BOARD MEETING

STATE OF CALIFORNIA

AIR RESOURCES BOARD

SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT OFFICE

AUDITORIUM

21865 COPLEY DRIVE

DIAMOND BAR, CALIFORNIA

THURSDAY, JUNE 22, 2006

9:00 A.M.

TIFFANY C. KRAFT, CSR, RPR

CERTIFIED SHORTHAND REPORTER

LICENSE NUMBER 12277

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345ii

APPEARANCES

BOARD MEMBERS

Dr. Robert Sawyer, Chairperson

Ms. Dorene D'Adamo

Dr. Henry Gong, Jr.

Ms. Lydia H. Kennard

Mr. Ronald O. Loveridge

Supervisor Barbara Patrick

Mrs. Barbara Riordan

STAFF

Mr. Tom Cackette, Chief Deputy Executive Officer

Mr. Tom Jennings, Chief Counsel

Mr. Michael Scheible, Deputy Executive Officer

Ms. Lynn Terry, Deputy Executive Officer

Ms. Kathleen Tschogl, Ombudsman

Ms. Catherine Witherspoon, Executive Officer

Ms. Lori Andreoni, Board Secretary

Mr. Bob Fletcher, Chief, Stationary Source Division

Mr. Ronald Haste, Air Resources Engineer, Emission

Research Section, MSCD

Mr. Dean Hermano, Staff APS, MSOD

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345iii

APPEARANCES CONTINUED

STAFF

Ms. Kitty Howard, Manager, Regulatory Assistance Section,

SSD

Mr. George Poppic, Senior Staff Counsel

Mr. Mike Tollstrup, Chief, Project Assessment Branch, SSD

Mr. Hien Tran, Health and Ecosystems Section, Research

Division

ALSO PRESENT

Mr. Larry Allen, San Luis Obispo, APCD

Ms. Colleen Callahan, American Lung Association of

Californa

Mr. William Davis, Southern California Contractors

Association

Mr. Terry Dressler, CAPCOA

Mr. Keith Duner, Allilson Transmission

Mr. David Ferris, General Motors

Mr. John Grattan, CCEEB

Mr. David Grose, Sacramento Metro AQMD

Mr. Jim Harris, Amador Air District

Assemblymember Dave Jones

Major Jeremy Jungreis, DOD Installations in Calilfornia

Mr. John McClelland, American Rental Association

Mr. Rick McVaigh, Deputy Air Pollution Control Officer,

San Joaquin Valley Air Pollution Control District

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345iv

APPEARANCES CONTINUED

ALSO PRESENT

Mr. Dave Smith, BP

Ms. Lisa Stegink, Engine Manufacturers Association

Mr. Eric Swenson, Truck Manufacturers Association

Mr. James Thomas, Nabors Well Services Co.

Mr. Tom Umenhofer, WSPA

Mr. Barry Wallerstein, Executive Officer, South Coast Air

Quality Management District

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345v

INDEX

PAGE

Pledge of Allegiance 1

Item 06-6-1

Chairperson Sawyer 3

Executive Officer Witherspoon 3

Staff Presentation 3

Mr. Smith 9

Q&A 12

Item 6-6-2

Chairperson Sawyer 13

Executive Officer Witherspoon 14

Staff Presentation 17

Ombudsman Tschogl 29

Q&A 31

Assemblymember Jones 43

Ms. Lee 46

Mr. Wallerstein 47

Mr. McVaigh 48

Mr. Smith 49

Mr. Allen 50

Mr. Harris 51

Mr. Lewis 52

Mr. Umenhofer 58

Mr. Grose 61

Mr. McClelland 62

Mr. Davis 68

Major Jungreis 75

Ms. Callahan 80

Mr. Grattan 81

Mr. Thomas 81

Mr. Dressler 85

Motion 90

Vote 90

Item 6-6-3

Chairperson Sawyer 91

Executive Officer Witherspoon 92

Staff Presentation 92

Ombudsman Tschogl 100

Mr. Swenson 102

Mr. Duner 102

Mr. Ferris 107

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INDEX CONTINUED

PAGE

Ms. Stegink 107

Motion 129

Vote 130

Item 6-6-4

Chairperson Sawyer 131

Executive Officer Witherspoon 131

Staff Presentation 132

Ombudsman Tschogl 139

Motion 140

Vote 141

Adjournment 141

Reporter's Certificate 142

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23451

1 PROCEEDINGS

2 CHAIRPERSON SAWYER: Good morning. The June

3 22nd, 2006, public meeting of the Air Resources Board will

4 now come to order.

5 Would all please rise and join me in the Pledge

6 of Allegiance?

7 (Thereupon the Pledge of Allegiance was

8 recited in unison.)

9 CHAIRPERSON SAWYER: Will the Clerk of the Board

10 please call the roll?

11 SECRETARY ANDREONI: Ms. Berg?

12 BOARD MEMBER BERG: Here.

13 SECRETARY ANDREONI: Ms. D'Adamo?

14 Supervisor DeSaulnier?

15 Dr. Gong?

16 BOARD MEMBER GONG: Here.

17 SECRETARY ANDREONI: Ms. Kennard?

18 BOARD MEMBER KENNARD: Here.

19 SECRETARY ANDREONI: Mayor Loveridge?

20 Supervisor Patrick?

21 SUPERVISOR PATRICK: Here.

22 SECRETARY ANDREONI: Ms. Riordan?

23 BOARD MEMBER RIORDAN: Here.

24 SECRETARY ANDREONI: Supervisor Roberts?

25 Dr. Sawyer?

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23452

1 CHAIRPERSON SAWYER: Here.

2 SECRETARY ANDREONI: Mr. Chairman, we have a

3 quorum.

4 CHAIRPERSON SAWYER: Thank you.

5 First, I would like to thank the South Coast Air

6 Quality Management District for making their facilities

7 available to us. We're trying to hold about every third

8 meeting of the Air Resources Board somewhere outside of

9 Sacramento. We feel it's very important to get out and to

10 get to the locales that have the problems.

11 I would like to remind the Board members that the

12 microphones here do a lot more than just amplify our

13 voices. When your microphone is on, speak directly into

14 it. And turn it off when you're not speaking directly

15 into it, because it picks up everything near it and it

16 also aims the camera where the microphone is. If you want

17 to get the camera off of you, it's essential that you turn

18 the microphone off.

19 At this time, I would like to inform all the

20 witnesses signing up to speak today, please be aware that

21 the Board will be imposing our usual three-minute time

22 limit so everyone gets a chance to speak. I would also

23 like to ask that each speaker put his or her testimony

24 into your own words. Please don't read your testimony.

25 We have a copy of that already, and it's much more

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23453

1 effective for us if you tell us what is important in your

2 statement.

3 The first agenda item is 6-6-1. Again, I would

4 like to remind anybody who wishes to testify today on

5 agenda items to please sign up with the Clerk of the

6 Board. Also if you have a written statement, please

7 provide 30 copies when you sign up to testify.

8 The first item on the agenda this morning is our

9 health update. Ms. Witherspoon, would you please

10 introduce this item.

11 EXECUTIVE OFFICER WITHERSPOON: Yes, I will.

12 Thank you, Dr. Sawyer. And good morning, members of the

13 Board.

14 The scientific evidence regarding the

15 relationship between particulate matter exposure and

16 premature death keeps getting stronger. The follow-up to

17 the Harvard six city study that staff will describe in

18 just a moment confirm this relationship again and its

19 reverse, that when pollution goes down, fewer people die

20 prematurely.

21 Mr. Hein Tran of the Research Division will make

22 today's presentation.

23 CHAIRPERSON SAWYER: Thank you, Ms. Witherspoon.

24 MR. TRAN: Thank you, Ms. Witherspoon. Good

25 morning, Dr. Sawyer and members of the Board.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23454

1 In today's health update, I will discuss the

2 results of a follow up to one of the landmark studies

3 associating long-term particulate matter exposure to

4 premature death. This new study provides additional

5 evidence supporting the association between PM exposure

6 and death due to heart related disease and shows that the

7 risk for premature death decreases as PM exposure

8 decreases.

9 --o0o--

10 MR. TRAN: In 1993, Professor Dockery and his

11 colleagues published results from the six-city study, the

12 first of its kind to examine the effects of long-term

13 exposures through a range of low to moderate PM levels.

14 The researchers followed over 8,000 adults living in six

15 cities in eastern United States for about 15 years and

16 examined the effect of PM on premature death. They

17 reported a statistically significant increase in premature

18 death due to long-term exposure to PM.

19 Recently, collaborating with Dr. Dockery, Dr.

20 Laden and colleagues extended the follow-up through 1998

21 through an additional eight years and approximately twice

22 the number of deaths to evaluate and understand the

23 previous findings.

24 --o0o--

25 MR. TRAN: For the extended follow-up years,

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23455

1 PM2.5 concentrations were not measured. Rather, they were

2 estimated for monitored PM 10 and visibility measurement.

3 The error associated with estimating PM2.5 concentrations

4 were not incorporated into the results of the study.

5 As was done in the original study, factors such

6 as smoking, educational level, body mass index, sex, and

7 age were controlled to reduce the confounding effects on

8 their results. The investigators observed a substantial

9 decrease in PM2.5 between the study periods in each city.

10 The reductions were associated with reduced death

11 risk and were largest in the cities with the largest PM2.5

12 declines.

13 --o0o--

14 MR. TRAN: Combining the results across cities,

15 the researchers found that the risk for premature death

16 due to all causes is increased by about 16 percent per 10

17 micrograms per cubic meter increase in PM2.5 over the

18 entire follow up. The 95 percent confidence interval

19 which reflects the uncertainty behind this estimate is

20 from 7 percent to 26 percent. The results are also

21 significant for death due to heart related disease.

22 However, they are of borderline significance for deaths

23 due to lung cancer, a disease with a longer latency

24 period.

25 The note that the findings on overall death are

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23456

1 consistent with other studies that address chronic

2 exposures to PM including two studies using the American

3 Cancer Society data, the national study by Dr. Pope and

4 the Los Angeles study by Dr. Jarrett.

5 --o0o--

6 MR. TRAN: In addition, when the investigators

7 compared the two study periods, they observed a

8 substantially lower risk for overall death, about 27

9 percent less for each 10 micrograms per cubic meter

10 decreased in average PM2.5. The 95 percent confidence

11 interval which reflects the uncertainty behind the

12 estimate is from 5 percent to 43 percent.

13 With regard to the findings on various causes of

14 death, the researchers noted that while the decrease in

15 death risk was associated with decreased PM levels for

16 deaths due to heart and lung disease, the results were not

17 statistically significant for lung cancers. The author

18 speculated these results suggest the effects of PM2.5 on

19 heart and lung disease to be somewhat reversible, while

20 the effects on lung cancer are not.

21 It is worthwhile to note that these studies' key

22 finding adds to the body of evidence which demonstrate

23 that improving air quality has a positive effect in

24 reducing adverse health impacts, including premature

25 death. Three such examples which were previously

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23457

1 presented to the Board are listed on this slide.

2 --o0o--

3 MR. TRAN: In conclusion, this study provides

4 additional evidence supporting the association between PM

5 exposure and death due to heart related disease. More

6 importantly, it confirms that reducing particulate

7 pollution can lead to health benefits, such as a decrease

8 in the number of PM2.5 associated deaths, further

9 supporting our call for reducing public exposure to PM

10 pollution.

11 Thank you for your attention. I'd be happy to

12 answer any of your questions.

13 CHAIRPERSON LLOYD: Thank you very much.

14 Do any of the Board members have questions?

15 Dr. Gong.

16 BOARD MEMBER GONG: Quick comment. I thought

17 that was an excellent presentation. This reference that

18 you're alluding to, Laden et al, actually is a nice

19 demonstration, a nice scientific demonstration perhaps of

20 cause and effect. And I think it's very important to note

21 that.

22 In a way, it's like an experiment in nature, and

23 they've actually proven that to a great extent that if you

24 reduce poor air quality, in this case particulates, you

25 can actually get an improvement in public health. In

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23458

1 other words, fewer deaths.

2 I do have one question, which I shared with some

3 of you already, is that there may have been also some

4 secular changes over time participating within this whole

5 process. Not necessarily just in these six cities, but

6 elsewhere. I believe in the actual reference they do not

7 discuss that greatly because they probably didn't have the

8 information. But have you considered it in your

9 investigation of this article?

10 MR. TRAN: Dr. Gong, thank you for your comment.

11 Yes, medical history and medication use were

12 included in the questionnaire sent to the 8,000 adults

13 that were followed in this study. And when the subjects

14 who had treated for high blood pressure or who has

15 diabetes, the diabetes were excluded from the analysis,

16 the results remained unchanged. And Joe Schwartz from

17 Harvard, one of the coauthors of this study, also studied

18 the effects of statens, the medication used for high blood

19 pressure, in a 2005 publication. And he concluded that

20 the use of statens eliminated the effect of PM2.5, but

21 only in subjects with a certain gene type.

22 BOARD MEMBER GONG: Thank you. I'm even more

23 impressed. Thank you.

24 CHAIRPERSON SAWYER: Let me add my

25 congratulations also to presenting this rather complex

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23459

1 study in such a clear way. It's good to have direct

2 evidence that reducing air pollution actually does save

3 lives.

4 We have one request to speak from a member of the

5 public, David Smith.

6 (Thereupon an overhead presentation was

7 presented as follows.)

8 MR. SMITH: Thank you, Mr. Chairman and Board

9 members. Let me say first off, I'm not an expert on this

10 topic --

11 CHAIRPERSON SAWYER: Could you please identify

12 your organization?

13 MR. SMITH: I'm Dave Smith with BP.

14 Let me say first off, I'm not an expert on health

15 effects. And I had not spoken specifically to staff about

16 this study, but I have talked to them about the estimated

17 premature deaths from some of the other studies. And I

18 felt like I needed to understand some of these base

19 studies to follow up on some of their comments to me.

20 --o0o--

21 MR. SMITH: So my presentation has a couple

22 recommendations to you for future presentations like this.

23 You can go ahead.

24 --o0o--

25 MR. SMITH: I'd like to suggest that if it's

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234510

1 possible for the staff to make their presentations

2 available to us prior to the Board meetings so we could

3 have maybe an opportunity to reflect on them.

4 We'd also ask maybe some outside experts present

5 some differing views on these reports or even ask the

6 staff to present findings from such reports, because there

7 are some experts that don't reach the same conclusions.

8 --o0o--

9 MR. SMITH: The study in question does reference

10 a number of other studies, but they focus on studies that

11 support their findings as compared to some that don't.

12 And because of the time limitations, there's an Engstrom

13 study in 2005 that does not find this relationship between

14 PM and mortality.

15 --o0o--

16 MR. SMITH: There's Lipfert Veteran Cohort study

17 that makes a similar finding. These are all quotes. And

18 I'm not saying these are good or bad. I'm just saying

19 these are experts who are published who don't agree with

20 the subject -- the report that we're looking at today.

21 --o0o--

22 MR. SMITH: This particular study in 2005 I found

23 very interesting, because it kind of discussed this whole

24 question about confounding factors and whether or not

25 these studies like the one that was presented to you can

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234511

1 eliminate some of these compounding factors and whether

2 you can really identify these health effects are really

3 from PM or not.

4 He makes the observation -- and I don't know if

5 this is true or not. But he observes that similar types

6 of studies, and they call them observational studies,

7 found in the health area -- and maybe the good doctor

8 would be aware of this -- that based on epi studies, they

9 found very strong relationships with hormone replacement

10 therapy and heart disease. And apparently, they've done

11 some subsequent testing that are called randomized tests,

12 and they didn't find that observed effect they concluded

13 from the earlier tests. And there were several other

14 things he suggested. I mean, in my mind, this just

15 suggests there may be some other factors that we should

16 all be considering.

17 --o0o--

18 MR. SMITH: The last point is that you may notice

19 some of the authors in this study, Green, Crouch, and

20 Ames, you probably recognize those names. This is a quote

21 from that study talking about toxilogical and experimental

22 clinical studies. And the next study.

23 --o0o--

24 MR. SMITH: And just to conclude, why is this

25 important? Why did I start looking at these studies,

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234512

1 which I really have a hard time reading. Is that the

2 results from these type of studies end up being used to

3 estimate premature death, and for example, in your

4 emission reduction plan for goods movements. And then you

5 look at the benefit, the benefit from the goods movement

6 plan is largely based on the premature death estimates.

7 In fact, it's as large as 90 percent.

8 So you see that these type of observational

9 studies and the results that come from it are very

10 important to people like me who have to deal with

11 regulations that come from such studies. So thank you

12 very much.

13 CHAIRPERSON SAWYER: Thank you very much,

14 Mr. Smith.

15 Does staff have comments or Dr. Gong?

16 EXECUTIVE OFFICER WITHERSPOON: I'd be interested

17 in yours as well.

18 But our two comments. First, the time to look at

19 all of the studies and their relative merit and weight of

20 the evidence is when the Board adopts and revises ambient

21 air quality standards, and you do that about every five

22 years.

23 Also later in November we will be bringing to you

24 a comprehensive report on PM mortality, which has to do

25 with some recent research in Los Angeles indicating that

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234513

1 our mortality estimates may be too low. And we will

2 certainly at that time discuss contrary evidence and again

3 the relative weight and what we should use as the

4 multiplying factor in our regulatory reports which

5 Mr. Smith is quite correct. We take this information and

6 apply it in our regulatory proposals to you. So in just a

7 few short months, you'll have an opportunity to look at

8 this mortality question for particulate. And in about

9 four years, we'll have the PM 10 standard and PM2.5 or

10 sooner. The 2.5 standard, the comprehensive review, will

11 be back in about three years.

12 I don't think it's appropriate to have a medical

13 debate at the start of every Board hearing. It would take

14 too much time. We would need to have the Office of

15 Environmental Health Hazard Assessment here.

16 Our point of these monthly updates is to tell you

17 about new studies and not their relative weight in all of

18 the bodies of evidence. So we will cover this material in

19 November and in our regular standard reviews.

20 CHAIRPERSON SAWYER: Thank you, Catherine.

21 Dr. Gong, did you want to make a comment?

22 BOARD MEMBER GONG: No comment.

23 CHAIRPERSON SAWYER: Since this is not a

24 regulatory item, it's not necessary to officially close

25 the record.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234514

1 Agenda Item 6-6-2, the next matter before us, is

2 Proposed Amendments to the Statewide Portable Equipment

3 Registration Program.

4 The subject was brought to my attention at my

5 very first meeting with CAPCOA, so I quickly learned how

6 important this topic is to local air districts. I also

7 learned in my most recent meeting with CAPCOA in May that

8 our staff has made great progress in coming up with

9 mutually agreeable solutions. So I want to thank them for

10 their efforts, particularly Bob Fletcher, Chief of the

11 Stationary Source Division.

12 We still have an enforcement problem that we need

13 to solve, including industry concerns about the recent end

14 of the amnesty period. I'm sympathetic to those concerns,

15 but I'm most concerned about California residents

16 breathing excess emissions from portable engines that are

17 not appropriately regulated. We need to get all of the

18 effected engines under control as soon as possible.

19 Ms. Witherspoon, would you please introduce this

20 item and begin staff's presentation.

21 EXECUTIVE OFFICER WITHERSPOON: Yes. Thank you,

22 Dr. Sawyer.

23 In 2004, when the Board last amended the

24 statewide portable equipment regulation, there were

25 several issues on the table that were not yet resolved.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234515

1 You asked us to work them out, and I'm pleased to say that

2 with the amendments in staff's proposal, we are 99 percent

3 of the way there. ARB staff and the districts have come

4 to agreement on the necessary funding for district

5 enforcement programs and are proposing changes in portable

6 engine fees to support that.

