MEETING

STATE OF CALIFORNIA

AIR RESOURCES BOARD

SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

AUDITORIUM

21865 E. COPLEY DRIVE

DIAMOND BAR, CALIFORNIA 91765-4182

FRIDAY, JANUARY 25, 2013

9:13 A.M.

TIFFANY C. KRAFT, CSR

CERTIFIED SHORTHAND REPORTER

LICENSE NUMBER 12277

CALIFORNIA REPORTING, LLC

52 LONGWOOD DRIVE

SAN RAFAEL, CA 94901

(415) 457-4417
APPEARANCES

BOARD MEMBERS

Ms. Mary Nichols, Chairperson

Dr. John Balmes

Ms. Sandra Berg

Ms. Dorene D'Adamo

Mr. Hector De La Torre

Mr. Ronald Loveridge

Mrs. Barbara Riordan

Dr. Alex Sherriffs

Professor Daniel Sperling

STAFF

Mr. James Goldstene, Executive Officer

Mr. Alberto Ayala, Chief Deputy Executive Officer

Mr. Richard Corey, Deputy Executive Officer

Ms. Lynn Terry, Deputy Executive Officer

Mr. Judson Cohen, Monitoring and Laboratory Division

Mr. Mike Ginty, Air Resources Engineer, Goods Movement 

Strategies Section, SSD

Mr. Scott King, Air Pollution Specialist, Northern 

California SIP Section, PTSD

Mr. Jack Kitowski, Branch Chief, Freight Transportation 

Branch
ALSO PRESENT

Ms. Barbara Baird, South Coast AQMD

Mr. Tim Carmichael, CA NGV Coalition

Ms. Elaine Chang, South Coast AQMD

Mr. Harvey Eder, PSPC

Mr. D. Douglas Fratz, Consumer Specialty Products 

Association

Mr. Mike Freeman, WD-40 Company

Mr. Bob Hamilton, Amway

Mr. Greg Johnson, Sherwin Williams

Patricia Ochella, Deputy Policy Director, Coalition for 

Clean Air

Mr. Fred Minassian, South Coast AQMD

Mr. Christopher Pearce, SC Johnson & Son, Inc.

Mr. Andrew Palomares, Port of Hueneme/Oxnard Harbor 

District

Mr. Bill Quinn, California Council for Environmental and 

Economic Balance

Mr. Doug Raymond, National Aerosol Association, WD-40, 

Stoner, Inc., Blaster

Mr. Spencer Richley, Clean Energy Fuels

Mr. Matt Schrap, Crossroads

Mr. Timothy Serie, American Coatings Association

Mr. Jim Stewart

Mr. Lee Wallace, Southern California Gas

Mr. Mike Watt, San Diego AOCD
INDEX

 PAGE

Item 13-2-5

Executive Officer Goldstene 4

Mr. Carmichael 20

Ms. Ochoa 20

Item 13-2-2

Chairperson Nichols 24

Executive Officer Goldstene 26

Staff Presentation 27

Mr. Richley 39

Mr. Quinn 40

Mr. Wallace 41

Mr. Eder 44

Mr. Serie 45

Mr. Freeman 47

Mr. Pearce 49

Mr. Hamilton 51

Mr. Fratz 52

Mr. Raymond 54

Mr. Johnson 55

Mr. Stewart 57

Ms. Chang 58

Ms. Baird 60

Motion 62

Vote 67

Item 13-2-3

Chairperson Nichols 68

Executive Officer Goldstene 69

Motion 81

Vote 81

Item 13-2-4

Chairperson Nichols 81

Executive Officer Goldstene 82

Staff Presentation 83

Mr. Carmichael 100

Mr. Watt 103

Mr. Richley 108

Mr. Minassian 109
INDEX CONTINUED

 PAGE

Item 13-2-4

Mr. Palomares 111

Mr. Schrap 112

Mr. Stewart 114

Motion 120

Vote 120

Adjournment 129

Reporter's Certificate 130
PROCEEDINGS

CHAIRPERSON NICHOLS: Good morning, ladies and 

gentlemen. We're getting started a little bit late this 

morning, but we're ready to go. 

Good morning. The January 25th, 2013, public 

meeting of the Air Resources Board will come to order. 

Actually, it already is in order. 

Would you please join me in saying the Pledge of 

Allegiance to the flag? 

(Thereupon the Pledge of Allegiance was

Recited in unison.)

CHAIRPERSON NICHOLS: The Clerk will please call 

the roll. 

BOARD CLERK JENSEN: Dr. Balmes? 

BOARD MEMBER BALMES: Here. 

BOARD CLERK JENSEN: Ms. Berg? 

BOARD MEMBER BERG: Here. 

BOARD CLERK JENSEN: Ms. D'Adamo? 

BOARD MEMBER D'ADAMO: Here. 

BOARD CLERK JENSEN: Mr. De La Torre? 

Mayor Loveridge? 

Mrs. Riordan? 

BOARD MEMBER RIORDAN: Here. 

BOARD CLERK JENSEN: Supervisor Roberts? 

Dr. Sherriffs? 

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BOARD MEMBER SHERRIFFS: Here. 

BOARD CLERK JENSEN: Professor Sperling? 

BOARD MEMBER SPERLING: Here. 

BOARD CLERK JENSEN: Supervisor Yeager? 

Chairman Nichols? 

CHAIRPERSON NICHOLS: Here. 

BOARD CLERK JENSEN: Madam Chairman, we have a 

quorum.

CHAIRPERSON NICHOLS: Thank you. 

I'll note we've also just been joined by Mayor 

Loveridge and that Mr. De La Torre is with us as well. 

