEER QUIROS: A chassis 

dynamometer can be thought of as a treadmill for vehicles. 

As this diagram shows, the drive wheels of a car are 

placed on a large roller, and the exhaust is connected to 

a rack of analytical instruments. A driver then follows a 

prescribed driving cycle that is displayed on a screen, 

accelerating or braking as needed. A fan is used during 

the test in place of the cooling normally provided by wind 

resistance. Tailpipe emissions produced during the test, 

including gaseous particulate and greenhouse gas 

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pollutants, are collected and analyzed by a range of 

instruments.

--o0o--

AIR RESOURCES ENGINEER QUIROS: This photograph 

shows a passenger car being tested on a chassis 

dynamometer in ARB's Haagen-Smit laboratory in El Monte. 

Clearly visible in the photograph are the dyno roll under 

the front wheels of the car, the driver display, the 

cooling fan, and the rack of analytical instruments.

--o0o--

AIR RESOURCES ENGINEER QUIROS: Another major 

source of air pollution from motor vehicles is evaporative 

emissions of hydrocarbons produced by engine heat and 

diurnal changes in ambient temperature. 

In the late 1960s, the concept of sealed housing 

for evaporative determination testing, or shed testing for 

short, was developed to measure evaporative emissions from 

cars. It involves placing a car in a sealed heated 

enclosure. The hydrocarbons are released over the course 

of one or more days and are measured as the car 

experiences diurnal changes in temperature typically 65 to 

105 degreed Fahrenheit. 

Although the shed testing approach was first used 

for passenger cars, ARB has since expanded the method to 

measure evaporative emissions from other gasoline powered 

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vehicles, including off-road recreational vehicles, 

watercraft, and lawn and garden equipment.

--o0o--

AIR RESOURCES ENGINEER QUIROS: This schematic 

shows how evaporative emissions of a passenger car are 

measured using the shed. The car is sealed in the shed. 

The ambient temperature is cycled over the course of one 

or more days, and the resulting evaporative emissions are 

measured using a gas analyzer.

--o0o--

AIR RESOURCES ENGINEER QUIROS: Here, a passenger 

car is ready to be tested in one of the sheds at the 

Haagen-Smit Laboratory.

--o0o--

AIR RESOURCES ENGINEER QUIROS: Beginning in the 

1970s, ARB recognized the health benefits of reformulated 

vehicle fuels, as well as the need for cleaner fuels to 

enable advanced pollution control technologies. 

One of the first fuel regulations adopted in the 

1970s removed led from gasoline, enabling the use of the 

catalytic converter for emissions control. 

In the 1990s, establishing sulfur limits for 

diesel fuel allowed the diesel particulate filter to be 

adopted. 

Fuel analysis capabilities employed at ARB's 

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Haagen-Smit Laboratory have played a tremendous roll in 

the development and enforcement of new fuel standards, 

including implementation of the reformulated gasoline and 

clean diesel standards.

--o0o--

AIR RESOURCES ENGINEER QUIROS: This slide shows 

ARB's mobile fuels enforcement laboratory that has the 

capabilities of a fuel scale analytical fuels laboratory 

on a mobile platform. This enables ARB to have fuel 

analysis capabilities available throughout the state at 

refineries and dispensing facilities. Fuel samples can be 

analyzed within a one-day period, thereby providing a 

rapid indication of potential enforcement issues.

--o0o--

AIR RESOURCES ENGINEER QUIROS: With the success 

of emissions standards and control technologies for 

passenger cars came an understanding that emissions from 

other types of motor vehicles needed to be controlled in 

order to meet air quality standards. 

In particular, heavy-duty vehicles were 

identified as major sources of nitrogen oxides and 

particulate matter. 

Beginning in the 1980s, heavy-duty vehicles began 

to be tested routinely using engine and chassis 

dynamometers. 

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Then in the 1990s, dynamometer cycles and methods 

were developed for a variety of off-road sources, such as 

watercraft, recreational vehicles, and motorcycles. These 

measurements methods were developed by ARB and were the 

basis of regulatory programs that have since achieved 

major emissions reductions from a broad array of 

heavy-duty and off-road vehicles.

--o0o--

AIR RESOURCES ENGINEER QUIROS: Now let's take a 

moment and watch a short video clip showing the testing of 

a heavy duty truck at ARB's MTA facility. 

(Whereupon a video presentation was given.)

--o0o--

AIR RESOURCES ENGINEER QUIROS: One of the types 

of assessments that we can do at the heavy-duty MTA 

facility is to evaluate the effectiveness of the diesel 

particulate filter for controlling particulate emissions. 

This slide shows laboratory filter samples collected from 

a truck with and a truck without a diesel particulate 

filter. Our studies have shown that diesel particulate 

filters reduce particulate matter produced by diesel 

engines by more than 90 percent.

--o0o--

AIR RESOURCES ENGINEER QUIROS: This slide shows 

once of the two motorcycle dynamometers at the Haagen-Smit 

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Laboratory. Similar to the light-duty and heavy-duty 

dynamometers, the laboratory provides a controlled 

environment where a pre-defined test cycle is followed and 

emissions are measured accurately. 

ARB has used these motorcycle dynamometers to 

conduct exhaust testing in support of more stringent 

standards for on and off highway motorcycles, as well as 

all-terrain vehicles.

--o0o--

AIR RESOURCES ENGINEER QUIROS: Prior to the 

1990s, motor vehicle emissions testing was limited to the 

laboratory environment. 

In the early 1990s, ARB recognized that 

measurement tools were needed that could be used in the 

field to measure emissions from large off-road equipment, 

as well as better understand real world operations. 

Advances in measurement technology allowed 

previously bulky laboratory instruments to be packaged 

into small compact, portable emissions measurement systems 

known as PEMs. PEMs have enabled ARB to make real world 

measurements of particulate matter and other pollutants 

from a wide range of vehicle types, including not just 

off-road equipment, but also cars, trucks, and 

motorcycles.

--o0o--

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AIR RESOURCES ENGINEER QUIROS: This photograph 

provides one example of how ARB is deploying PEMs to 

measure real world emissions. In this application, the 

PEMs is mounted temporarily to the roof of a front end 

loader, and the emissions from the exhaust are piped into 

the PEMs for measurement and analysis.

--o0o--

AIR RESOURCES ENGINEER QUIROS: Emissions 

detection tools were miniaturized again in the form of 

on-board diagnostics, or OBD. But rather than measuring 

emissions, OBD monitors the components of emissions 

control, such as catalyst censors, which if malfunctioning 

may indicate elevated emissions. 

OBD was required for passenger cars beginning in 

the late 1980s and for heavy-duty trucks beginning in 

2010. OBD enables the monitoring of virtually all the 

vehicles in the fleet to ensure that vehicles remain clean 

throughout their working life.

--o0o--

AIR RESOURCES ENGINEER QUIROS: ARB also measures 

mobile source emissions from the fleet at-large to better 

understand vehicle technology turnover, verify the 

benefits of adopted rules, and improve emissions factors 

that are used to support air quality modeling and assess 

exposure. 

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Approaches for tracking fleet emissions include 

surveillance testing, where a representative sample of 

in-use vehicles are acquired and tested in the laboratory 

and field measurements by remote sensing of plumes from 

passing vehicles, or roadway environment measurements 

conducted routinely or by targeted campaigns. 

As many of these studies require the use of 

specialized and unique equipment, ARB frequently contracts 

these studies or partners with academic institutions and 

other government agencies.

--o0o--

AIR RESOURCES ENGINEER QUIROS: One tool used to 

track fleet emissions is the mobile measurement platform 

that was developed in-house by ARB staff. Shown on the 

left, this all-electric vehicle is equipped with 

state-of-the-art instrumentation that measures on-roadway 

concentrations of gaseous particulate and greenhouse gas 

pollutants while driving through live traffic. 

ARB has developed the mobile source measurement 

platform in support of numerous studies, including 

assessing how roadway emissions have decreased due to the 

benefits of ARB's truck rules. 

The figure on the right shows the results of 

measurements made using the mobile measurement platform on 

the I-710 freeway in Los Angeles between 2009 and 2011. 

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Over that time period, we have measured a 70 percent 

reduction in black carbon, reflecting the benefits of 

trucks complying with ARB's drayage truck rule.

--o0o--

AIR RESOURCES ENGINEER QUIROS: This slide shows 

another tool that ARB is deploying to measure trends in 

heavy-duty truck fleet emissions. In this case, we are 

collaborating with the researchers at the University of 

Denver to set up a temporary heavy-duty emission tunnel to 

collect snapshots of fleet level emissions at two 

locations in California. 

The study, which began in 2013, will continue in 

2015 and 2017, providing a longitudinal assessment of the 

benefits of ARB's implementation of the truck and bus 

rule. As shown in the photograph, trucks drive through a 

temporary tunnel and their emissions are captured and 

analyzed in the mobile lab shown on the left. This set up 

allows the emissions from more than 2,000 randomly 

selected trucks to be measured over the course of a 

typical one-week sampling period.

--o0o--

AIR RESOURCES ENGINEER QUIROS: As shown by these 

two examples, both in-house and extramural research play a 

critical role in understanding mobile source emissions and 

guiding future measurement priorities. 

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Since 1970, over 200 mobile-source-related 

contracts have been funded. ARB staff are often key 

initiators and participants in these research efforts. 

Results of ARB's in-house and extramural research are 

typically peer reviewed and published in leading 

scientific journals.

--o0o--

AIR RESOURCES ENGINEER QUIROS: ARB's Mobile 

Source Measurement Program is a critical underpinning of 

our rulemaking efforts and benefits from sound science, 

rigorous test methods, and an open public process. 

As shown in the slides related to the tracking of 

fleet emission trends, ARB typically uses multiple 

independent emissions measurement approaches to understand 

a particular issue. We work closely with U.S. EPA and 

industry in developing appropriate test methods. In all 

of our rulemaking efforts, we share test methods and 

results through a public workshop process. 

Finally, ARB solicits expert review through 

working groups, such as the Coordinating Research Council, 

and through publication of peer-reviewed journal articles.

--o0o--

AIR RESOURCES ENGINEER QUIROS: The measurement 

tools discussed in this presentation are currently being 

used to support a wide range of ongoing ARB program needs, 

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including certification and enforcement activities. 

However, there are a number of new program areas 

requiring a focusing of measurement resources in the 

coming year. A major focus of our light-duty measurement 

program will be supporting the LEV III mid-term review, in 

particular the ability to measure particulate emissions at 

very low levels. 

For heavy-duty trucks, new measurement projects 

will include evaluating the feasibility of further 

reducing certification values for oxides of nitrogen. In 

addition, we are working with the U.S. EPA to develop 

Phase 2 standards to reduced greenhouse gas emissions from 

heavy-duty trucks. 

More broadly, we will continue using our 

measurement capability to assess advanced near-zero 

emissions cars and trucks, such as hybrids and alternative 

fuel vehicles. Many of these vehicles will require the 

development of new test methods and tools. 

Finally, ARB will need to consider approaches for 

measuring new pollutants, such as ultra fines, as well as 

unrecognized new sources of emissions.

--o0o--

AIR RESOURCES ENGINEER QUIROS: ARB's mobile 

source testing capabilities are currently housed at three 

facilities in California. 

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The Haagen-Smit Lab in El Monte, which was 

inaugurated in 1973, is the hub of our light-duty testing 

activities and is equipped with engine and chassis 

dynamometers, evaporative testing sheds and PEMs. The 

Haagen-Smit Lab also includes a comprehensive laboratory 

that conducts chemical analysis of fuels and vehicle 

emissions. 

The MTA test facility in downtown Los Angeles, 

which ARB began leasing in 1998, is one of our two 

heavy-duty testing facilities and is equipped with an 

engine dynamometer and a chassis dynamometer. 

Our Depot Park facility, located in Sacramento, 

is our other heavy-duty testing facility and was 

commissioned in 2010. We will be upgrading Depot Park 

with the addition of a chassis dynamometer in late 2014.

--o0o--

AIR RESOURCES ENGINEER QUIROS: Our current 

testing capabilities continue to provide critical 

measurement capabilities. However, advanced testing is 

needed for the new technologies that will further reduce 

emissions from motor vehicles and other engines. 

The two Southern California facilities have 

limited capacity for upgrading the infrastructure and 

instrumentation necessary to provide this advanced 

testing. Therefore, ARB is proposing to build a new 

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state-of-the-art testing facility in Southern California. 

A contract was awarded in May to complete a feasibility 

study for the new facility. The study will document 

program needs and provide a cost estimate. We expect the 

feasibility study to be completed by fall of 2014. 

We will use this information to work closely with 

the Department of General Services and the Department of 

Finance to complete the approval process. We expect the 

approval process to take about a year.

--o0o--

AIR RESOURCES ENGINEER QUIROS: In summary, we 

have a solid scientific foundation to support our future 

mobile source rulemaking. We are in the process of 

commissioning a new test facility in Northern California 

and are planning a new facility for Southern California. 

More than 100 ARB staff are engaged in mobile source 

emissions measurement testing and analysis, are recognized 

for their expertise, leading the country and the world in 

developing new tools and methods. We are leveraging this 

in-house expertise with academic and government 

partnerships. 

Finally, we recognize that just as our 

Measurement Program has evolved over the past 50 years, 

new measurement tools will be needed in the coming years 

to meet new program needs and critical air quality and 

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climate goals. 

That concludes our formal presentation. 

CHAIRPERSON NICHOLS: Thank you very much. 

We don't have any witnesses who have signed up, 

but I have a few comments. 

And before I give mine, I think Mrs. Riordan 

wanted to make a comment. 

BOARD MEMBER RIORDAN: Yes. First of all, staff, 

thank you very much for the presentation, but even more 

importantly, for the opportunity to view your efforts at 

our last meeting. And while I was there, I indicated my 

interest in the mobile measurement platform within the 

vehicle that has been now dramatically changed and with 

wonderful equipment. And so I had the good fortune of 

going about two weeks ago on a trip in that vehicle 

holding the computer with a driver -- fortunately with a 

driver. But along the 710 and watching the measurements 

along that particular freeway in Southern California. And 

I was very impressed, first of all, with the fact that 

that was developed in-house and the ingenuity it took to 

develop that system. And then for the staffing that is a 

part of that, such enthusiastic young members of the ARB 

team. 

So I would encourage any Board member who had the 

opportunity to take that trip. And they're doing it 

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several times because they monitor it over a period of 

time to understand what's happening as we make our 

regulations and the effects of those regulations. 

I also had, Madam Chairman, came back to the 

heavy-duty dynamometer there at the MTA, which I had been 

to many, many years ago. And I watched a test there. But 

also realized how that area has grown and how our needs 

are for I think ultimately having a facility of our own. 

Because obviously the MTA had expanded and it's been a 

wonderful relationship hopefully that we've had with them. 

But it's probably about time that we have our own. 

CHAIRPERSON NICHOLS: Our relationship would 

probably be better if we would move out. 

BOARD MEMBER RIORDAN: But it was a great 

opportunity. And I want to say thank you for those who 

hosted me that morning and encourage my colleagues here on 

the Board to take advantage if you're in the Southern 

California area because it is incredible what we are able 

to measure today. I'm so impressed. 

CHAIRPERSON NICHOLS: Thank you for that. 

Where are the photos of this event? I trust 

there are photos somewhere that document your ride-along 

on the journey. 

BOARD MEMBER RIORDAN: I'm not sure that there 

are any photos for the ride-along. Somebody was taking 

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some photos at the dynamometer, but I'm not sure where 

those are. They may have wanted to destroy them after 

they saw the character in the picture. 

CHAIRPERSON NICHOLS: A break down of our 

communication department because if I had at least one of 

those, I would be tweeting it this minute. That's what we 

should be doing to take advantage of exactly that kind of 

diligence on the part of our Board members. 

Well, I just wanted to add, obviously, the 

message here is, you know, we're doing a tremendous 

amount. And I don't think we even really noted all the 

places along the way where the equipment that we're using 

is designed by and invented by people in-house. So much 

of this program has evolved over time with ARB doing the 

measurements and then figuring out what could be done to 

solve the problem. 

But I just want to underscore the fact that this 

facility, which I was present at the christening of the 

Haagen-Smit Laboratory, is of enormous importance to our 

overall operation. And it's going to be a major 

undertaking to replace it. We can't just fix it up on the 

spot that it's in because we don't have enough land there 

to do it. We don't control the land around it. So we are 

going to have to go through a quite elaborate process. 

I know that the other State agencies that are 

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working with us on this are considering some very 

innovative ideas about how to go about financing and 

building a facility, which will be unique literally in the 

world and how to make it also into a zero net energy 

building and green laboratory. And we have many 

objectives in building a new building. The State doesn't 

get to build new buildings very often. 

So this is going to be a very large project and 

already, as you heard, is being thoroughly investigated 

and documented and all. So stay tuned. But this is a 

project I'm very hopeful will actually see the light of 

day in Governor Brown's next term. 

Any other comments or questions? If not, we can 

move onto the next item. Thank you very much. 

Our next item is a proposal to amend the State's 

Enhanced Fleet Modernization Program, commonly referred to 

as EFMP. EFMP is the State's program to reduce emissions 

from existing motor vehicles by providing incentives to 

speed up the retirement and replacement of older high 

polluting vehicles. 

The 2007 State Implementation Plan includes a 

commitment to achieve reductions equivalent to the early 

retirement of 60,000 vehicles per year combined in the 

South Coast and San Joaquin Valley air basins. EFMP 

provides critical funding towards meeting these State 

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Implementation Plan commitments. 

ARB works closely with the Bureau of Automotive 

Repair, otherwise known as BAR, in developing the program 

guidelines and also in assessing the program's 

performance. A review of the EFMP program in early 2013 

as well as legislation from last year has prompted staff 

to propose modifications that are being presented today. 

These proposed amendments should improve the program's 

performance, better assure participation by low income 

consumers, and as we will hear in the following agenda 

item, also leverage low carbon transportation funding to 

supplement or support pilot programs that will better 

enable lower and middle income consumers to be able to 

move into clean advanced technology vehicles. So this is 

an important program from the perspective of both of our 

smog and climate programs, and it will be interesting to 

see how these two things work together. 

I understand we're also going to be hearing from 

the two principal air districts that are involved in 

implementing this program, and that will be after the 

staff presentation. 

EXECUTIVE OFFICER COREY: That's correct. 

CHAIRPERSON NICHOLS: Great. So I'll turn it 

over then to Mr. Corey. 

EXECUTIVE OFFICER COREY: Thank you, Chairman. 

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EFMP is a vehicle retirement and replacement 

program that was authorized by Assembly Bill 118 in 2007. 

The program is funded by the one dollar surcharge on motor 

vehicle registration, translated into about 30 million 

each fiscal year. 

ARB in consultation with the Bureau of Automotive 

Repair adopted guidelines in 2009 to administer two 

separate program elements: Statewide retirement only 

element operated by BAR, that has provided retirement 

incentives to over 90,000 vehicles to date, and a 

retirement and replacement program which is intended to 

provide greater benefits by directly assisting consumers 

to get into newer cleaner vehicles. 

Unlike the retirement only element, which is 

oversubscribed each year, the replacement program has had 

participation that we'll address as part of the staff 

presentation and associated recommendations. The proposed 

amendments presented today are in response to both review 

of the program and in response to directives of Senate 

Bill 459. 

Today, we're asking the Board to approve the 

amendments that we believe will improve the effectiveness 

of the program, address the directives of SB 459, and 

provide a mechanism to leverage low carbon transportation 

funds for low-income consumers in disadvantaged 

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communities. 

I'd now like to turn the presentation over to 

Aaron Hilliard with our Mobile Source Division who will be 

providing the staff presentation. Aaron. 

(Thereupon an overhead presentation was 

presented as follows.)

AIR RESOURCES ENGINEER HILLIARD: Thank you, Mr. 

Corey. 

Good morning, Chairman Nichols and members of the 

Board. 

Today, I will present staff's proposed changes to 

the Enhanced Fleet Modernization Program. Staff's 

proposed changes will better ensure the program's 

emissions benefits are achieved, while continuing to 

assist low and moderate income Californians get into 

cleaner more efficient vehicles.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: Today's 

presentation will consist of a brief overview of the 

program's background and achievements to date, a summary 

of the legislation and program review that prompted 

today's proposal, a description of the proposed 

amendments, and staff's recommendation.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: The Enhanced 

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Fleet Modernization Program, also known as EFMP, is a 

voluntary vehicle retirement and replacement program 

originally authorized by Assembly Bill 118 in 2008 and 

extended through 2023 by Assembly Bill 8 in 2013. 

In 2009, the ARB adopted the EFMP program 

guidelines, which were developed in consultation with the 

Bureau of Automotive Repair, or BAR. The program consists 

of two separate elements: A Retirement-Only Program to 

compensate motorists to scrap their vehicles, and a 

replacement program, which provides funding towards a 

cleaner replacement vehicle. 

Currently, 90 percent of the total annual funding 

of $30 million is allocated towards the retirement only 

component of the program, leaving around $3 million 

annually to fund the replacement components. 

Statute directs that the program should be 

focused on the areas with the greatest air quality problem 

and considers cost effectiveness and impacts on 

disadvantaged and low income populations.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: EFMP was 

established to assist in the efforts to achieve ambient 

air quality standards. Many region of the state continue 

to struggle with the air quality problems. California's 

23 million passenger cars and light- and medium-duty 

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trucks, which travel close to 865 million miles per day, 

contribute significantly to this problem. 

As illustrated here, emissions from older 

vehicles certified to higher emissions standards are 

significantly greater than newer models that comply with 

more stringent emission standards. Thus, measures that 

encourage the early retirement of these older higher 

polluting vehicles can play an important role in cleaning 

the air.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: The 2007 State 

Implementation Plan, or SIP, recognizes the role that 

vehicle retirement programs can play and includes goals to 

retire approximately 60,000 vehicles each year in the 

South Coast and San Joaquin air districts through 

expansion of vehicle retirement programs. 

Although by itself EFMP is of insufficient scope 

to meet the entire goal, it is expected that the program 

improvements proposed today in conjunction with other 

local efforts to identify and remove older higher 

polluting cars from the road will continue to make 

significant progress towards achieving the needed 

emissions reductions in both the South Coast and San 

Joaquin Valley areas in the near future.

--o0o--

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AIR RESOURCES ENGINEER HILLIARD: The success of 

that goal depends on a partnership between several 

agencies. While ARB develops and adopts the EFMP program 

guidelines, the implementation is handled by others. 

BAR administers the statewide retirement only 

component of the program, providing a base incentive of 

$1,000 per vehicle retired. In the accordance with the 

focus on low income motorists $1500 is provided to those 

with an income below 225 percent of the federal poverty 

level, which for a family of four is approximately $54,000 

a year. This income threshold and the incentive levels 

provided are consistent with BAR's consumer assistance 

program, which provides funds for scrapping vehicles that 

fail a smog check. 

Both EFMP Retirement-Only Program and the 

Consumer Assistance Program share the same application 

process and both include a minimal vehicle functionality 

test prior to application approval. This consistency 

allows for a combined operation of both programs 

transparent to the participants. 