7 We have also come to agreement on amendments that

8 provide additional clarity and enhance the enforceability

9 of portable engine regulations. As you can hear today,

10 CAPCOA fully supports the proposed amendments. I'd

11 particularly like to acknowledge the efforts of Mr. Terry

12 Dressler, Air Pollution Control Officer of the Santa

13 Barbara District, for his role as the CAPCOA lead on

14 proposed amendments. Mr. Dressler was instrumental in

15 working with stakeholders and us in reaching consensus.

16 Although they will speak for themselves later on,

17 staff believes that the industry accepts the proposed

18 changes with one outstanding concern related to amnesty.

19 When the Board last considered this rule in 2004,

20 staff estimated that as many as 50 percent of portable

21 engines in the state were non-compliant, meaning they were

22 neither covered by the State registration program nor had

23 a valid district permit. You directed us to tackle that

24 problem head on by redoubling our outreach and enforcement

25 efforts.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234516

1 At the same time, the Board established an

2 amnesty period from February 2004 to December 31st, 2005,

3 wherein owners of noncompliant engines could join the

4 registration program or get a district permit without

5 having to completely replace their engines. That amnesty

6 period expired on January 1st of this year. From now on,

7 only new certified engines can be permitted or registered

8 for operation in California. Used portable engines cannot

9 enter the system.

10 You will be asked today to extend the amnesty

11 period, and staff will recommend that you decline. The

12 regulation has been on the books since 1997, and there's

13 been ample opportunity to comply. The companies that

14 registered or got permits prior to January 1st of this

15 year have spent thousands of dollars to bring engines into

16 compliance and have been at an economic disadvantage with

17 their competitors who choose to operate illegally.

18 Continuing the amnesty period would exacerbate that

19 disadvantage and is not justified. It will also delay

20 emission reductions necessary to protect public health.

21 Not withstanding what I just said, staff is

22 proposing one small adjustment to the amnesty period to

23 address good faith attempts to comply. Specifically,

24 staff is proposing a clause that will allow registration

25 of new engines that were purchased prior to January 1,

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1 '06, but because of manufacturing delays were not

2 delivered in time to meet the installation deadline.

3 Kitty Howard of the Stationary Source Division

4 will present staff's proposal this morning.

5 (Thereupon an overhead presentation was

6 presented as follows.)

7 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

8 Thank you, Ms. Witherspoon. Good morning, Dr. Sawyer and

9 members of Board.

10 --o0o--

11 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

12 Today, I will provide you with background about the

13 Portable Equipment Registration Program, the importance of

14 today's proposal, a summary of the proposed amendments,

15 and the major issues that have been raised by the effected

16 stakeholders. I will also explain our next steps and

17 provide you with the staff recommendations.

18 --o0o--

19 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

20 The Portable Equipment Registration Program, also referred

21 to as PERP, is a voluntary program. It allows owners and

22 operators to operate throughout the state without having

23 to obtain a permit each time they move their portable

24 equipment into a new district. It is designed for engines

25 and equipment units that can be carried or moved from one

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1 location to another and remain at a single location for

2 less than twelve consecutive months.

3 --o0o--

4 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

5 The types of equipment that qualify for registration

6 include both portable engines and equipment units.

7 Equipment units are associated with and powered by

8 portable engines.

9 --o0o--

10 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

11 The picture on the left is a portable generator. It can

12 be used to provide power for lighting and other services

13 at a construction site, at a nighttime highway project, or

14 an outdoor entertainment event.

15 The picture on the top right is a portable

16 aircraft start cart used by the U.S. Air Force to start

17 jet engines.

18 On the bottom right, you see a picture of a

19 portable equipment unit, a sand and gravel screening

20 plant. This unit has emissions from the diesel powered

21 engine and particulate matter emissions from the

22 processing of the sand and gravel.

23 --o0o--

24 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

25 The statewide regulation was first adopted by the Board in

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234519

1 1997 and amended in 1998 and again in 2004. At the 2004

2 Board meeting, the California Air Pollution Control

3 Officers Association, CAPCOA, raised concerns about the

4 enforceability of the statewide regulation. In response,

5 the Board directed staff to work with CAPCOA and effected

6 industries to address these concerns. Our proposal before

7 you today has been developed in consultation with CAPCOA

8 and the effected stakeholders.

9 --o0o--

10 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

11 Portable equipment is a significant source of NOx and

12 diesel PM emissions in California. All portable engines

13 are subject to the air toxic control measure, or ATCM,

14 that the Board approved in 2004 to reduce diesel PM

15 emissions from portable equipment. Under state law, the

16 districts are charged with the responsibility of enforcing

17 the statewide regulation. The proposed amendments that

18 you have before you today are designed to provide us and

19 the districts with the necessary tools to ensure that

20 sources registered under the State program are and will

21 remain in compliance.

22 --o0o--

23 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

24 The amendments that we are proposing today increase the

25 enforceability of the statewide regulation and provide

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234520

1 better information about emissions and potential air

2 quality impacts of portable equipment. These amendments

3 also allow for a temporary window of time to register

4 certain engines for businesses that experienced unexpected

5 delays in the delivery of some new cleaner diesel engines.

6 ARB staff is also proposing several amendments that

7 provide additional clarity, delete outdated provisions,

8 and strengthen the appeals process. The following slides

9 address each of the proposed amendments.

10 --o0o--

11 REGULATORY ASSISTANCE SECTION MANAGER HOWARD: As

12 I mentioned earlier, the districts are responsible under

13 State law for enforcing the statewide regulation. One of

14 CAPCOA's primary concerns was that the inspection fees

15 contained in the statewide regulation were not adequate to

16 fund their enforcement responsibilities. Staff worked

17 closely with CAPCOA and effected industries to develop a

18 proposed fee schedule.

19 In 1997, the Board approved the current

20 inspection fee of $75 percent per unit inspected each ear

21 year. Staff is proposing to increase inspection fees by

22 $40 per year for engines and $16 per year for equipment

23 units.

24 In addition, staff is proposing discounted

25 inspection fees up to 35 percent where an engine owner

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234521

1 ranges with the district to inspect multiple units at a

2 single location. These increased fees will provide

3 districts with the resources to ensure that registered

4 equipment is inspected at least once every three years and

5 that illegally operating equipment is brought into

6 compliance with regulatory requirements.

7 --o0o--

8 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

9 The proposal to designate a home district would facilitate

10 the enforcement of PERP. This amendment would require

11 owners to designate a home district in which the portable

12 equipment would reside most of the time. The home

13 district is responsible for enforcement of PERP and

14 therefore receives a portion of the inspection fees

15 collected by ARB.

16 Owners holding valid registrations would be

17 required to notify ARB of their home district designation

18 within 90 days of the effective day of the proposed

19 amendments. If the applicant fails to designate a home

20 district, ARB will designate one for them.

21 --o0o--

22 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

23 The proposed amendments require owners and operators of

24 equipment units to notify the district when an equipment

25 unit would be operated at a location for more than five

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234522

1 days. Where an owner typically operates within a single

2 district, the proposed amendments would allow the owner to

3 negotiate with the district to develop mutually agreed

4 upon alternative notification requirements.

5 --o0o--

6 REGULATORY ASSISTANCE SECTION MANAGER HOWARD: In

7 order to further enhance enforcement activities, this

8 proposed amendment would require the mounting of a placard

9 on all registered portable equipment. The placard,

10 roughly the size of a license plate, would be mounted to

11 the portable equipment in a conspicuous place and would

12 allow a district inspector to determine from a distance

13 whether the equipment is registered.

14 The intent is to reduce enforcement program costs

15 by minimizing the need to drive up to and inspect every

16 piece of equipment spotted in the field. The placard cost

17 is $5 each and would be required when an application for

18 initial registration is submitted to the ARB or the first

19 renewal is submitted to ARB.

20 --o0o--

21 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

22 The installation of hour meters is necessary to confirm

23 how many hours portable equipment is actually being used.

24 Currently, limited operational information is available to

25 evaluate emissions and potential air quality impacts of

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234523

1 portable equipment. The use of hour meters would provide

2 more accurate information for air quality analyses

3 conducted by both the districts and ARB.

4 Most new engines today are arriving from the

5 factory equipped with hour meters. In addition to

6 providing operational data, staff believes that the use of

7 hour meters is essential for establishing regular engine

8 maintenance intervals to ensure emissions are minimized.

9 The cost including installation for an hour meter on an

10 existing engine is about $200.

11 --o0o--

12 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

13 The proposed amendments contain a number of requirements

14 related to maintaining operational records and annual

15 reporting. Owners of portable equipment will be required

16 to record hours of operation, dates, and location of

17 operation for each project. This information will need to

18 be summarized and submitted to ARB annually. The

19 estimated cost to equipment owners is estimated to be

20 approximately $400 for each piece of equipment. However,

21 staff believes this number will drop as we develop

22 standardized forms, reporting formats, and expanded web

23 based tools.

24 In addition to owner/operator reporting

25 requirements, staff is proposing to require engine and

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234524

1 equipment vendors to report monthly sales of new equipment

2 and for districts to submit annual reports of inspection

3 and enforcement activities.

4 --o0o--

5 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

6 The ATCM for portable diesel fueled engines required

7 diesel engines registered or permitted after January 1st,

8 2006, meet the current most stringent emission standards.

9 We recently became aware that some manufacturers and

10 distributors experienced a longer lead time between

11 ordering and delivery of certain types of portable engines

12 than was originally anticipated.

13 New diesel engines were ordered but were not

14 delivered in time to register before the January 1st,

15 2006, deadline. Recognizing this issue, ARB staff is

16 proposing to allow the registration of a limited number of

17 new engines that because of unexpected delays are no

18 longer eligible for registration in PERP. In order to

19 qualify for this provision, the engine must be a newly

20 manufactured piece of equipment that was sold to the

21 ultimate user between July 1st, 2005, and December 31st,

22 2005. And an application must be filed with PERP by

23 November 1st, 2006. The provision's expected to allow

24 about 200 engines to register.

25 --o0o--

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234525

1 REGULATORY ASSISTANCE SECTION MANAGER HOWARD: I

2 would now like to discuss an issue that we have received

3 comments on and that you may hear testimony on. This is a

4 request to allow older dirtier and unpermitted engines to

5 enter the program. Before discussing this issue, I would

6 like to provide you with some background information.

7 Since 1997, portable engines have either been

8 required to be in the PERP program or to have a district

9 permit. The program is designed to ensure a steady

10 emission reduction. For the first few years, any engine

11 could opt into the program. Between July 2000 and

12 February 2004, as part of the effort to ensure PERP

13 engines achieved emission reductions, only clean, newer

14 engines could enter the program.

15 In 2004, the Board approved a new regulation that

16 required all portable engines to meet new provisions to

17 reduce air toxics. As part of these changes, the Board

18 also amended the PERP program to effectively allow a 22

19 month period for specified older engines to come into the

20 PERP program. About 1700 preexisting engines were

21 registered during this period. This window closed in

22 2005.

23 This period is referred to as the amnesty period.

24 However, staff is aware there may still be a significant

25 number of engines operating without permits.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234526

1 --o0o--

2 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

3 The staff has received comments that the Board once again

4 provide additional time for older dirtier engines to

5 register in the program. The requesters claim that costs

6 are prohibitive for new engines, that clean engines are

7 not available, and that emission reductions can be

8 preserved because cleanup can be done with much cheaper

9 retrofits. In addition, the requesters claim that not all

10 owners knew of the requirements and therefore additional

11 outreach needs to be done for small businesses. For the

12 reasons shown on the next slide, staff, CAPCOA, and other

13 industry representatives do not support this request.

14 --o0o--

15 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

16 Staff has conducted extensive outreach and has provided

17 sufficient opportunity to register older dirtier engines.

18 The older engines now seeking amnesty typically now have

19 three times higher emission of both NOx and PM compared to

20 new engines. There is no retrofit option available to

21 achieve equivalent emission reductions, and new engines

22 are available for sale.

23 Cost is a consideration. However, we believe the

24 process has been fair in providing a reasonable time

25 period to comply. Also, amnesty for those that have acted

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234527

1 illegally for a long period would be very unfair to those

2 that have spent money to comply with their responsibility.

3 In addition, CAPCOA has established a fair

4 process for owners who voluntarily contact the district to

5 bring unpermitted equipment into compliance. This process

6 allows the equipment to continue to operate while owners

7 make arrangements to purchase and receive delivery of

8 clean compliant engines.

9 As I mentioned earlier, the diesel portable ATCM

10 is designed to achieve better than 50 percent near-term

11 reduction in both NOx and PM. Allowing an extension would

12 result in significant loss in these reductions.

13 Therefore, we do not support providing an additional

14 amnesty period.

15 --o0o--

16 REGULATORY ASSISTANCE SECTION MANAGER HOWARD: I

17 would now like to talk about our next steps. First, we

18 intend to assist in the implementation of any amendments

19 that you adopt today. This would include creating

20 standardized reporting forms, expanding our web-based

21 services, and developing outreach materials that

22 distributors can give to their customers to remind them

23 about existing and future requirements of PERP.

24 We have received comments that we should expand

25 our outreach program to address future milestones in the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234528

1 PERP program, particularly the requirement to have even

2 cleaner portable equipment operating in California by

3 2010. We agree with the comment and are taking the

4 initial steps to conduct early outreach and to help our

5 stakeholders start planning now to meet upcoming

6 deadlines.

7 We will work with manufacturers, distributors,

8 and owners of the portable equipment to urge them to start

9 planning now for the 2010 deadline. As part of our

10 efforts, we will track market information to ensure that

11 engines are available to meet upcoming requirements.

12 The comment letter from the Engine Manufacturers

13 Association, EMA, includes a commitment to work with us on

14 this effort as well. Staff also proposes to report back

15 to the Board in 2009 to provide a status report and, if

16 necessary, recommend any changes to ensure the continued

17 effectiveness of the portable equipment registration

18 program.

19 --o0o--

20 REGULATORY ASSISTANCE SECTION MANAGER HOWARD:

21 Staff recommends that the Board adopt the proposed

22 amendments before you today. Thank you. That concludes

23 my presentation.

24 CHAIRPERSON SAWYER: Thank you very much.

25 Madam Ombudsman, would you please describe the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234529

1 public participation process that occurred while this item

2 was being developed and share any concerns or comments you

3 may have with the Board at this time?

4 OMBUDSMAN TSCHOGL: Thank you, Dr. Sawyer and

5 members of the Board.

6 This regulation has been developed with input

7 from many stakeholders and interested parties, as you

8 heard. The statewide regulation was approved by the Board

9 on March 27th, 1997, and became operative on September

10 17th, 1997.

11 The Board also approved amendments to the

12 statewide regulation on December 11, 1998, and February

13 26th, 2004.

14 At the February 2004 hearing, CAPCOA raised a

15 number of concerns related to the enforceability of the

16 statewide regulation. Consequently, the Board directed

17 staff to work with CAPCOA and effected industry to resolve

18 their concerns.

19 In consultation with CAPCOA and effected

20 industry, staff developed proposed amendments to the

21 statewide regulation and the draft regulatory concepts and

22 language amendments process began in February 2004.

23 Staff held public workshops on March 30th, 2006,

24 in Sacramento, and on April 4th, 2006, in Diamond Bar at

25 the South Coast Air Quality Management District.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234530

1 Approximately 30 stakeholders attended the March meeting

2 and more than 40 attended the April meeting.

3 The Sacramento workshop was also broadcast on the

4 Internet for meeting participants that were unable to

5 attend in person. The broadcast viewers were able to

6 submit comments and questions by e-mail during the

7 workshop so that staff could address their concerns or

8 answer their questions.

9 On December 1st, 2005, and January 17th, 2006,

10 and February 24th, 2006, staff held public consultation

11 meetings in Sacramento. They provided attendees with the

12 option of participating in the meetings by audio,

13 teleconference, or in person. In addition, there were a

14 number of conference calls and in-person stakeholder

15 meetings to further discuss the proposed amendments.

16 Staff participated in many individual meetings and

17 conference calls with effected industries to address their

18 specific concerns. They also attended several of the

19 CAPCOA Engineering Managers Committee and the CAPCOA

20 Enforcement Managers Committee meetings.

21 Staff made contacts with industry

22 representatives, State and local agencies, and other

23 interested parties through face-to-face meetings,

24 telephone calls, and electronic mail. ARB's Enforcement

25 Division conducted 404 inspections in seven different air

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234531

1 districts between July 6th and December 15th, 2004, in

2 part to get a better sense of the amount of resources that

3 are required to conduct an inspection of portable

4 equipment. These inspections were conducted at 175

5 different locations. Wherever possible, staff attempted

6 to find equipment that was located at job sites rather

7 than storage yards. The industries inspected were oil

8 fields and petroleum production, construction, and

9 building trades, equipment rental companies, municipal

10 public works agencies, gas and electric utilities,

11 telecommunication companies, composting operations, port

12 and harbor facilities, and concrete recycling operations.

13 On May 5th, 2006, the Notice of Availability was

14 distributed via list serve, mailing lists, and ARB's

15 website. There are nearly 135 stakeholders on the mailing

16 list and approximately 1200 on the portable equipment list

17 serve.

18 Thank you. This concludes my comments.

19 CHAIRPERSON SAWYER: Do any of the Board members

20 have questions? Yes.

21 BOARD MEMBER BERG: Thank you.

22 I just want to make sure that I'm clear on what

23 our goal is here, and I'm a little confused. Was the

24 original regulation to regulate new or existing equipment?

25 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: Good

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234532

1 morning. I'm Mike Tollstrup.

2 The original regulation, the one we adopted back

3 in '97, set requirements both for new engines coming to

4 the program and then the existing fleet of engines making

5 them replace those over time. So it got to both of them.

6 BOARD MEMBER BERG: What was the period of time

7 for replacement?

8 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: The

9 replacement period in our program was by 2010, anybody

10 that was registered in the portable equipment program

11 would have to have a certified engine. Basically, it

12 would be whatever tier was available at the time they

13 purchased. If they purchased early, it would be a Tier 1.

14 If they waited until later, it would be Tier 2 or Tier 3.

15 BOARD MEMBER BERG: And did we determine there

16 was retrofitting -- oh, it wouldn't matter the retrofit

17 issues, because we wanted the engine replaced by 2010.

18 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: We

19 looked at the retrofit issue back in '97. We continued to

20 follow it. Even to this day, we do not have viable

21 retrofits available that will give you any level of

22 reductions.

23 BOARD MEMBER BERG: So if we want to replace

24 these by 2010, why -- and I understand there was a

25 registration period. Could you just walk me through again

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234533

1 what the benefit would be not to allow people to register.

2 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: Part

3 of the issue here is that when we adopted the program back

4 in '97, this is kind of an unusual reg because we allowed

5 such a long period of time to comply. When we worked at

6 the reg, we had preemption issues. We had issues with

7 lack of availability of the retrofit devices that would

8 get reductions. So the agreement that we had at the time

9 was that we would get more time -- we basically gave from

10 1997 to 2010 for folks to start planning and replacing

11 their engines with newer engines to get the emission

12 reductions.

13 So we have a lot of folks in the program.

14 They've spent a lot of money to comply with this program.

15 We made a lot of effort to get the word out. We've opened

16 the program three times to let people in, no questions

17 asked. And basically what we have is a situation where we

18 have a lot of people that are in the program and complying

19 with the regulations who have spent a lot of money. A lot

20 of the competitors are out there operating. They have not

21 spent that kind of money. So it puts them at an economic

22 disadvantage.

23 BOARD MEMBER BERG: But I'm confused. I think

24 that the regulation requires that everybody be in

25 compliance with new engines by 2010, and so we have

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234534

1 three-and-a-half more years. If you're not in the program

2 and you have an older engine, what are we saying? I think

3 I'm --

4 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Let me try to

5 clarify. By 2010, the program ensures that all the

6 engines have been turned over at least once and we get the

7 high level of NOx and PM reductions that are available

8 from new engines. In the interim, the way we generate

9 emission reduction is by ensuring that as engines come

10 into California, only the best lowest emitting engines are

11 allowed. We started out the program in the late '90s, and

12 there weren't emission control standards for these

13 engines. In 2000 or so around that time, EPA standards

14 and our standards started to apply, and now progressively

15 more stringent standards apply. So we close the program

16 to pre-existing engines at this time and said if you're

17 going bring an engine into the program, you need to get

18 one of these lower emitting engines.