So a few opening announcements. Anyone who 

wishes to testify on any of the items on the agenda today 

or in the public comment period and has not signed up 

online is requested to fill out a card at the table 

outside the boardroom and turn it into the Clerk of the 

Board, who sits down there. 

If you've already signed up online to speak, you 

don't have to fill out a form, but you do need to check in 

with the Clerk just so your name gets on the speakers' 

list. 

We will be imposing our usual three-minute limit 

on speakers. So we appreciate it if when you get up to 

speak you just give your name and then quickly summarize 

the testimony in your own words. If you've given us 

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written testimony, we will have it and it will be in the 

record and we'll be able to read it anyway. 

For safety reasons, please note the emergency 

exits that are at the rear of the room. In the event of 

an emergency, we're required to evacuate this room 

immediately and go outside the building until the 

all-clear signal is sounded. I think that's it as far as 

announcements is concerned. 

But before we begin with our agenda this morning, 

I wanted to take advantage of the fact that we're here in 

the South Coast meeting room, and we are having an 

opportunity to say goodbye. I think this really is 

goodbye, at least as far as the Air Resources Board is 

concerned, to a Board member who has also served as a 

representative of the South Coast Air Quality Management 

District. So it's very fitting that we're here in this 

room. And we have a couple of small things to give to 

you, Mayor Loveridge. 

But I understand that you also have some thoughts 

that you would like to share with us about ARB and your 

service on the Board and the state of the air and whatever 

else is on your mind. So we'd like to invite you to take 

this opportunity to address the crowd. 

BOARD MEMBER LOVERIDGE: Chair, I think the most 

appropriate time would be the sort of final statement at 

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the end of the meeting, rather than -- so you finish the 

business of the Board. 

CHAIRPERSON NICHOLS: When it's all over. 

BOARD MEMBER LOVERIDGE: Then I have a final 

statement I'd like to make.

CHAIRPERSON NICHOLS: Okay. I'll honor your 

request and do it in the order that you subject then. But 

that's something you can all look forward to. 

So let's then begin with James Goldstene's report 

on the Air Resources Board program priorities for 2013. 

2013 is not going to be any less busy than 2012, 

you'll be happy to know. We have a number of major 

actions in the regulatory area as well as progress to make 

on our climate programs. And so we've asked the Executive 

Officer to give us an overview with the sense of the types 

of major Board actions that we're anticipating this year. 

So Mr. Goldstene, would you please begin your 

presentation? 

(Thereupon an overhead presentation was 

presented as follows.)

EXECUTIVE OFFICER GOLDSTENE: Thank you, Chairman 

Nichols. Good morning, Board members. 

This morning, I'm going to provide an overview of 

the work we'll be considering this coming year and also 

describe some of the staff's ongoing work to implement the 

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existing programs and regulations you've already approved.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: You have a full 

Board calendar this year. Of course, yesterday and today 

you are taking action on the State Implementation Plan 

amendments for achieving national ambient air quality 

standards. And yesterday, staff updated you on SB 375 

implementation in the San Joaquin Valley. 

Looking past today, not surprisingly, much of our 

effort will be in the climate change arena. Staff will be 

providing regular updates as well as proposals for 

regulatory action. 

Staff will also come back to you again later in 

the year with additional regional efforts to reduce GHGs 

through sustainable communities strategies. And we expect 

to bring you proposed revisions to ARB's mobile source and 

fuels regulations and guidelines, as well as another 

opportunity to reduce emissions from consumer products. 

Staff will also ask for your guidance on ARB's 

research program and the projects that provide the 

scientific support for the Board's work.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: It's been four 

years since the Board approved the Scoping Plan at the end 

of 2008. Since AB 32 requires that ARB update the plan 

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every five years, this will be an important effort this 

year. 

But AB 32 is not only planning work in 2013, even 

as you act on a SIP today, ARB and South Coast district 

staff have already begun the technical work for SIP 

amendments due in 2015 for the recently updated federal 

ozone standard. 

Finally, ARB will begin a freight transport 

initiative in the middle of the year. The Haagen-Smit 

Symposium in May and Advanced Technology Conference will 

kick-off that effort. 

Last June, staff briefed you on a framework for 

coordinated planning intended to lay out a process and 

identify the analytical tools to enable coordination among 

these three types of planning efforts. The Scoping Plan 

will address greenhouse gases. The SIP addresses federal 

health-based standards for ozone and particulate matter. 

And exposure to toxic diesel particles will be central to 

freight transport planning. 

The three planning efforts will address many of 

the same types of sources, especially mobile sources. And 

technology advances will be key to achieving the 

multi-pollutant goals. 

Coordinated planning drawing on the scenario 

methodologies developed in the Vision for Clean Air effort 

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will be key to developing common strategies and 

understanding the broad environmental and economic impacts 

of technology and energy transformation. 

The most frequent comment staff heard during the 

Vision effort was the need to consider a broader set of 

technologies and to evaluate more possible scenarios. 

These comments are good, and the planning efforts this 

year will take place to do just that.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: In last month's 

Climate Change Program update, staff highlighted the 

upcoming milestones. These include the auctions and 

reserve sales, the investment plan for auction proceeds, 

new compliance offset protocols, and market oversight to 

deter, detect, and respond to market problems. 

It remains important for ARB to continue our 

collaboration with federal authorities, including the 

Commodity Futures Trading Commission, the Federal Energy 

Regulatory Commission, and the Federal Department of 

Justice, as well as the California Independent System 

Operator, and the California Office of the Attorney 

General. 

Later this year, staff will bring you an update 

to the Climate Change Scoping Plan which will assess 

progress toward the 2020 emissions target and begin the 

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planning for post-2020 goals. 