--o0o--

AIR RESOURCES ENGINEER HILLIARD: The replacement 

program, on the other hand, is limited to motorists in the 

South Coast and San Joaquin Valley. Accordingly, 

implementation of the replacement program is handled by 

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these local air districts. The replacement program offers 

up to $2500 voucher in addition to the incentive offered 

through the retirement component to purchase a newer 

cleaner replacement vehicle. 

The existing pilot voucher replacement program 

requires applicants to apply for retirement funding 

through BAR, scrap the retired vehicle at a BAR-contracted 

dismantler, and then apply to the air district for a 

replacement voucher. This complicated process contributed 

significantly to low participation in the program.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: In 2013, ARB 

and BAR staff conducted an assessment of vehicles retired 

through EFMP to determine the program's effectiveness and 

to identify opportunities for improvement. A full report 

on the assessment was presented to you last November, so I 

will provide a brief summary of the key findings. 

The program assessment confirmed that the 

vehicles entering EFMP retirement are generally high 

emitters, but also generally at the end of their useful 

life. 

The overall conclusion of the assessment was that 

while EFMP is meeting program goals by purchasing and 

retiring high emitting vehicles, the cost effectiveness 

and emission benefits of the program could be 

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substantially improved by ensuring that only vehicles with 

significant remaining useful life are allowed to 

participate. 

In addition to assessing the performance of the 

retirement program, staff investigated the replacement 

element's low participation rate and whether the 

incentives offered were appropriate for the target 

motorists and vehicles. 

Staff found that the process was overly 

complicated, did not encourage participants to chose the 

cleanest replacement vehicle, and identified avenues to 

improve the process.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: Concurrently 

with the program assessment, Senate Bill 459 was passed. 

SB 459 emphasizes the need for EFMP to serve low-income 

consumers and directed ARB to promote cleaner replacement 

vehicles, enhance emission reductions, and increase 

outreach to community-based organizations. It also 

specified several goals that are consistent with what 

staff determined from the assessment mentioned in the 

previous slide. Finally, it required ARB to update the 

program no later than June 30, 2015. 

Given the goals set forth by SB 459, the 

conclusions of the 2013 program study, and the discussions 

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with our program partners and with stakeholders at 

workshops held in Sacramento, Fresno, and Diamond Bar, 

staff has developed today's proposal.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: For the 

Retirement-Only Program, we believe that there are only a 

few changes needed at this time. To better ensure 

benefits to low income motorists, staff proposes limiting 

participation to making less than or equal to 225 percent 

of the federal poverty level. Restricting program 

participation should better ensure that limited funds will 

be available to low-income consumers throughout the year. 

To increase the emission benefits and cost 

effectiveness of the program, staff proposes requiring the 

successful completion of a smog check test. Successful 

completion of this test, whether the result is a pass or a 

fail, is a good indication that a vehicle can be driven on 

the road, and that retiring it will provide real air 

quality benefits. Staff also proposes that follow-up data 

be collected to gain insight into the transportation 

choices participants make subsequent to vehicle 

retirement. 

To ensure the program's goals are being achieved, 

ARB and BAR staff will monitor participation in the 

program. If participation drops sufficiently to indicate 

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that the retirement program will fall short of expending 

its annual funding, staff is proposing that incentive 

amounts for vehicles passing the smog check test could be 

raised incrementally up to $2500 total per vehicle to 

improve participation. Also based on feedback from BAR, 

staff has already identified a few minor clarifying 15-day 

changes that will be made following today's hearing.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: For the pilot 

retire and replace program, staff proposes a greatly 

revised program to effectively respond to the requirements 

of SB 459 and stakeholder concerns. 

First, staff proposes to limit the program to low 

and moderate income consumers with household incomes less 

than 400 percent of the federal poverty level with 

incentives tiered to focus on the lowest income motorists. 

Second, staff proposes to establish minimum 

program requirements with flexibility to allow the 

implementing air districts to determine how they meet the 

proposed program requirements. This may include, but is 

not limited to, models such as the community outreach 

model used by the San Joaquin Valley's Tune In Tune Up 

Repair Program or a dealer-based model similar to the Carl 

Moyer Voucher Incentive Program for heavy-duty trucks. 

To ensure that the proposed program has 

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sufficient resources to be viable in each region, staff 

proposes that the $3 million annual funding for the 

program be split evenly between the South Coast and San 

Joaquin Valley air basins. Both the San Joaquin Valley 

and South Coast districts are here today and will provide 

more details on their plans to implement the pilot 

programs following staff presentation.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: Staff's 

proposal includes a number of specific steps to increase 

effectiveness in terms of participation, emission 

benefits, and the promotion of advanced technology 

replacements and alternative mobility options. Under the 

proposed guidelines, air districts have the flexibility to 

implement solutions that work best within their respective 

regions. 

As with the Retirement-Only Program, ensuring 

only functional vehicles are accepted is of paramount 

importance. However, in contrast to the proposed 

amendments to the Retirement-Only Program, implementing 

air districts would not necessarily be limited to the smog 

check test for that purpose and would have flexibility to 

propose an alternative. Alternatives can include a 

process by which cars are operated as they progress 

through a series of check stations, similar to how the San 

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Joaquin Valley's Tune In Tune Up event is run. Such 

operation can provide sufficient confidence that they are 

cars that are actually in regular use and have remaining 

useful life. 

The proposed revisions would also allow for an 

increase in the minimum incentive amounts available for 

the down payment of a replacement vehicle and provide 

improved funding options for advanced technology 

replacement vehicles and alternative mobility options, as 

well as expand outreach and incorporate comprehensive 

consumer protections. 

Now that I've given a broad overview of staff's 

proposal, I will provide more details on some key areas.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: The first of 

these are the proposed incentive levels. The proposed 

incentives are tiered to provide the highest compensation 

for lowest income eligible participants as well as 

additional compensation for higher fuel economy and 

advanced technology replacement vehicles, such as hybrids, 

plug-in hybrids, and zero emission vehicles. Please note 

that these are initial minimum incentives. As with the 

Retirement-Only Program, staff intends to closely monitor 

participation and adjust the incentives upward if needed 

to ensure meaningful participation rates. These 

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adjustments would be limited to a maximum of an additional 

$1,000 and would only be implemented after consultation 

with the implementing air districts and at public workshop 

in each region. 

The first replacement option would provide a 

total of $4,000 towards the purchase of a new or used 

eight-year-old or newer vehicle meeting minimum fuel 

economy standards by model year, starting at 20 miles per 

gallon for cars and 19 miles per gallon for minivans. 

This option would only be available to low-income 

participants. 

The second replacement option is the purchase of 

a new or used vehicle that meets or exceeds a fuel economy 

of an EPA combined 35 miles per gallon. This option would 

be available to both low and moderate income participants, 

with a total incentives of $4500 and $3500 respectively. 

The third replacement option is for the purchase 

of a new or used advanced technology replacement vehicle 

such as a hybrid, plug-in hybrid, or zero emission 

replacement vehicle. 

Under the staff's proposal, the program would 

provide total incentives of $4500 for low-income 

participants, $3500 for moderate income participants, and 

$2500 for participants making up to 400 percent of the 

federal poverty level. 

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Note that there will be additional incentives 

available for low income motorists through the EFMP Plus 

Up Pilot Project, which will be discussed in the next 

presentation. 

The fourth option would provide an incentive for 

the purchase of alternative mobility options in lieu of 

the purchase of a replacement vehicle. Total incentives 

available under this option would equal those just 

described for advanced technology replacement vehicles.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: In implementing 

this option, air districts are encouraged and given the 

flexibility to pursue ways in which these incentives could 

be leveraged to provide a greater overall benefit to 

participants. 

Staff proposes to expand the alternative 

transportation mobility options that can be utilized with 

EFMP funding to include items such as car sharing 

memberships, and to expressly permit the option of 

splitting the incentives among several different travel 

modes to better meet participants mobility needs.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: Discussions 

with program partners and stakeholders during the 

regulatory development process has made it evident that in 

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order to increase participation by low-income motorists, 

implementing air districts must have the freedom to 

develop and pilot strategies to target outreach and 

provide significant assistance to low-income motorists in 

disadvantaged communities. 

Staff's proposal would require the districts to 

conduct targeted community outreach and encourages 

partnerships with trusted community organizations and 

financial institutions to better assist local motorists in 

completing vehicle replacement transactions.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: To provide 

additional resources that could supplement the incentives 

provided by EFMP, staff is proposing a number of pilot 

projects using low carbon transportation investments that 

will benefit residents in disadvantaged communities. EFMP 

participants that live in disadvantaged communities could 

be eligible for an additional incentive for the purchase 

of a new or used hybrid, plug-in hybrid, or zero emission 

vehicle through the proposed EFMP Plus Up Pilot Project. 

This proposal will be discussed in greater detail 

during the next item regarding the Air Quality Improvement 

Program Funding Plan.

--o0o--

AIR RESOURCES ENGINEER HILLIARD: In conclusion, 

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the staff recommends that the Board approve the proposed 

amendments along with any necessary clarifying 15-day 

changes. 

The amendments proposed today were developed 

after careful consideration and discussion with 

stakeholders. The proposal is consistent with the 

directives given to the ARB by SB 459 and addresses the 

areas of improvement identified by the 2013 program study. 

Overall, the proposal contains provisions to 

improve cost effectiveness and emission benefits by 

requiring functional vehicles, focuses incentives on low 

to moderate income California motorists and promotes 

cleaner, sustainable vehicle replacements. Additionally, 

the proposed changes incorporate mechanisms to closely 

monitor program progress and course correct if necessary. 

Thank you. 

Mr. Seyed Sadredin from the San Joaquin Valley 

Air District and Mr. Henry Hogo from the South Coast are 

now ready to provide some remarks on the respective 

programs. Thank you. 

CHAIRPERSON NICHOLS: Gentlemen, welcome. 

MR. SADREDIN: Good morning, Madam Chairman, 

members of the Board. It's an honor and a pleasure to be 

here before you to testify on this important item that is 

before you. 

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First of all, I wanted to express my gratitude to 

your staff. They always do a bang-up job working with us 

as partners to exercise both oversight as well as helping 

us when we need their expertise and leadership on these 

issues. And the proposal before you today reflects a 

great deal of working together to come up with a proposal 

that hopefully will enhance participation by low income 

and disadvantaged community members. 

I have a few slides. I will go through them very 

quickly. 

(Thereupon an overhead presentation was 

presented as follows.)

MR. SADREDIN: I know you are familiar with the 

socioeconomic challenges that the Valley faces. We 

appreciate your Board's care and attention to the San 

Joaquin Valley over the years and we hope to continue that 

partnership. 

But just quickly, a couple of things I wanted to 

highlight here is that San Joaquin Valley -- and we have 

22 of the top 30 census us tracks on CalEnviroScreen in 

terms of cumulative impact and need in San Joaquin Valley. 

This is a program that is definitely needed and should 

receive a great deal of attention in San Joaquin Valley. 

In our district, we have a high percentage of low 

income communities. And the problem with personal 

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passenger vehicles is that about ten percent of the 

vehicle population in our district accounts for over 

50 percent of the pollution from passenger vehicles. So 

this is an important area to look at. 

And finally, I appreciate your staff's attention 

to this and providing flexibility in that 

one-size-fits-all will not work in this area for -- and 

different regions of the state. And program complexity 

and the cost have been a major barrier to low income 

members that participate in these programs.

--o0o--

MR. SADREDIN: Just quickly, a couple of programs 

that the district has been administering to these areas. 

First, the past program, the Polluting Automobile 

Scrap and Salvage Program, we have put in $2 million in 

that program. And it was targeted at low-income members 

with a $5,000 incentive. We scrapped over 500 vehicles 

and replaced over 200 vehicles in that program. 

The Tune In Tune Up Program that you heard quite 

a bit about last week, our Board appropriated another $4 

million into that program for a total of $12 million. Now 

they have been very successful in reaching out to the 

low-income disadvantaged community members. We do 

hand-to-hand outreach. We hire people from those 

communities to go out to these communities, hand out 

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flyers, talk to people, go to mercados and other places in 

the community to actually get those people that really 

need these programs to participate. 

And I have to tell you, we have testimonials that 

shows that this program has been life changing for many of 

these members of these communities. It has been a 

difference between can I feed my family or repair my car 

or can I go to work or not with the car that they can 

register and passes the necessary smog requirements. 

Today, we replaced over -- or repaired over 7600 

vehicles. If you can go to the next slide.

--o0o--

MR. SADREDIN: And 50 percent of the participants 

have been from the low-income EJ communities. Two out of 

every vehicle repaired were last registered in an EJ 

community, and 98 percent of the vehicles with labs 

registration have successfully now registered and are back 

in the system and they count. 

The replacement program -- pilot program that our 

Board approved about two months ago with the help from 

your staff, we designed it and implemented it. And they 

were actually present at many of these events to see what 

we can do to make it even better. This program was 

designed to build on the success of the Tune In Tune Up 

Program, and it utilizes existing vehicle repair events to 

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identify and engage candidates for replacement. We do 

realize that for some vehicles, replacement is really the 

way to go as opposed to retirement. 

Now, the targeted vehicles in this pilot program 

that we run with $100,000 of local funding were pre-1996 

model years with pre OBD II, onboard diagnostic systems 

that really impact fuel efficiency and emissions. And 

they also have to either pass -- to fail the smog test to 

qualify for these replacement dollars. 

And also an important change that we made in this 

program was that we also allowed unregistered vehicles to 

participate. Unfortunately, in the past, if you're not 

registered, you don't count. And the fact of the matter 

is these vehicles are real and they do emit and they do 

operate in San Joaquin Valley and other places. So we did 

let other unregistered vehicles also to participate with a 

$5,000 incentive. And the new vehicle criteria is listed 

out over there for you eight years or newer and less than 

100,000 miles. Of course, they have to pass the smog 

certificate.

--o0o--

MR. SADREDIN: The results were very favorable, 

this replacement program. With $100,000, we could replace 

18 vehicles. And we actually replaced 18 vehicles in that 

program, which is quite a bit just for a three-month of 

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time to be able to do that. 

But a couple of lessons that we learned is that 

this process is very labor intensive and requires hands-on 

assistance. We cannot just give these guys a voucher and 

say you're on your own. Go find a dealer and finance a 

company and get funding for that. So we have to be ready 

to -- and San Joaquin Valley is giving them ongoing 

hands-on assistance as they go through this program. 

Financing was a huge challenge for these people, 

even with a $5,000 incentive that we were providing for 

them. Many of them have difficulty qualifying. And if 

they did, they were facing exorbitantly high interest 

rates. So we are working with a number of financial 

institutions to actually have them as registered partners 

in this program with especially designed financing 

packages for these low income individuals. That's a key 

challenge as well. As you said, the minimum incentive 

level -- keep that in mind -- even with $5,000 that the 

district is providing, it was very difficult.

--o0o--

MR. SADREDIN: Here's just a list of some of the 

vehicles, the first eleven, that we were able to replace 

and give you information on. The only think I point out 

in that slide, the vehicles that have asterisks next to 

them, these are the vehicles that under the proposed 

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minimum mileage requirement of 24 miles per gallon will 

not qualify. As can you see, many of these vehicles are 

20-plus years newer. Significant emissions reductions, as 

you discuss, and the matter today and also talking about 

your Executive Officer flexibility, keep that in mind that 

there are some well-intentioned proposals that set high 

mileage requirements. But for people in these low income 

communities, the vehicle serves a great purpose. It's not 

just a quick commute back and forth to work. This is 

their only vehicle. And they have to be able to fit 

groceries, families, and a host of other things in their 

vehicles. Some of the high mileage vehicles just by two 

or three miles will make a difference between them being 

able to get a car they need or not.

--o0o--

MR. SADREDIN: We have a few -- three quick 

suggestions for you as you discuss the flexibilities that 

you need to give to your Executive Officer or perhaps even 

taking a position on some of these issues today. We'd 

like to ask you to raise the minimum base incentive for 

low-income participants from 4,000 to 5,000. We had a 

very tough time with these low income communities even 

with the $5,000 incentive to get them through the process. 

Do the same thing with the fuel economy 

requirements. Set the minimum at 20 instead of 24. We 

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can make adjustments. If program is overly subscribed and 

exceeds all of our expectations -- we still have a long 

ways to go to get to our 60,000 vehicle replacement target 

in the SIP. 

And then, finally, we'd like you to -- both in 

terms of how you set up this program and also your funding 

targets to really target all of this funding to low income 

and EJ community members. 

There are other programs that are available for 

zero emissions and plug-in hybrid -- your next item, CVRP 

and others, they will take care of those people that for 

low-income participants, this is really the key program 

that will enable them to get to a cleaner car. 

That was my presentation. Madam Chair, I want to 

thank you, your Board, and your staff for continued 

partnership and guidance from you. 

CHAIRPERSON NICHOLS: Thank you very much. 

Just one question about your efforts to get 

people into the more efficient replacement cars. What 

kind of response have you had from the dealerships on 

this? You mentioned how labor intensive it is to take 

someone and literally walk them through the whole process, 

including financing. I'm just curious whether you've been 

able to get some additional help from the private sector 

on this.

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MR. SADREDIN: Our experience has been that you 

have to be very careful in terms of who you let into this 

process. We can not let the participants to go on their 

own and have to go through the whole used car, you know, 

sales market and all that. 

So in our program, we actually wanted the 

dealerships actually to register with the district ahead 

of time. And they have to meet certain requirements. And 

they have to have pre-specified prices for the vehicles 

that they will charge anyone. 

So in our pilot program, we actually partnered 

with CarMax, which is a regional dealership as you might 

know. And also they have up-front pricing. So there is 

no haggling with trying to raise the price because these 

people are getting $5,000. So those are some of the key 

requirements that we think we should pay attention to. 

CHAIRPERSON NICHOLS: You found that was helpful.

MR. SADREDIN: That was helpful. And all the 

vehicles we were able to get these people into, they were 

significantly cleaner than the other vehicles that perhaps 

if they had been on their own they could have received. 

So the experience has been positive, but this is 

definitely something we have to pay attention to. Again, 

you cannot have a free-for-all and just go any dealership, 

here's a voucher, see what you can get. 

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CHAIRPERSON NICHOLS: It's very good to hear. 

Thank you very much. 

Mr. Hogo. 

MR. HOGO: Good morning, Madam Chair, members of 

the Board. 

Henry Hogo with South Coast Air Quality 

Management District. 

I just want to keep my comments very brief 

actually and just say that we want to thank staff also for 

working with us on the EFMP program. And we encourage 

your adoption of the proposed amendments today. And the 

South Coast AQMD stands ready to move forward with 

implementation of the program. We already crafted a 

request for proposal that we've taken to our Technology 

Committee, Governing Board Technology Committee, and will 

be heard by our full Board in July. 

We do recognize that there are two parts to this 

program, which are challenging. First is getting the 

participation, and second is the financial situation. So 

what we wanted to do was start from a fresh slate. We're 

open to whatever approaches are out there that people are 

looking at in terms of outreach to low income community to 

ethnic communities and just a broad base outreach program. 

And then secondly, once we find those 

participants, how they're going to go through the process. 

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Staff mentioned today two models, the weekend event and 

the dealership model. We've seen both, and we've actually 

seen both work effectively. The dealership model, they 

identify the participants and they arrange the financing 

and so forth. So we think that if the right team of 

outreach experts along with the people that understand how 

to assist low-income people in moving a car into the 

scrapping program and then ultimately getting a 

replacement vehicle, that would be the ideal team. And we 

believe there will be multiple approaches that will be 

proposed to us. And we're open to actually looking at 

potentially awarding to multiple entities to do this 

program. So we stand ready to move forward with the 

program. 

CHAIRPERSON NICHOLS: I think that's great. Your 

openness and willingness to accept innovative and creative 

ideas as opposed to trying to design it all in-house and 

then try to make it work is clearly a good way to go with 

something like this where we're still experimenting. But 

we know that there's a target audience out there that we 

haven't reached yet. So hopefully we will find the way to 

reach them. Thank you. 

Additional Board questions or comments before we 

move onto the rest of the witnesses? 

BOARD MEMBER MITCHELL: Thank you, Chairman. 

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I think we've heard from both the air districts 

the challenges of this program. We know that it wasn't 

successful in the past, and I think the difficulties of 

administering it are fairly high. 

So I, as a representative from South Coast, 

listened with very keen interest to what San Joaquin 

Valley was doing. And I know we do have an open sort of 

slate here, blank slate, to work on in our district. And 

our district is different from San Joaquin, obviously. 

And so I think the flexibility in how we approach this -- 

and staff has provided that. I think that's very 

important. 

And this is an important program. But we looked 

at this last year and saw that the EFMP was not as 

successful as we thought it could be. There's certainly 

some very high level of need to move moderate income and 

low income people into cleaner cars and advanced 

technology. This is a mechanism to accomplish that. 

And so I look forward to working with my district 

to move this program forward and be successful in 

accomplishing the goals that we set out to accomplish with 

this. 

So thank you, staff, for your hard work on this. 

We really appreciate that. 

CHAIRPERSON NICHOLS: Thanks. 

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Dr. Balmes. 

BOARD MEMBER BALMES: I only have a brief 

comment. 

When I first saw the Enhanced Fleet Modernization 

Program was on the agenda, you know, before I read any 

further, I was thinking of truck fleets or commercial 

fleets. So I think the name has totally mischaracterized 

the program. So are we calling it Retirement and 

Replacement Program, R&R Program? Because I would think 

that's a much better name. 

CHAIRPERSON NICHOLS: Certainly, the acronym does 

not trip off the tongue, that's for sure. We can do 

better. 

Yes? 

BOARD MEMBER SHERRIFFS: Thank you. Thank all 

for their work. And I think the model that the San 

Joaquin Valley is building on is an important one. 

Wondering if staff or others have considered 

rather than a miles per gallon or emissions per mile 

minimum and also whether we want a bigger differential 

between better mileage and then encouraging the plug-in 

hybrids EEV. Because right now the incentives are the 

same. And wondering about providing a little more push. 

Because we really need that in terms of long-term 

solution. And I think we also see that we get more 

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benefit for a longer period of time by encouraging and 

enabling people to get plug-in hybrids EEV models. 

CHAIRPERSON NICHOLS: Okay. Thank you. 

Why don't we turn to the audience then? We have 

several witnesses who wanted to speak on this item. And 

we'll start with James Barba. You can see yourself on the 

list up there. James Barba and then Tom Knox and Bill 

Magavern. 

MR. BARBA: Good morning, Chairman Nichols and 

members of the Board. 

Next Generation has submitted written comment for 

the public record. I'm here today just to reinforce our 

appreciation of ARB's great work on this program. 

As Next Generation has noted in our published 

work, replacing high polluting and inefficient vehicles 

with newer, cleaner, safer, and more efficient cars 

represents an opportunity to further expand the benefits 

to California's ground-breaking clean transportation 

policies to low-income car-dependant families who may be 

less likely to benefit from investments in public transit 

or zero emissions vehicles. 