19 So we have people out there who may have had a

20 pre-existing engine and not registered it for all that

21 time. We may have people who have brought out older

22 dirtier engines that would have never been allowed and are

23 trying to get them into the program. That's where we lose

24 the emission reduction.

25 BOARD MEMBER BERG: So just so I'm understanding.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234535

1 Engines that were owned let's say prior to 1997, that

2 isn't what we registered. We registered engines that

3 were --

4 DEPUTY EXECUTIVE OFFICER SCHEIBLE: We registered

5 those engines in the original program.

6 BOARD MEMBER BERG: Okay. And then engines that

7 were purchased between the late '90s to date, they're in a

8 different tier?

9 DEPUTY EXECUTIVE OFFICER SCHEIBLE: They're in a

10 different tier, and they could register so long as the

11 time they registered they met the most stringent tier

12 currently in effect.

13 BOARD MEMBER BERG: So if an equipment operator

14 chose not to register any of their engines, for sake of

15 argument, what are we looking at specifically?

16 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Well, we're

17 looking at engines that may be from any tier. And had

18 they been in existence and registered originally, they'd

19 have until 2010 to turn over. And we have no way of

20 knowing whether or not that engine came in as a used

21 engine in 2004 should have been a Tier 2 but is a Tier 0.

22 So it becomes very difficult. We know everybody who

23 participated in the program beyond 2000 and entered in an

24 engine had to have a new clean engine. And they had to

25 pay for those engines that we got emission benefits for.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234536

1 BOARD MEMBER BERG: So if we pass the amendment

2 to the regulation, what did they specifically need to do

3 to come into compliance?

4 DEPUTY EXECUTIVE OFFICER SCHEIBLE: If we pass

5 today's amendment?

6 BOARD MEMBER BERG: That's correct.

7 DEPUTY EXECUTIVE OFFICER SCHEIBLE: In order to

8 get into the program, you will have to have an engine that

9 meets the current Tier standards. So most of those will

10 be Tier 3 now. And older engines cannot qualify.

11 BOARD MEMBER BERG: So all the equipment they

12 would have would be illegal to use?

13 EXECUTIVE OFFICER WITHERSPOON: That's correct.

14 One more dynamic that needs to be understood here is that

15 before 1997 all portable engines had to be under district

16 permit. That was the law of the land. And as a

17 convenience to industry, a statewide registration program

18 was set up so they didn't have to have multiple permits.

19 But the idea was not to undercut permitting rules, but to

20 have equally stringent State rules that let you get a one

21 time, one stop, one shot, you know, certification to

22 operate.

23 Under district permit rules today, if you come in

24 to get a permit after January 1st of this year, BACT is

25 the best available for sale. So we are matching the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234537

1 registration requirements to what a district would

2 require, because we're not trying to undercut local rules

3 with a State rule that's more lenient.

4 BOARD MEMBER BERG: That's very helpful. I'm

5 sorry for all the questions.

6 EXECUTIVE OFFICER WITHERSPOON: Your questions

7 were completely logical. Because we set up this system,

8 and we did it with districts' involvement that because so

9 many scofflaws were out there, we needed to entice them

10 in. And one way to get them into the system was to say

11 bring your dirty engine in, and we'll deal with you later.

12 We only did that until the end of last year. And now

13 we're on the straight and narrow, and they need to be on

14 the straight and narrow. And because they waited, they

15 needed to buy a brand-new engine.

16 BOARD MEMBER BERG: I really appreciate that

17 explanation.

18 DEPUTY EXECUTIVE OFFICER SCHEIBLE: If someone

19 had a Tier 0 engine back there before year 2000 and

20 they're trying to bring it in now, basically they've been

21 operating illegally for a decade outside of the district

22 program and outside of the ARB program. So I guess there

23 may be some situations out there that had they acted when

24 the program was established, they could have come in. But

25 it's been an awful long period of time that they've had to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234538

1 comply.

2 CHAIRPERSON SAWYER: Ms. Riordan.

3 BOARD MEMBER RIORDAN: Yes, Mr. Chairman. Let me

4 ask the staff, when I first sort of looked at this for

5 this particular meeting and spoke to some of the

6 stakeholders, I was surprised that there was not a

7 retrofit for this type of equipment. I mean, we

8 retrofitted a lot of things. And could you hazard a guess

9 as to why we don't have a retrofit that has been developed

10 for this equipment? Is it just so unusual or economically

11 it doesn't make good sense? What would you suggest is the

12 reason there isn't a retrofit package for some of this

13 equipment?

14 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: In

15 our discussions with manufacturers on this particular

16 issue, there was a couple of things. One, because of the

17 duty cycles and the multiple uses of this type of

18 equipment, it was difficult to design one size fits all

19 type of control device that's going to work on the

20 majority of these engines. In addition to that, it's just

21 there are other categories that they're working towards

22 the on-road and some of the bigger off-road categories.

23 So there wasn't the volume here they needed to go after

24 the design and development of these technologies.

25 EXECUTIVE OFFICER WITHERSPOON: And just to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234539

1 clarify for all the Board members, there are not retrofit

2 particulate traps, which one would have expected there

3 would be. And there are not NOx retrofits either. So

4 that's why we have to go to full engine replacement. If

5 we could allow them to do equivalent emission reduction

6 with retrofits, we would. But there simply aren't any

7 certified.

8 BOARD MEMBER RIORDAN: And there must not be the

9 economic drive somehow for that either, because I would

10 think somebody would have developed that. What about not

11 a retrofit but a repower, or is that only available to the

12 big heavy equipment that we see that wouldn't be what

13 we're talking about today where you literally drop in a

14 new engine?

15 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: Under

16 our program, we have the option of totally replacing the

17 piece of equipment or just repowering. So that option is

18 currently available. But it would have to be one of the

19 newer engines that is available today.

20 BOARD MEMBER RIORDAN: So technically you could

21 repower --

22 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP:

23 Absolutely.

24 BOARD MEMBER RIORDAN: -- under our regulation?

25 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Also on the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234540

1 issue of the lack of retrofits, these engines are like the

2 truck engines of the '80s. And we don't have very many

3 retrofit options that get high level control for those

4 engines, because they had higher PM emissions. They don't

5 have electronic controls on the older engines. So it's a

6 technically difficult job. And keep in mind we're doing a

7 joint program here where we're getting both PM reductions,

8 and we stress those --

9 BOARD MEMBER RIORDAN: And NOx.

10 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And NOx. And

11 there's no retrofits out there for the new truck engines

12 that get 50 or 75 percent NOx reductions.

13 And on the repowering issue, I'd say that it's

14 not like -- the engine is a very large portion of the

15 value of the equipment for many of these applications.

16 That may not be true of a rock crusher, for example. But

17 for a generator set or a compressor or whatever, the

18 engine is the most valuable thing in the equipment.

19 BOARD MEMBER RIORDAN: Thank you.

20 CHAIRPERSON SAWYER: Dr. Gong.

21 BOARD MEMBER GONG: Yes. I have a question about

22 enforceability. I guess after 1997 there was some

23 enforceability rules I guess or process in place. And I

24 notice that in the presentation there are several slides

25 of increased enforceability. I get the impression that

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234541

1 what happened after 1997 until now is a weaker bit of

2 enforceability, or was this more up to the local air

3 districts and manpower issues?

4 EXECUTIVE OFFICER WITHERSPOON: It was resource

5 issues a lot. Because both ARB and districts have always

6 had the regulatory power to enforce, but not enough

7 revenue to send staff into the field. And when we became

8 aware that the scofflaw problem was as big as it was, we

9 did strike forces together, and we went to places where

10 there would be large clusters of portable equipment like

11 rental yards and began to make our presence known.

12 But we do need an ongoing source, and the

13 districts need an ongoing source of funding. And part of

14 the disagreement we had back in '04 was how much money

15 that would take and how much reporting was needed for the

16 districts to know when an engine was around in their

17 district. And that they should send an inspector out.

18 And we've been doing random inspections prior to that

19 time. So that's what the amendment package before you

20 today is about. More fees and more reporting so that not

21 as many engines slip though the net.

22 BOARD MEMBER GONG: Thank you.

23 Were any of these results reported in our

24 handouts or anything else, these random surveys I guess?

25 You indicate there was a big problem.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234542

1 EXECUTIVE OFFICER WITHERSPOON: We talked about

2 it in 2004 and we cover it in our annual enforcement

3 report to the Board. It's been part of the Enforcement

4 Division's strategic plan ever since we became aware of

5 the problem. And I'm sure it will continue into next

6 year, but with a lot more help from air districts as more

7 revenues come in.

8 CHAIRPERSON SAWYER: Am I correct to assume that

9 the majority of portable equipment is under district

10 regulation?

11 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP:

12 Actually, the majority of equipment is under the

13 registration program. We have about 30,000 units under

14 registration in the program. The last time we checked

15 with the districts, there are maybe a couple of thousand

16 permits issued. So again, the basic requirement comes

17 from the district to have a permit. But a lot of people

18 have opted into our program, just because it provides more

19 flexibility.

20 CHAIRPERSON SAWYER: And the severity of the

21 controls supplied by the district, is that uniform

22 throughout the state, or does it vary from district to

23 district?

24 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: Well,

25 I think it used to be more of an issue. I think now as

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234543

1 they come in, the districts are doing as we are through

2 the ATCM requiring the new engines be put in place.

3 CHAIRPERSON SAWYER: Thank you.

4 Are there any other questions from Board members?

5 Ms. Berg.

6 BOARD MEMBER BERG: With the random inspections,

7 are we seeing compliance out in the field? Is it 50/50?

8 What's our feeling?

9 EXECUTIVE OFFICER WITHERSPOON: We still don't

10 know how many noncompliant engines are out there. We

11 think it's less than 50 percent now, which is our worst

12 case assessment in 2004. But we need to conduct many more

13 inspections to find out.

14 BOARD MEMBER BERG: Thank you.

15 CHAIRPERSON SAWYER: I would now like to call the

16 first three witnesses who have signed up. That is Dave

17 Jones, Barbara Lee, and Barry Wallerstein. I would like

18 to thank Assemblymember Jones for joining us today.

19 Always good to hear from members of the Assembly.

20 ASSEMBLYMEMBER JONES: Thank you very much,

21 members of the Board. Mr. Chair, it was a pleasure to

22 meet with you in Sacramento the other month when you took

23 the time to visit some of us after your appointment.

24 Thank you for providing me to opportunity to speak this

25 morning.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234544

1 I actually had the pleasure of serving on a local

2 Air District Board, the Sacramento AQMD, for some number

3 of years before elected to the Assembly and am familiar

4 with the particular problem the regulation has been

5 assigned to address. It has been a big problem for air

6 districts, the weakness, if you will, of the existing

7 regulatory scheme.

8 Your staff report indicates that there are

9 probably about 20,000 or so engines which are registered

10 in the PERP program. Another roughly equal amount are

11 unregistered, and literally thousands of those engines are

12 out there in districts not inspected, essentially

13 districts not knowing whether they're complying or not,

14 and the absence of a strong regulatory regime and

15 notification requirements, recordkeeping requirements,

16 inspection fees sufficient to recover the cost of

17 inspections has significantly degraded the ability of the

18 ARB and the air districts to ensure that we're getting

19 clean air quality from these engines.

20 So in early 2005 or late 2004, I actually

21 introduced a bill, Assembly Bill 1220 sponsored by CAPCOA,

22 to amend the Health and Safety Code to address this issue,

23 and very pleased as a result of a collaborative effort on

24 the part of ARB staff and the industry and the air

25 districts and air pollution control officers. A working

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234545

1 group was formed that developed a series of agreements and

2 essentially the package of regulations you see before you

3 today.

4 The bill itself moved very speedily through both

5 Houses. It's now sitting in the Senate. I think it

6 reflects the Legislature's keen concern about this issue.

7 But the commitment I made to your staff was that I would

8 not continue moving that bill in the hopes that an

9 administrative and regulatory approach could be taken to

10 resolve the problem.

11 So I'm here in support of these regulations. I

12 think they're tremendously important. I think they

13 address the issues that have been raised by your staff, by

14 the air districts. I also want to thank the industry for

15 their collaboration and the PERP working group. I think

16 the working group itself is a great example of how the

17 industry and government can work together to achieve a

18 good end. And I'm very hopeful you'll adopt these

19 regulations.

20 I do hope as well that you'll decline the request

21 to extend the amnesty period. I think that would be a

22 step in the wrong direction. And I think it's

23 tremendously important we do everything we can to make

24 sure these engines and other pieces of portable equipment

25 are brought within this important regulatory scheme.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234546

1 We're talking about four tons of particulate matter and

2 between 50 and 60 tons of NOx. It's critically important

3 for those of us here in California.

4 Thank you very much. Happy to take any questions

5 you might have, and I appreciate your entertaining my

6 testimony. And I'm hopeful you'll adopt these

7 regulations.

8 CHAIRPERSON SAWYER: Thank you. Are there

9 questions from the Board? Thank you very much for coming.

10 ASSEMBLYMEMBER JONES: Thank you very much.

11 CHAIRPERSON SAWYER: Barbara Lee.

12 MS. LEE: Good morning, Mr. Chairman and members

13 of the Board. My name is Barbara Lee. I'm the Air

14 Pollution Control Officer in Northern Sonoma County and

15 also the President of the California Air Pollution Control

16 Officers Association. I will be brief.

17 I would like to extend my gratitude to Catherine

18 and to her staff for the tremendous job they have done

19 bringing this proposal forward. I'm sure that many of you

20 are aware from the times that you have heard it in the

21 past that working on this regulation is a thankless task,

22 and it has taken a tremendous amount of their effort to

23 bring it to you in such a fine form.

24 And I would like to acknowledge Assemblymember

25 Dave Jones for being here to support this. We appreciate

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234547

1 his help. But the real credit goes to your staff. We

2 urge you to support them and adopt their proposal. Thank

3 you.

4 CHAIRPERSON SAWYER: Dr. Wallerstein.

5 MR. WALLERSTEIN: Good morning, Mr. Chairman and

6 members of the Board. Barry Wallerstein, the Executive

7 Officer of the South Coast Air Quality Management

8 District.

9 I'm here also to say the staff has done a truly

10 excellent job on this proposal that is before you. We

11 appreciate Catherine's leadership on this, Bob Fletcher's

12 overall management, and the heavy lifting done by Mike

13 Tollstrup and Kitty Howard.

14 This is a very important clean air proposal.

15 This is a large emission source category where we need

16 these changes.

17 Paul, if you can blow up the image.

18 This is the smog report card thus far this year.

19 And like in golf, you want low numbers, not high numbers.

20 And what this in essence says if we look at the eight-hour

21 standard, thus far this year we have more days of

22 violation than Houston or San Joaquin, and more days

23 violation than we've had the previous two years.

24 Now, a few days difference year to year can be

25 the weather conditions. But I think the important thing

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234548

1 is that we're not seeing a downward trend. And if you

2 also look at the peak concentration for eight-hour ozone,

3 you see that we also have the highest level thus far this

4 year. And in fact, if you look at the one-hour level in

5 the column over here, you see that we have a level on June

6 3rd that was practically at 17 parts per hundred million.

7 So our ozone problem continues. This is a large

8 source category. We need to have these amendments to

9 appropriately regulate this category. We've done field

10 work. There is significant noncompliance. And absent

11 these amendments, that will continue.

12 On the issue of the amnesty, we would strongly

13 support the staff's proposal. To go beyond that I think

14 will add to our air quality problems here in Southern

15 California. So we would urge your approval of the staff

16 proposal.

17 CHAIRPERSON SAWYER: Thank you very much.

18 The next three speakers are Rick McVaigh, Dick

19 Smith, and Larry Allen.

20 MR. MC VAIGH: Good morning, Mr. Chairman and

21 members of the Board. I'm Rick McVaigh, the Deputy Air

22 Pollution Control Officer for the San Joaquin Valley Air

23 Pollution Control District, which is the home district for

24 about 2500 pieces of portable equipment.

25 I'm here to express our support for the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234549

1 regulation. We believe it's workable and will achieve

2 real reductions. This version completely addresses our

3 concerns about the inspection resources and also the

4 notification. We want to thank your Board and your staff

5 for listening to us and CAPCOA and working with us on the

6 resource issues. As staff mentioned, they actually went

7 as far as to come down to Kern County, went out in the

8 field, inspected these types of sources to determine

9 exactly how much resources it would take to go ahead and

10 do these inspections. So again, we're here to express our

11 strong support for adoption of the regulation. Thank you.

12 CHAIRPERSON SAWYER: Thank you.

13 Larry Allen -- oh, Dick Smith next.

14 MR. SMITH: Good morning, Mr. Chairman and

15 members of the Board. My name is Dick Smith. I'm the

16 Director of the San Diego County Air Pollution Control

17 District. And we also want to recognize the great efforts

18 the staff has made in bringing these amendments forward to

19 your Board. Quite honestly, we didn't think this was

20 something that was going to have quite the outcome that we

21 expect. And I can say at least for San Diego that we may

22 not be happy with all of the elements in the regulation,

23 but it's certainly something we can live with and make

24 work. And again, we urge you to adopt the amendments that

25 are being proposed by staff. Thank you.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234550

1 CHAIRPERSON SAWYER: Thank you.

2 Larry Allen, and then Jim Harris, Michael Lewis,

3 and Tom Umenhofer.

4 MR. ALLEN: Good morning, Dr. Sawyer, members of

5 the Board. My name is Larry Allen. I'm the Air Pollution

6 Control Officer for San Luis Obispo County.

7 I, too, would like to commend the work done by

8 all of your staff. They've done a truly outstanding job

9 here under very trying circumstances.

10 I would also like to acknowledge Assemblymember

11 Dave Jones. I believe that his bill was really a catalyst

12 that brought the regulators and industry and other

13 stakeholders together to work in this process.

14 I personally have been involved in it for the

15 last two years, sat through literally dozens of meetings

16 and conference calls working out just all of the details

17 that you see in your staff report with a very broad

18 section of stakeholders. So I believe that what you have

19 before you is something that all the parties can really

20 live with, and it's going to greatly improve the

21 effectiveness of this program. It's going to bring good

22 emission reductions. It's going to make it a lot more

23 enforceable for the districts. It will provide a source

24 of revenue that we can use to actually implement the

25 program which has been the problem in the past.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234551

1 So I would urge you not to allow amnesty for

2 those that have not been in the program. That is a very

3 big issue for the industry that has been compliant all of

4 these years. And I can tell you from my district

5 perspective that during the last amnesty period, we sent

6 out over 650 notices to individual businesses letting them

7 know there was an amnesty program, and if they had an

8 engine that didn't comply, they'd better get it registered

9 or this regulation was coming along.

10 We also did quite a media blitz. And I believe

11 this occurred in all of the districts as well to let

12 people know that amnesty period was going to close in

13 December. So the folks that we have found since then have

14 admitted that they just didn't act and they should have

15 and they're out there buying new engines now.

16 So I would urge your support of this regulation.

17 I think it goes a long ways towards achieving the goals.

18 CHAIRPERSON SAWYER: Thank you.

19 Jim Harris.

20 MR. HARRIS: Good morning, Chairman Sawyer and

21 members of the Board. I'm Jim Harris, Air Pollution

22 Control Officer from the Amador Air District located in

23 the foothills in Jackson, California, east of Sacramento.

24 I'm here to urge the Board to support the

25 proposed PERP amendments, and we would like to thank the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234552

1 Air Resources Board for listening to the comments and

2 giving consideration to all of those comments that were

3 made on these proposed amendments. I believe that they

4 will be effective and will urge you to pass the

5 amendments. Thank you.