With regard to the low carbon fuel standard, 

staff is acting on the Board's direction to focus on crude 

oil, carbon intensity indirect land use, electricity 

credits, flexible compliance mechanisms, and economic 

analysis.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: Work this year on 

the Advanced Clean Cars Program is primarily focused on 

implementation. Auto makers will begin introducing and 

certifying the cleanest vehicles in California. The first 

of these already occurred, thanks to the early opt-in 

provisions. Last month, the 2014 Honda Accord plug-in 

hybrid pictured on the right side of the slide became the 

first vehicle certified to meet the most stringent future 

LEV III standard known as SU LEV 20. 

There is ongoing work to support the program, 

including research projects coordinated with the U.S. EPA 

and the National Highway Transportation Safety 

Administration, on consumer acceptance and usage of new 

vehicle technologies, developments in advanced engine 

technology, and societal and economic impacts of the 

program. 

This research will support the mid-term review of 

the program in 2017 and an assessment of California's 

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progress towards meeting the zero emission goals. 

ARB's laboratory staff is also developing new 

analysis methods needed to implement the advanced clean 

cars regulations lower particulate matter standard.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: Now on ARB's diesel 

program, staff is putting together significant resources 

to ensure the continued successful implementation of ARB's 

in-use diesel regulations so that by 2014 almost every 

diesel engine in California will have a particulate 

filter.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: ARB's extensive 

compliance assistance and education program is designed to 

ensure that fleet owners know how to comply with the fleet 

turnover requirements that phase in over the next 

ten years. 

Public health benefits are happening already. A 

recent U.C. Berkeley study found that diesel emissions at 

the Port of Oakland have been cut in half as a result of 

ARB's clean diesel regulations. 

Later this year, staff will update you on the 

diesel program. And of course, you'll be considering 

Proposition 1B actions today. 

While California's diesel programs originated to 

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address public health impact in California, the program is 

also reducing emissions of black carbon, the second 

greatest contributor to global warming. 

California's limits on residential and open 

burning are also reducing the state's contribution to 

global black carbon emissions.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: Even with the 

significant reductions we are achieving from our diesel 

program, filters and cleaner engines will not address all 

of the challenges posed by the freight transport system. 

Additional innovation is needed to further reduce risk in 

communities adjacent to the ports, to attain new, more 

stringent air quality standards, and to address greenhouse 

gas emission targets. 

I mentioned the upcoming freight transport effort 

during my introduction. ARB will kick off the development 

of a sustainable freight strategy with the joint Air 

District/ARB Technology Conference this spring to assess 

potential advanced zero or near-zero emission technologies 

for the sector. And this year's Haagen-Smit Symposium in 

May will be devoted to a policy discussion on the path to 

a sustainable freight system. 

Staff hopes to bring a proposal for the Board's 

consideration in 2014 after a series of public workshops 

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and stakeholder meetings to develop the strategy. The 

goal is to build a broad coalition of stakeholders that 

can endorse a strategy for a more efficient, zero or near 

zero emission freight transport system. Transforming the 

freight system is critical for meeting the state's 

long-term goals for air quality and climate, 

transportation, energy security, and the international 

competitiveness of our logistics industry.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: A component of 

ARB's diesel program and others is reducing air pollution 

in heavily impacted communities and environmental justice 

areas. 

ARB's enforcement division is coordinating with 

other agencies and prioritizing enforcement of our diesel 

rules and idling requirements, particularly near schools 

and heavily industrialized communities. 

Staff is working with cities throughout 

California to get no idling signs installed wherever 

diesel emissions affect local residents. 

And staff is also establishing new roadside 

monitoring sites to help us better assess the air quality 

impacts of diesel emissions on the most heavily impacted 

communities. 

In our Climate Program, we are also working on 

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aspects of last year's cap and trade legislation, SB 535, 

which requires that a portion of auction proceeds be 

directed to disadvantaged communities. ARB staff is 

providing technical assistance to the Office of 

Environmental Health Hazard Assessment in the development 

of the screening tool, now known as Cal-Enviro-Screen to 

help identify these communities. This information will 

guide the administration as it allocates cap and trade 

auction proceeds.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: Switching to our 

work to support the development of sustainable 

communities, over the past three years, ARB reviewed the 

sustainable communities strategies from three of the large 

metropolitan planning organizations, or MPOs: San Diego, 

the Southern California Association of Governments, and 

the Sacramento Area Council of Governments. These regions 

are now implementing their adopted SCSs. 

And yesterday, of course, staff briefed you on 

the progress in the San Joaquin Valley. As staff said, we 

expect to see the first of the valley plans later this 

year and the last of the large MPOs, the Bay Area will 

complete its plan this year as well. 

We also anticipate receiving community plans from 

Tahoe, Butte, and Santa Barbara MPOs. From a research 

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perspective, our research staff is actively working with 

the MPOs to identify the types of academic research that 

would be most useful in the development of future SCSs. 

And we're continuing our involvement in the development 

and discussion of new methods and tools that will help 

quantify and describe the co-benefits of sustainable 

community strategies.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: Of course, all of 

the work we're doing can't be done without strong 

partnerships and effective collaboration. We've worked 

hard to build more productive partnerships and need to 

continue working at it. The leadership that you, as Board 

members, provided and continue to provide is crucial. 

As an example, we are building an already 

established agreement with the Bay Area, San Joaquin 

Valley, and North Coast Unified Air Districts, and with 

the Port of Los Angeles to leverage resources to more 

effectively enforce the heavy-duty vehicle regulations. 