With the aim of moving the EFMP further towards 

this expanded vision, we ask the Board and ARB staff to 

consider the following recommendations: 

First, we recommend that ARB increase minimum 

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fuel efficiency standards for all replacement vehicles, 

including those purchased by the lowest income households, 

which will be allowed to purchase vehicles with 

efficiencies as low as 20 miles per gallon under currently 

proposed regulation. Recent analysis by Next Generation 

indicates a substantial number of vehicles with efficiency 

ratings in the 27-plus mile per gallon ranges are 

available in California's auto market at prices comparable 

to vehicles that meet ARB's proposed criteria. 

Low-income households stand to benefit 

substantially from the cost savings offered by moderately 

more efficient vehicles and increasing efficiency would 

strengthen the EFMP's greenhouse gas reduction potential. 

Our second recommendation is that the ARB staff 

make the low-income financial assistance policy described 

its most recent staff report a continued and central focus 

of EFMP implementation efforts. Our analysis suggests 

that the EFMP will not be successful in reaching 

low-income households without a strong effort to increase 

the availability of affordable auto loans to low-income 

households. In the interest of flexible implementation, 

we do not recommend any specific changes to the 

regulations, but we encourage ARB staff to make this 

aspect of the program a high priority in improving 

district pilot level programs. 

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We believe these changes will provide for an 

enhanced fleet modernization program that improves air 

quality, reduces greenhouse gas emissions, and improves 

economic outcomes. And we believe that SB 459 provides 

the legislative intent to make this transformation of the 

EFMP a reality. Thank you very much. 

CHAIRPERSON NICHOLS: Thank you. 

MR. KNOX: Good morning, Board members and Chair. 

I'm Tom Know of Valley Clean Air Now. Thank you 

for the chance to speak on this. 

This is a date we've been very excited about for 

the last six or eight months. Thank you, staff and 

management, for just a really wonderful experience during 

this time. They have been incredibly helpful, 

open-minded, and very flexible in helping us to start to 

experiment with an EFMP type program with Valley Air 

District. 

The lessons that we've learned from that I think 

are valuable. We've been sharing them with staff. We'll 

have a more detailed report now that we've done the 18 

vehicles. The first round of funding for the Valley Air 

District, we'll be sharing that with staff along with the 

lessons we learned during that. The main lesson being 

that we need to be as flexible as possible when dealing 

with the low-income vehicle purchasing audience. We've 

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got to find people that are aware of the problem that are 

motivated to change. We've got to get them through 

financing. We have to get them into a vehicle that works 

for their family. There's a lot of steps to keep people 

with a lot of challenges and distractions in their life 

through. If we can't move quickly, we lose the customer. 

So we'd like to work with goals rather than guidelines. 

The more rules that are involved here, the more chance 

we're going to lose those customers. They're well 

meaning. They want to do the right thing. We need a 

clear path to get them into a vehicle that works for them. 

So we do ask that the fuel efficiency guidelines 

in the staff report are followed. We think they're 

reasonable. It's going to trim some of the vehicles that 

we've got available. I think we can deal with that. But 

if the mileage requirements are increased, it severely 

decreases the number of vehicles available. And it really 

skews it up toward a hybrid range. We're looking for 

vehicles in the $12,000 range to increase up to 27 miles 

per gallon. It's going to add to one to -- that puts it 

out of range for our target low-income audience. So it 

probably takes 75 percent of the vehicles that are 

feasible replacement vehicles out of contention for these 

customers. 

And then our one other request is we've seen that 

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$5,000 works. The math works for our customers. $4,000, 

you don't have the same kind of loan-to-value ratio. It's 

a lot more difficult to qualify for financing, which is 

already difficult in the first place. $5,000, we see the 

light turn on. The math works. They can get the 

financing. They can get a monthly payment that works for 

them. To us, it's really the threshold that the program 

really starts to work. 

And that's all for now. But we look forward to a 

long rapport in the future. Thank you. 

CHAIRPERSON NICHOLS: Thank you. 

MR. MAGAVERN: Good morning. Bill Magavern with 

Coalition for Clean Air. 

And today is an exciting day, not only for soccer 

fans, but also in the air quality world. Because I think 

there was a period when the importance of retiring older 

vehicles and helping low-income people get into cleaner 

vehicles was not getting the attention that it deserved in 

this state. But lately, we've seen with the law passed 

by -- authored by Senator Pavely, as well as the excellent 

work done by your staff over many months now, these 

programs really are getting the attention they deserve. 

And you have a really good proposal in front of you today. 

We certainly urge you to adopt it. 

As you've heard, not only are the benefits of 

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getting some of the dirtiest cars off the road and the 

major decrease in criteria air pollutants we get from 

that, we also see benefits from the perspective of 

reducing emissions of greenhouse gases and also just 

helping people obtain more reliable, safe, clean 

transportation, which is really significant for a lot of 

people in this state. 

In this retirement proposal, we agree with the 

limit to low-income drivers and also with the smog check 

requirement to prove functionality. We think that makes a 

lot of sense. In the retirement and replacement area, we 

agree with the limit to low and moderate income. We 

strongly agree with the inclusion of the community 

outreach model. Tune In Tune Up is a model that really 

has worked, and we should be building on that. 

We support the higher incentive levels for the 

reasons that Tom Know just gave. And we also really like 

the improved funding options for transit and alternative 

mobility and advanced cleaner vehicles. So you're 

creatively finding ways to meet the transportation needs 

of Californians with different kinds of transportation 

needs. 

The pilots in the disadvantaged communities match 

up very well with what we're working towards in the Charge 

Ahead California campaign. 

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We would suggest that you not lower the miles per 

gallon requirements that are in the proposal. And that as 

the pilots move forward that we look for ways that we 

could in the future increase those levels as more used 

vehicles become available with higher miles per gallon 

which will happen over the years in response to the clean 

cars law also authored by Senator Pavely and implemented 

by this Board. Thank you very much. 

CHAIRPERSON NICHOLS: Thank you. 

Rosemary Shahan. 

MS. SHAHAN: Chairman Nichols and Board members, 

I'm Rosemary Shahan, President of Consumers for Automobile 

Reliability and Safety. We're based here in Sacramento. 

We're a nonprofit consumer group. We work on a state and 

federal level on behalf of consumers. 

And we haven't taken a position regarding the 

proposal, although we very much support the goals. And we 

feel very strongly it's very important for the program to 

succeed. 

We really appreciate the efforts of the staff. 

We met with them. I bonded with some of them, going to 

Valley CAN, and getting up at very early hours of the 

morning and seeing people lined up. Some of them had 

waited all night in order to get into the program. And 

that can help create a real reality check on, you know, 

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these are the people that we're dealing with and how 

motivated they are to have vehicles that are functional 

and that they can register and operate legally in our 

state. 

We were very active in supporting Senator 

Pavely's legislation, SB 459. And definitely want to see 

the program succeed. And that's why we're asking for more 

consumer protection built into the program. And I believe 

that the staff got it right when they wrote on page 14 of 

the proposal that consumer protection is essential to 

ensuring that the program benefits are realized by the 

participants. And this is a program that's going to 

depend to a great extent on public perception and the 

perception of consumers that they can get into the program 

and get a fair deal. And they won't be harmed 

economically or that their safety won't be jeopardized. 

And it's important to note that although I 

understand our friends at car dealers have said that 

existing laws is adequate to protect consumers that I wish 

it were. But it isn't. Under federal law, new cars that 

are under safety recall cannot be sold to consumers by a 

new car dealer. When they're under safety recall, the 

dealer has to put them aside and wait until they are 

fixed. There is no comparable law either at the federal 

level or the state level that prohibits dealers from 

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selling used cars under safety recall. And unfortunately, 

they do sell cars under a safety recall. And we've been 

working with consumers who were sold -- for instance, I'm 

submitting this for the record the New York Times front 

page story David Clayton in Fresno bought a certified car 

that was under a safety recall. CarMax, we just submitted 

a petition regarding CarMax -- 

CHAIRPERSON NICHOLS: Your time is up -- 

MS. SHAHAN: They also sell cars under safety 

recalls. 

CHAIRPERSON NICHOLS: Thank you. 

Carishma Menon.

MS. MENON: Thank you, Ms. Chair Nichols. And 

good morning to the Board. 

My name is Carishma Menon. And I, on behalf of 

the NRDC, and the Charge Ahead, a California company, I 

commend staff for a comprehensive report on their proposed 

amendments to the EFMP. 

Staff has effectively responded to the directives 

contained in Senator Pavely's SB 459 in ensuring that 

older, heavily polluting vehicles are retired and replaced 

with newer, cleaner, and more efficient ones. These 

efforts align with the interest of the Charge Ahead 

California campaign which has sponsored by Assembly Member 

De Leon SB 1275. 

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We support the limitation of retirement-only 

incentives to low-income households. These populations 

are most significantly effected by low air quality. And 

this restriction will help ensure that the program targets 

these groups. Also means that more funding can be 

channeled towards the retire and replace portion of the 

program. 

We also support staff's proposal to require a 

smog check to assess vehicle's functionality to ensure 

that high-polluting vehicle retirements provide meaningful 

emission reduction goals. 

We also support the modifications staff has 

proposed to the retire and replace program. A strong 

emphasis on outreach and education to low-income and 

disadvantaged communities will be key to the success of 

the program. This also aligns well with the directives 

contained in SB 459. 

We also welcome the tiered incentive approach 

whereby high incentives given out to lower income 

populations and where more efficient vehicles. Additional 

incentives to participants to go CARB free are also in 

line with the mobility option contained in SB 1275. This 

proposal is, in fact, precedent setting and is a 

combination of VMT reducing strategies with vehicle 

retirement programs. Such incentives will further drive 

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cost savings in. 

In proposing a minimum efficiency requirement, 

staff has created a way for participants to see additional 

savings by opting for cleaner vehicles at similar price 

points. Bringing this requirement in the future will 

facilitate greater operative savings and emission 

reductions. 

We also fully support the program's proposed 

outreach and education components and note that the 

program compliments the EFMP plus up financing and car 

sharing pilots in disadvantaged communities proposed by 

the AQIP funding plan. 

We recommend the Board coordinate implementation 

of the retire and replace program and these closely 

related pilot programs in disadvantaged communities. 

Once again, we applaud the Board for its hard 

work and continued commitment to tackling air quality 

issues through sustainable transportation efforts. Thank 

you. 

CHAIRPERSON NICHOLS: Thank you. 

MR. MARIN: My name is Jose Marin. I direct 

outreach and community partnerships for Valley CAN and the 

Tune In Tune Up Program. 

I just want to reinforce the importance of 

community organizing and community inclusion in the Tune 

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In Tune Up Program events, both with the smog repairs and 

now with the check retirement and replacement program. We 

work with the large and growing number of community 

organizations and local groups throughout the San Joaquin 

Valley. And I just want to thank you for the support for 

these communities, these very low income communities and 

want to applaud for your staff who has done a wonderful 

job at supporting these communities, who I have the 

fortune of organizing a large group of on these 

communities for one of our meetings in Fresno. And they 

all send their support for this meeting today. Thank you. 

CHAIRPERSON NICHOLS: Thank you. 

Ms. Garcia. 

Ms. GARCIA: Good morning. My name is Veronica 

Garcia, and I actually coordinate the Vehicle Retirement 

and Replacement Program for Valley CAN. 

From personal experience, during these vehicle 

retirements, it is imperative that we maintain the 

flexibility while we are guiding our participants through 

the vehicle purchase process. The participants that we've 

been dealing with, they look forward to fuel-efficient 

cars. It's an idea they now consider, but by necessity, 

by the financial necessity, they have -- they're very cost 

conscious. Most of the cars that our participants have 

chosen are in the $12,000 range. And if it was possible, 

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they actually look for something that was less expensive 

because of the type of financial situation that they're 

in. The jobs they have are not jobs where they make a 

lot. They're minimum paying jobs. 

As Mr. Know mentioned, imposing additional 

requirements for higher fuel efficiency would by a minimum 

increase the prices of these vehicles anywhere from 1,000 

to $3,000. And again from personal experience, retiring 

these 18 vehicles, this extra cost will place a program 

out of reach for many, if not all, of our low-income 

participants. Thank you. 

MR. BARRETT: Good morning. I'm Will Barrett 

with the American Lung Association of California. 

First of all, we want to support the amendments 

and thank staff for the work to ensure it truly works to 

improve air quality and public health, especially in the 

South Coast and San Joaquin Valley as you heard earlier. 

We appreciate the emphasis and the commitments on 

the community outreach component and education components 

of ensuring that the program really does target the lower 

income drivers and the highest polluting vehicles and 

takes vehicle that would not continue to be on the road, 

really make sure we get the right vehicles retired. 

We appreciate the incentives for transit. We 

think this component really does work well with SB 375 

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goals. That's something we've been working on very 

closely in the San Joaquin Valley. We think that's a 

really important step to get people option for not having 

to drive. So appreciate that. 

We also join with our colleagues in the Charge 

Ahead Campaign and the recommendation for the ongoing 

review to update the efficiency thresholds to maximize air 

quality and cost savings under the program going forward. 

So that's all. I just want to thank you for the 

work and support the efforts and praise for Charlyn. Did 

appreciate that. Thank you very much. 

CHAIRPERSON NICHOLS: You're allowed to take time 

for that. Thank you. 

That concludes the list of witnesses that I have. 

I wonder if staff had any additional comments 

before we bring this back to the Board. We heard a number 

of comments about the need to give the greatest possible 

flexibility to the districts and to their partners in 

implementing this program as we move forward. 

I understand that we don't want to just keep on 

tinkering constantly with the program, for one thing, 

because we need to get good data. That's probably as 

important as anything else. We have acted in response to 

information that indicated that this program was not 

achieving its goals. I think we've come up with a number 

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of recommendations that will clearly improve it. 

I'm always mindful of the fact that if you keep 

on fiddling, you might be able to make improvement but you 

might also sacrifice progress. So I think in general 

we've heard enough to indicate that we should move forward 

with the proposal as it is. But we could hear some 

suggestions or concerns. So I'd like to hear the staff's 

response. 

MSCD CHIEF WHITE: Eric White with the Mobile 

Source Control Division. 

First, let me say I'm very pleased to hear from 

the stakeholders that staff's proposal really is going to 

provide that flexibility that we heard is so crucial to 

help not only bring people into the program but to help 

them successfully navigate the transaction process and get 

into that cleaner vehicle. 

As we've listened today and worked on this 

proposal, there's really two areas that I think where 

there's some comments about whether or not the staff 

proposal should be changed. One was about any minimum 

fuel economy requirements for the replacement vehicles. 

What that's referring to is those that meet the eight 

years or newer requirement. We think that in order to 

allow the maximum flexibility -- you heard about the 

sensitivity and the price, which these participants have. 

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It's important to make sure that we have as many vehicles 

available into the program. 

One opportunity we have though is as we 

experience successes with this and we start to see the 

successes that we're expecting, we have the ability to 

work with the districts to increase those minimum mileage 

requirements through future year programs and 

solicitation. So we think we have a mechanism to address 

that. And I think it's also important to note that there 

is a strong educational requirement in this that will be 

part of the district's program. So educating consumers 

about the benefits of a more efficient vehicle that is 

available through the program we think will really help 

address some of those issues because there are cost 

savings for the more efficient vehicles. 

CHAIRPERSON NICHOLS: In terms of operation, you 

mean? 

MSCD CHIEF WHITE: Yes. On a monthly basis in 

terms of fuel savings for the participant. 

The other relates to what is the appropriate 

minimum amount for these vehicles. Should it be 4,000? 

Should it be 5,000? Our experience has been that this 

program has not been successful so far. And what we 

really want to do is be able to build on some success and 

make sure that we can fund as many vehicles as possible. 

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The proposal that staff has sets a floor. The 

$4,000 is a floor by which we can increase as time goes on 

and if we see participation is not at the levels I think 

everyone in this room is hopeful and expectant that it 

will be. We have the ability to offer higher levels 

moving forward and stand ready to do that in conjunction 

with the districts. 

CHAIRPERSON NICHOLS: Thank you. 

Supervisor Gioia. 

BOARD MEMBER GIOIA: Thanks. 

Just on the discussion of how to improve 

participation by low-income voters, I think that's always 

going to take some effort. And I know you've talked a 

little bit about that in the slide. Can you go into a bit 

more on your initial thinking how to do this? I think it 

should involve greater partnerships with community-based 

organizations in these communities. Having a statewide 

program, even though it's regional, be successful is a 

challenge. So talk about how you're thinking of 

developing the outreach and more the process of how you're 

going to do it. Because I do think it would be useful to 

give some thought to that. 

CHIEF ROWLAND: My name is Scott Rowland. I'm 

with the Mobile Source Control Division. 

One of the things that we learned from the 

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previous iteration of the pilot program for retire, 

replace is that outreach is crucial. It does need a lot 

of one-on-one sort of contact. And what we heard early on 

was advocates of the San Joaquin Valley Tune In Tune Up 

process as a very good way of reaching that target 

demographic. 

And so that basically informed our approach in 

realizing that there is a need not necessarily to mimic 

that process exactly, but to enable the districts to have 

the resources to engage on a very direct level with folks. 

And so as you've heard, a big part of our 

proposal is the flexibility for the districts to determine 

what's going to be the approach that works best for their 

communities and their constituents. But one of the things 

we did to sort of sweeten the pot, if you will, or to help 

them be able to do that is we are proposing that they get 

an additional amount of administrative resources of the 

funding to basically partner with local community groups. 

And it's going to be up to them to determine which ones 

are the appropriate ones. 

I think San Joaquin Valley, you know, obviously 

they're building on the success of Tune In Tune Up, which 

I think is quite wise. South Coast, very different 

circumstances. They're taking -- again, I think a wise 

approach of basically saying, okay, our previous ways of 

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doing this didn't really hit this demographic. Let's have 

an open mind. 

So in some ways, that's probably not a real good 

answer to your question. But I think the bottom line is 

the districts need that ability to figure out what is 

going to work best for them. 

BOARD MEMBER GIOIA: So the South Coast Air 

District will take the lead on determining the strategy of 

how best to do outreach? 

CHAIRPERSON NICHOLS: Yes. 

CHIEF ROWLAND: They have the RFP out. ARB staff 

has submitted to work with them to help evaluate the 

responses to that RFP and to work with them in 

determining, you know, essentially is the bid that you got 

sufficiently responsive to the requirements of the 

program. 

BOARD MEMBER GIOIA: I know we have a Board 

member from South Coast up here. Is there sort of 

discussion up until now on this? 

BOARD MEMBER MITCHELL: This discussion is just 

beginning. The Technology Committee of the Governing 

Board approved last Friday the issuance of an RFP to 

determine how to administer this program to look at 

various proposals for administering the program. The 

Governing Board will take that up at their July meeting. 

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And we will then look at what is proposed by various 

proposers and determine what we think -- in conjunction 

with the ARB staff what we think will work. 

I do have another comment, Chairman Nichols. 

CHAIRPERSON NICHOLS: I just wanted to say I've 

seen different districts do some criteria if they have a 

little bit of money to spend to target people for 

replacement, certainly in the truck area, you know, all 

kinds of community events and fairs and other things were 

done, BBQs, you name it, wherever we could find people 

that were part of the targeted audience. 

Did you want to add an additional comment? 

BOARD MEMBER MITCHELL: I wanted to comment I 

know staff haven't fully developed the EFMP Plus Program. 

I'm going to make a suggestion. You probably already 

thought of it. That if an additional incentive could be 

offered for putting folks into hybrids or hybrids plus, 

however it's better. Because one goal we want to reach in 

this state is further market penetration of the clean 

hybrid cars. And we want to do that with this lower 

income and moderate income segment of our communities. 

And this program provides a road to do that. And strongly 

encourage you to consider that as part of the program. 

We heard people mention incentives should be 

5,000 instead of 4500. You could add an additional 500 to 

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get to that 5,000 level, but then we ask them to be put 

into a hybrid or better car. And that also complies with 

the goals of SB 459 as well. So just a suggestion. And 

something to take a look at. Thank you. 

CHAIRPERSON NICHOLS: I think it is already under 

consideration at this point. So thank you. Any other -- 

yes, Dr. Balmes. And we need to move this onto a vote. 

BOARD MEMBER BALMES: I told staff when I was 

briefed how much I like the alternative mobility options. 

But since my briefing, I wondered have we market tested 

this, if you will? Do we know this is -- it sounds good. 

I'd love to see people give up their cars and use public 

transit. Do we know is this likely to be a popular 

option? 

MSCD CHIEF WHITE: I think I would say we don't 

know yet. And there's certainly going to be challenges 

from the very practical standpoint that many residents may 

need to travel through different counties, different 

transit agencies. But we will work with the air districts 

to -- we'll work with their local transit agencies to put 

together a package that may include both transit and ride 

sharing and other types of travel modes together in a way 

that will work. 

This is -- I think this is somewhat in a sense 

uncharted territory. But it has such potential. And we 

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certainly understand the importance of trying to make this 

work. So this will be really be a good incubator for 

trying to make programs like this work that hopefully can 

be expanded into other programs as we move forward. 

BOARD MEMBER BALMES: One other comment about one 

of Seyed's slides about the cars that didn't meet current 

MPG requirements. There are three Chevys: The 2011 Chevy 

Malibu, 2012 Chevy Malibu, and the 2012 Chevy Cruise. 

First of all, I find this amazing and not a very 

good sign for the new GM. But I do also feel these are 

much better vehicles than what they were replacing. So I 

will say I think say it was arguing for more flexibility 

in this regard. I'm supportive of that. 

CHAIRPERSON NICHOLS: Okay. Well, I think it's 

time to move on. So I should officially close the record, 

which I didn't do before. But the record is closed on 

this item. And I'll ask for a motion. 

BOARD MEMBER EISENHUT: So moved. 

CHAIRPERSON NICHOLS: Dr. Eisenhut. 

BOARD MEMBER BALMES: Second. 

CHAIRPERSON NICHOLS: All right. All in favor, 

please say aye. 

(Unanimous aye vote.) 

CHAIRPERSON NICHOLS: Opposed? 

Abstentions? 

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Very good. Thank you very much. This is a 

really exciting new opportunity. And I'm looking forward 

to seeing how this evolves. I think the public transit 

agencies are going to jump on this. If given an 

opportunity, this will be an opportunity for them to. 

Our next item which is related in a very obvious 

way is the funding plan for the Air Quality Improvement 

Program, or AQIP, as it's been called around here. 

Funding for low carbon transportation investments from cap 

and trade proceeds. This funding plan will serve as the 

blueprint for spending $22 million for incentive projects 

in fiscal year 2014-15. For the first time, this year's 

plan also includes $200 million are predicated from the 

greenhouse gas reduction fund for low carbon 

transportation investments. These greenhouse gas 

investments will support a substantial investment in 

disadvantaged communities as well, with half of the $200 

million allocated specifically to benefit these 

communities. 

These funds are critical to continue to support 

the early introduction of the next generation of clean 

vehicles and equipment to California's fleet. It is 

important to see these two things are working in tandem 

with each other, even though they have separate 

legislative sources and separate funding sources. We need 

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to make sure that they are coordinated with each other. 

The success of the effort is no more readily 

apparent than in the Clean Vehicle Rebate Project, or 

CVRP, which has gathered a great deal of attention where 

we issued over 60,000 rebates since 2010. And as we heard 

at our Board meeting in April, the funding ran out early 

once again. And so we had to initiate a waiting list 

which was fulfilled with the recent passage of the state 

budget. Overall, the investments made by this year's plan 

are an important step in the transformation of the 

California vehicle fleet to one with widespread use of 

zero and near zero emission vehicles. 