6 CHAIRPERSON SAWYER: Thank you very much.

7 Michael Lewis.

8 MR. LEWIS: Good morning. My name is Mike Lewis,

9 Senior Vice President of the Construction Industry Air

10 Quality Coalition. And I think you have a letter from us

11 in your package of materials.

12 I want to -- I guess I'm the generic requester

13 that Kitty referred to in her presentation, and I want to

14 I guess clarify something up front. We're not asking for

15 an amnesty program. What we're proposing is that you

16 create a pathway for these contractors who have this

17 equipment that isn't registered to get into the program.

18 We agree with the staff that probably half or

19 less of the equipment in the state is actually in the

20 program, and that's been pretty consistent for the last

21 ten years. We think that despite everyone's efforts to

22 get these engines in, it hasn't happened. Why, I'm not

23 sure.

24 I think in large part we would say that the -- we

25 believe that this equipment falls into three categories.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234553

1 A small percentage of it is people who are scofflaws if

2 you will who are just simply hiding, don't want to be

3 found and aren't going to be found. We think a large

4 percentage of it is equipment that belongs to small to

5 medium size contractors who don't belong to contracting

6 associations who frankly just aren't paying any attention

7 that don't know anything about the program. And there's

8 probably a very small percentage of it that belongs to

9 contractors who are actually in the program but they own

10 hundreds of pieces of equipment and somewhere in the

11 process a piece of paperwork or a particular engine didn't

12 get registered as part of the process.

13 What we had suggested is that there be a way for

14 these people to get their engines in the program, that

15 they pay a penalty just like you would pay a penalty if

16 you don't register your own automobile on time. And that

17 they have to agree to some sort of retrofit device, a

18 V-dex device, to be applied to the equipment.

19 After all, the purpose of this is to get the

20 equipment registered, but also to reduce emissions. We

21 think you're going to get equipment into the program

22 faster this way than you are with the inspection program.

23 And you're going to achieve those emission reductions if

24 they're required to put these retrofit devices on the

25 equipment.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234554

1 You know, we're working very closely with your

2 staff on the off-road equipment regulation. And we're

3 told that as soon as the regulation is adopted that

4 requires V-dex, there was going to be V-dex available on

5 every street corner. And I find it hard to believe that

6 if you don't -- if you require V-dex on this portable

7 equipment, much of it, which frankly uses similar engines,

8 there won't be V-dex devices available if, in fact,

9 they're required to be installed as part of getting this

10 equipment in the program.

11 We just think that the current proposal is too

12 punitive for half the engines in the state to be illegal

13 and have to be replaced overnight. Should they be -- in

14 order to get in the program, it's just not a good public

15 policy. And we think you need to create a pathway for

16 these engines to come in. And again, we're not proposing

17 amnesty. We think there should be a penalty, and we think

18 they should have to retrofit the equipment as part of that

19 penalty.

20 BOARD MEMBER RIORDAN: Mr. Chairman, may I ask

21 the speaker a question?

22 When we spoke about that very subject of

23 retrofit, my assumption was that there were retrofits.

24 But I think you hear staff say there just aren't any. And

25 obviously knowing that something was coming as -- because

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234555

1 those who make retrofits are pretty sophisticated in terms

2 of following what the Air Resources Board and local

3 districts are requiring. So they're stepping out and

4 particularly -- you know, there's a whole association.

5 And many times they're in our audience representatives of

6 that association of these retrofit devices.

7 But apparently, unknown to me until I spoke to

8 staff, just -- there's nothing out there for them. And

9 I'm wondering, you know, with your recommendation and

10 request how we get from here to there. I just don't know.

11 Do you have a thought on that?

12 MR. LEWIS: Well, your off-road staff is telling

13 me faith.

14 We tried that argument on them, and they said

15 don't worry, they'll be available. All the retrofit

16 manufacturers tell us once they're required, they're going

17 to be available. But they're not going to spend any money

18 in developing them until they know they're required.

19 The question I guess is who do you believe. And

20 at this point, I guess we have to believe the staff who's

21 telling us that these devices are going to be available.

22 That in many cases they're going to be able to grant

23 interim certifications for on-road devices to be used on

24 off-road devices on off-road equipment. And in many

25 cases, this portable equipment uses the same engines that

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234556

1 are used on road.

2 So I have to assume that they're accurate and

3 that these devices will become available once they are

4 necessary.

5 BOARD MEMBER RIORDAN: Thank you.

6 Staff, maybe you could comment on that.

7 EXECUTIVE OFFICER WITHERSPOON: Well,

8 unfortunately, it's just not true. And even the brand-new

9 engines are not coming from the factory equipped with

10 particulate filters. They have been optimized to emit

11 less NOx and less particulate, but they do not have

12 after-treatment. Because even in a new engine

13 configuration, they still haven't solved all the problems

14 with the duty cycles, the necessary temperature to light

15 off the particulate and burn it off.

16 So I think, Ms. Riordan, you're absolutely right

17 that the aftermarket device industry is very

18 sophisticated. They are anticipating market

19 opportunities. They are building to meet our regs. And

20 they've looked at this sector and said not for this one.

21 BOARD MEMBER RIORDAN: Thank you.

22 BOARD MEMBER BERG: I had just one more question.

23 Mr. Lewis, on the people that are out of

24 compliance, how are we going to reach them now if, in

25 fact, we try to come up with a pathway? That there seems

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234557

1 to be a feeling that a lot of information has gone out in

2 the past. What's going to make it different now?

3 MR. LEWIS: I think we're going to have to extend

4 an even greater effort in order to do that. I mean, we've

5 certainly done that through our industry associations.

6 But you know, the construction association probably only

7 represents 30 or 40 percent of the contractors in the

8 state. Most of them are very small contractors who don't

9 belong to associations. They don't spend the money on it.

10 They don't pay attention to this kind of stuff. And

11 getting to them is a little more difficult task. And I

12 think we recognize that for the off-road program in terms

13 of trying to -- in the development of that rule and trying

14 to notify contractors and using mailing lists from the

15 State Contractors Board.

16 A lot of the small contractors just don't pay

17 attention. And frankly, there's no reason for them to now

18 because they're illegal and there's nothing they can do

19 until they replace the equipment, so they're going to roam

20 around hoping they don't get caught. I'm not sure the

21 inspection programs are going target that half of the

22 equipment. In order to get paid, they need to concentrate

23 on the people who are registered to perform the inspection

24 so they can get their revenue.

25 So I think they're going to find the guys that

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234558

1 have a lot of engines and have one that fell through the

2 cracks. And they may when they go on a construction site

3 find a small contractor, subcontractor who's performing

4 some specialty task who happens to be there who may get

5 caught because he wasn't registered. But I don't think

6 you're going to find significant -- the kind of numbers

7 that you got when you allowed people in the program. You

8 got 4,000 new engines when you did that. That was 25

9 percent of what you had in the program then. If you still

10 have 50 percent of the engines unregistered at this point,

11 I think you're going to get more in with honey than you

12 are with vinegar. But you have to have a way for them to

13 do it, short of having to buy a new piece of equipment.

14 CHAIRPERSON SAWYER: Thank you.

15 Mr. Umenhofer, and then David Grose, John

16 McClelland, and William Davis.

17 MR. UMENHOFER: Dr. Sawyer and members of the

18 Board, my name is Tom Umenhofer. I'm Vice President,

19 Technical Director for Entrex and Executive Board member

20 of WSPA Associates. WSPA Associates is an association of

21 hundreds of businesses throughout California that service

22 the gas and oil industry. And among their members are

23 companies that operate in the state of California, a large

24 number of portable pieces of equipment.

25 And I wanted to focus on talking about a process.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234559

1 Before I do that, I want to get right to the punchline.

2 WSPA Associates is 100 percent supportive of the staff

3 proposal. Not 99. On-hundred percent. And we

4 unequivocally are opposed to anything related to

5 discussion of extension of amnesty. The discussion you

6 just had with the previous speaker, we had the same

7 discussion five years ago, two years ago, and today. Now

8 is the time to move on.

9 I want to go into history about this just a

10 little bit because -- and not a long history, only back to

11 2004, because it's meant a lot to me and my colleagues.

12 Under the clear leadership of CAPCOA and the commitment of

13 the regulated community, our members, and the facilitation

14 of CARB, we embarked on a journey a little over two years

15 ago with one goal in mind, and that's the product that we

16 have in front of us. We formed what was called the PERP

17 Consensus Development Work Group, abbreviated PERP Work

18 Group. And every stakeholder out there had the

19 opportunity to participate. And we out in the business

20 community did everything to bring folks in.

21 And as was presented in the staff report, we had

22 many, many, many meetings. And I will tell you that we

23 addressed one issue at a time. We built consensus. At

24 one time, I was the custodian of the draft. I have 14

25 drafts on my computer. I keep them there in a special

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234560

1 file just to remind me of the process. And at the end of

2 the day, we got it done.

3 And we have a fine product here, but there is

4 something else that was special about this, and that was

5 the process. We developed relationships and communication

6 strategies that in 20 years I've been working in this in

7 Southern California I have not seen here. And even us who

8 have been around a long time learned something new. And

9 this is a success story. This is a success story of

10 public policy, and it's a success story of public process.

11 What I wanted to do today, not talk about the

12 technical part, because I know a lot about the technical

13 part, but to thank folks. I want to specifically thank

14 CAPCOA under the driving leadership of Barbara Lee, and

15 input of Larry Allen, Barry Wallerstein, Carol Coy, Rick

16 McVaigh, and my friend Terry Dressler, and Terry bringing

17 it home.

18 I'd also like to acknowledge the great work of

19 your staff, Bob Fletcher, Mike Tollstrup, and Kitty

20 Howard. Tremendous working with those folks.

21 We also owe a tremendous amount of thanks to

22 another person we haven't mentioned which is the real

23 author back in early days, Cindy Tuck, at that time

24 general counsel for CCEEB, and of course her successor

25 John Grattan who is in the audience today. Everybody did

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234561

1 a great job. And we really have a product we can be proud

2 of, and we have a process that we can be proud of.

3 In conclusion, on behalf of WSPA Associates, I'd

4 like to say that we fully support the staff proposal and

5 we urge the Board to the approve the amended PERP program.

6 Thank you very much.

7 CHAIRPERSON SAWYER: Thank you very much.

8 David Grose.

9 MR. GROSE: Good morning, Chairman Sawyer and

10 members of the Board. I'm David Grose. I'm the Manager

11 of Permitting and Enforcement at the Sacramento

12 Metropolitan Air Quality Management District.

13 Sacramento District strongly supports the

14 adoption of this PERP rule as written. We would like to

15 thank in particular Bob Fletcher, Kitty Howard, and Mike

16 Tollstrup for all of the hours they put in bringing

17 together disparate groups to come up with what's before

18 you today. I appreciate this has been a lengthy process

19 for a number of years. We look forward as a district --

20 since I'm the person that's got to put this on the road,

21 if you will. We look forward to taking our part in making

22 this program work. We now feel that we have the adequate

23 support and resources to actually do the job that we think

24 has been required of us for a long time but we've had the

25 inability to do.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234562

1 As regards to amnesty, as a permitting agent for

2 the Sacramento Metropolitan Air Quality Management

3 District, I have to point out that all of these engines

4 technically require a permit in your district and for many

5 years have sought out the portable registration program as

6 a way not to attain that. There is no amnesty in the

7 permitting programs throughout the state. Every district

8 will sit here and tell you that the permits aren't allowed

9 to be obtained at a later date or that we bring in engines

10 that don't comply. And as such, our district does not

11 support the extension of any opening of the amnesty as

12 it's been called at this district.

13 I thank you for your time.

14 CHAIRPERSON SAWYER: Thank you.

15 BOARD MEMBER BERG: Dr. Sawyer, can I just ask a

16 question?

17 That last comment was very helpful to me, and I

18 just want to understand. If somebody was working in your

19 district and they weren't going from district to district,

20 they would come and get a permit from you?

21 MR. GROSE: Right.

22 BOARD MEMBER BERG: They can elect if they're

23 moving around the state to be in this program that we're

24 talking about?

25 MR. GROSE: If it's available to them, they could

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234563

1 elect to apply for inclusion.

2 BOARD MEMBER BERG: Thank you very much.

3 CHAIRPERSON SAWYER: John McClelland.

4 MR. MC CLELLAND: Thank you, Mr. Chairman. My

5 name is John McClelland. I'm Vice President for

6 Government Affairs at the American Rental Association.

7 ARA represents approximately 4800 rental companies in the

8 U.S. and Canada, all 50 states of the United States. And

9 our members rent equipment, tools, and party goods and

10 services to their customers, which include contractors and

11 individuals. We appreciate the opportunity to appear this

12 morning and to provide our comments on the PERP program.

13 In California, we have 543 rental stores that are

14 represented as ARA members. Several of those are

15 operations that are owned by large companies, but we have

16 probably about 165 of those stores that are just small

17 businesses with a single operation.

18 We strongly oppose the proposed action as it's

19 currently structured, because we believe that it doesn't

20 provide any demonstrable diesel particulate emissions

21 benefits, but it does impose substantial costs on our

22 members and other businesses that are already

23 participating in the PERP program.

24 Let me explain a little bit. Our business is

25 extremely competitive. You saw one of the compressors or

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234564

1 generators that may actually be rented by one of our

2 companies. You know, if it doesn't work when it's out

3 there on the job, then that member is in trouble with his

4 customer. And next time, that call is going to go to a

5 competitor.

6 The point being that our companies have to have

7 new equipment that operates at a very high level, has to

8 be very well maintained, or they're just simply not going

9 to be able to compete in this business. And many of our

10 members we are sure are currently participating in the

11 program.

12 The purpose of the regulation ought to be to

13 provide cost effective and quantifiable emissions

14 benefits. But in the initial statement of reasons,

15 there's a statement that says that the benefits of the

16 regulation cannot be quantified. So if the inspection

17 program can't provide any quantifiable benefit, then how

18 do you justify that?

19 We finally can say that we are interested in

20 catching cheaters as well. There have been a number of

21 statements made about people who have been paying and

22 participating in the program and they're at an economic

23 disadvantage. That is clearly a comment we've heard from

24 a number of members. We want everybody to comply. We

25 have no problem with catching people who should be in the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234565

1 program and are not in the program. And if some of those

2 are our members, shame on them. They should be in this

3 program. It's a requirement. It's the law, in fact.

4 But we're having a problem suggesting that our

5 people who are participating in the program, who have been

6 paying the fees are now going to have to pay higher fees

7 in order to catch the cheaters who have been in an

8 economic advantage over them for this number of years that

9 the program has existed. And we know what the benefits

10 are.

11 CHAIRPERSON SAWYER: May I ask you to conclude

12 with our three-minute limit?

13 MR. MC CLELLAND: Yes, sir.

14 Thirty-five million dollars for small businesses

15 over five years. Our estimates for our members are about

16 $2.8 million annually. And that does not include the cost

17 of taking equipment out of service for inspection. So

18 that's our comment. And we would appreciate your

19 consideration of them. Thank you.

20 CHAIRPERSON SAWYER: Thank you very much.

21 Does staff have any comments on the last

22 speaker's remarks?

23 STATIONARY SOURCE DIVISION CHIEF FLETCHER: This

24 is Bob Fletcher.

25 I think the only comment we have is the purpose

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234566

1 of this regulation is to ensure that the emission

2 reductions that have been identified in the portable

3 equipment control measure are retained. And that's one of

4 the reasons why we weren't able to quantify emission

5 reductions.

6 We have gone back and looked a little bit at what

7 the consequences would be of engines that we think should

8 have come in but haven't. And those are somewhere along

9 the line of ten tons a day of NOx, for example. So

10 there's potential significant emission reductions that are

11 associated with this action. We just weren't able to

12 quantify them precisely.

13 EXECUTIVE OFFICER WITHERSPOON: I would also say

14 we're not just charging those who are compliant to go

15 after the scofflaws. The regulation has within it a

16 constant turnover requirement. So we need to ensure that

17 these companies that are registered are upgrading to

18 engines at the applicable deadlines and keeping them in

19 good working order.

20 CHAIRPERSON SAWYER: Ms. Berg.

21 BOARD MEMBER BERG: Thank you, Chairman.

22 Is the $116 per year, is that in line with other

23 equipment fees?

24 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: The

25 way that we have the fee structured in the program, the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234567

1 proposed increases, there is a difference between the fee

2 for an engine which approximately went up $40 and for what

3 we call the associated equipment. And that's basically

4 billed on an hourly rate. That's why it says up to 116.

5 It may be lower depending on how sophisticated or

6 complicated the equipment is. But typically what you find

7 is it takes more time to inspect those pieces of

8 equipment. They've got conveyors, a lot of different

9 pieces of equipment the inspector has to go out and

10 inspect. It takes more time. That's why that rate is

11 higher.

12 EXECUTIVE OFFICER WITHERSPOON: The rate was

13 drawn from district's hourly rates from the permit fees

14 they charge on other source categories. And we got very

15 detailed and up-to-date information from the major

16 districts in the state and took an average of their labor

17 costs in order to arrive at our proposed fee.

18 BOARD MEMBER BERG: But my understanding on the

19 inspection is we're going to have a visible registration

20 sticker. So how long is that going to take?

21 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: Well,

22 they will have a placard. All the things that we're

23 proposing are going to go towards reducing the enforcement

24 cost to the program. That's one of the things the placard

25 will do. It provides the districts with a siting device

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234568

1 they can see from a distance so they're not wasting all

2 that extra time when they're driving around going up to

3 every piece of equipment.

4 But I think your question was in relation to the

5 district program costs, ours compared to theirs. If you

6 look at the district fees, ours are considerably less on

7 the inspection side then they would be under the district

8 programs.

9 BOARD MEMBER BERG: Thank you.

10 CHAIRPERSON SAWYER: William Davis, and then

11 we'll have Jeremy Jungreis, Colleen Callahan, and John

12 Grattan.

13 MR. DAVIS: Good morning, members of the Board,

14 staff, and visitors. My name is Bill Davis. I'm with the

15 Southern California Contractors Association, and one of

16 our subdivisions, which is the Mobile Crane Operators

17 Group. We're founding members of the Construction

18 Industry Air Quality Coalition along with AGC, BIA, and

19 ECA. And we support CIAQC's statements to you today

20 entirely. The notion that -- the statements that our

21 industry makes are merely claims that can be dismissed is

22 not appreciated.

23 The construction industry in California is very

24 large. It's very diverse. I checked with the Contractors

25 State License Board this past week. They show more than

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234569

1 302,000 contractors licenses in California currently on

2 file. Our industry, that's the known construction

3 industry in California. The known construction industry

4 in California also is a very large employer. It employs

5 924,000 people at high paying jobs according to the

6 Construction Industry Research Board. It's been around

7 for about 30 years.

8 However, there's a large unknown industry here as

9 well. The 3,300 firms that are represented by CIAQC make

10 up a very small fraction of the construction industry.

11 Mike called about 30 or 40 percent of contractors being

12 represented. As a person in the contractor association

13 businesses, I can tell you that that number is less than

14 20 percent.

15 And we suffer from the same things that your

16 staff has suffered from in terms of reaching this unknown

17 part of the construction industry. In the case of SECA,

18 we had five notices that went out in 2005 to our members

19 regarding the registration deadline passing. We meet

20 annually with AQMD and our members of our association on

21 the Carl Moyer Program. We've replaced hundreds of

22 engines in construction equipment through that program

23 worth over $20 million. And our members are featured in

24 national magazines about their efforts to improve the

25 environment.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234570

1 Having said that, there are certain segments of

2 our industry that will never be able to comply with this

3 regulation. These are categories of equipment that do not

4 have certified CARB engines. That includes the crane

5 industry, the drilling and blasting industry, and concrete

6 pumping industry. These are all key components to

7 building anything in the state of California.