We are hopeful that similar agreements can be 

reached with the San Diego Air District and the Port of 

Long Beach. We're partnering with MPOs, the California 

Energy Commission, CalRecycle, the PUC, and others on 

implementing the Scoping Plan, and will assist the 

Department of Conservation's Division of Oil and Gas on 

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the development of fracking regulations.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: We also have very 

collaborative relationships with our academic partners and 

other non-governmental organizations. These relationships 

are crucial, providing essential support to our research 

program, advice on program implementation, and in many 

cases, a reality check on the impact of our actions on 

affected stakeholders.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: We recognize that 

the success of our sustainable freight initiative this 

year will rely on successful collaborations between a wide 

range of stakeholders and the effectiveness of our 

outreach efforts. 

One example of a recent successful collaboration 

is with the California Trucking Association and the 

California Bus Association on outreach and compliance 

assistance efforts relating to the heavy-duty diesel 

regulations.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: Incentive program 

re-authorization is a major priority this year. The Carl 

Moyer Program, AB 118, and AB 923 complement our 

regulatory efforts. 

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However, several key funding sources will end in 

2015, unless they are re-authorized by the Legislature, 

reducing funding from about $300 million annually to 

around $65 million. 

Incentives are critical for demonstrating the 

State's commitment to new technologies, encouraging 

industry to invest, develop, test and market new emission 

reduction technologies, clean vehicles, and fuels and to 

build the essential supporting infrastructure. 

We are continuing our partnership with CAPCOA, 

the Energy Commission, and other stakeholders to pursue 

the re-authorization. Two bills, Assembly Bill 8 by 

Assembly Member Perea and Senate Bill 11 by Senator Pavley 

would extend funding for these critical programs through 

2023.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: ARB's research 

staff are actively implementing this year's research plan, 

including the nine projects the Board approved last month 

to support SIP development and advanced clean car diesel 

and sustainable community programs. 

Later this year, in addition to bringing you next 

year's research plan, staff will also provide an update on 

some of the results from the research you have funded, 

including updates on indoor air quality research, the 

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health effects of traffic, and the CALNEXT field study. 

Three major ARB-federal collaborations on air 

quality and climate science will also begin this year. As 

you heard yesterday in Bakersfield, NASA just began a 

four-year campaign to use satellites to monitor air 

quality in the San Joaquin Valley. 

Another NASA funded effort is studying the impact 

of Asian emissions on California air quality. The 

National Institute of Standards and Technology is 

initiating a five-year project to monitor greenhouse gas 

emissions in Los Angeles. 

These studies will contribute valuable 

information to our understanding of criteria pollutants 

and greenhouse gases.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: I would like to 

take a moment to highlight an effort to replace the 

existing Haagen-Smit laboratory in El Monte. 

The current facility was constructed for ARB in 

1972 when a staff of 40 supported a fledgling on-road 

vehicle control program. The Haagen-Smit facility now 

houses 360 employees who perform complex and often 

innovative tests on a wide array of on-road and off-road 

mobile sources and equipment and fuels. 

The laboratory's work must meet the highest 

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standards as it supports the far-reaching decisions that 

must be able to withstand the rigorous scientific and 

legal review. 

Over the years, ARB has added dynamometers, 

dedicated test chambers and sophisticated emission testing 

equipment. The facility can no longer accommodate the 

demands placed on its mechanical and electrical 

infrastructure. When new equipment is purchased and 

installed, other equipment must be taken off line. 

The aging facility also requires extensive 

repair, maintenance and upgrades to address code 

compliance with health and safety issues, including fire 

alarm and employee notification systems, asbestos 

abatement, and underground containment systems. 

Under the Chair's direction, we have started to 

look for a new lab site in the Los Angeles area and to 

potentially partner with one of the universities. 

Locating the new lab at a university would allow us to 

build an Extremely efficient state-of-the-art facility and 

would also enhance opportunities for academic 

partnerships. 

Our vision is that the lab would become an 

international focal point for research on air quality and 

climate.

--o0o--

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EXECUTIVE OFFICER GOLDSTENE: Let me conclude 

with the last few slides that highlight some of the 

specific items that come out of my general description of 

2013 priorities that staff will bring to you for your 

consideration. These will be -- there will be several 

more state implementation, SIP, actions this year listed 

here along with those that were before you yesterday and 

now today. 

Climate change actions will include SCSs from the 

San Joaquin Valley and the Bay Area, as well as an update 

to the Scoping Plan. And you'll consider amendments, 

linkage, and new offset protocols for the cap and trade 

program. 

--o0o--

EXECUTIVE OFFICER GOLDSTENE: Staff will propose 

several regulatory actions that deal with mobile source 

emission controls affecting off-road recreational 

vehicles, hybrid and zero emission buses, and 

specifications for all alternative diesel fuels and E85 

ethanol. 

You are also scheduled to consider the hydrogen 

production standard and designations for the new PM2.5 

standard.

--o0o--

EXECUTIVE OFFICER GOLDSTENE: In terms of 

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incentive programs, you'll be voting on funding plans and 

guidelines for Proposition 1B, the Goods Movement Emission 

Reduction Program, and for AB 118, the Air Quality 

Improvement program. 

Finally, last on the list are amendments to two 

VOC programs: Amendments to the existing consumer 

products and gasoline vapor recovery requirements. 

As you can see, 2013 will be another full year. 

Staff is looking forward to the challenges ahead and 

continuing to support your decision making with technical 

and scientific expertise. 

Thank you. That concludes my presentation. And 

we are available to answer any questions.

CHAIRPERSON NICHOLS: Thank you, James. I think 

that's a pretty full report. 

The Board members obviously meet once a month and 

act on things you bring to us. But in between, my 

observation is that every single member of this Board is 

also doing a lot to assist both with the outreach part of 

the program and with bringing ideas and suggestions back 

to the staff. 