This year's combined AQIP and low carbon 

transportation investments will help the state begin to 

make considerable progress towards meeting our air quality 

and climate change goals. I would say we've already 

begun. I think it will accelerate. 

Mr. Corey, would you please introduce this item? 

EXECUTIVE OFFICER COREY: Yes, thank you, 

Chairman. 

AQIP has traditionally provided about $25 million 

annually to invest in the clean vehicles and equipment 

projects that reduce criteria pollutants and air toxics 

and often concurrent with greenhouse gas reductions. AQIP 

expands ARB's air quality incentive providing the 

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opportunity to fund projects not covered by other 

incentive programs which focus on near-term emission 

reductions from old commercialized technology. 

AQIP is ARB's only incentive program structured 

to enable investments in technology advancement in 

projects that also provide immediate emission reductions. 

In the program's first few years, the program has helped 

accelerate the introduction of the advanced motor vehicle 

technologies just coming to market, such as hybrid trucks 

and buses and zero emission passenger cars. Widespread 

use of these technologies is critical for meeting our 

post-2020 air quality emission reduction targets, as well 

as the climate change reductions. 

This year's combined funding plan includes a 

long-term vision for how AQIP incentives should continue 

to support market transportation management compliance 

formation in the future and identifies metrics for 

measuring the success of the projects funded. 

The funding plan further establishes ARB's 

priorities for the funding cycle, describes the projects 

we should fund, and sets funding allocations. The funding 

plan maintains coordination with the Energy Commission's 

portion of AB 118, which supports the necessary 

infrastructure foundation for cleaner cars and trucks. 

Lisa Macumber of the Innovative Strategies Branch 

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will present staff's proposal. And at the conclusion of 

staff's presentation, Jim McKinney at the Energy 

Commission will provide some comments on staff's plan and 

how it coordinates with the CEC's efforts. With that, 

Lisa. 

(Thereupon an overhead presentation was 

presented as follows.)

MS. MACUMBER: Thank you, Mr. Corey. 

Good morning, Madam Chairman and members of the 

Board. 

Today, I will present staff's recommended fiscal 

year 2014-2015 funding plan for the Air Quality 

Improvement Program, commonly known as AQIP, and 

low-carbon transportation investments generated by the 

state's Cap and Trade Program.

--o0o--

MS. MACUMBER: Last year at this time, we brought 

you the current year's funding plan and highlighted the 

growing command for incentives and the limited sources of 

funding available. 

This year, we are excited to tell you that the 

Governor, Legislature, and our stakeholders agree that 

more investments in criteria and greenhouse gas emission 

reduction projects are needed. 

This year's state budget builds on AQIP's past 

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successes with a $22 million allocation, and also includes 

$200 million in new funding from cap and trade auction 

proceeds to expand existing projects that help further the 

purposes of AB 32, with an emphasis on investments in 

light-duty advanced technology vehicles and the freight 

sector and significant support for disadvantaged 

communities. 

AQIP offers a successful framework for allocating 

this funding since the program support's mobile source 

technology advancing projects that are critical to meeting 

California's post-2020 air quality and climate change 

goals, while also achieving immediate emission reductions. 

For today's presentation, I will provide you with 

a brief overview of our program before presenting staff's 

recommendations for allocating a total of $222 million 

from AQIP and low carbon transportation investments.

--o0o--

MS. MACUMBER: First for some background, AQIP 

was established by Assembly Bill 118 and updated last year 

by Assembly Bill 8. Assembly Bill 8 extended the fees 

that support AQIP through 2023. AQIP is ARB's only 

incentive program that funds the deployment and 

demonstration of advanced technologies, which are the 

basis for the transformation of the vehicle fleet 

necessary to meet our long-term air quality and climate 

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change goals. 

Each year, staff brings the Board a proposed 

funding plan, which details the priorities and projects to 

be funded in the upcoming year. As part of this year's 

funding plan, and to be included in future years, Assembly 

Bill 8 requires ARB to conduct a benefit cost analysis to 

score projects eligible for funding. Staff conducted that 

analysis, and I will present the resulting projects 

proposed for funding later in the presentation.

--o0o--

MS. MACUMBER: AQIP was established alongside two 

other programs: The Energy Commission's Alternative and 

Renewable Fuel and Vehicle Technology Program, which 

provides both direct and indirect support to AQIP by 

co-funding some of our projects, and funding 

infrastructure to support our deployment projects. And 

the Bureau of Automotive Repair's Enhanced Fleet 

Modernization Program, which you acted upon in the item 

prior to this one. 

ARB works closely with both agencies on the 

implementation of these programs. For example, ARB's 

partnership with the Energy Commission has been essential 

to the success of AQIP as their co-funding for the Clean 

Vehicle Rebate Project over the past two years has ensured 

the project's critical continuation. 

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The Bureau of Automotive Repair has also provided 

significant investments to support clean car rebates this 

past year by helping to fill the waiting list demand from 

the past three months. Further, the Energy Commission's 

significant investments in fueling infrastructure remains 

vital to ensure a successful zero emission vehicle 

roll-out in California. 

To help highlight our partnership, the Energy 

Commission staff is here with us at the table today and 

will provide a few remarks at the conclusion of my 

presentation.

--o0o--

MS. MACUMBER: Now for an update on ARB's 

advanced technology investments. Since the program's 

inception, AQIP has invested over $250 million, resulting 

in over 12,000 tons of criteria emission reductions, and 

six million metric tons of carbon dioxide equivalent for 

the last, administrative of the vehicles and equipped 

funded. AQIP deployment projects which offer rebates for 

clean cars, vouchers for advanced technology trucks and 

buses, and loan assistance for truck upgrades or 

replacements, have seen the largest investments and 

concurrently have provided the most significant benefits 

thus far.

--o0o--

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MS. MACUMBER: Now I will present staff's 

proposed funding plan. As mentioned previously, this year 

the funding plan has proposed allocation for the $22 

million from AQIP and $200 million from the new low-carbon 

transportation appropriation in the state budget. 

Low-carbon transportation funding is intended to 

support greenhouse gas reduction projects that also 

achieve co-benefits, provide benefits to disadvantaged 

communities, and be consistent with the administration's 

three-year investment plan. These investments provide an 

incredible opportunity to build upon AQIP's success.

--o0o--

MS. MACUMBER: But before I present the list of 

projects proposed, I'd like to highlight an important 

element of this year's plan. Last year, the Board 

directed staff to evaluate the long-term need for AQIP 

incentives. Despite the success of AQIP to date, there 

remains an ongoing need for incentives in the mobile 

source sector. Incentives will remain necessary until 

main stream consumer acceptance and broad market diversity 

is achieved and the costs associated with advanced 

technologies comes down. 

This slide illustrates the evolution of 

incentives from the demonstration to commercial, to 

transitional phases, in which technologies are tested in 

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the field, introduced to the market, produced in larger 

numbers, and then finally accepted by main stream 

consumers and transitioned into other populations. 

Incentives are needed to support technologies 

across this entire spectrum, with the highest cost 

investments for smaller projects in the demonstration 

phase to lower incentive amounts for a much greater 

population of vehicles or equipment in the 

commercialization phase, to more highly targeted 

incentives for specific demographics, such as low-income 

populations or disadvantaged communities in the transition 

phase. 

Later in the presentation, I will highlight for 

you where each of the projects we are proposing to fund 

fit within this landscape and what tools we expect to use 

to measure each project's progress as they move along the 

incentive funding horizon and actually transition away 

from incentives.

--o0o--

MS. MACUMBER: Now for key elements of our 

proposal; the projects. This year, staff is recommending 

dividing investments into three primary categories: 

Light-duty vehicle projects, heavy-duty vehicle and 

equipment projects, and loan assistance programs. A very 

small portion of the funding from AQIP is recommended as a 

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reserve for revenue uncertainty. 

This slide lists each of the proposed projects 

within the primary categories and the amount of funding 

from the two funding sources: AQIP and low carbon 

transportation investments.

--o0o--

MS. MACUMBER: As you can see, staff is 

recommending that the bulk of funding for this year be 

directed to light-duty vehicle projects, namely, the Clean 

Vehicle Rebate Project, or CVRP. However, substantial 

investments are also recommended in the heavy-duty vehicle 

and equipment sector, particularly for new pilot projects 

that deploy zero emission trucks and buses and advanced 

technology demonstrations in the freight sector.

--o0o--

MS. MACUMBER: One important aspect of this 

funding plan is that staff is targeting 50 percent of the 

low carbon transportation funding to benefit disadvantaged 

communities. 

To illustrate, the middle column of this slide 

now displays the low carbon transportation funding 

allocation for each project. And the far right column 

displays the proposed percentage and corresponding amounts 

of that allocation that will be targeted to benefit 

disadvantaged communities. 

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As you can see, staff is relying greatly on 

heavy-duty vehicle and equipment projects to provide these 

benefits, as they currently are the type of projects that 

provide direct benefits to disadvantaged communities. 

How we determine these benefits is still under 

development. But staff expects that guidance will be 

available later this summer. 

In the next few slides, I will cover these 

projects in more detail, including providing an update on 

the implementation of existing projects. I'll start first 

with light-duty vehicle projects.

--o0o--

MS. MACUMBER: CVRP offers rebates to consumers 

that purchase or lease light-duty zero emission and 

plug-in hybrid electric vehicles. CVRP is designed to 

accelerate the widespread commercialization of these 

vehicles by partially offsetting higher costs relative to 

comparable conventional vehicles. These higher costs not 

only include sticker prices, but higher taxes, license 

fees, and annual license renewal costs. 

Currently, the rebate is $2500 for a zero 

emission vehicle, such as a Nissan Leaf or Ford Focus 

electric, and $1500 for a plug-in hybrid, such as a Chevy 

Volt or Toyota Prius plug in. The rebate can be combined 

with a federal tax credit of up to $7500 for those that 

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qualify, HOV lane access, and other incentives offered at 

the regional or local level. 

To date CVRP has issued over 60,000 rebates, 

totaling $132 million, which is more than double the 

amount of rebate activity reported to you last year at 

this time. 

Since April, when the $30 million waiting list 

was issued, about 12,000 rebates have been reserved. 

While the zero emission passenger vehicle market continues 

to grow, it remains at a critical development stage and is 

just now beginning to transition beyond early adopters to 

main stream consumers. In order to achieve the goal of 

deploying one and a half million zero emission vehicles in 

California by 2025 as directed by the Governor's Executive 

Order, continuing to support incentives for these vehicle 

remains critical.

--o0o--

MS. MACUMBER: For the 2014-2015 fiscal year, 

staff is proposing to allocate a total of $121 million for 

CVRP. This allocation for CVRP includes $5 million in 

supporting investments from our partners at the Energy 

Commission. 

Because of the tremendous success we've 

experienced with VRP this year, staff spent considerable 

time evaluating the needs of the project going forward. 

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Staff held several workshops, workshop meetings, and 

individual meetings with stakeholders to discuss the many 

possibilities for how to structure the project for this 

upcoming year. 

Staff analyzed a significant amount of vehicle 

data survey data collected as a part of CVRP to consider 

the consumer and market impacts of various potential 

project modification options that support the core 

principles listed above. 

Staff projections for CVRP indicate that between 

$130 million and $200 million may be needed to support the 

project in its current form for the upcoming year.

--o0o--

MS. MACUMBER: Since projections indicate a need 

above the proposed budget for CVRP, staff's original 

funding plan proposal would have reduced rebates by $500 

for both battery electric and plug-in hybrid electric 

vehicles. However, after continued dialog with 

stakeholders and considering that market variability in 

terms of future demand continues, today staff is proposing 

to maintain current rebate levels for battery electric and 

plug-in hybrid electric vehicles. 

Staff will continue to monitor market activity 

closely and will return to the Board, if necessary, with 

recommendations for mid-course adjustments if demand grows

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above expectations. 

Also, because fuel cell electric vehicles are 

just beginning to enter the market, staff is proposing to 

increase their rebate amounts to $5,000. This amount is 

consistent with battery electric vehicle rebate levels 

when the program began and when they were at that same 

stage of commercialization. 

Since CVRP is intended reach consumers who have 

yet to acquire the technology, staff is proposing to limit 

the lifetime number of rebates for individuals and 

businesses to two overall so that a greater number of 

consumers can participate in the program. This limitation 

would not apply to fleet or car share purchases, nor would 

it apply to consumers that purchase fuel cell vehicles. 

Staff is also proposing to allow the Executive 

Officer flexibility to utilize a waiting list, as we done 

in several years past to help bridge a potential gap 

between fiscal years.

--o0o--

MS. MACUMBER: Over the course of the next year, 

staff plans to work with stakeholders to continue to 

refine market demand projections so that we can be better 

informed moving forward. 

Staff will also continue to evaluate options for 

the best ways to motivate consumers to purchase advanced 

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technology vehicles and continue evaluating research on 

the vehicle market and on incentives. 

Finally, staff proposes to develop and solicit 

new ARB-sponsored research in addition to research 

underway to inform when and possibly how to transition and 

eventually end incentives for the light-duty vehicle 

market.

--o0o--

MS. MACUMBER: To compliment the efforts made 

through CVRP and bring cleaner technologies to 

disadvantaged communities, staff is proposing to allocate 

$9 million to four pilot projects. 

First, larger incentives are proposed for public 

fleets that traditionally cannot take advantage of the 

federal tax credit. Second, car share projects will help 

bring cleaner technologies to those in multi-family 

dwellings and other areas where the vehicles and 

infrastructure currently don't exist. 

Next, staff is proposing to offer an added 

incentive, above the amounts approved in the previous 

agenda item for the enhanced fleet modernization program 

for the purchase of cleaner new or used replacement 

vehicles. 

And finally, financing assistance, such as loan 

loss guarantees or interest buy down programs is proposed 

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for consumers that need additional financing support. 

This investment will be used to evaluate the 

viability of these projects, collect data, and achieve 

immediate emission reductions from the vehicles deployed. 

Staff expects that these projects will be developed in a 

way that allows us to build upon them in future years so 

that they can become strong supporting projects that 

achieve significant emission reductions that benefit 

disadvantaged communities. 

Development of these pilots will resume in the 

summer and fall with continued opportunities for public 

input and coordination. 

MS. MACUMBER: Now it's time to move on to our 

recommendation for the heavy-duty vehicle and equipment 

sector.

--o0o--

MS. MACUMBER: I'll begin with the hybrid and 

zero emission incentive project, or HVIP. HVIP continues 

to be successful in accelerating commercialization of new 

hybrid and zero emission trucks and buses. To date, over 

1600 vouchers have been issued, totaling over $50 million. 

Currently, hybrid vehicles make up the most 

significant portion of the project's demand, with about 75 

percent of the vouchers going toward hybrid vehicles. 

Demand for these vehicles remains strong and continued 

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HVIP investment is considered critical to ensuring 

availability of these vehicles in the marketplace. 

In contrast, demand for zero emission vehicles 

has been flat over the past four years, averaging only 

about 100 vehicles annually. Fleets have purchased zero 

emission trucks when they have been able to obtain local, 

state, or federal co-funding, which when combined with 

HVIP vouchers approaches full incremental cost. Additional 

incentives are needed to increase market demand for these 

vehicles. 

Of the 25 percent of HVIP funding that has gone 

towards zero emission vehicles, the bulk has been for 

partial delivery, namely UPS, trucks, food distribution, 

and a variety of other trucks. 

Because additional support is needed to help 

boost the placement of electric trucks, staff is proposing 

some modifications I'll discuss on the next slide.

--o0o--

MS. MACUMBER: This year, staff is proposing to 

allocate up to $15 million towards HVIP. The amount of 

funding allocation from a low carbon transportation will 

be dependent upon the criteria by which benefits to 

disadvantaged communities is defined. As mentioned 

earlier, efforts are underway to develop guidance for 

defining how projects will be evaluated as benefiting 

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disadvantaged communities. Once guidance is available 

later this summer, staff will determine the amount of HVIP 

funding that will be directed specifically to benefit 

disadvantaged communities. 

If HVIP is unable to support $10 million in low 

carbon transportation investments that benefit 

disadvantaged communities, only $5 million will be 

allocated with the other $5 million directed towards the 

zero emission truck and bus pilot projects, which I will 

discuss more in the next slide. 

Also because zero emission truck and bus sales 

have been relatively flat, staff is proposing to increase 

the base voucher amounts for zero emission vehicles. To 

support increased deployment of disadvantaged communities, 

staff is proposing an additional increase in the voucher 

amounts for zero emission vehicles purchased to support 

those areas. 

Staff is also proposing to strengthen hybrid 

vehicle eligibility requirements which includes adjusting 

the emissions testing requirements for vehicles that do 

not undergo fuel vehicle certification.

--o0o--

MS. MACUMBER: In addition to the proposed 

modifications for HVIP that further support sales of zero 

emission trucks, staff is proposing to allocate up to $25 

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million for zero emissions truck and bus pilots that 

support emission reductions in disadvantaged communities. 

This pilot is intended to be transformational in a way the 

first-come first-serve model HVIP cannot be by allowing 

vehicle purchasers to leverage resources, thereby helping 

bring down costs through larger vehicle purchases. 

These projects would place a significant number 

of zero emission trucks and buses in a handful of 

strategic truck or bus hubs to encourage advanced 

technology including infrastructure, marketing workforce 

training, and other synergies. Staff believes that the 

Incentive amounts exceeding incremental cost and charging 

or refueling infrastructure funding may be needed. 

Some examples of the types of projects that may 

be funded include zero emission transit or school buses, 

which could provide much needed support to offer the 

cleanest public transportation option or zero emission 

freight or delivery trucks, which could be centered around 

facilities like distribution centers or warehouses. 

Similar to the light-duty vehicle pilot projects 

discussed earlier, staff expects that this investment will 

seed these projects such that they may be expanded upon 

geographically and among other fleets in future years. 

In the coming months, staff will prepare a broad 

solicitation with public input that allows flexibility for 

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several project types to compete. The solicitation will 

be held open for multiple months to allow fleets time to 

maximize co-funding partnership opportunities.

--o0o--

MS. MACUMBER: For the first time, staff is 

proposing to allocate a significant portion of funding for 

much needed advanced technology freight demonstration 

projects. These funds will target pre-commercialization 

demonstrations of advanced freight technologies that 

provide real and immediate emission reductions to 

disadvantaged communities. 

The focus of past demonstrations have been 

directed at small scale projects with fewer than ten 

vehicles or pieces of equipment. This year, staff is 

proposing to focus the bulk of funding in the two specific 

areas in order to take advantage of the freight 

technologies that are currently ready for large 

pre-commercial demonstrations. Of the $50 million 

proposed for this category, staff is recommending up to 

$25 million to fund the demonstration of zero emission 

drayage trucks, up to $25 million to demonstrate multiple 

types of zero or near-zero technologies, working 

cooperatively at distribution centers, warehouses, and 

intermodal facilities. And if available, up to $10 

million for other smaller scale freight projects. 

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In order to help inform planning for future 

years, staff is proposing to initiate a request for 

information process to solicit input from industry and 

stakeholders regarding future investments in advanced 

technology demonstrations. The input received will help 

us better assess the current state of technology and 

inform future funding plans.

--o0o--

MS. MACUMBER: And now to discuss our last 

category of funding, loan assistance programs. The Truck 

Loan Assistance Program enables lenders to provide 

affordable financing to small business owners that fall 

just outside conventional underwriting standards and may 

not qualify for traditional financing. Financing is used 

to upgrade or retrofit trucks facing existing in-use fleet 

rules. Without this program, there may be no financing 

option for those business owners. 

This program is currently administered by the 

California Pollution Control Financing Authority, or 

CPCFA, who also joins us at the table today. 

What makes this program so unique is that it 

reaches California's fleets most in need of economic 

assistance. For example, 76 percent of loans are single 

truck owner-operators. Ninty-three percent of loans are 

to companies with ten or fewer employees. And 80 percent 

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of borrowers self-identify as a member of a minority 

group. 

So far, ARB has invested over $39 million in the 

program, supporting about 4200 loans and leveraging nearly 

$280 million in financing. This equates to over seven 

dollars in private financing for every public dollar 

invested. 

Staff is proposing to allocate $10 million from 

AQIP. With the recent amendments to the in-use truck and 

bus regulation that extended deadlines for small fleet 

owners, staff anticipates that continued support for these 

truck owners will be needed.

--o0o--

MS. MACUMBER: As mentioned earlier in the 

presentation, each of our projects is targeted toward 

supporting the transition of technology across this 

conceptual evolution of incentives. 

To tie our projects together, this slide now 

identification where the light-duty projects, heavy-duty 

vehicle and equipment projects, and finally loan 

assistance projects fit within this incentives landscape. 

Our proposed advanced technology demonstration 

projects and the zero emission truck and bus pilot are 

examples of projects still in the demonstration phase 

because they are focused on supporting large investments 

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to demonstrate the viability of technologies in smaller 

volumes. 

Because of the slow roll out of heavy-duty 

electric trucks and buses and the need to continue larger 

incentives for these vehicles, HVIP supports both the 

transition of these vehicles from very low deployment to 

commercialization. HVIP also helps spur market growth of 

hybrid vehicles which remain in the lower volume 

production phase. 

CVRP and the light duty pilot projects support 

the commercialization of hybrid and electric light-duty 

vehicles whereby different vehicle types currently reside 

in different stages of commercialization. 

Plug-in hybrid electric and battery electric 

vehicles are just entering the higher volume stage while 

fuel cell electric vehicles are now being produced. 

Incentives funding remains critical for maintaining 

momentum towards full commercialization of these vehicles.

--o0o--

MS. MACUMBER: And last, the Truck Loan 

Assistance Program targets incentives for fully 

commercialized technology toward small trucking fleets 

that need incentives to adopt cleaner technologies. 

While this project is the only one currently 

supporting the transition phase, staff expects that some 

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of the light-duty pilots, for example, car sharing and 

financing assistance, will help to serve this purpose in 

the future by bringing cleaner technologies into 

disadvantaged communities.

--o0o--

MS. MACUMBER: AQIP incentives have traditionally 

been prioritized and structured to accelerate the 

advancement of vehicle technologies, first from 

demonstration to full main stream commercialization. And 

second, from the light-duty sector to heavier vehicle 

sectors as vehicle technology has typically migrated in 

this fashion. 

Staff believes that AQIP should remain focused on 

supporting these transitions and recommends these 

priorities continues with the proposed fiscal year 

2014-2015 investments. 

Further, staff is developing long term visions 

for each of the proposed projects that addresses more 

specifically how evaluations or metrics can be used to 

gauge success in transitioning projects across the 

incentives funding horizon and eventually ending 

incentives for each technology or sector type. 

Some examples of metrics staff will evaluate 

include market penetration of technology types, 

manufacturer diversity, technology costs, consumer 

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acceptance, and others. Each project, depending upon 

where it is within the incentives funding horizon, will 

have different criteria by which it will be evaluated. 

Staff intends to continue to refine these criteria and 

update the Board each year.