8 The reason that these industries are so afflicted

9 is that the companies that manufacture them are not in

10 this country. Largely European and Asian manufacturers

11 who meet air quality requirements in their countries. The

12 European air quality requirements are comparable to

13 CARB's, but because their sales volume per year in

14 California is so low, they're not going to go through the

15 CARB certification program.

16 It is unreasonable we think to require segments

17 of the industry which are critical to performing the job

18 of building our roads, highways, homes, and commercial

19 structures to basically have to go out of business and not

20 have some off-ramp they can employ to stay in compliance.

21 CHAIRPERSON SAWYER: May I ask you to conclude,

22 please?

23 MR. DAVIS: I'm concluding.

24 CHAIRPERSON SAWYER: Thank you very much.

25 MR. DAVIS: I'll be glad to answer any questions.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234571

1 CHAIRPERSON SAWYER: Mayor Loveridge.

2 BOARD MEMBER LOVERIDGE: I understand what you're

3 against. What are you far?

4 MR. DAVIS: We support CIAQC's position with

5 regard to this regulation. We think that our industry --

6 at least a significant part of the part represented by our

7 association is interested in improving air quality. We

8 wonder -- and as an editor, I have to deal in fact. We

9 wonder when people use statements regarding the

10 contribution of these particular engines as large, how

11 large is that? Our understanding of the construction

12 industry's contribution to the air quality in the state of

13 California is that it's in the 1 to 2 percent range of the

14 total problem. So these portable engines, being a very

15 small part of the construction industry, must be a very,

16 very small part of the problem.

17 BOARD MEMBER LOVERIDGE: Okay.

18 BOARD MEMBER D'ADAMO: Question of staff.

19 Of the three engines, concrete, pumping

20 equipment, cranes, and I don't recall what the third one

21 was --

22 MR. DAVIS: Drilling and blasting equipment.

23 Much of that is actually individually manufactured.

24 BOARD MEMBER D'ADAMO: Are any of these types of

25 equipment currently under the registration program?

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234572

1 EXECUTIVE OFFICER WITHERSPOON: I thought you

2 were going to ask me a different question.

3 The answer to that -- is that yes?

4 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: We

5 have quite a range of equipment under the program. We do

6 have some cranes and concrete units. Like I say, there's

7 quite a bit of construction equipment already registered

8 with us.

9 EXECUTIVE OFFICER WITHERSPOON: I was just asking

10 legal staff if there's no certified engine whatsoever, do

11 you simply keep the one that you have. And Tom Jennings

12 and George Poppic were consulting on that point. And now

13 I have a separate question for them. If there is not a

14 certified engine, and that's a question of registration,

15 does that mean that these kinds of equipment stay under

16 district permit rather than entering into the statewide

17 registration program, and then the BACT requirement would

18 be the best that there is and they would stay with the

19 engine they have? Is that what would happen?

20 SENIOR STAFF COUNSEL POPPIC: Yes, because of the

21 definition of BACT.

22 MR. DAVIS: But at the district level, they're

23 not allowed to register.

24 EXECUTIVE OFFICER WITHERSPOON: They can get a

25 permit. They can still legally operate in the state of

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234573

1 California, and they're not going to be obliged to have a

2 technology that doesn't exist. They're going to be

3 required to comply with BACT, whatever BACT is for that

4 particular category of engine.

5 That's the difference. They can't get into the

6 statewide registration program, but they can always obtain

7 a permit. If they need to move to other districts, they

8 might have some inconvenience where they have to get

9 multiple permits, which is something that the state was

10 trying to avoid, but it does not mean they are out of

11 business. That's an overstatement.

12 MR. DAVIS: Any other questions?

13 BOARD MEMBER RIORDAN: I think that helps clarify

14 the situation, because conceivably these are unusual

15 pieces of equipment perhaps. But from what I hear staff

16 saying, there is an opportunity for them to continue to

17 operate in the district where they are permitted. And

18 then if they move that equipment to another district, they

19 would go in and simply get a permit for that piece of

20 equipment.

21 EXECUTIVE OFFICER WITHERSPOON: Right. And given

22 how well CAPCOA has worked on this issue, if they find

23 there is a lot of movement between districts, I'm sure

24 they'll figure out a way to streamline permitting for this

25 type.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234574

1 MR. DAVIS: These pieces of equipment fall under

2 three different categories of regulation. They fall under

3 on-road because they are propelled, you know, basically on

4 a truck body to construction side. They fall under

5 off-road on some occasions, and they fall under the PERP

6 program because all of them contain secondary engines that

7 actually power their function. And if we can get a letter

8 from anything stating this, we would really appreciate it.

9 STATIONARY SOURCE DIVISION CHIEF FLETCHER: This

10 is Bob Fletcher again. If I can hopefully help clarify

11 this a little bit.

12 From the portable engine perspective, we're not

13 aware of any engines that are -- we haven't run into a

14 situation yet where they're not certified for the portable

15 engine side of the regulation.

16 We have had discussions and are working with the

17 crane industry to try to sort out this issue that

18 Mr. Davis just identified where there are multiple

19 requirements for cranes in particular. And some of those

20 have to do with international standards and the fact that

21 they don't want to come to California and get those

22 certifications.

23 We do have a process, I understand, in place that

24 allows the Executive Officer to issue certifications for

25 situations like that on a special basically one-on-one

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234575

1 circumstance. But from the portable engine perspective,

2 we have not yet reached a situation where they're not

3 certified engines available for the applications. If that

4 comes up, then we will certainly address that at that

5 time.

6 EXECUTIVE OFFICER WITHERSPOON: And they can

7 always get a district permit.

8 MR. DAVIS: Can I get somebody to send me a

9 letter stating that? Because we've been asking for

10 permits and have been unable to receive them.

11 EXECUTIVE OFFICER WITHERSPOON: We'd be happy to

12 work with this witness on clarifying what the requirements

13 and options are.

14 MR. DAVIS: Thank you.

15 BOARD MEMBER RIORDAN: I think our Ombudsman can

16 take your card.

17 MR. DAVIS: Who's the lucky winner?

18 CHAIRPERSON SAWYER: Thank you very much.

19 Major Jungreis.

20 MAJOR JUNGREIS: Good morning, Mr. Chairman and

21 members of the Board. I want to congratulate you on

22 pronouncing my name correctly. I think you're the first

23 person in a public setting to ever do that. So

24 congratulations.

25 I am here on behalf of Department of Defense

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234576

1 Installations in California. We work across the board

2 with the Air Resources Board staff, particularly in the

3 Stationary Source Branch, very effectively. And they're

4 always extremely helpful in a meeting a lot of the unique

5 challenges we have in the Department of Defense.

6 Generally, we're in favor of this regulation.

7 However, there are some procedural issues I want to bring

8 to your attention. We previously provided written

9 comments on May 16th. You should have those before you.

10 Mostly as to clarification, and that's the one

11 concern we have as to -- I know there is a new provision

12 in the regulation regarding appeals. It doesn't seem to

13 really address the situation we're concerned about, which

14 is where you have a district -- and this has happened to

15 us in the past. Where a district has made a determination

16 based on different factors that a piece of equipment is

17 not portable, sometimes using factors that are appropriate

18 and sometimes not. It's come up before, and we're

19 concerned under the current regulation there's no process

20 for resolving that.

21 I guess what we would like to see is some kind of

22 at least discussion in the final statement of reasons that

23 would say something to the effect that the ARB would make

24 the final determination. Not that we don't trust the

25 districts. We do. Mr. Smith in particular, we think San

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234577

1 Diego is great to work with, and all the district we work

2 with tend to be very helpful. However, we operate in a

3 lot of different places and get different interpretations.

4 So what we understand from some of the informal meetings

5 that have happened in the past is essentially what would

6 happen is if there's something -- the process would be

7 something to the effect of there's a disagreement between

8 a district and a user, the military in this case. The

9 district would then elevate that issue to the ARB. And

10 then the ARB would discuss the resolution or the

11 appropriate resolution with the user and the district.

12 And they would make the final determination.

13 And the reason this comes up is in the definition

14 of stationary source, which hasn't changed in the current

15 regulation, it defines in a way which could include a

16 military base -- a piece of equipment on a military base

17 because the equipment its under common ownership on a

18 contiguous property and may be part of the same SIC code.

19 You could have a situation -- this has happened us to

20 before -- where a district has taken a position where you

21 actually have a stationary source which the piece of

22 equipment would otherwise be pretty clearly portable.

23 So I think this is something we can probably work

24 out with staff. I was asked to come here today to talk

25 about it. Perhaps it can be worked out during the 15-day

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234578

1 review, and I'm happy to take any questions.

2 CHAIRPERSON SAWYER: Thank you. Are there any

3 questions?

4 Ms. Berg.

5 BOARD MEMBER BERG: Staff, could you reply to

6 this for me?

7 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP:

8 Certainly. First of all, the program has been -- as we

9 mentioned earlier, we've been doing this since '97. And

10 there aren't any changes in the proposed amendments before

11 you today that are going to change any of the processes

12 that we've used all along.

13 Under state law, when we issue a registration to

14 somebody, the districts don't have any authority to do

15 anything with that equipment other than inspect it. They

16 can't impose any additional requirements to permit. But

17 we have run across cases where the districts will find

18 equipment under registration and determine that's maybe

19 not an appropriate use of that under our program. It

20 probably is better suited under the district.

21 What we do in those cases is we sit down with the

22 districts. We go through the facts, try to decide whether

23 we agree or disagree. If we agree, we think it's part of

24 a stationary source. We go through the process of

25 revoking or rescinding the permit and sending them off to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234579

1 the district to work with the district to get a permit.

2 We've done that before. We have found instances where we

3 have sources that are operating in our program. And

4 perhaps they're supplementing a stationary source. They

5 don't belong in a portable program. They belong in the

6 districts program. But we have found instances as well

7 where we have not agreed with the district. And in that

8 case, the registration stands, and they stay under our

9 program.

10 STATIONARY SOURCE DIVISION CHIEF FLETCHER: We'd

11 be happy to address that in the final statement of reasons

12 as well.

13 EXECUTIVE OFFICER WITHERSPOON: And the key

14 requirement is that it not stay any place more than 12

15 months. So were we to learn it in fact had, that might be

16 a reason to call it a stationary source. Or if it was

17 bolted or permanently attached in any way, that wouldn't

18 be a portable engine either. They're just never going to

19 take it away from that site, because they have no other

20 reason for the engine. But then to drive something going

21 on at the stationary facility, we would conclude that

22 belongs in the district permit not in our program. And in

23 that case, we would rescind our registration. We make an

24 initial eligibility determination when we're approached

25 for engines wanting to enter into the ARB registration

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234580

1 program of whether it qualifies, and then these other

2 issues come up in the field.

3 BOARD MEMBER BERG: It appears maybe the military

4 has specific examples. Maybe staff could work with our

5 speaker and just make sure that we're trying to pave the

6 way with less bureaucracy on both sides.

7 EXECUTIVE OFFICER WITHERSPOON: Sure. And we do

8 want to be consistent with how we reach those

9 determinations in each district of the state. We'll

10 always be consistent because we're the same people but

11 they might be different, and we'll have to work it out.

12 MAJOR JUNGREIS: Thank you.

13 CHAIRPERSON SAWYER: Thank you.

14 Colleen Callahan.

15 MS. CALLAHAN: Good morning, Mr. Chairman and

16 members of the Board. My name is Colleen Callahan, and

17 I'm speaking on behalf of the American Lung Association of

18 California to express our strong support in the strongest

19 standards for diesel engines, including portable engines

20 because of our concerns about diesel pollution. We

21 commend CARB staff for your concerted effort put forth to

22 provide more accountability and enforcability to the

23 statewide regulation.

24 We believe that the proposed revisions will

25 result in increased accountability and enforcability as

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234581

1 well as air quality benefits. We are pleased that these

2 proposed changes will result in the location of engines

3 and equipment that are currently not under permit or in

4 the registration. So we are glad that this will result in

5 increased compliance. The American Lung Association of

6 California urges you to adopt this rule. Thank you --

7 adopt the changes.

8 CHAIRPERSON SAWYER: Thank you very much.

9 John Grattan. And then we will have James Thomas

10 and Terry Dressler.

11 MR. GRATTAN: Good morning, Mr. Chairman, members

12 of the Board. I'm John Grattan. I represent the

13 California Council for Environment and Economic Balance,

14 CCEEB. And CCEEB is composed of public, labor, and

15 business members. Members most involved and concerned

16 with these portable equipment regulations are utility,

17 refinery, and entertainment industry.

18 As many other speakers have done here before, we

19 would like to salute the staff, and we'd like to show our

20 great appreciation of the open process by which these

21 regulations were conducted. And we'd also like to salute

22 CAPCOA. And finishing the salutes, I guess we urge that

23 you adopt the regulations as presented to you by staff.

24 And thank you very much. It's been a pleasure and a

25 privilege.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234582

1 CHAIRPERSON SAWYER: Thank you.

2 James Thomas.

3 MR. THOMAS: Good morning, Mr. Chairman and Board

4 members. I'm James Thomas. I represent Nabors Well

5 Services out of Bakersfield, California. We operate

6 throughout all of California.

7 I would like to take this time to thank the CARB

8 staff and CAPCOA for having the opportunity to work on

9 this development of this rule.

10 First of all, I'd like to let you know that I've

11 been involved in the development of the PERP rule for 14

12 years. I made every meeting except for one. So I know

13 these people, and I know what we have accomplished.

14 The first reg took us five years to adopt -- to

15 develop and then get it adopted. And after that, we have

16 developed a flexible regulation that allowed us to operate

17 throughout the state without having multiple permits.

18 We've operated like this for nine years.

19 And at the last Board meeting on the adoption of

20 the ATCM and the new regs, staff gave us the opportunity

21 to go back and to look at the enforcement part and the fee

22 issues. CAPCOA was really a big part in this and took a

23 very major stand in it as well.

24 I was very impressed because something was

25 different after the last Board meeting. Several of the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234583

1 officers contacted the effected industry and asked us to

2 start working together on a proposal. That proposal took

3 us nine months to develop. There was a lot of

4 frustrations on both sides. And somewhere in the middle

5 part, we started recognizing the values that each of us

6 was trying to express. We started bridging the difference

7 between our group, and we developed a proposal that was

8 brought to the work group.

9 One real short piece. The inspection section

10 allows a range of inspections. And we can do multiple

11 inspections, which will save CAPCOA dollars and will save

12 industry dollars. And we employed a district multiple

13 discount that would allow us to save money. So Nabors

14 Well Service does want you to adopt this program.

15 I would like to speak now about amnesty. Number

16 one, I want to make sure that everybody understands that

17 we're talking about the third amnesty in the portable

18 equipment program.

19 Number two, I would like to ask the same question

20 to you today if you vote on the amnesty that I asked on

21 the last amnesty. At the end of the amnesty period, what

22 are you going to do with the scofflaws that elected not to

23 take part in the amnesty? People have made the statement

24 that owners did not know the requirements. First of all,

25 if you operated in South Coast AQMD, you have operated --

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234584

1 the requirement was required for 25 years. In Ventura, it

2 was 14. In the PERP, it's nine. So in other words,

3 scofflaws have had the opportunity to reject your

4 regulations.

5 One of the Board members asked, well, what has

6 the scofflaws gotten through the years? Number one, they

7 don't have to pay permits. If you worked in South Coast

8 all these years, you haven't paid permits for 25 years.

9 They didn't have to go through the inspections. And they

10 didn't have to do recordkeeping. That's important.

11 But here's the real crux that people don't know

12 about. In 2001, the portable equipment regulation

13 required that if an engine goes down, you can no longer

14 overhaul it. You must replace it. My company has been

15 buying engines and replacing them to meet the requirements

16 of this regulations.

17 So what we would like you to do is we would like

18 the scofflaws to be located. We would like to see them

19 penalized. We would like to see that money would be used

20 to locate other scofflaws.

21 And as the last suggestion, if you do decide to

22 have an amnesty, what I would like to request from you

23 today is that you do something for us. We've been in

24 compliance for years. So what we would like to suggest is

25 that you let us operate for six years without any

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234585

1 penalties, without any fees, without any inspections, and

2 we'll see you six years from now. And we appreciate your

3 time.

4 CHAIRPERSON SAWYER: Thank you very much for your

5 comments.

6 Terry Dressler.

7 MR. DRESSLER: Chairman Sawyer, members of the

8 Board, my name is Terry Dressler. I'm the Director of the

9 Santa Barbara County Air Pollution Control District. And

10 as Catherine indicated in her gracious comments, I was the

11 Air Pollution Control Officer who drew the short straw to

12 bring these final negotiations to an end.

13 And I would like to acknowledge everybody who

14 worked so hard on this and point out once again if it

15 hasn't been made very clear to you that this was a

16 consensus project. The name of this group was the PERP

17 Consensus Work Group. And we brought a consensus proposal

18 to your Board. The Air Resources Board worked with us

19 very hard on this. And they were part of this from the

20 very beginning, and they're part of this consensus.

21 Industry worked with us very hard on this. And they gave,

22 just like we all did, like everybody does in a

23 negotiation.

24 Regarding the costs of inspections, a big deal

25 has been made about, oh, now the districts are going to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234586

1 get money to do this. Well, I'll tell you something.

2 We're barely going to get just enough to do it right. And

3 we decided that we can live with this amount of money.

4 And in some of the cases, we will spend more money than we

5 get in order to ensure compliance. But we knew that we

6 had to give on that issue. And we had to come in and

7 create efficient processes so that we can do this as

8 cheaply as possible for industry.

9 Another thing that was mentioned a lot in a lot

10 of the comments that we had was the term enforcability.

11 Oh, this is going to make it more enforceable. It's going

12 to improve enforceability. But the nexus between

13 enforceability and effectiveness has really not been

14 spoken about today. And I think that point needs to be to

15 be made very important. You see, if you have a rule or

16 regulation and it's not enforceable or it's not enforced,

17 you really don't have a rule or regulation. You go out on

18 the freeway, and it says it's 65 miles an hour. Nobody is

19 enforcing 65 miles an hour. So what's the speed limit?

20 There is no speed limit. It's as fast as anybody wants to

21 go.

22 Enforcability is the key to effectiveness. And

23 the package before you today with a combination of

24 recordkeeping, fees that we'll pay for inspections, and

25 the provision for scheduling those inspections will all

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234587

1 make this rule more enforceable. More importantly, it

2 will make it more effective. And effectiveness is the key

3 to your goal. Because your goal is to reduce the exposure

4 to people, to diesel particulate, and ultimately making

5 this rule enforceable and effective will reduce the

6 exposure to diesel particulates. Thank you.

7 CHAIRPERSON SAWYER: Thank you very much.

8 Ms. Witherspoon, does staff have further

9 comments?

10 EXECUTIVE OFFICER WITHERSPOON: Nothing further.

11 CHAIRPERSON SAWYER: I would like to make one

12 comment, and that is it appears that the process which has

13 been engaged in the last several years by the industry and

14 CAPCOA and Air Quality Management Districts and our staff

15 is a model for how we could hope we could resolve issues

16 in the future. Thank you all very much.

17 Since all testimony, written submissions, and

18 staff comments for this item have been entered into the

19 record and the Board has not granted an extension of the

20 comment period, I'm officially closing the record on this

21 portion of Agenda Item Number 6-6-2. Written or oral

22 comments received after the comment period has closed will

23 not be accepted as part of the official record on this

24 agenda item.

25 As a reminder to our Board members of our policy

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234588

1 considering ex partes communication, while we may

2 communicate off the record with outside persons regarding

3 Board rulemakings, we must disclose the names of our

4 contacts and the nature of the contents on the record.

5 This requirement applies specifically to communications

6 which take place after notice of the Board hearing has

7 been published.

8 Are there any communications that you need to

9 disclose?