And I just want to say that that's an important 

dynamic, and I expect and hope it will continue in the 

coming year. 

We do have a couple of people who have asked to 

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address us on this overview. So we'll call on them. Tim 

Carmichael and Patricia Ochoa, come forward. 

MR. CARMICHAEL: Good morning, Chair Nichols, 

members of the Board. Tim Carmichael with the California 

Natural Gas Vehicle Coalition. 

Let me say that I appreciate Mr. Goldstene's 

comments about the Vision document. We were one of the 

parties that submitted comments suggesting that a broader 

approach would be a good idea. 

As some of you have heard from me directly and 

some of my colleagues, we were very concerned that other 

agencies and other individuals looked at the Vision 

document and concluded that ARB either felt no other fuels 

or technologies were necessary or that they weren't going 

to support other fuels and technologies in the future. 

And that, of course, is problematic, not just for natural 

gas, but for other clean fuels and technologies that we 

believe will be part of the mix going forward. 

So I'll leave it at that. We look forward to 

working with you on that broader approach because we think 

that is a recipe for success. Thank you.

CHAIRPERSON NICHOLS: Thank you. 

Ms. Ochoa. 

MS. OCHOA: Good morning, Chairman Nichols and 

Board members. 

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My name is Patricia Ochoa. I'm the Deputy Policy 

Director for Coalition for Clean Air. I'm here also to 

talk about the Vision document and the importance of 

finalizing the Vision document. 

Before I start, I do want to thank the staff at 

ARB for their work in finalizing or getting the document 

to the point where it's at. 

As an organization that works to restore clean 

healthy air to California, we're in support of your 

efforts to develop and finalize the Vision document. We 

consider document visionary in its approach of integrating 

planning across various pollutants and necessary to inform 

critical decisions for how California can best address 

efforts to improve air quality and reduce greenhouse 

gases. 

We consider the document -- it is the integrated 

and collaborative approach of the Vision document that 

will be needed in the following months as California 

updates its AB 32 Scoping Plan and prepares for ozone 

State Implementation Plans and kicks off the statewide 

sustainable freight initiative and tackles agriculture 

equipment rulemaking and decisions regarding new and 

existing funds. 

We may lose an opportunity to coordinate 

strategies across various planning processes if the Vision 

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document is not finalized. 

And we believe that a final Vision plan will 

inform our near-term decision making and future policies 

and funding will get us to achieving clean air and 

reducing greenhouse gases. 

Therefore, we like to urge you to finalize the 

Vision document at this time because it will provide the 

direction, clarity, and the wisdom we need for the various 

planning processes and rulemaking that California will be 

engaging in in 2013. Thank you.

CHAIRPERSON NICHOLS: Thank you. 

Any further comments on this item from the Board? 

BOARD MEMBER RIORDAN: Madam Chair, I just am 

very pleased to see that the staff has identified as an 

item sustainable freight strategies, because I think 

that's critical to both the economic health of the state 

of California as well as our personal medical health. And 

I think that this is a wonderful opportunity to come 

together and to really think about these things in a 

little less formal setting, those that you have identified 

here for sustainable freight strategies. And I want to 

thank you for that.

CHAIRPERSON NICHOLS: Thank you, Mayor Loveridge. 

BOARD MEMBER LOVERIDGE: Three comments. 

One, I think it's important to get this kind of 

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framing of the priorities for this next year. 

I do think one theme that James Goldstene 

emphasized that it's not simply the Board passing rules 

and regulations, but this idea of partnership and 

cooperation. 

Two quick comments. One just mentioned before at 

South Coast meetings, but Tim Carmichael reminded me. I 

think the abundance now and the price of natural gas is 

sort of a game changer. And I think we need to rethink 

some of our choices based on what I think is going to be 

available in the immediate future. 

But the primary reason for asking for a comment 

is slide number eight, which was communities and 

environmental justice, and the question of distribution 

centers and the role trucks have in terms of diesel 

affects on communities. 

The inland area clearly has land, and there are a 

number of communities looking at distribution centers. 

The South Coast has been in the paper and comments made on 

Moreno Valley and steps on what mitigation measures should 

be taken to reduce the impact of diesel, particularly on 

the community in Moreno Valley. 

Does CARB have a role in commenting on the 

environmental impact report or monitoring or participating 

with the South Coast on this development of major 

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distribution centers? 

EXECUTIVE OFFICER GOLDSTENE: Well, we're not the 

lead agency. I think that we think we have a role again 

in the partnership. We want to work with our local air 

district. 

But even if we weren't partnering with them, 

which we do, we would try to weigh in on something like 

this. When you're dealing with these comments let's say 

in a CEQA process, it can get complicated. But that 

certainly shouldn't stop us from engaging in these areas, 

particularly as you say as the need for these logistics 

and distribution centers increases and they're getting 

bigger and so much of the goods -- I've heard several 

times over the years that 40 percent of the goods that 

come into the United States come in through the ports of 

Long Beach and L.A. And those go into the distribution 

centers by train and truck and out again. So clearly 

there is a role for ARB in weighing in on that.

CHAIRPERSON NICHOLS: Okay. Without any further 

comments, I think it's time to move into our next item, 

which though it's not regulatory is one that we do need to 

take action on. That's the South Coast 2012 Air Quality 

Management Plan. 

Obviously, the South Coast faces tremendous 

challenges, but has also made tremendous progress, which I 

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know this Board is aware of and proud of the role that 

we've played in it. 