--o0o--

MS. MACUMBER: This year's plan includes a series 

of investments aimed at reducing both criteria and 

greenhouse gas emissions in the near and long term, 

promoting the advancement and commercialization of the 

cleanest technologies available today and helping to bring 

emission reductions to disadvantaged communities that need 

them the most. 

As in the past years, the funding plan also 

includes contingencies to address funding shortfalls, 

increases or other changes that may arise, and provides a 

comprehensive update on all of our projects to date. 

With that, staff requests that you approve the 

proposed fiscal year 2014-2015 funding plan for AQIP and 

low carbon transportation investments with the inclusion 

of modifications to the original CVRP proposal. 

This concludes my presentation. 

At this time, I would like to invite first Jim 

McKinney, Manager of the Alternative and Renewable Fuels 

and Vehicle Technology Program at the California Energy 

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Commission to speak. And then Jillian Franzoia with 

CalCAP, Manager with the California Pollution Control 

Financing Authority, to say a few words. 

Jim. 

MR. MC KINNEY: Great. Thank you very much. 

Good morning, Chairman Nichols and members of the 

Board. 

As Lisa said, I'm Jim McKinney. I'm the Program 

Manager for the Alternative and Renewable Fuel and Vehicle 

Technology Program at the California Energy Commission. 

We are the sister incentive program to ARB's Air Quality 

Improvement program. 

On behalf of the Energy Commission, I'm here to 

offer our support to the staff proposed AQIP funding plan 

for 2014-2015. I and others from the Commission staff 

participated in many of the working group workshop level 

meetings that ARB staff posted for many parts of the 

funding plan, including CVRP, HVIP, the new ABA required 

metrics, and how to allocate GGRF funds. 

Your staff has been thorough and inconclusive 

throughout the public vetting of these multiple option. A 

lot of these public meetings have included vigorous 

debates among the stakeholders, and again your staff 

managed that well. And we support these recommendations. 

A few I want to highlight are the new funding levels for 

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the fuel cell vehicle vouchers. It's very exciting. 

Hyundai has been first out the gate. Many of us went down 

to an event a couple weeks ago where the very first 

consumer in California was able to take possession of a 

commercially available fuel cell vehicle. So we think 

that CVRP $5,000 voucher amount will be critical in 

helping to launch this part of the ZEV vehicle program. 

We're also extremely pleased to support the pilot 

program for disadvantaged communities. I think as we 

heard in the 88 deliberations at the Legislature, this is 

a critical function for us. As we learned from you and 

the air districts, it really is the people residing in the 

San Joaquin Valley and parts of the South Coast air basin 

that suffer most from pollution effects from the 

transportation sector. 

We're also really excited about the ZEV truck 

demonstration funding level of $50 million. We have been 

providing funding in the space since our program 

inception. And today, we've done about 70 million in 

investments for 36 projects. It's a very expensive 

technology class. Also critical if you kind of think 

through where the emissions comes from, both CARB and 

criteria and particulate matter emissions from the truck 

sector. So we really welcome this major influx in 

funding. 

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As we approach the 100,000 vehicle milestone in 

California, we celebrate the success of CVRP in helping to 

create the commercial market for light-duty electric 

vehicles. We know from our own experience with ARF that 

it's challenging to manage incentive programs as the early 

markets begin to gain momentum and transition from early 

adopter to fast follower. A key challenge is modulating 

its incentive levels so the program can stay within its 

budget parameters. This is critical. Again, a big part 

of the deliberation and the success with ABA, which we 

authorize our programs. 

In my view, they entrusted us to continue be 

stewards and wisely distribute these funds so we can 

promote these ZEV technologies. But they express concern 

on cost, cost effectiveness, and equity. So we take this 

as a serious responsibility. 

And again, I want to applaud the ARB staff. It's 

very, very hard work to modify incentive programs. And no 

stakeholder wants to hear that funding levels for the 

technologies they promoted may have to be reduced and 

eventually phased out. But again, these are market 

transformation programs. These are not programs designed 

to fund implementation of other regulatory programs.

--o0o--

MS. MACUMBER: I want to briefly share some of 

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our advise to ARB staff during the deliberations. 

So first, use AQIP and GGR funds strategically to 

motivate the undecided consumer. In my mind, this is the 

key to continue building new market for electric vehicles. 

Let's not use the limited funds to reward consumers that 

have already made the decision. This may make everyone 

feel good, but it risks dramatically cutting the fund or 

diluting it so it's no longer a critical motivator for the 

undecided. 

One of the measures that Lisa Macumber hinted at 

was some modifications for FEV vehicle eligibility. And 

I'd like to highlight that a FEV 40 is a very different 

feature from a FEV 10 in terms of how consumers are 

maximizing emiles out of a FEV 40 vehicle, like the Volt. 

In terms of our contributions to CVRP, again, 

we're very pleased to have been able to offer the level of 

support we do. It's been $49 million in total to date. 

We estimate that's about 21,000 vouchers. That's about 

one-third of the total voucher amount that ARB has been 

able to offer. So this includes the $5 million that Lisa 

mentioned in our 14-15 investment plan that was just 

approved in April. 

Summarizing some of our infrastructure 

investments that Richard Corey highlighted, in total, for 

the infrastructure side of the program, we now have $38 

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million invested for over 8600 charge points and charges 

throughout California. I think we heard in other 

testimonies that some stakeholders are concerned we're 

falling behind. 

But again, when you buy one of these cars, you 

can't take it home and plug it in. It's critical that we 

leverage that and build upon that as we work to get the 

infrastructure needed and the commercial zones, the 

destination areas, and the fast charger corridors. 

For the hydrogen fuel cell part of our program, 

we now have $80 million invested in funding. This will 

total 48 new and upgraded stations. And we think in 2015 

when all these should be online, we'll have about 51 total 

stations. This's just critical because you can't take 

your new fuel cell vehicle home and plug it into the gas 

line at your house. This is a long way out. 

In total, so we're coming up on the half-billion 

dollar mark in investments. We're proud to play the role 

we do. I think it's critical to just start moving the 

ball. We're seeing the needle move off zero as we start 

to see sizable numbers in the fleets, both from the 

infrastructure side and the vehicle side. 

And lastly, I just want to just highlight some of 

the multiple collaborative efforts between the Energy 

Commission and the Air Resources Board. So first for the 

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investment plan, Dr Ayala has become a fixture at our 

Advisory Committee. And we always welcome his input and 

insight into this. This is great. Thank you, Dr. Ayala, 

for all your insightful comments to us. 

The Integrated Energy Policy Report, Commissioner 

Ganeo Scott has been on a force march as we do the 2014 

HYPR update to focus on transportation. Long series of 

workshops. And again, we hope these are informative and 

help inform parts of the ARB programs. And we really 

appreciate the participation of State Board Member Burg 

and others from ARB staff. 

On the EVSE planning side, we are moving ahead 

with our NRELL assessment. And we'll convert that to a 

statewide plan as for the Governor's action plan. We want 

to acknowledge the staff efforts at ARB for planning for 

EVSE deployment. That's critical. We think these two 

things compliment one another. 

On hydrogen-station planning and financing, the 

contribution from your technical staff have been great. 

Mica Shuca, Gerhard Achtelik, Analisa Bevin, have all been 

integral parts of our planning team for the solicitation. 

It was very well received. 

ZEV truck deployments, we just love working with 

Joe Calavita and now Earl Landberg on that. We 

collaborate with you on LCFS and bio fuels. 

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The ARB technology assessment that's underway 

right now we think will be critical for the truck sector. 

And we're pleased to make the contributions we can to 

informing that dialogue. 

And most recently, I've been able to meet with 

Todd Saxton and work with his team as we try to educate 

the Board at AC Transit to stay the course on their fuel 

cell bus program. Both agencies have been able to 

contribute to those efforts. 

In conclusion, I want to paraphrase a famous line 

from Casablanca, "Louie, this is a beautiful friendship." 

BOARD MEMBER GIOIA: I was wondering which quote 

you were going to use. 

CHAIRPERSON NICHOLS: All right. Let's top that 

one. 

MS. FRANZOIA: I don't know that I can. Good 

morning, Madam Chair and members of the Board. 

I'm Jillian Franzoia, the Program Manager for the 

CalCAP program at the State Treasurer's office. We 

administer the ARB On-Road Loan Loss Reserve Program. 

This program has been a collaborative effort and an 

excellent partnership between the Air Resources Board and 

the Pollution Control Financing Authority at the State 

Treasurer's Office. And the ARB staff has been so great 

over the past five years to work with facilitating such a 

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successful program. 

I think the success of the program speaks for 

itself by providing financial incentives to encourage 

lending. The program has put close to 4900 compliant 

trucks on the road and helped retrofit an additional 330. 

In addition, the $300 million in loans has 

contributed to creating or retaining over 9,000 jobs 

throughout the state. And over 75 percent of the loans 

were made in areas of high unemployment. 

CPCFA and the State Treasurer's office support 

this additional funding as it would be beneficial to the 

small business borrowers who still need to upgrade their 

vehicles to meet compliance standards. Our statistics 

show that the demand is as strong as ever and continuing 

to grow. And although I don't have a quote from 

Casablanca, I would like to show our support for this 

funding plan. 

CHAIRPERSON NICHOLS: Thank you very much. 

Appreciate your coming over too. 

MS. FRANZOIA: Thank you for having me. 

CHAIRPERSON NICHOLS: Okay. Shall we turn to the 

witness list then? Okay. Beginning with the Bay Area Air 

Quality Management District. 

MR. FOURNIER: Good morning, Madam Chair, members 

of the Board. 

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My name is Anthony Fournier, Director of 

Incentives for the Bay Air Area Quality Management 

District. 

I'd like to start off by thanking staff for their 

detailed presentation and all the hard work they put into 

the recommendation you prepared today. We've submitted 

written comments. I'm not going to restate all of them. 

I'd like to highlight a few. 

First, we are in support of the CVRP 

recommendation presented by staff. I would like to see a 

more detailed, longer-term lan to provide greater 

certainty for consumers and interested stakeholders. 

We also are in support of the proposed increase 

for HVIP funding for zero emission truck and bus fleets. 

But the opportunities for freight demonstrations projects 

should be prioritized to areas with the largest population 

exposure to emissions from these sources and greatest 

potential for adoption. 

We believe that the Vehicle Retirement Program 

and Replacement Plus Program should be open to all areas 

of the state with highest vehicle populations, traffic 

congestion, and lengthy commute times. 

Finally, we believe the use of the 

CalEnviroScreen tool needs to be evaluated to ensure that 

funds are used to benefit those with the greatest need. 

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We are a care program. We spent the past decades 

working to identify communities within the Bay Area that 

are most impacted by air pollution. And we used this 

local analysis to get several of our local air district 

initiatives. Many census tracts in the Bay Area do not 

have CalEnviroScreen scores in the top 20 percent on a 

statewide basis. But nonetheless have helped areas within 

the top 20 percent for asthma and low birth weights. 

On the basis of this, 18 percent of the Bay Area 

Census tracts would qualify as impacted. However, 

CalEnviroScreen scores show only three percent actually 

qualify. 

We realize a long-term solutions would be 

technically difficult and time consuming, but we believe a 

two-step approach for allocating cap and trade leads to a 

practical solution. 

Step one would be to allocate the funds to 

regions in proportion to the region's population. 

Step two would be within each region distribute 

funds to impacted and disadvantaged communities based on 

localized method and where there is not a localized 

method, you could consider using the CalEnviroScreen tool 

on a regional basis. 

The Bay Area stands ready to continue and work 

with ARB and OEHHA to further refine the CalEnviroScreen 

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tool. And I thank you for your time and the opportunity 

to comment today. 

CHAIRPERSON NICHOLS: Thank you. 

Mr. Hogo again. 

MR. HOGO: Good morning, Chairman Nichols, 

members of the Board. 

Henry Hogo with South Coast AQMD. 

I just want to express our support of the funding 

plan as proposed by staff. It's sends a really strong 

message to the community and to actually project 

proponents, goods movement expansion projects, especially 

project proponents for the 710 expansion and some of the 

other facilities that are expanding to incorporate the 

growth in goods movement. That zero emission vehicles, 

zero emission technologies will be there when they move 

forward. 

And I just want to point to the 710 project 

proposal, because they're planning to analyze how 

dedicated zero emission truck freight corridor that will 

run along the I-710 for about 25 miles or so. So this is 

important signal to them that these trucks will be 

available if such a corridor is built. 

So with that, I just urge moving forward. 

CHAIRPERSON NICHOLS: Thank you. 

Mr. Greene. 

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MR. GREENE: Good morning. Larry Greene with Sac 

Metro AQMD. 

We appreciate the work that ARB has put into AQIP 

and will continue our collaboration and strong support of 

the program. Specifically, we'll participate in the pilot 

program working groups and believe we have many 

opportunities in the Sac regional communities, especially 

for our disadvantaged communities, for high quality 

projects. 

Our approach in the Sac region has been to focus 

on a full range of cap and trade funding streams that 

might benefit our region. As soon as the Governor's 

initial budget came out, we began to meet with our other 

regional partners such as cities, counties, SACOGs, 

transits, the Sacramento Housing and Redevelopment 

Authority, Sac Tree Foundation, and Valley Vision. All of 

these partners have training and funding programs for 

projects which would benefit from low and zero emission 

vehicles and infrastructure. And all share our goal of 

lowering greenhouse gas and criteria pollutants emissions. 

Our common interest was that especially within 

the disadvantaged communities identified by 

CalEnviroScreen we could identify specific project areas 

where multiple funding streams could be leveraged. For 

example, we can likely leverage funding into areas already 

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identified in the SACOG, sustainable communities strategy, 

and CalEnviroScreen as disadvantaged to benefit from cap 

and trade funding for improved transit, urban trees, home 

energy efficiency, low and zero emission vehicles and 

infrastructure. 

As we move into applying for project funds 

through ARB and other agencies also make applications in 

their traditional program areas, we will work to 

coordinate our efforts in this and subsequent years. We 

believe we have identified a range of project locations 

and partners in disadvantaged areas that will provide 

excellent greenhouse gas reductions as well as good 

co-benefits for reducing criteria pollutants. We will 

bring those ideas to the pilot program working groups and 

hope these good programs will turn specific and long-term 

funding for such programs. 

We also intend to participate in the HVIP and 

zero emission truck and bus pilots. Our participation in 

AQIP, but really all the cap and trade funding areas, is 

very important to the Sacramento region, not only for 

greenhouse gas reductions, but because we're a severe 

ozone non-attainment area. Under the new tighter federal 

standards, we will continue to gain emission reductions 

for many years. 

We look forward to close relationship with CARB 

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staff over these months as we develop and fund high 

quality projects under a cooperative relationship and 

develop a program for funding cycles in the future. 

Thank you. 

CHAIRPERSON NICHOLS: Thank you. 

Mr. Clements. 

MR. CLEMENTS: Good morning, Madam Chair and 

Board members. 

It's an honor to be here today and actually say 

that I'm representing somebody else other than Kings 

Canyon Unified, which is Motiv Power Systems. They're the 

folks that provide the propulsion system that saved our 

electric bus project that's listed in your AQIP brochure. 

They support this project. They see a number of 

opportunities in the near future, as I do, to serve the 

San Joaquin Valley. I think Seyed said it very 

eloquently, the folks that need that car crush program, 

we're talking about retirement here. I'm retired. I 

don't feel like I was retired because I've been chasing 

buses and trucks this year, electric ones. 

But that said, those are the students that -- the 

constituents for that car crash program, those are the 

students that are riding on those Iwo electric school 

buses today. I have personally driven them home, as the 

Director of Transportation. I get to go back now as the 

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substitute driver in my retirement. And have personally 

driven them home. We're seeing that outreach as kids say 

why is this bus different. Second day I took them home, 

they said, "Can you honk the horn? Because my mom can't 

hear the bus coming." This was an added value in addition 

to the reduced emissions. 

So currently I'm working with Motiv and a sales 

company here in California. And I think in the near 

future, we're going to see a larger school bus, an OEM 

school bus, that will come to the stage that will be 

all-electric that can continue to benefit the rural 

disadvantaged community. 

I wanted to also mention as you talk about 

transportation hubs, this past week I visited an ag 

packing facility, one of dozens in my community. And was 

able to go there and offer a demo truck from another 

manager here in California, hybrid extended range electric 

that will run on natural gas that will be Kings Canyon 

Unified customer for natural gas. We have our CNG 

station, thanks to CEC and some other folks along the way. 

They were telling us there were 80 semi-trucks that leave 

that facility every day, six days a week. And all those 

products come on light and medium-duty diesel trucks 

currently. 

So here's an example of an electric truck that 

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Kings Canyon Unified just look delivery of this past year 

that's all-electric, including the reefer. When we talk 

about serving disadvantaged, this is food distribution 

happening at a school level. We serve 10,000 students a 

day. That 600-mile region is on page 105 of the 

CalEnviroScreen map. And these are all free and reduced 

lunches going on a zero all-electric truck now. 

So thanks for the opportunity to -- and I want to 

thank the staff for putting up with me during this 

retirement period. 

CHAIRPERSON NICHOLS: Well, thank you. I think 

you're one of our more effective marketers. Appreciate it 

very much. Now if we can just get the CNG to be made from 

renewable gas, it's like a completely closed loop system. 

It's wonderful. 

Mr. Pike. 

MR. PIKE: Hello, Chairman Nichols and members of 

the Board. My name is Ed Pike. I am with Energy 

Solutions California. 

Thank you for the opportunity to provide comments 

today. We support the disadvantaged community pilot 

funding. And we think that would be a great match for a 

fuel efficient tire incentive replacement tire program 

focused on disadvantaged communities. 

We appreciate CARB's recent Scoping Plan update 

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which recognized the potential benefits of fuel efficient 

replacement tires and also the potential for an incentive 

program to help permanently transform the market through 

enabling standards and ratings as well. 

The Union of Concerned Scientists, Energy 

Solutions, and Mountain View Tire have submitted comment 

letters supporting the AQFP and the low carbon 

transportation fund as a potential resource for funding an 

incentive program. And the Energy Commission estimates on 

a statewide basis a fuel efficient replacement tire 

incentive program could save consumers almost $900 million 

annually and reduce greenhouse gases by close to 3 million 

metric tons per year, which would be equal to 12 percent 

of the Scoping Plan update long-term transportation 

target. 

We understand that staff would like to further 

vent the idea for further consideration in the 2015-16 

plan, and we appreciate the constructive dialogue we've 

had with CARB staff thus far. And we look forward to 

continuing this helpful dialog. 

In the meanwhile, we encourage CARB to note the 

potential benefits of an incentive program in the 14-15 

plan as an informational item similar to the Scoping Plan 

update. 

We also note that several commentors have 

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recommended that CARB retain some level of discretion in 

the plan for the disadvantaged community pilot funding. 

And we would similarly like to see CARB retain some 

discretion, if needed, for activities that staff decide 

are needed to further evaluate the proposed fuel efficient 

tire program at a level that couldn't diminish any of the 

other pilots. 

Thank you again for the opportunity to comment. 

And again, we look forward to continuing our helpful 

dialog with staff. 

MR. REICHMUTH: Chairman Nichols and members of 

the Board. My name is David Reichmuth. I'm speaking on 

behalf of the Union of Concerned Scientists. 

I'd first like to recognize the work of ARB staff 

on producing a comprehensive plan to support 

transportation solutions that will reduce emissions and 

air pollution. 

We have submitted written comments on support of 

the plan, including specific recommendations for heavy 

duty and freight. But I'm going to focus today on the 

CVRP program. UCS agrees with staff's recommendation to 

keep CVRP rebates at the current levels. With current 

rebates, we forecast CVRP program costs could range 

between 130 and 161 million, with a base line estimate 

being 137 million as shown there. 

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Now these estimates include protective rebate 

cost of fuel cell vehicles and program administrative 

costs. If no changes to the eligibility or incentive 

amounts are made, there is a substantial risk that the 

program costs will exceed the 121 million allocation in 

the funding plan. So we urge the Board to consider a 

combination of methods that will allow the program to 

function without a reduction in rebate amount. 

First, we ask the Board to authorize a year-end 

wait list of up to 30 million. This will allow the 

funding for CVRP under our base line scenario. As you can 

see, they're not under a high demand scenario. Therefore, 

we believe the Board should adopt eligibility criteria 

based on annual household income to further reduce the 

risk of exceeding the proposed funding levels. 

Data from a recent CVRP survey shows a potential 

correlation between higher household income and lower 

importance of CVRP in the purchasing decision. Setting an 

income cap would decrease the demand for rebates and also 

improve the effectiveness of the program. Based on 

staff's analysis, an income cap of 400,000 would save an 

estimated ten percent cost, which I show here. Yet, staff 

estimates only one percent decrease in EV sales overall. 

This greatly minimized the risk of needing a wait list, 

but these savings only happen if we implemented this at 

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the start of the year. 

Now, UCS is not recommending a particular income 

level, but does recommend that ARB examine the raw survey 

data from CCSE to determine the optical criteria for CVRP 

eligibility. 

We also like to note that the income cap is not 

an eligibility provision. However, the alternative of 

across-the-board cuts would have the most impact on the 

lower income households and more affordable models. That 

would negatively impact equity. 

Finally, we agree with the recommendation to 

allow midyear changes to the program to keep the program 

costs with an allocation or within the wait list limit. 

I'd like to thank staff again for the hard work 

on this plan and for the workshops and calls and the Board 

for the opportunity to comment here today. Thank you. 

MS. MENDOZA: Good morning, Chairman Nichols and 

Board members. 

My name is Jerilyn Mendoza here this morning -- 

still morning -- on behalf of the California Air Resources 

Board -- I'm sorry -- on behalf of Southern California Gas 

Company. I looked up to say hi to LaRonda and I waived to 

her and I said -- so I apologize for that. Please forgive 

me for that. 

So I'm here to say several things on behalf of 

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the Gas Company. One is we are definitely in support of 

the AQIP program as put forward by staff. Personally, I 

also would like to extend my thanks and hope it goes 

forward as my husband and I leased a beautiful Nissan Leaf 

last month. And we are very much looking forward to the 

rebate. And I will say in response to the previous 

comments, the rebate was actually a significant factor 

infrastructure our decision making. So we're really 

excited about that. 

At the same time, I have to wonder when I look at 

the AQIP plan for about $228 million, where the funds for 

deployment. There is a lot of money in there for research 

and development of pilot projects, but there are natural 

gas vehicles available now in the heavy-duty sector 

particularly effecting freight movement that are available 

right now that can significantly reduce particulate 

emissions criteria pollutants and GHGs to help us move 

forward on all of our goals. And there is no funding for 

that. There is no funding for moving those kinds of 

advanced technologies forward. 

I've been told by legislators not to even bother 

trying to get natural gas funds or funds to move forward 

natural gas technologies from ARB because there is a 

singular focus on electric vehicles. And that makes me 

frustrated. 