10 I'll start with Ms. Berg.

11 BOARD MEMBER BERG: No, I don't have any.

12 BOARD MEMBER GONG: None.

13 BOARD MEMBER D'ADAMO: None.

14 CHAIRPERSON SAWYER: I have none.

15 BOARD MEMBER RIORDAN: I do, Mr. Chairman.

16 I met with the Construction Industry Air Quality

17 Coalition. Those members that I met with, Jeb Stewart,

18 Clayton Miller, and Michael Lewis, we essentially

19 discussed the retrofit issue and touched on those items

20 that appear in the letter that all Board members have

21 received.

22 CHAIRPERSON SAWYER: Mayor Loveridge.

23 BOARD MEMBER LOVERIDGE: Yes. I had a phone

24 conversation with Jeb Stewart from the Construction

25 Industry Air Quality Coalition. Comments were similar to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234589

1 those identified by Barbara.

2 CHAIRPERSON SAWYER: Supervisor Patrick?

3 SUPERVISOR PATRICK: No, sir.

4 CHAIRPERSON SAWYER: We will now take a moment to

5 read the Resolution.

6 Do we have any further comments by Board members

7 or a motion?

8 BOARD MEMBER RIORDAN: Mr. Chairman, I would

9 comment, and it relates to my discussion. Initially, when

10 I did meet with the Construction Industry Air Quality

11 Coalition, I had some very positive feelings about

12 retrofit, because I feel that and I've always felt

13 regardless of whether it's portable equipment or anything

14 else that you set a target for whatever regulation that

15 we're doing. And then how you get there, as long as it's

16 verified, I feel very comfortable with.

17 And so I was thinking that this was an

18 opportunity for retrofit again that we might reach the

19 same thing, but ease the burden a bit on the industry that

20 was owner of the equipment that we were regulating. But

21 to my dismay, I have discovered that there is no retrofit

22 at this time and probably will not be into the near

23 future.

24 So I'm sort of confounded, because I had

25 originally been very supportive. And then like

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234590

1 everything, there's two sides to the story. And suddenly

2 I realize there was no retrofit.

3 So I'm certainly going to support the staff

4 recommendation, but I was going to add something about

5 retrofit as an amendment but just don't see us getting

6 there. And I'm sorry, but that seems to be what is

7 available to us at this time. Should anything change in

8 the future and retrofits be developed and verified by the

9 Air Resources Board, hopefully we could come back and

10 revisit this.

11 But I am a little bit happy to say there is a

12 repowering ability. So that makes me a little bit

13 comfortable, and we've handled what seems to be the

14 difficulty of certain engines that are perhaps those

15 involved with cranes and drilling and other and we'll work

16 on that. So I think we've tried to address those issues

17 that I felt were still maybe could be reworked in in this

18 particular item. Thank you.

19 CHAIRPERSON SAWYER: Thank you.

20 Do I have a motion to adopt?

21 SUPERVISOR PATRICK: Motion.

22 BOARD MEMBER D'ADAMO: Second.

23 CHAIRPERSON SAWYER: It's been moved and seconded

24 that we adopt the Resolution. Would the Clerk please call

25 the roll?

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234591

1 SECRETARY ANDREONI: Ms. Berg?

2 BOARD MEMBER BERG: Yes.

3 SECRETARY ANDREONI: Ms. D'Adamo?

4 BOARD MEMBER D'ADAMO: Yes.

5 SECRETARY ANDREONI: Dr. Gong?

6 BOARD MEMBER GONG: Yes.

7 SECRETARY ANDREONI: Ms. Kennard?

8 BOARD MEMBER KENNARD: President Sawyer, I've

9 been advised by the city attorney that I should abstain on

10 the matter because the Airport Transport Association has

11 submitted comments.

12 SECRETARY ANDREONI: I'll note that.

13 Mayor Loveridge?

14 BOARD MEMBER LOVERIDGE: Yes.

15 SECRETARY ANDREONI: Supervisor Patrick?

16 SUPERVISOR PATRICK: Aye.

17 SECRETARY ANDREONI: Ms. Riordan?

18 BOARD MEMBER RIORDAN: Aye.

19 SECRETARY ANDREONI: Dr. Sawyer?

20 CHAIRPERSON SAWYER: Yes.

21 SECRETARY ANDREONI: Motion passes.

22 BOARD MEMBER LOVERIDGE: Four yeses and three

23 ayes.

24 CHAIRPERSON SAWYER: Thank you all very much. We

25 will take a brief break now, about ten minutes, to give

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234592

1 our court reporter a break.

2 (Thereupon a recess was taken.)

3 CHAIRPERSON SAWYER: The next agenda item is

4 6-6-3, proposed Amendments to the Motor Vehicles Service

5 Information Rule.

6 The Board got about halfway through this item in

7 January 2004 when it voted to add heavy-duty vehicles to

8 the service information rule for light- and medium-duty

9 vehicles. But we had to wait to finish the job until

10 on-board diagnostic requirements for heavy-duty vehicles

11 were completed. We finished that later process in July

12 2005, so staff has come back to us with amendments that

13 put the whole package together at this time.

14 Ms. Witherspoon, could you please introduce this

15 item and begin the staff's presentation?

16 EXECUTIVE OFFICER WITHERSPOON: Thank you, Dr.

17 Sawyer.

18 As you indicated, now that the revised on-board

19 diagnostic requirements are in place for heavy-duty

20 vehicles, staff is prepared to match those up with the

21 tool availability provisions in the service information

22 regulation. The staff presentation on this item will be

23 made by Dean Hermano of the Mobile Source Operations

24 Division.

25 (Thereupon an overhead presentation was

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234593

1 presented as follows.)

2 STAFF APS HERMANO: Thank you, Ms. Witherspoon.

3 And good morning, Dr. Sawyer and members of the Board.

4 Today, I will present to you staff's proposed

5 regulations, the California's motor vehicle service

6 information regulation.

7 --o0o--

8 STAFF APS HERMANO: I will begin with a brief

9 overview of the history of the regulation and its

10 requirements. I will then summarize the amendments to the

11 regulation that staff is proposing today. Finally, I will

12 conclude the presentation with staff's recommendations.

13 --o0o--

14 STAFF APS HERMANO: The Board initially adopted

15 the service information requirements in December 2001 for

16 1994 and later model year passenger cars, light-duty

17 trucks, and medium-duty vehicles and equipped with

18 on-board diagnostic systems.

19 Adoption of the regulation was required by Health

20 and Safety Code Section 43105.5, a statute created in 2000

21 by Senate Bill 1146. The intent of this regulation is to

22 ensure that independent service facilities and aftermarket

23 part companies have access to the same service information

24 and tools available to franchise dealerships. This

25 includes service manuals, wiring diagrams, training

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234594

1 materials, and diagnostic tools.

2 Requiring motor vehicle manufacturers to release

3 this information allows independent service providers to

4 be better equipped to effectively carry out emission

5 related repairs and gives vehicle owners more choices

6 regarding where their vehicles can be serviced.

7 Manufacturers are required to post the

8 information on the internet for convenient access at fair,

9 reasonable, and non-discriminatory prices. Implementation

10 of the regulation began in March 2003.

11 --o0o--

12 STAFF APS HERMANO: Service information

13 regulation was amended in January 2004 to include 2007 and

14 later model year heavy-duty vehicles as they begin

15 complying with ARB's initial OBD requirements known as

16 engine manufacturers diagnostics, or EMD. However, the

17 Board decided to defer requirements for the availability

18 of diagnostic tools and reprogramming equipment for these

19 vehicles until more comprehensive OBD requirements were

20 developed. These new OBD requirements were adopted by the

21 Board in July of 2005 and applied to 2010 and later model

22 year heavy-duty engines.

23 The decision to defer the diagnostic tools

24 availability requirements was based on the fact that the

25 future OBD requirements and their impact on heavy-duty

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234595

1 vehicle diagnostic fuel designs was not fully understood

2 in 2004, and because of manufacturers' concerns that

3 additional lead time was necessary to address security and

4 safety concerns associated with release of the tools

5 beyond manufacturer dealerships.

6 --o0o--

7 STAFF APS HERMANO: Now that the more

8 comprehensive OBD requirements are in place, staff is

9 again ready to propose amendments that would require

10 heavy-duty engine manufacturers to make their

11 emission-related tools and information available for

12 purchase by the 2013 model year.

13 The proposed amendments would require heavy-duty

14 engine manufacturers to make available the emission

15 related diagnostic tools, recalibration, reconfiguration

16 equipment that is supplied to franchise dealerships. This

17 includes the software using such tools. Manufacturers may

18 charge a fair, reasonable, and non-discriminatory price

19 for the tools and software.

20 Because these tools offer many complex diagnostic

21 features and the ability to adjust engine parameters based

22 on the configuration of the vehicle, the proposed

23 amendments for manufacturers require training on the use

24 of these tools as a condition of sale.

25 The proposed amendment would also require engine

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234596

1 manufacturers to license information on the use of data

2 exchange and bi-directional control data to independent

3 diagnostic tool manufacturers to permit them to

4 incorporate the same functionality into their products.

5 As a condition of sale, engine manufacturers would be

6 permitted to require hold harmless clauses that relieve

7 them from liability resulting from negligence or misuse of

8 aftermarket tools using their information.

9 These proposed tool availability requirements for

10 heavy-duty engines are generally the same as those already

11 in place for light and medium-duty vehicles and would

12 satisfy the requirements for the Health and Safety Code.

13 All though the new heavy-duty OBD regulations

14 effective starting 2010 model year, staff is proposing

15 that the availability rules take effect with the 2013

16 model year. The 2013 model year marks the end of a

17 phase-in period for the new OBD requirements and is the

18 point where manufacturers are required to comply with

19 standardized technical requirements and communications

20 between the engine and diagnostic scan tools.

21 Manufacturers would therefore be able to make any tool

22 design changes necessary to safely release their products

23 to the independent service industry at the same time they

24 rework their equipment to meet the OBD regulation.

25 --o0o--

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234597

1 STAFF APS HERMANO: Staff is also proposing to

2 delete most heavy-duty transmission requirements in the

3 regulation, because ARB neither currently certifies

4 heavy-duty transmissions nor exercises any authority over

5 heavy-duty transmission manufacturers. This is primarily

6 due to the non-integrated nature of the heavy-duty vehicle

7 manufacturing process where the engine, transmission, and

8 chassis are typically produced by separate manufacturers.

9 Therefore, heavy-duty transmission manufacturers are not

10 subject to emission standards or other emission control

11 requirements.

12 Consistent with this, staff is proposing

13 amendments to make clear that heavy-doubt transmission

14 manufacturers are no longer subject to ARB's service

15 information availability requirements. However, if a

16 heavy-duty engine manufacturer elects to monitor

17 transmissions as part of a heavy-duty OBD monitoring

18 system, staff is proposing that engine manufacturer

19 provide related OBD descriptions and corresponding

20 transmission repair information needed to remedy any false

21 detected.

22 Engine manufacturers would need to provide this

23 information under this situation, because current

24 heavy-duty OBD requirements do not apply to transmission

25 manufacturers either. But since they do allow an engine

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234598

1 manufacturer to voluntarily monitor outputs from a

2 transmission, it would then be appropriate to require an

3 engine manufacturer that lets you do so to make available

4 the same OBD related diagnostic and repair information to

5 independent technicians that it provides to its dealers.

6 In this manner, aftermarket facilities can compete fairly

7 with dealers for the repair of transmission related

8 malfunctions.

9 Should it occur that heavy-duty transmissions

10 begin playing a greater role in emissions or OBD

11 compliance in the future, the staff will reevaluate

12 whether or not transmission manufacturers should be

13 subject to the service information requirements and will

14 return to the Board with proposed amendments as needed.

15 --o0o--

16 STAFF APS HERMANO: The service information

17 regulation requires the use of certain industry standards

18 for technical details related to diagnostic tools and

19 reprogramming equipment and also for terms and acronyms

20 used in service information. Because different practices

21 are in place for light and medium-duty service facilities

22 as opposed to those that focus on repair of heavy-duty

23 vehicles, different standards and technical requirements

24 are specified for each category.

25 In some cases however, a particular engine design

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234599

1 will be produced for use in both medium- and heavy-duty

2 applications. Under the current regulation, a

3 manufacturer of such an engine would have to comply under

4 both requirements for service information. To avoid this,

5 the staff is proposing an amendment that would give

6 manufacturers the option of using either set of technical

7 requirements for compliance based on the type of engine in

8 question. Specifically under the proposal, a manufacturer

9 of heavy-duty engines could choose to comply with the

10 provisions specified for light- and medium-duty vehicles.

11 And conversely, a manufacturer of diesel-derived

12 medium-duty engines could choose to comply with

13 requirements for heavy-duty engines subject to Executive

14 Officer approval.

15 In either case, the provider flexibility would

16 not impact the implementation dates of any requirement.

17 This flexibility would be consistant with that provided

18 for compliance with industry standards specified in ARB's

19 OBD regulation.

20 --o0o--

21 STAFF APS HERMANO: The staff is also proposing

22 additional minor amendments to the regulation to complete

23 and update necessary references to the heavy-duty vehicle

24 industry standards and to adjust the fine terms to be more

25 easily understood by the heavy-duty industry.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345100

1 --o0o--

2 STAFF APS HERMANO: In conclusion, the proposed

3 requirements for the availability of emission-related

4 diagnostic tools for heavy-duty vehicles will help

5 independent service facilities better diagnose and repair

6 emission related malfunctions, thus helping to minimize

7 the lifetime emissions from heavy-duty vehicles.

8 And as intended by Senate Bill 1146, the

9 amendments will continue to ensure competition within the

10 vehicle service industry by providing consumers with more

11 repair facilities to choose from when emission-related

12 malfunctions occur.

13 Staff therefore recommends the Board approve the

14 amendments and the 15-day changes proposed today. Thank

15 you. This concludes my presentation.

16 CHAIRPERSON SAWYER: Thank you.

17 Madam Ombudsman, would you please describe the

18 public participation process and share any concerns or

19 comments you may have with the Board at this time?

20 OMBUDSMAN TSCHOGL: Thank you.

21 Dr. Sawyer and members of the Board, this

22 regulation has been developed with input from the

23 Automotive Aftermarket Industry Association, the Engine

24 Manufacturers Association, the Equipment and Tool

25 Institute, and the Heavy Vehicle Maintenance Group. The

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345101

1 regulatory process to propose amendments to the motor

2 vehicle service information regulation began in December

3 2004.

4 The outreach activities included one public

5 workshop, four individual meetings, and nine

6 teleconferences. The workshop was held on February 16th,

7 2005, in El Monte. One of the individual meetings was

8 held on April 27th, 2005, in Bloomington, California. And

9 the other three were held in El Monte on May 19th, June

10 8th, and November 10th of 2005.

11 The teleconferences were held on March 2nd,

12 August 31st, December 7th, 2005, and then into 2006 with

13 January 10, February 1, February 7, February 16, and

14 February 22nd, and March 13th. An average of 15

15 stakeholders attended each meeting, teleconference, and

16 workshop. They represented members of both the

17 aftermarket industry and the heavy-duty engine industry.

18 The staff report was released on May 5th, 2006,

19 the regular mail, electronic mail, and web posting. The

20 mailing lists have approximately 850 stakeholders, and the

21 list serve has more than 3,000 stakeholders.

22 Thank you. This concludes my comments.

23 CHAIRPERSON SAWYER: Do any of the Board members

24 have questions at this time?

25 If not, we'll move to the public testimony. I

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345102

1 have the names of four people who have asked to speak in

2 the following order: Eric Swenson, Keith Duner, David

3 Ferris, and Lisa Stegink.

4 Mr. Swenson first. If not, Keith Duner. Excuse

5 me.

6 MR. SWENSON: I'm Eric Swenson with International

7 Truck and Engine Corporation. I'm also here on behalf of

8 the Truck Manufacturers Association.

9 I have no specific oral comments, but will accept

10 questions on written statements previously provided.

11 CHAIRPERSON SAWYER: Would you like to summarize

12 briefly your reasons for opposition?

13 MR. SWENSON: Briefly, first, I think the

14 heavy-duty industry takes long strides to serve customers

15 and service information. It's a duplicate effort that is

16 being regulated.

17 Second, there are some provisions in the

18 transmission regulations that just seem very difficult to

19 comply with because of transmission manufacturer isn't

20 required to sell service information for redistribution by

21 the vehicle manufacturer as far as I know. And I see that

22 as a potential barrier.

23 CHAIRPERSON SAWYER: Thank you very much.

24 Keith Duner.

25 MR. DUNER: Good morning. My name is Keith

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345103

1 Duner. I work for Allison Transmission, Division of Power

2 train and a component of General Motors.

3 I come with no prepared statement. I come in

4 support of any questions that might be asked in regards to

5 the Transmission Association to this regulation.

6 CHAIRPERSON SAWYER: It's my understanding that

7 the regulation puts the requirement on the engine

8 manufacturer and takes it away from the -- or does not

9 assign it to the transmission manufacturer. Do you agree

10 with that as the right way to do it?

11 MR. DUNER: Do I agree? No, sir, I don't agree

12 that's the right way to do it. Most transmission

13 manufacturers face their service channel and their

14 constituents directly, not under the osmosis of engine

15 supplier, nor in most cases through the osmosis of the

16 vehicle manufacturers. We provide and have a history of

17 providing that service information directly to those

18 people who have an interest in using it. And it is

19 largely consistent with the information we provide to

20 authorized service channels.

21 CHAIRPERSON SAWYER: Thank you very much. Are

22 there any questions?

23 BOARD MEMBER BERG: How would the engine

24 manufacturers get this information? Would this regulation

25 require you to add them into the communication loop?

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345104

1 MR. DUNER: That's a valid and interesting

2 question. We recently became aware of this most recent

3 change and haven't identified how we would make that

4 information available. Today, we make it available to

5 again anyone who has an interest. I don't have a

6 formalized methodology to make it available directly to

7 the engine manufacturers.

8 BOARD MEMBER BERG: And do you provide that via

9 technology? I mean, you know, like through computer or --

10 MR. DUNER: Typically, today our service

11 available is available for access on a website. It is not

12 searchable. It is available for purchase through the

13 Allison Transmission website. It's also available through

14 over a thousand service dealers and distributors in North

15 America.

16 BOARD MEMBER BERG: Maybe staff could make an

17 observation or a comment on how do we see this working?

18 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS:

19 Well, in our previous discussions with the transmission

20 manufacturers, I guess we were under the impression that

21 they did not want to be included in the regulation. And

22 maybe I'm hearing something different from that today.

23 But overall, the issue is that with the adoption

24 of OBD for engines, transmissions were excluded and

25 therefore were not included in any ARB regulation. And

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345105

1 they really have no defined emissions related role.

2 However, as discussions on OBD implementation

3 have continued, some manufacturers have indicated that

4 their engines may actually monitor transmission inputs.

5 And if the transmission input is not as expected, the

6 engine control unit will turn on the check engine light.

7 And we became concerned about situations where a vehicle

8 comes in for service and the check engine light is on, and

9 an independent technician does not have access to the

10 information necessary to repair the transmission fault

11 that actually turned on the check engine light. That's

12 what we're trying to address here, and we tried to address

13 it.

14 One other thing to point out is that it's really

15 the engine manufacturer's decision as to the extent to

16 which it monitors transmission inputs. And we developed

17 this proposal. It was done with the mind set that a

18 transmission manufacturer would not have control over that

19 situation, and therefore would be in a position where they

20 really wouldn't know what information they would have to

21 post on a website. It would all be under the -- based on

22 the direction of the engine manufacturers.

23 And so we felt that having an engine manufacturer

24 which choose to monitor a transmission input work with the

25 transmission manufacturer to make that information

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345106

1 available was the best approach. However, if the

2 transmission manufacturers would rather have that

3 information put up by themselves on a website, I think

4 that's actually kind of a new slant to this that we hadn't

5 heard prior to this meeting.