The document that we're considering here today, 

an Air Quality Management Plan, the 2012 Air Quality 

Management Plan, represents I think some of the most 

innovative thinking anywhere in the world on how to 

address air quality problems. The fact that there are 

elements in it that are specifically required by the Clean 

Air Act and which will be forwarded by us, as is our legal 

responsibility to EPA, as part of the State Implementation 

Plan and also that it contains other elements that are not 

necessarily required by federal law, but which are very 

important to explaining the overall strategy and knitting 

together approaches to more than one pollutant at a time 

is reflective of I think the kind of leadership that's 

been shown in this region for a long time in recognizing 

that we don't just breathe one pollutant at a time and 

that the sources of the major pollutants that we are 

dealing with are, in many cases, exactly the same. So it 

makes more sense from a point of view of government 

efficiency and also general effectiveness if we can 

address all these things in one overarching strategy. 

Enormous resources have gone into the development 

of this plan, not only on the part of the district and our 

staff, but also of course of the community groups and the 

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private sector that participated along the way. And it's 

an important legal milestone that has to be met in terms 

of the region's compliance with federal law as well. 

We, at ARB, are in the unique position of being 

both partners in this effort because many of the measures 

that are included in the plan are measures that we are 

responsible for developing and enforcing. But also as 

approvers and legal enforcers of a plan from time to time 

as well. So it's a constantly active partnership that 

we're involved in here. And it's one that is leading us 

to recognition that we need to keep on working to develop 

even newer strategies all the time. 

So Mr. Goldstene, why don't you begin with this 

presentation? 

EXECUTIVE OFFICER GOLDSTENE: Thank you, Chairman 

Nichols. 

Last month, the South Coast Air District adopted 

its 2012 Air Quality Management Plan, which includes a 

multi-pollutant strategy to reduce PM2.5 and ozone 

pollution. It is designed to satisfy several SIP 

requirements. Specifically, the plan demonstrates 

attainment of the 24-hour PM2.5 standard in 2014, 

demonstrates attainment of the 1-hour ozone standard in 

2022, and includes actions to reduce emissions needed to 

meet the 8-hour ozone standard by developing and 

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implementing advanced technologies. 

ARB staff has worked with district staff 

throughout the SIP development process to provide 

technical information on emissions and reductions for a 

variety of mobile sources that we regulate. 

The technical collaboration also includes air 

quality modeling and data analysis. Staff finds these 

technical elements to be scientifically sound. 

Staff's presentation will describe the SIP 

elements of the AQMP that we are recommending the Board 

approve for submittal to U.S. EPA. 

Scott King of the Planning and Technical Support 

Division will provide the staff presentation. Scott. 

(Thereupon an overhead presentation was 

presented as follows.)

AIR POLLUTION SPECIALIST KING: Thank you, Mr. 

Goldstene. Good morning, Madam Chairman and members of 

the Board. I will present the South Coast Air Quality 

Management District's 2012 Air Quality Management Plan.

--o0o--

AIR POLLUTION SPECIALIST KING: The South Coast 

Air District regularly develops a comprehensive Air 

Quality Management Plan, or AQMP, to address the region's 

air quality needs. 

The AQMP is an integrated planning document that 

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considers multiple pollutants, including PM2.5 and ozone, 

toxics, and greenhouse gases. And under state law, the 

AQMP is the region's portion of the State Implementation 

Plan, or SIP. 

The 2012 AQMP would amend the California State 

Implementation Plan to address three health-based national 

ambient air quality standard by: 

1. Demonstrating attainment of the 24 hour PM2.5 

standard by 2014. 

2. Demonstrating attainment of the 1-hour ozone 

standard by 2022; 

And 3. Identifying measures and actions to 

fulfill federally-approved 8-hour ozone SIP commitments to 

achieve emission reductions from advanced technologies.

--o0o--

AIR POLLUTION SPECIALIST KING: The South Coast 

Air Quality Management District Board approved the 2012 

AQMP on December 7th, 2012. ARB staff has reviewed the 

AQMP and finds it meets the requirements of the Clean Air 

Act. 

Therefore, staff is proposing the Board approve 

the 2012 AQMP and direct the Executive Officer to submit 

the plan to U.S. EPA as a revision to the California SIP. 

--o0o--

AIR POLLUTION SPECIALIST KING: The next series 

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of slides provide some background information on the 

region's air quality trends and how the 2012 AQMP control 

strategy and attainment demonstrations build on the 

region's existing SIPs.

--o0o--

AIR POLLUTION SPECIALIST KING: The South Coast 

air basin is home to approximately half of California's 

population. The population growth, warm climate, and 

robust economy, along with the air basin's complex 

terrain, create conditions that have historically led to 

unhealthy air quality with high ozone levels in the summer 

and high fine particulate matter, PM2.5, concentrations in 

the late fall and winter. 

Never the less, due to the control programs being 

implemented today by ARB and the district, large parts of 

the basin now meet federal standards for PM2.5 and ozone. 

And by 2014, the entire basin is expected to meet 

both the annual PM2.5 standard of 15 micrograms per cubic 

meter set in 1997 and the 24-hour PM2.5 standard of 35 

micrograms per cubic meter set in 2006. 

Meeting the ozone standard will be a greater 

challenge, requiring advanced new technologies and the 

time to deploy them. 

--o0o--

AIR POLLUTION SPECIALIST KING: This slide 

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illustrates the improvement in 24-hour PM2.5 levels 

between 2001 and 2011. It shows design values, which are 

based on measured pollution levels at monitoring stations 

throughout the basin. 

In 2001, every monitoring site in the South Coast 

violated the PM2.5 24-hour standard of 35 micrograms per 

per cubic meter. 

You can see that by 2011 nearly the entire area 

met the standard, with the exception of a single 

monitoring site at Mira Loma in Riverside County. That is 

the Orange colored area in the middle of the map. The 

PM2.5 portion of the AQMP focuses on the last increment of 

reductions needed to bring this area into attainment.