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But it also makes me wonder. Because as I 

mentioned before, I served on the Harbor Commission for 

the Port of LA from 2005 to 2010. I'm going bring it up 

again. Because we reduced criteria pollutants by 80 

percent in five years, primarily by transitioning out 

dirtier trucks for clean fuel, natural gas, heavy-duty 

trucks. And this was in a disadvantaged community. This 

was in a community that had struggled and continues to 

struggle with environmental justice issues and in working 

closely Brighton right near the Port of L.A. in East Long 

Beach, West Long Beach. Board Member Mitchell, you know 

what I'm talking about, the area I referred to. 

So if we're talking about action taken today that 

can reduce emissions, that can improve our air quality, 

the natural gas technology is there. And there is no 

funds for it. 

And yesterday, we had a seminar that we sponsored 

and Dr. -- may I just close on this point? Dr. Matt 

Misado from the South Coast Air Quality Management 

District was there. He talked about the importance of a 

multi-prong approach, different technologies reducing for 

different sectors. I just want to know where does the 

natural gas element fit. I think there is a role for us 

in the freight sector. Thank you. 

CHAIRPERSON NICHOLS: Thank you. 

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MR. MAGAVERN: Bill Magavern, Coalition for Clean 

Air and also speaking on behalf of the Charge Ahead 

California Campaign. 

I think, first, this plan shows ARB's commitment 

to reducing emissions from the freight sector. And so 

we're very glad to see the proposed investments in 

heavy-duty vehicles, the zero emission truck and bus 

pilot, as well as the advanced freight technology 

demonstration program and the extra bonus under HVIP for 

zero emission vehicles in disadvantaged communities. And 

the fact that all of this funding is slated to benefit 

disadvantaged communities is really great to see. We 

appreciate working with the staff on those programs. 

Moving to the light-duty area, we're strongly 

supportive of the pilots, which again are targeted for 

disadvantaged communities, as well as for the continued 

funding for the classic CVRP program. We think it's 

premature at this point to reduce the rebate amounts so 

really appreciate the staff making that adjustment to keep 

those whole. 

We do think that in order to make sure there is 

enough money to go around that instituting an income cap 

is the best way to go. And I second the testimony of Dave 

Reichmuth from Union of Concerned Scientists. This policy 

is not about punishing anybody or making a social 

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statement. It's simply really echoing what the Energy 

Commission said, that we want to give rebates to motivate 

purchase decisions. And when people get above certain 

level of income, the availability of the rebate is not 

what's motivating their purchase decision. 

So we think it makes sense to focus the rebates 

on those who need them and therefore are motivated by the 

rebate in making their purchase decision. Therefore, 

having a sensible and moderate income cap is the best way 

to go. We don't know exactly what's the best level to do 

that. But would delegate that to data-driven analysis by 

the ARB staff. 

Thank you. And I also want to add on behalf of 

the Coalition for Clean Air our thanks to Charlyn for all 

of her great works over the years and congratulations on a 

well-earned retirement. 

CHAIRPERSON NICHOLS: Thank you. Okay. 

Mr. Lovelace.

MR. LOVELACE: Good morning, Chair Nichols and 

Board members. I also submitted written comments, but I'm 

just going to present a portion of those here. 

At XL Hybrids, we're appreciative in the AQIP 

funding plan for 2014-15 and agree with the basic 

principles and structures that have been proposed. 

The concept of a funding level and time line that 

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declines as technology becomes more mature makes complete 

sense to us. However, we believe, of course, that such a 

plan needs to be comprehensive and a weighted portfolio to 

maximize the opportunities to achieve those long-term 

goals that are set forth for the funding sources. 

On April 15th, XL hybrids provided feedback to 

broaden the H Class II PHEV at a properly weighted lower 

voucher level. The program currently supports Class III 

and up HEVs, but only PHEVs and EVs in the Class II B 

space. 

ARB staff responded in their final plan document 

on May 23rd as follows, "Zero emission and zero emission 

range extended vehicles in the Class II A and II B classes 

are currently HVIP eligible due to their ability to 

achieve zero emission miles. However, non-plug-in hybrids 

are not HVIP eligible. As mentioned in this document, 

HVIP is intended to facilitate deployment of the cleanest 

technology, particularly in the larger tech classes that 

pose the greatest technical challenges." 

At XL Hybrids, we believe the current program 

rightly places value on HEVs towards supporting a low 

emissions future as evidenced by support for Class III. 

But the staff response does not explain why by contrast 

the Class III HEVs are included in the program. Why is a 

10,001 pound HEV more challenging than a 999 pounds HEV? 

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Why is a 10,001 pound HEV cleaner than a 999 HEV? The 

answer to all these are clearly no. The implication may 

be that Class II BHEVs are already main stream. It is 

well known that the major OEMs have pulled out of the HEV 

space, and therefore that's not true. 

At the last page of my written comments, there is 

a chart of the nine vehicle classes and the three 

electrification classes. You can see there's only one 

square in the 27 that isn't supported. 

The only class to which there is no incentives 

are Class II as summarized on this chart. The major OEMs 

sell to consumers in Class I. And some Class II pick-ups 

and SUVs and AQIP CVCR programs supports clean 

alternatives in those classes. The HVIP program supports 

Class III to eight, but not including the HEVs for Class 

II B. 

CHAIRPERSON NICHOLS: Understand. I'll ask a 

question about that later. Thank you. Jaime Hall. 

MR. HALL: Good morning, Chairman Nichols and 

members of the Board. 

My name is Jaime Hall. I'm Policy Director for I 

CALSTART. We're here today in support of the staff 

proposal. 

It's been busy couple months on this front, and 

we really enjoyed the opportunity to work with staff and 

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all of you. I'm sure they're really happy to have this 

plan finished. And they've done a great job. 

I just wanted to provide some quick thoughts and 

reactions on the plan. The first on CVRP is we have been 

working with the broad coalition of auto makers and CalETC 

submitted extensive comments. I'll keep it short and 

sweet on this program. 

CVRP is an important program. It's working. And 

all Californians benefit from the deployment of these 

vehicles. Therefore, agree it's not the time to cut 

rebates or limit eligibility at this time. And for those 

reasons, we support the staff proposal for both CVRP and 

the pilot programs. And we'd really like to thank staff 

for being responsive and working with us on this plan. 

I want to change gears and discuss the mediumand heavy-duty investments briefly. We support the higher 

HVIP incentives for the zero emission trucks and buses and 

think staff should be commanded for recognizing the needs 

of the market and recommending an increase to those 

incentives because what the previous levels were not 

enough to move the market. 

We also strongly support the inclusion of the 

pilots and demonstrations. And as I think some of you 

know, we've been working with the coalition of zero 

emission bus manufacturers and suppliers and end users and 

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are particularly excited about the potential for the zero 

emission bus pilot projects. 

I just want to leave you with some overarching 

thoughts on the structure of the plan. With this big 

increase in funding and with all the eyes on California 

right now and on what's happening with this program, we 

think it makes sense to maintain a little bit of 

flexibility and make sure you're able to achieve your 

goals. There are two specific areas I'm thinking of. 

First, we think you may want to retain the 

ability to shift funds between pots depending on the 

proposals that come in and the needs of the market. And 

if available, if there are good deployment projects 

available, it would be nice to get more vehicles out in 

the near term to get benefits to point to. 

Second, we think it makes sense to consider 

additional technologies, potentially including down the 

line additional technologies not currently in the program. 

I just mention the Class II B hybrids. There are some 

aftermarket solutions. And as Jerylin mentioned, there 

are some alternative fuel and near zero emissions from 

long haul freight opportunities you may wish to consider 

down the line. 

Flexibility is particularly important given the 

goal and the medium heavy duty sector of directing 

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100 percent of these funds to disadvantaged communities. 

Definitely going to need some flexibility and creativity 

to make that happen. 

So overall, this is an exciting opportunity in 

the plan. We support the proposal. We think it would be 

stronger with more flexibility. A lot of this can be 

handled in the implementation phase, and we're going to 

take part in the working groups and look. Good plan. And 

thank you. 

CHAIRPERSON NICHOLS: Thank you. 

MR. ELAM: Madam Chair, Board, my name is Rob 

Elam from Propel Fuels. We have submitted comments in 

support of AQIP's funding plan. I had a couple of quick 

additional thoughts I'd like to submit. 

First, a little context. Propel Fuels is 

California's largest alternative fuel retailer, serving an 

imbedded fleet of vehicles, diesel and flex fuel vehicles. 

Over half of our locations are located directly in 

disadvantaged communities. And over 80 percent of our 

locations are within a 15-minute drive time of 

disadvantaged communities. 

We have been serving disadvantaged communities 

since 2008 with low carbon fuels. Approximately 49 

percent of our customer base in the Inland Empire and San 

Joaquin Valley is Latino. And we understand the value of 

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price point fuels and vehicle limitations to the customer 

base in disadvantaged communities. 

Two quick points. One, I'd like to echo we would 

support increased flexibility for staff to make technology 

choices across the portfolio, particularly to engage 

disadvantaged communities directly. So we would encourage 

staff to. You've heard from a number of folks about 

today. 

Two, there's sort of a co-mingling of funds 

between AB 118 and GGRF. And 118 does not follow fad 

under SB 535. So we just wanted to note that. 

But again, support the program. These are 

exciting times. And thank you for my comments. 

CHAIRPERSON NICHOLS: Thank you. 

MR. BAUMHEFNER: Thank you, Madam Chair. 

Max Baumhefner on behalf of the Natural Resources 

Defense Council and the Charge Ahead California Campaign. 

I commend staff for developing a comprehensive 

plan to move the state's cars, trucks, and buses to zero 

and near zero emissions operations while improving access 

to cleaner transportation areas of the state suffering too 

long from air pollution. 

We are strong proponents of the proposed medium 

and heavy duty projects and the proposed pilots and 

disadvantaged communities which align well with the vision 

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articulated by the Charge Ahead California Campaign and 

that of SB 1275 authored by Pro Tem Elect De Leon. We 

look forward to engaging with staff in the workshops to 

further develop these programs. 

With respect to the CVRP, we support the decision 

to not adopt a significant rebate production at this 

juncture before the long-term planning that SB 1275 would 

require has occurred. This strategic planning would 

articulate an exit strategy for the program with rebates 

stepping down at pre-determined sales volume, taking the 

guesswork out of program planning. 

Earlier this week, the Assembly Natural Resources 

Committee amended 1275 to include an income cap that would 

need to be implemented by June of 2015. And we note that 

early action by the Board in response would obviate the 

need for a midyear rebate production to keep the program 

within its means. 

ARB staff have already analyzed various rebate 

income caps, revealing that significant savings can be 

achieved with little adverse impact on vehicle sales. 

We presume this reflects the fact that many 

affluent respondents that the owner survey reported to ARB 

is they would have bought their cars anyways. Not all 

that data has been made public, but ARB staff has access 

to the underlying survey responses and could calculate an 

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income cap at a level that would prove the program's 

effectiveness without undermining progress towards our 

clean vehicle goals. 

We also believe the administrative barriers to an 

income cap have been overstated. And we rely on a similar 

structure in the EFMP and believe we can do so here and 

have every confidence that the agency that administers the 

world's most comprehensive carbon pricing screen can build 

an income cap. 

Accordingly, we reiterate the course of action 

outlined in our comments, which would be to implement an 

income cap now to provide immediate and significant budget 

savings but does not undermine progress towards our 

long-term ZEV deployment goals; second, monitors program 

sales and make midyear adjustments to the income cap, if 

necessary; and finally, in the unlikely event the previous 

two events provide a sufficient savings, you can always 

implement a wait list at the end of the year with full 

knowledge that this broad group of stakeholders will be 

continuing to advocate for full funding for low carbon 

fuel transportation. Thank you. 

CHAIRPERSON NICHOLS: Thank you. 

MS. HOLMES-GEN: Chairman Nichols and Board 

members, Bonnie Holmes-Gen with the American Lung 

Association in California. 

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We're very pleased to be here to support the 

staff's recommendation. We've been a supporter of the 

AQIP program since its inception and believe it's a key 

tool on a state's air quality strategy. And of course, 

it's incredible now to see the acceleration and expansion 

of this program with the 200 million GGRF funds. We 

appreciate the staff has been incredibly helpful in 

reaching out and sharing with us all of their proposals as 

they move forward. 

We also appreciate the partnership that's 

developed between your agency and the CEC. It's 

incredibly important to have these agencies working 

together so closely to ensure success of these programs. 

We support the CVRP program and will defer to the 

Charge Ahead campaign comments. 

In terms of the heavy duty, I want to say we're 

incredibly pleased with the recommendation up to 85 

million in incentives from this sector. We know it's 

incredibly important. We cannot meet our federal air 

quality goals and our GHG goals without transformation of 

our entire vehicle fleet. And we have a lot of work to do 

and heavy duty. 

We support increasing the incentives for truly 

zero emission trucks and buses. We're supportive of the 

freight demonstration projects, not just commercial 

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projects, but pre-commercial projects and moving those 

forward. 

And pleased with the truck and bus transit and 

the truck and bus hubs. We think these program funds can 

really help to re-energize to focus on school buses. And 

getting transit in disadvantaged communities is incredibly 

important. 

There's been a lot of discussion about metrics 

around all of these programs. And that's, of course, 

incredibly important. But we also want to mention there 

needs to be a focus on communication. And we hope we can 

work with you in getting the word out about the good news 

that these projects that are improving the air, improving 

public health, moving us toward clean energy economy, and 

a focus we have on disadvantaged communities. So we'd 

like to help get the word out, promote how these state 

funds are helping communities at the local level. I think 

that's really important. 

And I have to say that on a note about Charlyn, 

because she has been such an incredibly helpful person to 

us. She's been gracious, cheerful, and incredibly helpful 

over the years. I look forward to seeing her on the 

running trails, as we heard about this morning, her 

incredible hobby of running. 

So thank you very much. We look forward to 

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working with you and seeing these funds roll out. I think 

it's an incredibly important program. 

CHAIRPERSON NICHOLS: Thank you. 

MR. GONZALEZ: Good morning, Madam Chairman and 

Board members. 

I'm Tony Gonzalez with the firm of Rose and 

Kindle here in Sacramento. And I'm speaking on behalf of 

the Association of Global Auto Makers. 

I prepared remarks you received copies of. 

Global Auto Makers supports the Clean Vehicle Rebate 

Project. The CVRP is one of the important incentives that 

California offers to zero emission vehicles in its support 

of ZEV technology. Although a number of new ZEV models 

are expected in the coming year, the ZEV market is still 

in the early stages of market growth and PVs represent 

just over two percent of California's new vehicles sales 

today. 

Under California's ZEV programs, significant 

increases in ZEV volumes are required starting in 2018. 

And according to ARB staff, ZEV sales must increase more 

than seven-fold to 15 percent of the new vehicle sales by 

the year 2025. 

California's ongoing support of the ZEV market 

through programs such as the CVRP is critical for market 

growth to be realized. And we expect such incentives will 

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continue to be needed for the foreseeable future. 

We support the ARB recommendations to maintain 

the current levels of rebates in the CVRP for battery 

electric and plug-in hybrid electric vehicles and to 

provide a rebate of $5,000 for fuel cell vehicles. These 

changes are essential to maintaining a robust CVRP and 

providing incentives for the early market for ZEVs. 

We also support ARB's plans to remove the 

contingency plan to reduce rebates. But instead include a 

mid-course check for a contingency plan which would be 

presented to the Board for decision making. Decisions on 

rebate availability and amounts have broad reaching 

impacts on the ZEV market that warrant public comment and 

consideration by the Board. And we support ARB's plan to 

include the Board decision. 

Finally, as explained in our comments submitted 

jointly with the Alliance of Automobile Manufacturers on 

June 20th, we do not support ARB's proposal to impose a 

two per lifetime cap on rebates. The cap would 

unnecessarily limit the market and penalize the most 

enthusiastic ZEV adopters. We recommend eliminating the 

cap at this time. 

And I would just like to add one editorial note. 

I want to thank all of the staff who have been involved 

with this work product and also like to thank your 

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legislative staff. We enjoy the great relationship that's 

gone beyond cooperation and I would say comradery. Thank 

you very much. 

CHAIRPERSON NICHOLS: Thank you. 

MS. TUTT: Thank you, Chairman Nichols and 

members of the Board. My name is Eileen Tutt. I'm with 

the California Electric Transportation Coalition. I'm 

here today representing the larger group of coalition 

members that Jaime Hall mentioned. I'm going to ask them 

to stand up. There's only a few of them here today 

because of all of the staff's efforts, to be quite honest. 

But we are here, and I'm speaking for all of them. 

There's about 40 people that are part of this coalition. 

They're auto makers, utilities, new car dealers, 

non-profits, trade associations, all kinds of people that 

we're all on the ground trying to make this market work. 

And we're all here today in support of the staff's 

recommendation, particularly on the rebate amounts, the 

increased per vehicle for the HVIP and the pilot and demo 

program. So thank you so much. 

CHAIRPERSON NICHOLS: Do you want to let them sit 

down? 

MS. TUTT: The Chair said you can sit down. 

So I first want to thank the staff for all the 

time they spent with us. You have to be sick of us. I'm 

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sorry we aren't going away. 

But we feel like you should be given a lot of 

credit for designing and implementing the most successful 

incentive programs that I think have ever been implemented 

in this state. And I would extend that to the Energy 

Commission as well. 

You were humble in some of your projections about 

how effective your programs were going to be. Some of 

those projections were a little off. You deserve praise 

and rose petals, is all I'm going to say. 

Finally, I do want to take just a minute 

responding to this income cap thing because we did not 

comment on that in our comments because the staff isn't 

recommending it. But we are opposed to an income cap. 

There are essentially two goals to this program. One is 

to sell as many cars as fast as possible to whomever, 

wherever will buy them. That's what the incentive 

programs are about. 

The other is to get these vehicles into 

disadvantaged communities. And that's what the pilot 

programs are about. And these are two programs or two 

goals that are essential to each other. And they 

complement each other, but they require different 

strategies. 

The income cap doesn't further either of those 

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goals, and I would say that it actually undermines both of 

them. So I'm not sure why it's being recommended. There 

is a suggestion that it's easy to implement. It is not 

going to be easy to implement. It will be very 

contentious and take a lot of time. I would rather the 

staff spend their time working with us developing a 

long-term plan and basically saving the plan in general as 

they do so well. I do believe that this is a brilliant 

staff and they could solve this problem. I'd just rather 

they worked on other issues. 

And then finally, I just want you all to know -- 

and I'm sorry to tell you this -- but we're going to stick 

around and work shoulder to shoulder with the Board 

members and the staff to continue to make sure that this 

program, both the heavy duty and the light duty, is fully 

funded. 

Thank you to the Board. 

By the way, the flowers I've been carrying around 

all day, those are for Charlyn. And they were freshly 

watered by the Coalition tears this morning. I'm sorry 

that I missed this morning. I didn't quite I was too 

busy -- chatting out there. But we'll get them to Charlyn 

somehow. 

CHAIRPERSON NICHOLS: I'm sure you can make it 

upstairs with the flowers

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MS. TUTT: They don't let me up there. 

MR. DUNLAP: Good afternoon, Madam Chair and 

members. I'm John Dunlap representing Nissan today. 

We're proud coalition members of CalETC. It's impossible 

to have more enthusiasm than Eileen. But we wanted to 

come today and voice our strong support for the staff 

recommendation and add our voices to others, saying how 

much we appreciated working with the staff. Richard Corey 

and Alberto Ayala and other team members they assigned 

were with us every step of the way. We appreciated that. 

We also appreciated them digging deep and hearing from a 

lot of folks and weighing it all. 

We think it's a terrific program. It makes a 

difference in the roll out of these advanced clean 

vehicles. As you know, you heard a lot about that. 

You've seen some terrific statistics. And Nissan remains 

committed to making a success of the Leaf product. And 

you'll be hearing from us in an ongoing way as well. And 

we urge your support of the staff recommendation. 

Thank you. 

CHAIRPERSON NICHOLS: Thank you. 

Mr. Douglas, welcome

MR. DOUGLAS: Thank you. I'm Steve Douglas with 

the Alliance of Automobile Manufacturers. And you have a 

written comment, so I'll be brief. 

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First, I would also like to thank the staff for 

all their hard work. We recognize that we're just one 

stakeholder and that you're trying to balance the 

competing and sometimes mutually exclusive demands of many 

other stakeholder groups. So throughout this at every 

level at every turn, you've been helpful, open, and just 

thoroughly professionals. So we've appreciated that. And 

we believe that the Board Resolution -- the draft 

Resolution strikes a perfect balance. We support that. 

Second, I'd like to thank the Board for their 

support of the CVRP program. As you know, my members are 

all subject to the ZEV regulations and spend tens of 

billions of dollars to bring these vehicles and put them 

on the dealer lots. That's just part of it. Getting them 

on the lot is the first step. But the second step is 

getting them on the roads. That's what the CVRP is about. 

The purpose of the CVRP is to get ZEVs on the 

road. And to that purpose, it's been an undeniable, 

unmatched success. It's simple. It's effective. 

The CVRP, when combined with the generous 

incentives and manufacturers also provide for ZEVs, make 

these vehicles some of the most affordable vehicles today. 

Today, the ZEVs can be leased for 99 to 199 per 

month. And that's what zero down or near zero down. 

Again, these are some of the most affordable vehicles out 

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there. 

Just to quickly summarize then we support what -- 

we agree that reducing the rebate at this time is not a 

well -- will have a negative impact on sales. Also, we 

believe it's not necessary at the time, so we support the 

staff's recommendation on that. 

We also support the Executive Officer's authority 

to establish a wait list. That's important. And also 

midyear review is obviously appropriate. 

And finally, for the fuel cell vehicle 

provisions, we support those. It's an exciting 

technology. It's just starting. It's an exciting day. 

And then just last, I wanted to touch on this 

income cap. That would -- an income cap, it's an 

interesting to draw a line and see where the income is. 

But it would dramatically increase the complexity of a 

program that succeeds because of its simplicity. I can't 

imagine how you implement it. I'm sure there are ways. 

But I can't imagine bringing W2s, tax returns to the 

dealership and letting them decide whether you're eligible 

or not or trying to figure out -- having the dealer figure 

out whether you're eligible. 

So we look forward to working with the staff. 

And we look forward in the coming years to implement this. 

Thank you a lot. And thank you for your support. 

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CHAIRPERSON NICHOLS: Thank you. We appreciate 

your bringing here. Obviously, this is an important 

program for the industry and for us as well. 

So, 

Mr. Sadredin, you get the last word.

MR. SADREDIN: Thank you, Madam Chair. 

I just wanted to express our support for staff 

recommendation. But I really got up to say a statement of 

support on behalf of your decision to target this program 

at disadvantaged low-income communities and also offer a 

word of support for the CalEnviroScreen document. I know 

there are some regions that they feel left out for not 

being on the list. We take no pleasure in San Joaquin 

Valley for being highly featured on that list. And every 

day, we're working to get off of that list. But it has to 

come through actual work that improves quality of life for 

those people, not from some sort of creative methodology 

of changing the scoring system. 

It's not a perfect tool. We are working with our 

colleagues, with other districts, with ARB, with Cal/EPA 

to make it even better. It's a living document as far as 

we're concerned. But at this time, we believe it's the 

best tool in terms of assessing relative cumulative 

impacts to those communities and trying to pick apart some 

factors from others and only focus on air quality or other 

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factors in our view that diminishes the value of that 

tool. Because as you know, they are inter-related dynamic 

factors, the fact you have a poor community, lack of 

access to health care, it makes air quality even more 

impactful, even though air quality may not be that high in 

those areas. So just wanted to make sure we don't lose 

that tool as a significant tool in terms of making some 

decisions. 