6 CHAIRPERSON SAWYER: I assume there's nothing

7 preventing them from providing information to their

8 customer.

9 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS:

10 Right. It occurred to me that if they did actually post

11 this information on a website, an engine manufacturer

12 could simply comply with the requirements of our

13 regulation by providing a link over to Allison, in this

14 case, saying this is where transmission information is for

15 things that turn on the check engine lights.

16 MR. DUNER: If I might add, the service

17 information available from Allison today is entirely

18 supportive of the ability to diagnose the product.

19 However, it is not in a configuration today consistent

20 with the legislative expectations as far as searchability.

21 And our ability, our requirement to provide it in that

22 configuration would drive a measurable expense into our

23 organization.

24 BOARD MEMBER BERG: But what I'm hearing is that

25 you're excluded out of this regulation and wouldn't

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345107

1 therefore be required to do that.

2 EXECUTIVE OFFICER WITHERSPOON: Or the engine

3 manufacturer would have to pay them to do that. Because

4 the cost is laid on the engine manufacturer as the party

5 subject to this regulation.

6 BOARD MEMBER BERG: Thank you.

7 CHAIRPERSON SAWYER: Thank you very much.

8 Mr. Ferris.

9 MR. FERRIS: My name is David Ferris from General

10 Motors. I have no prepared testimony. I'm concerned that

11 the Engine Manufacturers Association may not have enough

12 time with three minutes to cover the testimony, and I'd

13 like to give my time to Engine Manufacturers Association.

14 CHAIRPERSON SAWYER: Okay. That's not usual

15 procedure. But I think we want to understand this issue

16 thoroughly, so Lisa Stegink.

17 MS. STEGINK: It's Stegink. Rhymes with roller

18 rink. You'll remember me the next time you see me.

19 Good morning. My name is Lisa Stegink. I'm here

20 today on behalf of the Engine Manufacturers Association.

21 I do want to get to the transmission issues. But I before

22 I do that, I want to just talk about a couple of other

23 background issues.

24 As you recognize, the driving factor behind the

25 service information requirements are the onboard

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345108

1 diagnostic requirements. And the purpose of rule is to

2 allow and make sure that necessary information is

3 available to diagnose and repair engine problems.

4 We discussed with staff many times what we think

5 is necessary and reasonable, and we don't fully support

6 this rule because we think the staff's proposal goes far

7 beyond that. Manufacturers of heavy-duty engines already

8 make service information available to the independent

9 service industry. And those -- when this issue first came

10 up, there were members of that industry that said we don't

11 need a change. We're getting what we currently need. And

12 so we think that implementing this proposed rule is not

13 going to make the requirements or make the information

14 substantially more available or cheaper to obtain.

15 Heavy duty is much smaller than the light duty

16 industry when you look at the size of the industry and the

17 volume. There are fewer independent services facilities,

18 and there are, however, a much wider range of products.

19 But if you look at the sales volumes of light duty to

20 heavy duty, you're looking at a 40 to 1 volume difference.

21 This rule is going to require manufacturers to

22 incur significant costs to develop websites and

23 significant costs to reengineer their tools which are

24 those tools for heavy-duty are software, to reengineer

25 that and to reengineer their delivery systems to make

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345109

1 these tools available to third parties.

2 But at the same time, engine manufacturers don't

3 anticipate any increased demand for those tools. We

4 recently obtained, for example, information to contrast to

5 the light-duty industry from two light-duty vehicle

6 manufacturers where their month and year long service

7 subscriptions over their websites total about 300

8 nationwide. If you apply that and then take the

9 California numbers in the heavy-duty industry, that would

10 be about one subscription per year. So while some

11 elements of this proposal might make some aspects of

12 heavy-duty tools more available on balance, the cost of

13 this proposal do and far outweigh its benefits. Our

14 concern is that all subscribers are going to end up having

15 to pay more for the same information.

16 I'm also compelled to point out before I get to

17 the transmission issue that the legal authority on which

18 ARB relies here was not drafted with the heavy-duty

19 industry in mind. Senate Bill 1146 was a distinctly

20 light-duty effort negotiated between the light-duty

21 industry and aftermarket service providers. And the law

22 was not adopted with any view or intent to fix any

23 perceived problems in the heavy-duty industry.

24 ARB must find a way to address these issues as

25 well as the following: The transmission issue. The rule

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345110

1 must require heavy-duty engine manufacturers to supply

2 engine service information, not transmission information.

3 EMA opposes the change that ARB is suggesting in the

4 15-day notice. We had numerous discussions with staff

5 including discussions with the aftermarket which we

6 explained why it wasn't appropriate to require engine

7 manufacturers to provide transmission information. Staff

8 agreed. They proposed an approach we supported, and now

9 they've done a turnabout.

10 Engine manufacturers produce engines, not

11 transmissions. And they can't provide information over

12 components over which they have no control. They don't

13 have that information at their fingertips, and they don't

14 otherwise provide it to their authorized networks. The

15 way this language is -- we've looked at it. We've only

16 had a day to look at it really -- to start looking at it.

17 Is that it would require that information to go out to the

18 aftermarket regardless of whether we provide it to our

19 authorized networks.

20 And the reference Allen was talking about getting

21 inputs, manufacturers might get an input from a

22 transmission. The information they get is that something

23 has gone bad. There's been a failure. And then what they

24 do -- they are able to identify that it is a transmission

25 issue and direct that the transmission be addressed. They

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345111

1 can't identify where that issue or where that problem

2 might be located in the transmission or what kind of a

3 repair might be needed.

4 The heavy-duty OBD rule is an engine rule, and

5 this should be an engine rule as well. This should

6 require engine manufacturers to provide engine

7 information.

8 Just a couple other points I want to raise other

9 than the transmission issue. Further changes are also

10 needed to define the emission related to focus on those

11 engine components that have an impact on emissions. The

12 way emission related is defined right now, it's going to

13 catch every nut and bolt that's not emission related, and

14 we don't think that's appropriate.

15 Training: Manufacturers are allowed to require

16 training, and we support that. But one of those

17 conditions that would require training in California

18 locations we don't support. Manufacturers currently

19 provide training in centralized locations. So asking them

20 to set up specific special California locations that they

21 don't otherwise make available to their authorized service

22 network is asking again for special treatment for the

23 independent service industry. That's not the intent of

24 the proposed rule as we understood it. And it's going to

25 create a lot of costs, including cost of traveling, costs

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345112

1 of having to find locations, cost of shipping equipment,

2 and engine demonstration and whatnot.

3 We would like to see a special definition for

4 covered person for heavy-duty purposes that clearly

5 identifies qualified heavy-duty service providers in the

6 rule. We do support the compliance flexibility provisions

7 where there is overlap, but we don't support the

8 requirement that would require cross referencing of the

9 terminology. We do appreciate the discussions we've had

10 with staff in which they realize that subscription periods

11 for heavy-duty may need some flexibility.

12 And finally on the liability issue, heavy-duty

13 tools are powerful. We're concerned about misuse. And we

14 want to make sure that the liability provisions that

15 clearly establish that engine manufacturers are not going

16 to be liable for the use of their tools and the use of

17 third party tools.

18 We ask you to direct the staff to work with us

19 through the 15-day notice process to address these issues

20 and also as we detailed them in our written comment.

21 CHAIRPERSON SAWYER: Thank you.

22 Would staff please comment?

23 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS:

24 Going through the list of issues or a particular issue?

25 CHAIRPERSON SAWYER: Maybe the list that were

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345113

1 raised. Maybe could you start off by explaining to me

2 what transmission functions are monitored and how they

3 effect emissions from the engine?

4 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS:

5 Well, it's -- okay. Sure. It's somewhat undefined at

6 this point, which is why we struggle with it a little bit.

7 However, we have heard from the industry that, for

8 example, the shaft speed within the transmission is

9 measured by the transmission, and that signal is input to

10 the engine controller. And the engine controller then

11 uses that transmission shaft speed input as an enable

12 condition for the onboard diagnostic system.

13 So I think in terms of emissions, the impact is

14 with respect to the ability of the engine to do its

15 on-board diagnostic duties as opposed to having a direct

16 tailpipe or smoke stack related emissions issue.

17 So in that situation where the engine on-board

18 diagnostic system is relying on this transmission shaft

19 speed, if something goes wrong with the censor or the

20 control module, it says the engine no longer gets that

21 signal, it has to turn on the check engine light because

22 it can no longer do the monitoring that requires that

23 signal.

24 And in developing our proposal, we had

25 originally, as Lisa appointed out, tried to make a clean

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345114

1 break between engines and transmissions and only have

2 engines be subject to this regulation. However, it leaves

3 an information gap in this instance where you have an

4 input speed censor that has malfunctioned. It's caused a

5 check engine light to turn on. And if that vehicle comes

6 into again to an independent service facility, there may

7 or may not be information available to that technician on

8 how to get that check engine light to turn off.

9 And after releasing our 45-day notice and going

10 through this a little bit more, we were concerned about

11 bringing that situation to the Board where we would have

12 the information gap uncovered. And that's the basis for

13 our 15-day change, to say it's the manufacturer who will

14 decide whether or not that information gap will exist, and

15 therefore, we thought it made sense for them to try to

16 work with the transmission manufacturers in this case to

17 get the necessary information to repair just that fault as

18 related to the signal they require for their OBD system.

19 MS. STEGINK: May I comment on the information

20 gap?

21 I don't believe there is that information gap to

22 the extent staff may believe there is. My understanding

23 is that if that kind of a fault were to show up, that it

24 would direct that it would be a transmission issue that

25 needed to be repaired. But an engine manufacturer is not

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345115

1 going to know the nature of that repair.

2 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I just

3 want to point out if I can one thing, sort of who the

4 customer for this regulation is. I think we covered it

5 briefly in the background. But there is a long history of

6 legislative involvement, and the basic tenant of that

7 legislation that directed us to do this is that the

8 independent repair people, the non-dealers, are supposed

9 to be able to get the information that they need to be

10 able to repair vehicles successfully in competition with

11 dealerships and other people that are more controlled by

12 the engine manufacturers, in the case.

13 And so that's the thing that we're trying to make

14 sure that we do is be consistent with the legislation

15 which says let's not have big gaps that prevent an

16 independent repair network from being able to fix this

17 vehicle. So it may sound -- some of this may sound kind

18 of nuance, but that's what the goal is here.

19 CHAIRPERSON SAWYER: Thank you.

20 Mayor Loveridge.

21 BOARD MEMBER LOVERIDGE: Tom, I'm trying to

22 understand what's important about these multiple things

23 that are in definition of emissions related training,

24 definition -- help me out there. What's this long list

25 here? What's the importance of this long list?

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345116

1 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: Well, I

2 think it's all trying to fill in and make sure that the

3 goal I just indicated is met, but does it in a way that

4 doesn't hurt people. Like, for example, the training on

5 the tools really I think came out because the engine

6 manufacturers requested it, I believe, because they were

7 concerned that the tools are able to actually change the

8 way the engine operates, which would effect emissions,

9 would effect performance, might effect durability. So

10 they wanted the training. We added on the training ought

11 to be convenient and in California. So you know, that

12 point I guess is nuance about whether or not that's

13 important.

14 BOARD MEMBER LOVERIDGE: Are we working to --

15 assuming we adopt this, are we working to deal with some

16 of these lack of clarity I guess?

17 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: I don't

18 think it's a lack of clarity. In this case I think it's

19 trying to respond to the comments that we received

20 particularly from the independent repair site. They have

21 a written comment here. They didn't show up to testify.

22 But there was concern there. This one happens to address

23 the engine manufacturers' concern. So we've tried to

24 address everybody's concerns. But as you often do, we

25 weren't successful at having consensus as the last item.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345117

1 MS. STEGINK: And I do realize the fact staff has

2 done a lot. And I think we've done a lot too to really

3 come a long way in trying to make, you know, a rule that

4 makes sense, make sure there is information available to

5 the aftermarket. That one happens to be one out of the

6 four or five conditions of the training that we just were

7 not comfortable with. There are other conditions of the

8 training we're willing to live with, but it has to be done

9 in a certain amount of time.

10 Again, as Tom says, those are issues, you know,

11 the background is that we know the legislation was out

12 there. Heavy-duty wasn't a part of it at the time. We

13 understand, you know, staff's position that sort of

14 doesn't matter. But at least in terms of some of these

15 specifics, what we're really trying to get at is that this

16 is a different industry than light duty. And so -- and

17 again, staff has done a lot to recognize that, and we have

18 these additional changes that we would like the Board to

19 take this list and direct the staff to say yes, we see

20 what you've proposed in a draft 15-day language. We also

21 want you to address these other issues.

22 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: And

23 maybe to be more responsive, Mayor Loveridge, to your

24 request, Allen is more than willing to go down each of the

25 bulleted ones on page 3 and 4 and just give you a crisp

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345118

1 response to why we have it there and how important it is,

2 if you'd like that. If not, fine.

3 BOARD MEMBER LOVERIDGE: The idea working further

4 to reach conclusion, we've worked as far as we can to

5 reach conclusion?

6 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS: I

7 think that's probably true. We have had very many

8 discussions over the past few months. And I think we are

9 at a place where we may be just at a difference of opinion

10 on some of these things. So I would be happy to run down

11 this list and I give you a very concise point of view of

12 staff.

13 EXECUTIVE OFFICER WITHERSPOON: You could skip

14 the last two, because EMA is supporting what staff is

15 recommending.

16 MS. STEGINK: With respect to the liability

17 language, we would like to take a look at that closely,

18 because we haven't been able to really kind of fully

19 assimilate it and understand.

20 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: That's

21 kind of a 15-day thing. If there's clarity, as Mayor

22 Loveridge said, of some proposal and it's a new 15-day

23 change, we can deal with that. I think what we need some

24 clear direction on is are we supposed to go back and

25 reconsider each one of these bullets, which is what Lisa

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345119

1 is asking or not. And that's kind of what's at stake here

2 I guess.

3 CHAIRPERSON SAWYER: I guess it's our obligation

4 to hear the short responses to all of these questions.

5 And also since this doesn't come into effect for

6 seven years, is that right?

7 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS:

8 The tools aspect of it comes into effect in seven years.

9 The website part of it comes online with the 2007 model

10 year.

11 CHAIRPERSON SAWYER: The information will be

12 available, but the tool isn't required?

13 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS:

14 For the heavy-duty category, right.

15 LEGAL COUNSEL TERRIS: I would just like to add

16 before Allen talks that the legislation that came out from

17 the Legislature, basically it was a directive to the Air

18 Resources Board to create a reg that balances the

19 interests of the service industry versus the burdens

20 placed on the motor vehicle industry. And so we're sort

21 of caught between the two sides in all of this, and we

22 tried to reach compromises wherever possible. And as Tom

23 indicated, there's a list of concerns that the aftermarket

24 still has, just as EMA has concerns on some of the burdens

25 that we still place on them. So we've been trying to walk

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345120

1 this narrow line in fashioning this regulation.

2 CHAIRPERSON SAWYER: Okay. Let's try to run

3 through these in as simple a fashion as possible.

4 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS:

5 Sure. The definition of emission related information was

6 actually established by the Board with the 2004 hearing.

7 This is not a new proposal today. But our language

8 mirrors very closely almost word for word the language of

9 the Health and Safety Code. The Health and Safety Code

10 defines this term. We moved that into the regulation.

11 EMA wants the language to be -- how broad it is

12 to be narrowed to things that specifically control

13 emissions and are clearly emissions related. We believe

14 the Legislature intended for the information to cover the

15 engine more broadly to cover virtually anything that can

16 impact emissions. And our position here is that we should

17 stay close to the Health and Safety Code's language and

18 intent.

19 With respect to training, all parties agreed that

20 training on the use of heavy-duty tools is a good idea for

21 independents. However, the aftermarket argued strongly if

22 we concede to this training which is going to cost people

23 time and money, it should be convenient and people should

24 be able to get it within California and not have to fly to

25 the midwest to a manufacturers' headquarters to get the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345121

1 training. We thought that it was a reasonable position,

2 and that's what's reflected in our current proposal.

3 Another aspect with respect to training is that

4 the manufacturers, although they would incur some costs if

5 they don't have the California training facilities set up,

6 those costs can be recouped at least to some extent

7 through the prices they charge the people who attend the

8 training.

9 The definition of a covered person is also

10 language that was defined in 2004. EMA wants in order for

11 someone to be entitled to heavy-duty service information

12 to make a showing that they are not light-duty service

13 people, but they are in fact heavy-duty service people.

14 We actually looked at the language they proposed, and we

15 couldn't find that it would -- if someone was involved in

16 servicing light-duty vehicles but they wanted to get into

17 the business of servicing heavy-duty vehicles, even under

18 EMA's proposed language, they would easily be able to do

19 that. And therefore, we really just didn't see any

20 benefit to complicating the regulatory language to expand

21 this definition. We don't think practically it really

22 changes anything with respect to who's entitled to

23 information.

24 Compliance flexibility I believe we have

25 addressed in our proposed 15-day changes. Lisa can

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345122

1 correct me if I'm wrong about that.

2 MS. STEGINK: The one issue we had there was the

3 requirement to cross reference terminology. We don't

4 think that's necessary. We think that's done to a great

5 degree already in the SAE documents. Plus there's

6 knowledge the service providers have that this seems to be

7 really unnecessary, that aspect of the compliance

8 flexibility provision that was added in in the 15 day.

9 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS:

10 Okay. What that is is essentially sort of a one-time

11 effort. And to the extent it's already defined by SAE,

12 that may be a solution right there. But this is a

13 one-time effort that in cases where there is a cross over

14 in terms of the terminology to use service information,

15 whether it complies with requirements that are developed

16 by the heavy-duty industry or light-duty industry, there

17 be some cross referenced documents so that somebody who is

18 used to servicing heavy-duty vehicles but all of a sudden

19 sees the service information based on light-duty

20 standards, they would have a way to look up any term or

21 record that they're aware of. I think this is a fairly

22 minor point we probably could work out fairly easily with

23 EMA during the 15-day process.

24 Getting near the end, subscription periods, one

25 manufacturer in particular has asked us if they can only

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345123

1 provide a yearly subscription. That's the only time

2 period access option available to the independent

3 technicians is to buy a whole year's worth of information.

4 Whereas, typically in the light-duty segment, we require

5 that the technician have the option of purchasing maybe a

6 week or a month or six months or a year's worth of

7 information based on their needs. We think only one

8 subscription period in requiring someone who wants

9 information to purchase a whole years's worth of

10 information is unreasonable. And in our discussions, we

11 haven't really heard a good reason why a manufacturer

12 cannot set up multiple access intervals for service

13 information. We think that's better for the independents.

14 We think it's more likely to get them to get on the

15 websites and use the information. Whereas, having to make

16 a decision, either I get nothing or a year, might be

17 likely just to try to fix the problem without necessary

18 information.

19 MS. STEGINK: Allen, could I clarify just where

20 EMA is on that point? Because I didn't want to leave you

21 with the impression that EMA was asking just for year-long

22 subscriptions. However, some flexibility when you're

23 looking at the subscription periods, versus I know what

24 light duty is really -- we've talked about that, and we

25 were supporting the fact that you realized that

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345124

1 flexibility need.

2 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS:

3 Yes. EPA's regulation actually specifies I think one day,

4 one week, and one month, and one year access. Our

5 regulation does not do that. So I would say it is

6 flexible for us to consider the types of access periods

7 that the manufacturers want to propose. We were just

8 opposed to a single access period of one year.

9 And with respect to liability, we did put in a

10 provision that we thought addressed EMA's concerns. I

11 guess EMA may be okay with that, but you haven't had a

12 chance to look at the language?

13 MS. STEGINK: Correct. We have to look at the

14 language.

15 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS: I

16 think we can work that out in subsequent 15-day

17 activities.

18 CHAIRPERSON SAWYER: Okay. Thank you very much.

19 It seems to me these issues are ones which would

20 ordinarily be handled under the 15-day process.