--o0o--

AIR POLLUTION SPECIALIST KING: This slide 

illustrates that 1-hour ozone concentrations in the South 

Coast air basin have also improved markedly. Today, 81 

percent of the South Coast population lives in areas that 

meet the 1-hour standard, compared with two percent in 

1990. 

By 2011, Orange County and the major portions of 

Los Angeles and Riverside Counties attain the standard. 

Further, there are relatively few days that 

exceed the standard. In 2011, there were 16 exceedance 

days in the South Coast air basin, down from 131 days in 

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1990. The worst site, Crest Line, had eight days over the 

standard. 

Although U.S. EPA has replaced the 1-hour 

standard with the 8-hour standard, some planning 

requirements remain. That is why a 1-hour ozone 

attainment demonstration is included in the 2012 AQMP.

--o0o--

AIR POLLUTION SPECIALIST KING: This slide 

provides a similar comparison for the 8-hour ozone 

standard. Like 1-hour concentrations, the improvement in 

8-hour ozone design values has also occurred basin-wide 

between 1990 and 2011. 

On average, the decrease in 8-hour ozone levels 

at all monitors is over 40 percent. As with the 1-hour 

standard, San Bernardino County and portions of the Santa 

Clarita Valley stand out as areas that continue to exceed 

the standard. 

For the 8-hour standard, most of Riverside County 

also has design values above the level of the standard. 

To give you a sense of the stringency of the 

8-hour standard, I said on the last slide that in 2011 

there were 16 exceedance days of the 1-hour standard. 

That compares to 71 days in the same year for the 8-hour 

standard.

--o0o--

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AIR POLLUTION SPECIALIST KING: Moving onto the 

2012 AQMP strategy. Since much of the air quality 

improvements over the past few decades demonstrated in the 

last slides can be credited to the implementation of 

California's comprehensive air pollution control programs, 

the 2012 AQMP carries forward the control strategies and 

commitments in the SIPs adopted by the district and ARB in 

2007. 

U.S. EPA approved these SIPs in 2011 and 2012. 

The AQMP adds new district measures to ensure attainment 

of the 24-hour PM2.5 standard by 2014. 

For ozone, the plan identifies measures and 

actions that ARB and the district are undertaking to 

identify and implement advanced technologies and address 

the long-term strategy commitment approved by U.S. EPA. 

And as all SIPs must, the AQMP includes other 

mandatory elements, which I will address later in this 

presentation.

--o0o--

AIR POLLUTION SPECIALIST KING: Since the 2007 

SIP is also central to the 2012 AQMP, the next few slides 

review the control strategy and implementation of the 2007 

SIP. 

The core strategy in the 2007 SIP reduces 

emissions from diesel powered vehicles and equipment. It 

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relied on new engine standards and rules to accelerate 

fleet turnover so benefits of the new engines could be 

realized sooner. 

Since 2007, the Board adopted regulations that 

accelerate the cleanup of commercial trucks, off-road 

construction and mining equipment, and freight transport 

equipment used at ports and rail yards. 

The Board also adopted controls on consumer 

products which are sources of ozone-forming volatile 

organic compounds. 

To ensure passenger vehicles remain as clean as 

possible, the California Bureau of Automotive Repair 

strengthened the Smog Check Program by including diesel 

vehicles, tightening cut points, and requiring inspection 

of evaporative emission control systems.

--o0o--

AIR POLLUTION SPECIALIST KING: This chart 

illustrates the projected reductions of NOx in the south 

coast over time from ARB's adopted diesel regulations for 

on-road sources. It includes the benefits of rules to 

reduce emissions from trucks, buses, drayage trucks, 

utility and waste haul fleets. As seen by the arrows, 

implementation of these rules is being phased in over 

several years.

--o0o--

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AIR POLLUTION SPECIALIST KING: Complimentary to 

ARB's work implementing measures from the 2007 SIP, the 

district adopted and is implementing local measures from 

the 2007 AQMP. 

They address: Wood burning sources, SOX reclaim, 

stationary source upgrades, solvent and lubricants, 

architectural coatings, evaporative emissions, green waste 

composting operations, ovens, dryers and furnaces and the 

SOON program.

--o0o--

AIR POLLUTION SPECIALIST KING: The 2007 SIP 

included a federally-approved commitment to achieve 

emission reductions to meet the 8-hour ozone standard in 

2023 from advanced technology as provided by the Clean Air 

Ac section 182(e)(5). 

There are also several important multi-agency 

efforts underway. As part of the effort to meet this 

commitment, in 2008, ARB, US EPA, and the South Coast and 

San Joaquin Valley Air Districts signed a Memorandum of 

Agreement establishing the Clean Air Technology 

Initiative, with the purpose of evaluating innovative 

technologies that have the potential to reduce emissions. 

Funding assistance for this effort came through 

California's Assembly Bill 118, which established ARB and 

CEC incentive programs with the goal to foster advanced 

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clean technologies for vehicles and fuels they use. 

Locally, the South Coast Air District has also 

the technology advancement program to explore advanced 

technologies that could reduce emissions from sources 

within its boundaries.

--o0o--

AIR POLLUTION SPECIALIST KING: The remaining 

slides in my presentation address the 2012 AQMP in terms 

of meeting Federal Clean Air Act requirements for an 

approvable SIP.

--o0o--

AIR POLLUTION SPECIALIST KING: Most importantly, 

the 2012 AQMP demonstrates attainment for the 24-hour 

PM2.5 standard. 

As I just discussed, most of the reductions come 

from the implementation of the 2007 SIP. However, 

additional reductions are needed to meet the 2014 

deadline. 