We're all for getting more funding to Bay Area. 

Any reductions in Bay Area reduces air pollution in San 

Joaquin Valley as well, so we would be happy to work with 

them to get funding to them through various programs. I 

just want to go on record as supporting the focus on those 

communities and also CalEnviroScreen as at this point 

being a tool to use. Thank you. 

CHAIRPERSON NICHOLS: Okay. That concludes the 

testimony, and we will close the record on this item at 

this time. 

I, too, want to add a voice of support for the 

staff. It is a complicated and large program. It is not 

just about CVRP, although we seem to have spent most of 

the time talking about that. But there are a number of 

other highly important pieces of this program and the 

opportunity to present -- to spend a significant 

allocation of funds is really remarkable. Obviously, the 

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burden on us is great to do it well. 

I think somebody used the term "data driven 

review." And I would just like to echo that I'm hoping 

that we can avoid again making adjustments to the program 

before we've had an opportunity to implement it and learn 

from it. It is possible, given that there is legislation 

moving, that we may be given direction in some regard as 

to how we spend the money. But I think for now we should 

leave the staff recommendations as they are in particular 

with respect to the CVRP not to start tinkering on one 

side or another with how the money gets spent. 

So I think that the effort that's been made to 

target funds to disadvantaged communities and particularly 

the pilot programs are really exciting and innovative, 

something that's never been done before. And we will see 

how successful they are. But we have a lot of hope in 

them. But to start drawing lines over who can get rebates 

and who can't at this stage of the game I think would not 

be wise. So that's my advice. 

But I also recognize that other Board members may 

wish to make comments and ask questions at this point. 

I'll start down at this end. Anybody who wants to speak? 

BOARD MEMBER BALMES: Thank you, Madam Chairman. 

So I, too, very much like the focus on 

disadvantaged communities and the pilot programs. I'm 

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fully supportive of that. 

I'm also cognizant of our Chairman's desire not 

to tinker now. But I don't want us to run out of money. 

And so I like someone's suggestion that we perhaps 

consider giving the Executive Officer some discretion sort 

of a midyear to review what's going on. 

CHAIRPERSON NICHOLS: May I just respond to that 

because I initially thought that was a good idea. I 

changed my mind when I realized the intense level of 

interest there is in any decision to draw any line, either 

to lower the amount, to put an income cap, a vehicle cap. 

BOARD MEMBER BALMES: So now we have to go back 

to the Board -- 

CHAIRPERSON NICHOLS: It has to come back to the 

Board anyway. 

BOARD MEMBER BALMES: I would like to see a 

midyear review, if necessary. 

CHAIRPERSON NICHOLS: Well, it's an if necessary. 

I think, if necessary, the staff is on notice they are 

going to need to have to come back to the Board. So 

agreed. 

BOARD MEMBER BALMES: I would agree actually 

after hearing the testimony today that needs to be a 

public process. 

So one thought on the pilot program in response 

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to Mr. Pike's suggestion that a tire replacement program 

be considered. When I first heard about this program last 

week, I knew there was no way we were going to be able to 

include it in this year's programs. But it struck me as a 

good idea, especially given it was targeted towards 

disadvantaged communities. 

So all I would say is I support looking at this 

further. I realize there are all sorts of issues that 

we -- would these tires be acceptable to the intended 

target population, et cetera. Maybe old cars don't drive 

very well with these tires. 

But I think it's a good idea. And I would like 

to see it reviewed further by the staff, especially since 

the South Coast I think commissioned Mr. Pike's firm to 

come up with a plan, this would be another program where 

we could potentially collaborate well with South Coast. 

Always interested in us collaborating with our district 

partners. 

I guess another comment I'd make is directed to 

Mr. Sadredin when he correctly spoke about the importance 

of disadvantaged communities in the San Joaquin Valley. I 

was quite disturbed when I recently saw a comment that he 

made about fine particulate no longer being linked with 

asthma based on some study commissioned by his district 

that I don't think is in the published literature. I'm 

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very disturbed by that comment. I don't think it's a 

healthy comment to be coming from a head of a air district 

that has such an important pollution problem and I don't 

think it helps disadvantaged communities. So I hope Mr. 

Sadredin is more careful in his comments about linking 

fine particulate and asthma in the future. Thank you. 

CHAIRPERSON NICHOLS: Mr. De La Torre. 

BOARD MEMBER DE LA TORRE: Thank you. 

I guess to keep with that theme, this is 

something that I said in the meetings with the OEM and 

CalETC. We're going to move ahead today and we're going 

to fund this, and that's great. I'm very supportive of 

that. And as I said numerous times, I think when we make 

a commitment in this area on these vehicles, we need to 

follow through. We need to send a very clear signal to 

the market that this is what it's going to be in order to 

in incentivize this. That makes perfect sense to me. 

Medium and long term, I have yet to see a plan 

for us to make a transition away from these incentives. 

And I wanted to say here publicly -- I said it to them in 

our meetings -- that I want to see a plan. We have these 

meetings. Staff comes up with all kinds of ideas, and I 

have yet to see a whole lot on the manufacturer's side. 

So I very much expect that in these six months 

with no pressure, with no hammer hanging over our heads, 

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that we'll see some ideas coming from the OEMs about this. 

And the one that I specifically mentioned in our 

meeting is the graduation of vehicle name plate that 

graduates, that sells enough cars that it no longer needs 

the subsidy, no longer needs the rebate. And what is 

that? And let's justify that number, whatever that number 

is. 

No car is anywhere near it right now. This is 

the time to come up with it and stick to it down the road. 

Not when it's impending or there's one car that's way 

ahead of the others. It's now, ahead of time, to 

establish what that marker is. And then whoever hits that 

marker, you graduated. Congratulations. You sold enough 

cars you're in the main stream that you no longer need the 

support that we are providing. That's something that I 

absolutely want to see in the next few months. And again 

I don't know what that level is. But I want to see it 

coming from the OEMs first. And then we can have a dialog 

about whether that's the right mark or not. Thank you. 

CHAIRPERSON NICHOLS: Ms. Mitchell. 

BOARD MEMBER MITCHELL: Thank you, Chair Nichols. 

Just to follow up briefly with Mr. De La Torre's 

comments. SB 1275 actually requires this Board in 

collaboration with other agencies to do a plan on meeting 

the ZEV initiative goal. So I would suggest working with 

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the OEMs and our Board on that would be a good way to go 

forward. 

I'm fully in support of the CVRP program that 

staff has set forward in maintaining the existing levels. 

I think we're not quite there yet. It was -- it's hard to 

know when we get there. I think that that's a difficult 

issue. There was a U.S. Supreme Court case many years ago 

when the U.S. Supreme Court justice says, "I don't know 

how to define pornography, but I know it when I see it." 

And I think about that when are we going to know it when 

we see it where we've gotten where we need to be in the 

market penetration for these very new, modern, clean 

vehicles. 

The other thing I want to mention in connection 

with the entire program is how important the HVIP segment 

of this program is. And it is geared to help 

disadvantaged communities. Another goal, of course, of 

our agency and of all the air districts because our 

primary goal and what we do is to protect public health. 

And we recognize. And what we do that the disadvantaged 

communities are often the most highly impacted by the 

emissions and air pollution that is present today. I see 

this program, the HVIP, as a significant crossroads to 

move forward our sustainable freight strategy and to help 

disadvantaged communities as well. 

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So I think it is a very well crafted plan for us 

to accomplish multiple goals. So I look forward to 

continuing on this path. Thank you, staff, for all your 

hard work on this. 

CHAIRPERSON NICHOLS: Mr. Roberts. 

BOARD MEMBER ROBERTS: Thank you, Madam 

Chairwoman. 

First of all, I think we have something that 

really is working and we want to keep it working. But I 

think Mr. De La Torre's point that we have to define how 

do we transition and start to think about that. I'm not 

sure that the graduation you suggest is the right thing. 

But I think we do have to come up with a transition to 

think that you might set a path where you penalize the 

successful firms and keep rewarding the unsuccessful firms 

who might be building an inferior product doesn't make 

sense to me. But we need to have some type of a metric 

and it should be defined. That would help to get 

certainty into the markets. 

I think staying the course in terms of the 

incentives that were created here I think are very good. 

I'm concerned when I hear about putting a limit, a cap on 

the income. We really want people to buy these. And you 

know, I don't care what their income is. This is not a 

success yet. Companies that are producing these aren't 

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making tremendous dollars on these cars. And probably 

without these incentives, there still probably would not 

be any program going. 

This is not the hottest profit thing around. And 

I think what we really want to do is we want to introduce 

these to all segments of the population so that they -- 

not only the people driving them, but their neighbors and 

everybody else will become more aware of the different 

options that are out there and start to use, whether 

they're fully electric or partially electric or whatever, 

that we not only do we clean out the environment, but 

we're developing a sustainable vehicle that people are 

going to go forward with the infrastructure to support it. 

So I think we're on the right path. I think we 

need to give definition to know the transition period when 

we see it and have some kind of a measurement that's out 

there with an expectation we're going to try to continue 

to do what we're doing for some period of time that I 

think will really help. I think the certainty in the 

market for as long as we can hold it is good. I don't 

think we're going to go on indefinitely. It wouldn't make 

a lot of sense to me to go on indefinitely. 

With that, my compliments to staff. You've done 

well. 

CHAIRPERSON NICHOLS: It's not mandatory 

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everybody speaks, but many people wish to, so please do. 

I'm not going to cut anybody off. 

BOARD MEMBER RIORDAN: I'm very supportive of the 

staff recommendation and appreciate very much their 

modifications that have occurred in the last month or so. 

Thank you. 

CHAIRPERSON NICHOLS: Thank you. 

Mr. Eisenhut. 

BOARD MEMBER EISENHUT: I'm prepared to offer a 

motion when you're ready. 

CHAIRPERSON NICHOLS: Move on down the line. Dr. 

Sherriffs. 

BOARD MEMBER SHERRIFFS: Thank you. 

Thank you, staff, for your hard work on this and 

flexibility and adjustments that you've been able to make. 

The stakeholders, obviously thanks for all your 

funding advocacy that makes this possible and your ongoing 

support for that and work in that funding advocacy, the 

advocacy for flexibility in the plan, and the advocacy to 

reach the environment justice communities with this. 

I agree this is a good time to be thinking ahead 

in a couple of areas. And I don't think we want to 

penalize the successful, but we want to think about how we 

are going to transition and what the non-rebate incentives 

will be going forward to promote these technologies. 

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One question for staff and for Mr. McKinney, 

because I think infrastructure is so important and because 

infrastructure relates to SB 375 goals and the things that 

happen there, what thoughts again about next year, because 

infrastructure is so important for getting these 

technologies out. I know having bought a Leaf, you know, 

the big barrier to making the leap is how am I going to 

plug this thing in? What do I need to plug it in? Is the 

infrastructure here to support the technology. 

MR. MC KINNEY: Board Member Sherriffs, Jim 

McKinney here. 

We really recognize the importance of 

infrastructure to continue pushing the market forward and 

making sure the new consumers are confident that they can 

charge their cars and get to where they need to be in 

their daily life. That's why with the past investment 

plan that we essentially doubled down. So traditionally, 

our funding level has been 7 to $8 million a year. We 

doubled that to 15. I haven't seen any indication from 

our Commissioners that we would modify that in the near 

future. We've heard a lot of testimony and in various 

forums it's important to continue matching infrastructure. 

And again, could be workplace. Could be in the public. 

Could be fast-charging corridors. So we're on that one. 

And we worked very closely with many parts of ARB staff to 

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figure out where exactly is the best place to put them. 

BOARD MEMBER GIOIA: I actually wanted to address 

a different issue on this just to acknowledge all the 

points that were made. 

I think it's always a balance. I think we've 

acknowledged that we know that we could run out of money 

here. We're going to keep an eye one this. I think 

agreeing with some other comments, we do want to see data 

that shows the linkage and the causal effect between the 

incentive and the actual purchase. We know that in most 

cases there is a relationship and in some cases there 

isn't. 

We realize that the higher income you make or the 

higher the cost of the car that the relationship may not 

be as great. There may be some. And so that's always 

hard to get one's a grasp on that. But we're going to 

keep an eye on that, as this program has limited funding. 

But we want to keep this going at this level. That's a 

good call. 

On the pilot programs and on the advanced freight 

technologies, can you talk a little bit more about -- this 

is from slide 17 and 18. First of all, I strongly support 

the idea that we're focusing on disadvantaged communities. 

There has been some legitimate concern raised about the 

EnviroScreen tool. It's not a perfect tool. It has 

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issues. And given there is a large amount of money that 

is being focused on disadvantaged communities, we need to 

understand what criteria we're using. 

So can you talk a little bit more on how we are 

going to select the freight technology demonstrations and 

the truck and bus pilots? And obviously, you don't have 

that fully laid out. It's going to be still a lot of 

effort put into that. I think we should be kept informed 

about how you're developing the criteria as we look 

because we want to make sure these pilot projects are 

going to be meaningful, they're going to be in the right 

communities, and we want to make sure that's going to be 

geographically appropriate in terms of how it's spread out 

around the state. So can you talk a little bit about that 

for 17 and 18? 

STATIONARY SOURCE DIVISION CHIEF MARVIN: Thank 

you, Supervisor Gioia. 

Cynthia Marvin with the Stationary Source 

Division.

I'm starting out the response because ARB was 

recently given responsibility through the budget trailer 

bill to develop the guidance for implementing 535. 

They're all very similar. So ARB staff will be developing 

recommendations as to what does it mean to benefit a 

disadvantaged community. And we certainly think that's 

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really critical for implementation of ARB's low carbon 

transportation funds. We've got mobile sources compared 

to fixed locations. And we know that vehicles are 

traveling in communities that are not necessarily where 

they are domiciled or housed. So we would fully expect 

that that guidance will recognize the benefits to downwind 

communities, whether those communities happen to be 

disadvantaged or not. 

Let me give you an example. Port of Oakland, 

let's say that the Port of Oakland responds to our 

suggestion that they participate in this program for zero 

emission drayage trucks. If they do that perhaps with the 

assistance of the Bay Area Air Quality Management 

District, we would expect that that program would provide 

benefits to the disadvantaged communities which are just 

east of the port. So the port itself and perhaps the 

money would not go to a disadvantaged community census 

tract. But the benefits of those investments and the 

benefits of cleaner air would clearly go to downwind 

communities, both those in those in the census and not. 

BOARD MEMBER GIOIA: There is the ten percent 

must be spent in the disadvantaged community and 25 

percent to benefit. These are floors, not ceilings, 

right. So -- and you're talking about the communities 

that get a benefit, right, and how to define that. 

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STATIONARY SOURCE DIVISION CHIEF MARVIN: We 

definitely see much of the money that ARB is administering 

fitting into that benefit category. To the extent it also 

works because the fleets or the operations are housed in 

the disadvantaged communities, so much the better. 

But I think there is a definite emphasis on 

benefiting the communities, which means that as those 

vehicles are traveling, we're talking about the census 

tracts that come up in the top tier in CalEnviroScreen and 

we're talking about the surrounding neighborhoods. As we 

look at some of the classic environmental justice 

communities from an air quality perspective, we believe 

that many of the low carbon transportation investments by 

their very nature will be benefiting both the 

disadvantaged communities and many of those adjacent 

communities in the Bay Area and elsewhere. 

BOARD MEMBER GIOIA: So how long do you see it 

taking to develop this and how is that being timed with 

the roll out of funding for the pilot projects? Because 

we've obviously gotten this funding for this fiscal year. 

When do you anticipate starting to put to call out for 

projects and making decisions on pilot projects and how 

does that align with this time frame to develop the 

guidelines for what it means to benefit a disadvantaged 

community? 

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STATIONARY SOURCE DIVISION CHIEF MARVIN: Let me 

address the guidelines and the crew sitting to the left of 

me nodding their heads will talk about the pilot project 

time frame. 

Because of the demand to move forward with these 

funds, not just ARB, but in other agencies, there's two 

key decisions when it comes to disadvantaged communities. 

So the first is Cal/EPA Secretary Rodriguez's 

determination about where to draw that line using 

CalEnviroScreen as a tool. 

BOARD MEMBER GIOIA: That decision hasn't been 

made yet. 

STATIONARY SOURCE DIVISION CHIEF MARVIN: That 

decision hasn't been made. We expect there will be a 

proposal in the next month to month and a half. That 

proposal will then go to a public workshop and then that 

decision will be made. 

What we're looking at doing from an ARB staff 

guidance perspective is developing some initial or 

preliminary guidance this summer that agencies, including 

ARB, could use for the first round of funding, including 

the development of the pilot projects. And then do a 

full-blown guidance document in a public process, bring 

that guidance and other guidance documents that ARB is 

required to do for the cap and trade option proceeds to 

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the Board in spring to early summer of next year. 

BOARD MEMBER GIOIA: I would like to see, given 

that you're developing here this summer and this is going 

to be a really important policy and it's going to effect 

sort of the roll-out, if we can get an update on the our 

next meeting because this. Because I think it's useful to 

have a presentation here to see and understand and provide 

any input. Because right, we're going to be spending a 

fair amount of money here over the next fiscal year. So 

rather than wait just to see something next spring, I 

would like us to get an update, if the Chair is fine with 

that, at our meeting to see how this is progressing. 

CHAIRPERSON NICHOLS: I think this Board should 

hear what the staff is thinking in terms of the 

development of the guidance. I also think -- and we have 

not heard from the people who are actually going to be 

doing the project development, but there's not -- I 

shouldn't say -- we need to get people thinking and 

working on innovative project ideas because the fact is 

that there are varying pots of money out there. This is 

not the only money. And so we want people thinking about 

the projects and then bringing them to us. And we'll 

figure out how to get funding for them because there are 

other sources as well. But yes, it's still a good idea to 

hear from the staff as soon as they have any draft 

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thoughts at all about how this guidance is going to work. 

BOARD MEMBER GIOIA: And you're going to briefly 

just comment on the project roll out. 

MS. MACUMBER: Lisa Macumber with Air Quality 

Permit Program. 

In parallel effort, once we develop -- once the 

funding plan is approved by the Board, we immediately 

begin our next process, our next phase, which brings our 

stakeholders back to the table in our project solicitation 

process. So we hold several work group meetings where we 

sit down with our stakeholders. We talk about the 

projects. We refine them. We look at what the parameters 

need to be to get the best products in the door. We build 

our solicitation. Solicitation is then put out and there 

is a window of time we'll give applicants opportunities to 

build their partnerships and come in and bring us the best 

projects for those categories. And then we close our 

solicitation and we convene funding our projects. 

So we do have a process that takes place. It 

traditionally takes place over the next several months. 

And it's actually aligned very well with this process. By 

the time we get to that point of where we're really 

refining our solicitations, the guidance process should be 

done. So we should be able to get solicitations out early 

fall to get the projects going. 

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CHAIRPERSON NICHOLS: Mr. Serna, last but not 

least. 

BOARD MEMBER SERNA: Thank you, Chairman Nichols. 

First, I do want to express my thanks to staff 

for a lot of hard work. And I think this is -- with 

today's action, we can all be proud about the intended 

investment in disadvantaged communities in particular. 

I do want to also agree with Mr. De La Torre and 

others about the growing concern about the rebate program 

that today we don't have a light at the end of that 

tunnel. And I do think that the need to plan is 

imperative in terms of setting an expectation, not just 

for the Board, but certainly for the OEM representatives, 

auto manufacturers as well. 

I did have a question I'm going to refer to slide 

twelve. And it has to do with the intention to issue the 

rebate for fuel cell electric vehicles. It states on 

slide 12 the increased rebates for fuel cell electric 

vehicles are consistent with the battery electric vehicles 

at introduction. 

So my question is, those are two different types 

of technologies, with different infrastructure. So what 

thought goes into the amount of the rebate based on the 

fact that the infrastructure is so different. But here 

you're explaining that the rebate is basically going to be 

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equal to a different technology when it was first 

introduced. 

MSCD CHIEF WHITE: As we did with the battery 

electric vehicles and electric fueling infrastructure, we 

worked very closely with the Energy Commission to ensure 

that the two are paired well together. So when we talk 

about looking at the rebate levels that were available and 

the battery electrics first rolled out, it was when CEC 

first started to make substantial investments as well in 

terms of electric infrastructure to support the roll out. 

The $5,000 was the amount or the value that I 

think we looked at it was effective. I think the results 

we have today in terms of the volumes of pure battery 

electric vehicles that we're seen in the marketplace 

certainly support that level. Certainly is sufficient on 

a new technology roll out. 

As we look at fuel cells, we find ourselves 

really in a similar situation where we have substantial 

investments that the Energy Commission is making on 

hydrogen infrastructure. And now that we have the 

vehicles here, that the $5,000 value certainly seemed like 

an appropriate place to start in terms of really trying to 

incentivize the roll out of those vehicles as we would 

expect. We'll be similarly successful as you saw on the 

battery electric side. 

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CHAIRPERSON NICHOLS: Okay. Before I invite Mr. 

Eisenhut to make a motion he's already volunteered to 

make, I just wanted to make one final comment. 

Sometime this summer, most likely, August, 

possibly as late as September, we will hit 100,000 

electric vehicles in California, which is wonderful and 

places us at the head of the nation certainly. And just 

reminds us all of the importance of what it is we're doing 

here. At the same time, we have a goal of a million 

electric vehicles staring at us. So our work is hardly 

done. 

I do agree that it's always frustrating, 

especially when we have to go back to the Legislature and 

beg for more money because we've done better than we 

predicted. And that's part of what set us on this path 

was to try to honorably live within our means and come up 

with a way of somehow fixing the program so that we could 

get all the goals that we had in mind and yet not spend 

any more money than we had. 

That has proven to be illusive. I completely 

support the comments of the Board members who said we need 

to be thinking ahead to how we transition out of this 

rebate program. 

My own view is that it shouldn't be a rebate 

program at all, that it should be a mix of incentives 

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which would probably include tax benefits, but would not 

have to be administered by ARB at all. And our job should 

be to tell people what the zero emission vehicles are and 

then let an institution whose role is primarily financial 

be the one to actually administer the program. 

And I'd ask the staff to work on this idea and 

the Governor's office has encouraged me to think they 

would support a change in the future as well. 

Not to escape from the necessity of putting money 

on the line, but just to find a way of administering it 

that doesn't add to the other things that ARB is already 

doing because we have a lot to do here. But in the mean 

time, I do think that the overall proposal here makes 

sense. It's going to be an exciting time to get the money 

out into the communities and doing the visible work that 

we hope it will. 

So I want to thank everybody also who 

participated in this effort. This has been extremely 

engaging of staff and stakeholders, and we certainly don't 

expect you to go away. We expect you to continue to be 

very actively involved as we implement this program. 

So with that, may I have a motion to approve the 

resolution? 

BOARD MEMBER EISENHUT: Of course. I move. 

CHAIRPERSON NICHOLS: So moved. 