21 EXECUTIVE OFFICER WITHERSPOON: Except for the

22 core issue on transmission information which you need to

23 decide as a Board whether you think that's appropriate to

24 include that linkage in the regulation or not.

25 CHAIRPERSON SAWYER: Well, how does the Board

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345125

1 feel about this?

2 Ms. Berg.

3 BOARD MEMBER BERG: I do have a problem requiring

4 the engine manufacturers to be responsible for

5 transmission information. If, in fact, there is a

6 mechanism within the engine that the engine knows if the

7 transmission isn't working for whatever reason, doesn't

8 matter what it is, and that can cause the check light to

9 go on and just indicate that it's transmission, but the

10 engine manufacturer has no responsibility because they

11 don't manufacture the transmissions to indicate what the

12 problem is, I wouldn't have a problem supporting that.

13 But for them to be responsible to coordinate with the

14 transmission manufacturers and be the ones that are

15 ultimately responsible, I would have a problem supporting

16 that.

17 CHAIRPERSON SAWYER: It seems to me maybe that's

18 not the nature of the interaction between the engine and

19 the transmission, but that the engine manufacturers use

20 information which is since from the transmission such as

21 speed, maybe transmission temperature or something like

22 that.

23 EXECUTIVE OFFICER WITHERSPOON: Well, and the end

24 goal when it gets to a repair shop that the technician

25 repairing it knows what happened and can fix it. And so

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345126

1 that's the only linkage. And only where the manufacturer

2 is using transmission features to drive the on-board

3 diagnostic computer that runs the emission control system

4 would they have any obligation at all to work with the

5 transmission manufacturer. They by their own engine

6 design, emission control system design, have made a link

7 that makes them responsible for telling the technician at

8 a repair shop how to fix it. Is that still a problem?

9 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: One

10 other thing, too, if you have the impression that engine

11 manufacturers produce engines and they go out the door and

12 people use them any way they want, that's not the way it

13 works. For example, these engines in 2007 will have some

14 kind of aftertreatment device, a catalytic converter or

15 filter on them that has to be placed on the truck. The

16 engine manufacturer will say this has to be placed this

17 position, has to be hooked up with this kind of a sensor.

18 It has to have this kind of information, maybe a fuel line

19 going to it, whatever.

20 There's other things -- they specify what warning

21 gauges have to go into the truck and where they should be

22 placed and all those kind of things. In this situation, I

23 don't think it's completely unreasonable for the engine

24 manufacturers to say if you want to use my engine, you're

25 going to have to provide because of this law the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345127

1 information on how to repair anything that my engine

2 touches. In this case that would be the sensed

3 information.

4 It's not like there's an impossible communication

5 barrier here between the engine manufacturer and the

6 transmission. I think it's just something they don't want

7 to do, and it's a question of whether this law -- the

8 goals of this law dictates they do or not.

9 BOARD MEMBER BERG: I'm wondering why we aren't

10 putting more responsibility on the transmission guys.

11 EXECUTIVE OFFICER WITHERSPOON: We don't regulate

12 them.

13 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: It was

14 mainly trying to keep ten other manufacturers or so from

15 having to come under the web of ARB regulation that are

16 not there now. So it would kind of create a whole --

17 bureaucracy is not the right word. But they're not

18 subject to another government agency that's regulating

19 what they do. And I guess we thought the balance was

20 better just for this one narrow area just for the engine

21 manufacturers to be responsible, since they're responsible

22 for the large part of providing information on repairing

23 their engines. This one other piece would better be

24 placed with EMA's member than it would be to have, you

25 know, ten new people who have to come in to visit Allen

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1 and become certified or verify they do certain things.

2 We have to audit that this is all happening

3 according to the law. We have to audit them. And it just

4 seemed like a better -- I'm not saying any of it is the

5 greatest solution, but it seemed like it was the process

6 with the least evil involved in it I guess.

7 MOBILE SOURCE OPERATIONS DIVISION CHIEF LYONS:

8 Our rational is also based on the fact it's the engine

9 manufacturer that decides whether or not the transmission

10 manufacturer has to provide some information by virtue of

11 how they use the OBD system. We didn't want to create a

12 situation where a transmission manufacturer, you know,

13 doesn't think anyone is using their transmission in that

14 way, and all of a sudden an engine manufacturer decides

15 to, and then all of a sudden the transmission manufacturer

16 has this burden to put this information on a website in

17 order to comply with the regulation. It leaves them in

18 too much doubt as to what's required, because it's all

19 based on the decisions the engine manufacturers make.

20 Therefore, we thought it made more sense for the engine

21 manufacturers to have more responsibility in the process,

22 because it's really driven by their decisions.

23 MS. STEGINK: May I make three clarifications?

24 CHAIRPERSON SAWYER: Okay.

25 MS. STEGINK: One is that a transmission light

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345129

1 will go on so the transmission can be repaired.

2 The second is that engine manufacturers don't

3 necessarily have or know what transition is going to be

4 paired with their engine. What transmission will, you

5 know -- like whatever this communication would be, they're

6 not necessarily in charge of that. That's an issue left

7 up to the customer and to the vehicle manufacturers, not

8 the engine manufacturer.

9 And then finally, this concept or notion of sort

10 of deciding to use transmission information to enable a

11 diagnostic I think is more like deciding to breathe. And

12 I may be overstating that a little, but my understanding

13 is that it's often that some sort of transmission

14 information, like I think Allen gave the example of the

15 vehicle speed sensors with shaft speeds used as an input

16 to enable a diagnostic, and when that goes back, the light

17 goes on.

18 CHAIRPERSON SAWYER: Mayor Loveridge.

19 BOARD MEMBER LOVERIDGE: Well, I don't claim full

20 understanding of all of what's before us, but I have been

21 persuaded by staff's presentation and arguments and would

22 move staff position with the understanding that some of

23 these issues identified would be worked on in the 15 days.

24 BOARD MEMBER KENNARD: I would second the motion.

25 CHAIRPERSON SAWYER: Okay. I think I need to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345130

1 officially close the record before we move ahead, although

2 we have a motion on this.

3 I close the record on this agenda item. The

4 record will be reopened when the 15-day notice of public

5 availability is issued. Written or oral comments received

6 after the hearing date but before the 15-day notice is

7 issued will not be accepted as part of the official record

8 on this agenda item. When the record is reopened for a

9 15-day comment period, the public may submit written

10 comments on the proposed changes which will be considered

11 and responded to in the final statement of reasons for the

12 regulation.

13 We also should take our ex partes statement at

14 this time. Ms. Berg.

15 BOARD MEMBER BERG: None.

16 CHAIRPERSON SAWYER: Dr. Gong.

17 BOARD MEMBER GONG: None.

18 CHAIRPERSON SAWYER: None. Okay.

19 Take a moment to read the Resolution. And we've

20 had a motion to adopt, which was seconded. I think we can

21 take a voice vote on this.

22 All those in favor, please say aye.

23 (Ayes)

24 CHAIRPERSON SAWYER: Opposed.

25 (Nay)

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345131

1 CHAIRPERSON SAWYER: We have one nay. It is

2 adopted by voice vote.

3 Thank you all very much for your comments, and I

4 hope that we can work out most of the details during the

5 15-day process. Thank you.

6 The last item on the agenda, 6-6-4, is the

7 staff's proposed amendments to the California motor

8 vehicle evaporative, refueling, and exhaust emission test

9 procedures. These amendments seek primarily to streamline

10 the evaporative test procedures by reducing the

11 certification and compliance test burden on manufacturers.

12 These amendments will not impact the stringency of current

13 emission standards and test procedures.

14 Ms. Witherspoon, would you introduce this item?

15 EXECUTIVE OFFICER WITHERSPOON: Thank you,

16 Dr. Sawyer.

17 As you indicated, this is a very straightforward

18 technical amendment to our evaporative emission test

19 procedures. We are not changing the stringency or overall

20 emission reductions in any way, just making the process

21 less complicated and less expensive. The U.S. EPA has

22 already acted on this front with final rule changes that

23 took effect on February 6th of this year. The amendment

24 staff is proposing to California rules largely harmonize

25 about what U.S. EPA is requiring nationally.

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1 The staff presentation will be given by Ron Haste

2 of the Mobile Source Control Division.

3 (Thereupon an overhead presentation was

4 presented as follows.)

5 AIR RESOURCES ENGINEER HASTE: Thank you,

6 Ms. Witherspoon. And good afternoon, Dr. Sawyer and

7 members of the Board.

8 We are here today to propose amendments that

9 primarily effect the current evaporative test procedures

10 for motor vehicles. I would like to begin by providing

11 some brief background information on evaporative

12 emissions, control methods, and the existing regulations

13 before presenting staff's proposal.

14 --o0o--

15 AIR RESOURCES ENGINEER HASTE: Evaporative

16 emissions are hydrocarbon vapors that escape from a

17 vehicle's fuel system primarily from fuel hoses and the

18 fuel tank. Evaporative emissions are classified into four

19 types: Running loss, hot soak, diurnal, and refueling

20 emissions.

21 Running loss emissions result when vapors escape

22 from the vehicle's fuel system while the vehicle is being

23 driven.

24 Hot soak emissions are primarily the result of

25 vapors escaping immediately after the vehicle has been

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345133

1 shut off.

2 Diurnal emissions occur when vapors are generated

3 and escape as a vehicle experiences daily ambient

4 temperature swings.

5 And lastly, refueling emissions occur when vapors

6 inside the fuel tank are dispensed into the ambient air

7 whenever the tank is refueled.

8 As you are well aware, controlling evaporative

9 hydrocarbon emissions is important since they are ozone

10 precursors and they contain toxic air contaminents such as

11 benzene.

12 --o0o--

13 AIR RESOURCES ENGINEER HASTE: The main

14 components used for controlling the vehicle's evaporative

15 emissions are shown here. Diurnal, running loss, and

16 refueling emissions are controlled primarily by an

17 on-board carbon canister which collects and stores fill

18 vapors. Later, under suitable engine operating

19 conditions, these vapors are released or purged out of the

20 canister and burned along with the fuel going to the

21 engine.

22 Evaporative losses due to fuel permeation through

23 the tank, fill pipe, fuel lines, and seals are minimized

24 by using advanced materials that are designed, fabricated,

25 and assembled to be as leak proof as possible.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345134

1 --o0o--

2 AIR RESOURCES ENGINEER HASTE: The current

3 evaporative test procedures were adopted in 1990 and

4 phased in during the 1995 through 1998 model years. The

5 new procedures included a real time diurnal simulation.

6 This new approach was based on findings that evaporative

7 emissions could not be accurately measured using an

8 accelerated test, which is what the old procedure used.

9 Two test sequences are now required for

10 certification. The three-day diurnal plus hot soak and

11 running loss test sequence ensures that three days worth

12 of diurnal emissions and high temperature hot soak

13 emissions and running loss emissions are controlled. This

14 test sequence takes five days to complete.

15 The two-day diurnal plus hot soak test verifies

16 that the canister adequately stores and purges vapor

17 during vehicle operation, especially during short driving

18 trips. This test procedure takes four days to complete.

19 The on-board refueling vapor recovery, or ORVR, emission

20 standards were adopted in 1995 and are intended to control

21 refueling emissions. The ORVR test sequence takes three

22 days to complete.

23 Following the adoption of the test procedure in

24 1990 and 1995, the evaporative regulations were amended in

25 1998 as part of California's low emission vehicle phase

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345135

1 two regulations. The requirements from these regulations

2 were phased in during the 2004 through 2006 model years.

3 Included in the left two evap rules is an optional zero

4 evaporative emission standard which allows manufacturers

5 to generate partial zero emission vehicle, or P-ZEV,

6 credits when certain other requirements are satisfied.

7 Also adopted under the LEV II rulemaking was an in-use

8 verification program, which is an in-use vehicle

9 compliance program that is self-administered by the

10 manufacturers.

11 Currently, completing all of the required

12 evaporative test sequence takes a minimum of twelve days.

13 --o0o--

14 AIR RESOURCES ENGINEER HASTE: This is primarily

15 why a 1996 the U.S. EPA, ARB, and automobile manufacturers

16 began a collaborative effort to determine if the

17 evaporative test procedures could possibly be streamlined

18 without impacting stringency.

19 In December 2002, U.S. EPA proposed streamlined

20 measures that included both clarifications to their

21 current procedures and suggestions for future regulatory

22 modifications. Subsequently, these clarifications and

23 modifications were co-defined by the U.S. EPA in a direct

24 final rule issued in December 2005. These amendments

25 became effective on February 6th of this year.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345136

1 --o0o--

2 AIR RESOURCES ENGINEER HASTE: Accordingly, staff

3 is proposing similar amendments to the California

4 evaporative test procedures and the on-board refueling

5 vapor recovery test procedures. In addition, relatively

6 minor amendments to other related test procedures and

7 requirements are proposed.

8 --o0o--

9 AIR RESOURCES ENGINEER HASTE: The first change

10 staff is proposing is to allow manufacturers an optional

11 waiver of the two-day diurnal plus hot soak test for

12 certification. This would shorten the time required to

13 complete compliance testing. The primary purpose of the

14 two-day diurnal test is to ensure that a vehicle's carbon

15 canister adequately stores and purges during short driving

16 trips. However, we have found that adequate purge can be

17 demonstrated by compliance with both the three-day diurnal

18 and the on-board refilling vapor recovery test standards.

19 ARB would retain the authority to perform two-day diurnal

20 tests to verify in-use compliance.

21 The next amendment clarifies certain alternative

22 testing provisions for the running loss test. The current

23 running loss test procedures allow manufacturers to use an

24 alternative test procedure as long as the alternative is

25 more stringent than the specified procedure. The proposed

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345137

1 amendment would explicitly allow ARB to use a

2 manufacturer's alternate running loss test procedure when

3 conducting confirmatory or in-use compliance tests.

4 The final proposed amendment to the evaporative

5 test procedures allows an option for evaporative canisters

6 to remain installed in a vehicle during pre-conditioning

7 procedures. This is intended to address complications

8 arising from inaccessibility of some present day

9 canisters.

10 --o0o--

11 AIR RESOURCES ENGINEER HASTE: Proposed

12 amendments to the on-board refueling vapor recovery test

13 procedures relates back to their relative inaccessibility

14 of some evaporative canisters. The existing regulations

15 require that when the vehicle is pre-conditioned prior to

16 the ORVR test, the fuel tank vent hoses must be

17 disconnected. Staff proposes that these procedures be

18 revised to make disconnecting the canister and vent hosing

19 optional when the pre-conditioning steps are performed.

20 This option would not compromise the stringency of the

21 test. In fact, it may increase the stringency slightly,

22 because the canister would be required to hold more vapor

23 prior to the start of this test.

24 --o0o--

25 AIR RESOURCES ENGINEER HASTE: Staff proposes an

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345138

1 amendment which would address testing a four-wheel drive

2 dyamometer. The current dyamometer provisions do not

3 include an allowance for using four-wheel drive

4 dyamometers. Staff's proposal would add provisions

5 specifying that full time four-wheel and all-wheel drive

6 vehicles may be tested on four-wheel drive dyamometers.

7 Staff also proposes to update the existing

8 vehicle labeling requirements. The proposed amendment

9 would eliminate the requirement to provide outdated

10 information such as vacuum hose routing, engine tune-up

11 adjustments, and vehicle emission control bar codes on

12 engine labels.

13 This revision allows more design flexibility and

14 further aligns the California label requirements with

15 federal regulations. Staff also proposes other relatively

16 minor amendments which would clarify the existing in-use

17 verification program evaporative test requirements.

18 --o0o--

19 AIR RESOURCES ENGINEER HASTE: In conclusion,

20 staff recommends that the technical amendments presented

21 be adopted.

22 Thank you. This concludes my presentation.

23 CHAIRPERSON SAWYER: Thank you.

24 Madam Ombudsman, could we have your statement,

25 please?

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345139

1 OMBUDSMAN TSCHOGL: Dr. Sawyer and members of the

2 Board, staff has worked in a collaborative effort with the

3 Alliance of Automobile Manufacturers and the Association

4 of International Automobile Manufacturers. The

5 United States Environmental Protection Agency was also

6 actively involved in the development of this rule.

7 In May of 1996, staff first met with these

8 stakeholders to consider the proposal for amending

9 procedures. As development of the amendments progressed,

10 further industry-wide meetings were held in July 1999,

11 March, May, and June of 2001. Supplementing these

12 milestone meetings over this period were numerous

13 individual meetings, correspondence, and conversations

14 between staff and stakeholders.

15 Staff also provided technical input on the final

16 version of the proposal, which was distributed to

17 stakeholders in a letter of guidance issued by U.S. EPA on

18 December 31st, 2002. The staff report and Board hearing

19 notice were published on April 7th, 2006.

20 When consideration of these amendments was

21 delayed until a June 2006 hearing, a notice of

22 postponement was issued April 13th, 2006. These notices

23 were distributed to stakeholders via ARB's mailing lists,

24 posted to the website, and e-mail to subscribers of the

25 list serve.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345140

1 In summary, staff has worked with stakeholders

2 over ten years to develop this proposal which addresses

3 the challenge of maintaining the stringency of the

4 evaporative standards and test procedures and reducing the

5 testing burden on industry.

6 Thank you. This concludes my comments.

7 CHAIRPERSON SAWYER: Thank you.

8 Do Board members have any questions?

9 There are no requests for public testimony. And

10 therefore since all testimony, written submissions, and

11 staff comments for this item have been entered into the

12 record, and the Board has not granted an extension of the

13 comment period, I'm officially closing the record on this

14 portion of Agenda Item 6-6-4. Written or oral comments

15 received after the comment period has closed will not be

16 accepted as part of the official record on this agenda

17 item.

18 Ex parte statement, Ms. Berg.

19 BOARD MEMBER BERG: None.

20 BOARD MEMBER GONG: None.

21 BOARD MEMBER KENNARD: No.

22 CHAIRPERSON SAWYER: None.

23 Do I have a motion to adopt?

24 BOARD MEMBER LOVERIDGE: So moved.

25 BOARD MEMBER PATRICK: Second.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345141

1 CHAIRPERSON SAWYER: There is a motion to adopt

2 and second.

3 All those in favor please say aye.

4 (Ayes)

5 CHAIRPERSON SAWYER: Opposed?

6 The Resolution is adopted.

7 And I would thank the staff members for their

8 ten-year patience in making these changes. And certainly

9 we always want to take opportunities to simplify the

10 application of our regulations.

11 This would conclude the official business of our

12 Board meeting.

13 I would remind the Board members that we have an

14 opportunity to see some plug-in hybrid technology, and I

15 encourage you to take that opportunity.

16 Do I have a motion to adjourn?

17 BOARD MEMBER RIORDAN: You do.

18 BOARD MEMBER BERG: So moved.

19 SUPERVISOR PATRICK: Second.

20 CHAIRPERSON SAWYER: We're adjourned. Thank you

21 all very much.

22 (Thereupon the California Air Resources Board

23 adjourned at 12:27 p.m.)

24

25

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345142

1 CERTIFICATE OF REPORTER

2 I, TIFFANY C. KRAFT, a Certified Shorthand

3 Reporter of the State of California, and Registered

4 Professional Reporter, do hereby certify:

5 That I am a disinterested person herein; that the

6 foregoing hearing was reported in shorthand by me,

7 Tiffany C. Kraft, a Certified Shorthand Reporter of the

8 State of California, and thereafter transcribed into

9 typewriting.

10 I further certify that I am not of counsel or

11 attorney for any of the parties to said hearing nor in any

12 way interested in the outcome of said hearing.

13 IN WITNESS WHEREOF, I have hereunto set my hand

14 this 6th day of July, 2006.

15

16

17

18

19

20

21

22

23 TIFFANY C. KRAFT, CSR, RPR

24 Certified Shorthand Reporter

25 License No. 12277

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345