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BOARD MEMBER BALMES: Second. 

CHAIRPERSON NICHOLS: And the second here. 

BOARD MEMBER BALMES: Over here. Second. 

CHAIRPERSON NICHOLS: Thank you all. Now we will 

take a vote. All in favor please say eye. 

(Unanimous aye vote)

CHAIRPERSON NICHOLS: Any opposed? 

Any abstentions? 

All right. We did it. The Board is going to 

take a lunch break. And we have scheduled an executive 

session to hear a report from our counsel on litigation 

matters. So when we come back, we will report on any 

action that's been taken, if any, and also take up our 

very last item, which is a report on federal activities on 

climate change. 

(Whereupon a recess was taken.)

CHAIRPERSON NICHOLS: We had a briefing by our 

counsel over lunch on a two cases that we're involved in 

and there was no action taken by the Board. So that was 

the executive session. 

We're now ready to move onto the last agenda item 

of the day, which is a report on recent federal climate 

activities. I know most of the Board members have been 

following this quite actively, so I don't think we need a 

lengthy report. But it would be good to have an update on 

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what's going on. Who wants to take this one? 

EXECUTIVE OFFICER COREY: I'll be brief and we'll 

get right to the presentation. 

In June of 2013, President Obama announced his 

Climate Action Plan, which is intended to significantly 

reduce carbon emissions by regulating potent greenhouse 

gases such as methane, chloral floral carbons, as well as 

focusing on significant sources of CO2, such as coal-fired 

power plants and inefficient gas-fired plants. 

And over the past several months, ARB staff has 

been working closely with staff from the California Energy 

Commission the PUC, and the Cal ISO to inform and help 

shape US EPA rule making efforts in addressing the power 

plant CO2 emissions. So part of today's presentation will 

summarize some of those activities as well as provide the 

Board with a sense of the work yet to be done by 

California and our partner states to meet the requirements 

of the rule. 

With that, Tung Le of our Stationary Source 

Division will give the presentation. 

(Thereupon an overhead presentation was 

presented as follows.)

REGULATORY ASSISTANCE SECTION MANAGER LE: Thank 

you, Mr. Corey. 

Good afternoon, Madam Chairman and members of the 

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Board. 

I will be providing an update on federal climate 

activities this morning, with a focus on US EPA's newly 

proposed rule for existing power plants. 

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: In 

2007, in the court case Massachusetts versus EPA, the 

Supreme Court determined that greenhouse gases are 

considered air pollutants as defined by the Clean Air Act. 

This ruling obligated EPA to regulate both mobile and 

stationary sources of GHGs. Soon after, EPA made an 

endangerment finding, which was analysis study that 

determined manmade GHGs were, indeed, contributing to 

global warming and endangering public health and welfare. 

In December 2009, at the United Nations Climate 

Change Conference in Copenhagen, two dozen countries 

responsible for over 80 percent of the world's man-made 

carbon emissions committed to GHG emissions reductions to 

slow the effects of global climate change. At this 

summit, President Obama committed to reducing the United 

States' emissions to 17 percent below 2005 levels by 2020.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: In 

2010, EPA and the National Highway and Traffic Safety 

Administration or NHTSA, adopted a joint rule that set GHG 

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and fuel economy standards for model year 2013 through 

2016 cars and light duty vehicles. These standards were 

based on California's Pavely standards, which were adopted 

by this Board in 2009. The standards are estimated to cut 

6 billion metric tons of CO2 over the lifetime of these 

vehicles and save American families over 1.7 trillion 

dollars in fuel costs. 

In 2012, EPA and NHTSA, with ARB support, adopted 

a more stringent rule to set greenhouse gas and fuel 

economy standards for model year 2017 through 2025 

passenger vehicles. Over the lifetime of these additional 

standards, this program is projected to cut an additional 

two billion metric tons of CO2 emissions, with additional 

net benefits up to $451 billion. 

In 2012, EPA and NHTSA proposed a joint rule, 

again with support from ARB, to set GHG and fuel economy 

standards for medium- and heavy-duty vehicles. This 

heavy-duty GHG Phase I rule is estimated to cut 270 

million metric tons of CO2 and save over $42 billion in 

fuel costs to vehicle owners.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: In 

2010, EPA adopted the tailoring rule to regulate GHGs from 

large stationary sources. This rule was to ensure the 

applicability of existing prevention of significant 

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deterioration or PSD permitting program was consistent 

with how major sources of criteria pollutants have 

traditionally been permitted. The PDS permitting program 

ensures that best available control technology is 

installed at new major source facilities as well as at 

existing facilities that significantly increase their 

emissions. 

Soon after, EPA's authority to regulate these 

large stationary sources was challenged in court by 

industry groups. Just this week, the US Supreme Court 

upheld EPA's authority to regulate stationary sources of 

GHGs, but stated that EPA could only do so with when the 

PSD permit was also required for criteria pollutants. 

Since most facilities that would have been required to 

obtain a PSD permit for GHG would have also need a PSD 

permit for criteria pollutants, the practical impact of 

the Supreme Court ruling is that these large sources will 

continue to be regulated for both types of pollutants.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: In 

June 2013, President Obama unveiled his Climate Action 

Plan. The Climate Action Plan is the national blueprint 

to slow the effects of climate change. The plan focuses 

on both CO2 and short-lived climate pollutants, such as 

methane and hydrofluorocarbons. I will describe some of 

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the goals in the President's Climate Action Plan in the 

next few slides.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: 

Building on the already adopted rules for light, medium, 

and heavy-duty vehicles, the plan commits to developing 

GHG and fuel economy standards for post-model year 2018 

heavy-duty vehicles. This second phase of rulemaking 

jointly developed by EPA, NHTSA and ARB will result in a 

mutually agreed upon national program. A notice of 

proposed rulemaking is expected by March 2015 with 

standards expected to be finalized by March 2016. This 

will be followed by an ARB rulemaking shortly thereafter 

in 2016.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: The 

President's Climate Action Plan also recognizes what 

California has long known, that improved energy efficiency 

can significantly reduce GHG emissions and save money. 

The plan builds on existing energy efficiency requirements 

for federal buildings and for appliances such as 

dishwashers and refrigerators with new programs to reduce 

three billion metric tons of CO2 by 2030. 

In addition to these new standards for appliances 

and federal buildings, the plan directs the Department of 

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Agriculture to propose up to $250 million in loans for 

rural utilities to finance efficiency investments. 

In addition, the Department of Housing and Urban 

Development will implement a $23 million multi-family 

energy innovation fund to test new approaches to deliver 

cost-effective residential energy efficiency programs. 

Finally, the existing Better Buildings Challenge 

Program partners public and private organizations with 

commercial and industrial building owners to become at 

least 20 percent more energy efficient by 2020. The 

Climate Action Plan expands the challenge to include 

multi-family housing.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: To 

address hydrofluorocarbons, or HFC emissions, EPA will use 

its authority through the Significant New Alternatives 

Policy Program, or SNAPP, to encourage private sector 

investment in low emissions technology by identifying and 

approving climate-friendly chemicals while prohibiting 

certain uses of the most harmful chemical alternatives. 

Additionally, the President has directed his 

administration to purchase cleaner alternatives to HFCs 

whenever feasible and to transition over time to equipment 

that uses safer and more sustainable alternatives. 

In May 2014, the United States, Canada, and 

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Mexico together proposed to phase down consumption and 

production of HFCs under the Montreal protocol on 

substances that deplete the ozone layer. Global benefits 

of the proposal may yield significant reductions of over 

90 billion metric tons of carbon dioxide equivalent 

through 2050.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: Like 

the updated Scoping Plan that this Board adopted in May, 

the Federal Climate Action Plan recognizes the importance 

of addressing methane emissions. 

In March of this year, the President unveiled a 

multi-sector strategy to reduce methane emissions. In 

this strategy, the President directed EPA to propose 

updated standards to reduce methane emissions from 

landfills in the summer 2014. To address methane 

emissions from agricultural operations, EPA, working with 

the United States Department of Agriculture, will soon 

release a biogas road map which will include voluntary 

measures to accelerate the adoption of digesters and other 

cost-effective technologies to reduce dairy methane 

emissions 25 percent by 2020. 

To address methane from oil and gas operations, 

EPA is analyzing significant sources of methane and other 

emissions from the oil and gas sector. EPA has solicited 

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input through a series of technical white papers. And in 

the fall of 2014, EPA will determine how best to pursue 

further methane reduction from these sources. 

If EPA decides to develop additional regulations, 

it will complete those regulations by the end of 2016. 

ARB is considering regulations to further reduce methane 

emissions from oil and gas operations and will coordinate 

with EPA in these efforts. 

The plan calls for voluntary action on coal mine 

related methane emissions. Coal mines account for almost 

11 percent of annual man-made methane emissions in the 

U.S. As you know, California recently adopted a mine 

methane capture offset protocol to incentivize the 

voluntary capture and destruction of fugitive methane from 

mining operations. Staff expects this protocol to be 

approved by the Office of Administrative Law next month.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: The 

Action Plan explores approaches to protect and restore 

domestic forests. In addition, the US also supports 

international activities to reduce emissions from 

deforestation and forest degradation or RED and has 

provided more than one billion dollars in financing for 

RED. The first update to California's Scoping Plan notes 

that RED is a key topic within the United Nation's 

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framework convention on climate change and between 

national and subnational jurisdictions, including through 

collaboration between California and the US Department of 

State.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: The 

Federal Climate Action Plan accelerates permitting of 

renewable energy on federal lands and commits to expand 

and modernize the electrical grid to facilitate renewable 

energy projects. 

The Climate Action Plan directs EPA to promulgate 

rules to address CO2 emissions from new and existing power 

plants, which nationally emitted over two billion metric 

tons of CO2 per year in 2012, the largest single source of 

greenhouse gas emissions in the country. These proposed 

rules will be the focus of the remainder of the 

presentation.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: I'll 

start with a brief overview of EPA's rule to limit CO2 

emissions from new power plants under Section 111(b) of 

the Clean Air Act. 

The proposed rule was released in September 2013. 

In it, EPA proposes two sets of standards: One for 

coal-fired electric generating units, or EGU, and the 

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second for natural gas-fired units. 

For the natural-gas fired EGUs, EPA proposed a 

limit of 1,000 pounds of CO2 for large units as defined by 

the rule and 1,100 pounds for small units. 

ARB staff has worked closely with staff at the 

CEC, CPUC, and CalISO on evaluating EPA's proposed power 

plant rules. Together, we developed comments on EPA's 

proposal that point out the unique way that California 

uses our power plants. The integration of large volumes 

of renewables like solar and wind means that base load 

power plants in California are being ramped up and down to 

support our variable renewable resources. 

Power plants that are ramped up and down do not 

operate as efficiently as power plants operating at base 

load. We suggested that EPA should develop separate 

standards for power plants operating in different ways. 

We are continuing to work with EPA to finalize a 

proposal that will meet California's needs and reduce GHG 

emissions nationwide.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: 

Earlier this month, EPA released a proposal rule to 

regulate CO2 emissions from existing power plants under 

Section 111(d) of the Clean Air Act, also known as the 

Clean Power Plan. EPA estimates that the rule will reduce 

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CO2 emissions from the power sector 30 percent by 2030 

from 2005 emissions. 

Instead of regulating emissions from individual 

EGUs, the rule focuses heavily on energy efficiency and 

renewable energy programs as a whole, which are two 

mechanisms championed by states like California where much 

progress and success have already been achieved.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: EPA 

proposes an individual goal for each state in 2030 based 

on four building blocks. The first building block assumes 

that existing coal-fired EGU can be made more efficient. 

This is not a big factor in California, as we have very 

few coal plants. 

The second building block looked at under-used 

natural gas units in each state and proposed that these 

units can be used to generate electricity before 

coal-fired units could be used. 

The third building block, EPA projected the 

potential renewable energy for each state based on its 

neighboring state's renewable energy requirements. In the 

west, many states have aggressive renewable energy 

requirements, therefore, this block accounts for a 

significant portion of our target. 

Finally, in the fourth building block, EPA looked 

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at existing energy efficiency programs nationally and 

averaged the potential increase in energy efficiency that 

could be realized. This average is an increase of 1.5 

percent efficiency per year starting in 2020 and ending in 

2030. 

As with renewables, significant investments have 

been made in energy efficiency, therefore, this building 

block also represents a significant portion of our target. 

These four building blocks are only used to set 

the goal in 2030. EPA's proposal provides significant 

flexibility to states in what measures can be used to 

achieve the goal and how to structure the commitments.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: Based 

on EPA's calculations, California's base line is 698 

pounds of CO2 per megawatt hour in 2012. When we apply 

EPA's target-setting building blocks to California, our 

2030 emissions target is 537 pounds of CO2 per megawatt 

hour, which is approximately a 25 percent reduction. This 

2030 target is one of the lowest in the country because 

California relies on natural gas for power and already has 

aggressive energy efficiency and renewable energy programs 

in place. 

Based on our preliminary analysis, staff expects 

that California will comply with the 2030 target largely 

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because of programs we already have underway such as cap 

and trade and the renewable portfolio standard. We are 

continuing to work with EPA to ensure that the investments 

that California industries, utilities, and consumers have 

made to reduce GHG emissions are credited towards 

compliance with the rule.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: 

Because of the way Clean Air Act is structured, the 111(b) 

rule for new power plants must be finalized prior to or 

concurrent by with finalization of the 111(d) rule for 

existing power plants. Staff anticipate that both rules 

will be finalized in June 2016 to meet the President's 

direction in the Climate Action Plan. 

Once the 111(d) rule is final, each state must 

write a plan detailing how it intends to comply with the 

rule. The plan must include a description of each measure 

that describes how it reduces CO2 emissions and must also 

include how these measures can be enforced to ensure CO2 

emission reductions are realized. 

These plans are due to EPA by June 2016. 

However, should states decide to collaborate on a 

multi-state compliance strategy, the rule allows until 

June 2017 to submit a compliance plan. 

Because of the regional nature of the electricity 

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grid working with other states has potential to help 

maximizes emissions reductions and minimize cost. We are 

working with Oregon and Washington and our Pacific Coast 

collaborative partners to better understand how the rule 

will effect western states and to explore the potential 

benefits of collaboration.

--o0o--

REGULATORY ASSISTANCE SECTION MANAGER LE: In 

closing, I'd like to highlight some of our next steps. 

Together, with our energy agency partners, we 

will be holding a public workshop to solicit input from 

stakeholders. During this workshop, we hope to understand 

stakeholder views and potential concerns with the proposed 

rule. We will also continue to delve into EPA's analysis 

to understand the targets for California to ensure the 

data and assumptions used are appropriate. This work will 

inform our comments to EPA on how the rule might be 

improved to gain additional emissions reductions. 

Staff are also engaging in conversations with our 

neighboring states to discuss how a multi-state compliance 

strategy might work and explore the potential benefits of 

taking such an approach. 

Since California imports a portion of its 

electricity from our western states, staff believe that 

collaboration were our neighbors will provide a most 

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cohesive compliance plan and likely generate the most 

reductions possible. 

Finally, staff continues to participate in 

national discussions through EPA listening sessions and 

through organizations such as National Association for 

Clean Air Agencies and the Georgetown Climate Center. 

California's participation in these national conversations 

have contributed greatly to the flexible structure built 

into this rule and continued participation will help 

ensure that a fair and effective rule is finalized. 

This concludes my presentation. And I would be 

happy to answer any questions at this time. 

CHAIRPERSON NICHOLS: Thanks. 

You know, I think the main points here is just to 

indicate there is a lot going on. The Obama 

administration has decided to go all out using their 

authority under the Clean Air Act. They have some heavy 

rulemaking to do. We're very engaged in it. Edie in 

particular and our legal counsel Craig Segel has been 

making those trips to Washington and been very helpful in 

making sure other states and we are talking to each other 

and providing coordinated input into the rulemaking 

process. 

So for those of you who have other associations 

that you're involved with or other organizations that may 

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possibly be involved in any of these efforts that you're 

hearing from neighboring cities, counties -- I don't know 

about any professional associations. I haven't heard of 

anything. But you never know. We are trying to gather 

California stakeholders. There is going to be a western 

states meeting in Colorado coming up in July, which 

Chairman Weisenmiller of the Energy Commission and I are 

going to attend. The plan is to take the predominantly 

conservative and republican states in the west in the WGA 

membership, most of whom dropped out quite some time ago 

on anything relating to climate change, but have now 

become engaged because of the APA proposal and have a 

conversation with them -- about not necessarily about how 

important it is to work on climate, but how important it 

could be for them and for us as all part of one energy 

grid to work together on some compliance options here. 

And the response to that invitation has been very 

good. So we're looking forward to trying to have a 

constructive dialogue an all of this. And something 

obviously I personally am interested in, and so is the 

Governor. He's very, very motivated to want to try to get 

other states to work with us on these efforts and has put 

a lot of time in on the Oregon/Washington connection. 

Those three Governors, of course, are much more aligned in 

their general views of the world. We pacific coast states 

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tend to think more alike about many of these issues. But 

he's also been really willing to put in time and effort 

talking to other Governor's on this stuff, too. 

So anyhow, this was just an opportunity to open 

the conversation and let you know that if you have any 

questions about what's going on or what you're reading in 

the papers or ideas about things you could or should be 

doing, you should let us know. 

BOARD MEMBER SHERRIFFS: You mention -- well, 

collaboration, collaboration, collaboration. You mean 

other professional organizations. You know, health care. 

Health care is a huge consumer of energy. In my 

experience wandering through hospitals and clinics is 

there is huge opportunity for increased efficiency in the 

use of energy. And we really do need to think about how 

to engage really these very natural allies because it is 

fundamentally about health at the end of the day. And 

they should be easy to engage when you think about 

hospital systems, clinic systems. 

CHAIRPERSON NICHOLS: I don't think we had any 

ongoing relationships with the professional association. 

But through the Department of Health, we probably could 

access that group without too much difficulty. 

BOARD MEMBER RIORDAN: Those who are building 

these new hospitals, and there are some, those would be an 

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excellent opportunity. 

May I ask just one question of information? And 

it's just going back to the Climate Action Plans on 

methane. Could you just remind me -- I'm sure I've been 

told. But in the general generation of methane, those 

that we have enumerated here, what is their percentage of 

contribution? I mean, in real general terms between 

landfills, agriculture, oil and gas and cold mines. Where 

would that percent be for each of those? 

DEPUTY EXECUTIVE OFFICER CHANG: I don't have the 

percentage in front of me. I can tell you in California 

the largest methane sources are agricultural related. So 

the largest sources are enteric fermentation from 

livestock as well as manure management. And then the 

largest source after that is oil and gas production. 

BOARD MEMBER RIORDAN: Okay. But that isn't 

necessarily throughout the United States. That percentage 

would change. Do we know those changes nationwide? 

DEPUTY EXECUTIVE OFFICER CHANG: I don't know 

those. 

BOARD MEMBER RIORDAN: If and when you ever see 

those, if you will communicate them to me. I'm just 

curious. 

DEPUTY EXECUTIVE OFFICER CHANG: Definitely. 

BOARD MEMBER BALMES: As a physician, I love to 

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hear Edie say enteric fermentation. So blunt. 

CHAIRPERSON NICHOLS: Thank you. That's great. 

Okay. And on that note, I think there was no action 

required. So before we close, we do a public comment 

period, and we have one person who signed up for public 

comment. 

Before we hear from Mr. Tilton, I do want to 

just, however, say we don't normally adjourn in memory of 

anybody the way city councils or county boards often do. 

If we were to do that, the person we should be adjourning 

in memory of would be Dr. James Pitts. I think many of 

you have seen some of the press on his passing in the last 

two days. There was a wonderful obituary in the Los 

Angeles Times which quotes our former Board Member 

Loveridge and me and many other people, Alan Lloyd, all 

talking about the importance of his contribution. He was, 

indeed, one of the founding fathers of atmospheric 

science. When it comes to what we know and what we do 

about air pollution, it traces back to Jim Pitts and his 

roll as a founder of the State Air pollution Research 

Center at U.C. Riverside. He and his colleagues built the 

first smog chambers. They demonstrated the way in which 

smog actually is created. A lot of his work was 

controversial at the time because it pointed the finger at 

people who didn't necessarily want to be held responsible 

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for having to make changes in technology or practices to 

clean up the air. But he was a brave and also very 

charming man. 

And so we've recognized his contributions at 

other times in the past. He lived to be 91. And for 

almost all of his year, he stayed active in the field of 

air pollution research and teaching. So it's good to be 

able to honor him. 

BOARD MEMBER RIORDAN: Really an incredible man. 

CHAIRPERSON NICHOLS: He really was. With that 

Mr. Tilton, come and talk to us about Blue Castle 

Holdings. 

Mr. TILTON: Thank you. Appreciate that. We 

appreciate the opportunity, Chairman Nichols and members 

of the Board, to come by way of information. We're not 

commenting on previous discussion, although it may seem 

like we are on the climate change policy. It was I think 

very helpful and probably teed up the discussion for what 

we're about to comment on. 

I've got limited time, but we just want to 

introduce Blue Castle Holdings and the Blue Castle project 

was a nuclear project in Utah. Speaking of collaborative 

opportunities for climate change, the project is the 

leading nuclear power plant site in the US. We are about 

50 percent of the way through the application process for 

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the early site permit and have significant interactions 

with the NRC, regulatory approvals on water, on cooling 

water for the project, and other things I won't go into a 

lot of detail. You have a summary of information there. 

But we wanted to make sure that the Board was 

aware of our activities and what we're doing and how we 

view the possible interactions with the state of 

California. We're obviously well aware there is a 

significant portion of coal-fired power that comes from 

our state to your state. In fact, one of the members of 

our senior management was the former general manager of 

IPA and is now leading some of the business development 

activities for our company. So there is we think 

significant opportunity for collaboration. We would say 

the time frame for the operations of a plant that is being 

worked on there would be about 2025 would be an in-service 

date. And the figures on the available power generation 

from that site would be between 500 and 1,000 megawatts of 

carbon free nuclear power. 

With that, I would answer any questions or take 

any comments. 

CHAIRPERSON NICHOLS: Thank you for the update. 

Appreciate knowing about it. 

MR. TILTON: Appreciate it. Thank you. 

CHAIRPERSON NICHOLS: With that, I think we're 

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ready for adjournment. We'll be adjourned. Thanks, 

everybody. 

(Whereupon the Air Resources Board adjourned 

at 1:29 p.m.)

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CERTIFICATE OF REPORTER

I, TIFFANY C. KRAFT, a Certified Shorthand 

Reporter of the State of California, and Registered 

Professional Reporter, do hereby certify:

That I am a disinterested person herein; that the 

foregoing hearing was reported in shorthand by me, 

Tiffany C. Kraft, a Certified Shorthand Reporter of the 

State of California, and thereafter transcribed into 

typewriting.

I further certify that I am not of counsel or 

attorney for any of the parties to said hearing nor in any 

way interested in the outcome of said hearing.

IN WITNESS WHEREOF, I have hereunto set my hand 

this 8th day of July, 2014.

 

TIFFANY C. KRAFT, CSR, RPR

Certified Shorthand Reporter

License No. 12277 

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