To achieve this last increment, the new 2012 AQMP 

strategy reduce emissions on episodic high PM2.5 days that 

exceed the standard. These reductions come from the 

enhancement of existing programs to curtail emissions from 

wood burning and prescribed open burning. Benefits from 

these measures, in addition to projected reductions from 

ongoing incentive programs, provide the last increment of 

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reductions necessary for attainment by 2014.

--o0o--

AIR POLLUTION SPECIALIST KING: Now turning to 

the 1-hour ozone standard. 

U.S. EPA first adopted the 1-hour ozone standard 

of 0.12 parts per million in 1979. 

In 2005, U.S. EPA revoked the 1-hour ozone 

standard and replaced it with the more stringent 8-hour 

standard. Recently, however, courts have ruled that 

states will need to meet certain 1-hour standard 

requirements, including an attainment demonstration. 

U.S. EPA is now requiring an attainment 

demonstration for the 1-hour standard showing attainment 

by 2022 in the South Coast. 

To meet this requirement, the district included a 

1-hour demonstration in the 2012 AQMP that is consistent 

with U.S. EPA guidance and demonstrates attainment of the 

1-hour standard by 2022. The control strategy for the 

1-hour standard is the same as the control strategy for 

the 8-hour standard. 

--o0o--

AIR POLLUTION SPECIALIST KING: The 2007 SIP 

includes reduction from the development and use and 

advanced zero and near-zero emission technologies. To 

meet the 8-hour ozone standard in 2023, the advanced 

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technology provision of the Act, Section 182(e)(5), 

recognizes the further need for development and deployment 

of new technologies in regions with the most severe ozone 

air quality problems. 

The Clean Air Act Section 182(e)(5) provision is 

only available to areas classified as extreme. 

To meet the 182(e)(5) commitment in the 2007 SIP, 

the 2012 AQMP measures identifies actions to reduce mobile 

source emissions through programs to accelerate the 

penetration and deployment of partial zero emission and 

zero emission vehicles and to accelerate retirement of 

older gasoline and diesel powered vehicles. 

The 2012 AQMP also lays out actions for the 

deployment of zero and near zero technologies for freight 

transport related sources, including on and off-road 

vehicles and equipment, locomotives, cargo handling 

equipment, commercial harbor craft, oceangoing vessels, 

and aircraft engines.

--o0o--

AIR POLLUTION SPECIALIST KING: In addition to 

the core requirements for a control strategy and 

attainment demonstration, the Clean Air Act specifies 

submittal of other components, including an emission 

inventory, a reasonably available control measures 

analysis, contingency measures, vehicle miles traveled 

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offset demonstrations, and transportation conformity 

budgets. The 2012 AQMP includes all of these necessary 

components, fulfilling the requirements of the Act.

--o0o--

AIR POLLUTION SPECIALIST KING: ARB staff 

recommends that the Board approve the South Coast Air 

District Air Quality Management Plan as a revision to the 

California SIP with attainment demonstrations for the 

24-hour PM2.5 standard by 2014 and the 1-hour ozone 

standard by 2022. 

That concludes my presentation. Thank you.

CHAIRPERSON NICHOLS: Thank you very much. 

I think we should go to the witnesses, unless we 

have any question. We have a number of people that signed 

up to speak. 

I'm going to ask we have two representatives here 

from the South Coast, Barbara Baird and Elaine Chang. And 

last time we did one of these, yesterday, in fact, we 

deferred the speakers from the local air district until 

the end so that they could respond to any comments that 

came up along the way, as well as to their presentation. 

Would that be acceptable to you? It's not a terribly long 

list. Is that okay? All right. I see nodding out there. 

Good. 

Let's start with Spencer Richley and then Bill 

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Quinn and Lee Wallace. 

MR. RICHLEY: Good morning, Chairman Nichols and 

Board. 

My name is Spencer Richley. I'm from Clean 

Energy. We are a natural gas vehicle fueling company. 

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

on this plan. In the first draft of the AQMP, it was 

heavily focused on zero emission vehicle technologies, in 

all applications, from light to heavy-duty vehicles mainly 

focusing on battery electric and hydrogen fuel cell. This 

was much like the Vision for Clean Air document. It was 

clear that the Vision document had a large influence on 

the AQMP. 

However, Clean Energy and many others submitted 

comments to the AQMD it needed to include a broad array of 

fuels, like natural gas, which provides great reductions 

in NOx, PM, and greenhouse gas emissions. 

The staff did a great job in processing and 

responding to the comments, and it was clear they put in a 

lot of hard work into doing this. 

The final product of the AQMP now includes a wide 

range of alternative fuels like natural gas. And Clean 

Energy is in full support of the final document in its 

current form. And we look forward to the same changes to 

be made in the Vision document. Thank you.

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CHAIRPERSON NICHOLS: Thank you very much. 

Mr. Quinn. 

MR. QUINN: Good morning, Chairman Nichols and 

members of the Board. 

My name is Bill Quinn. I'm the Vice President of 

CCEEB, the California Council for Environmental and 

Economic Balance. 

I'm here today to recommend your approval of the 

2012 South Coast AQMP. During much of last year, we spent 

considerable time working with the South Coast staff to 

seek clarification and gain a better understanding of the 

various components of the plan and potential impact it 

would have on our members. 

Our greatest focus dealt with how the plan would 

address the NOx reclaim program. We explained to the AQMD 

Board and it staff the extreme importance to provide 

facilities with as much certainty as possible to allow 

them to more accurately plan for capital investment 

expenditures necessary to meet their reclaim obligations. 

From early in the AQMP development process, we 

expressed our concern of having multiple rulemakings with 

unknown shaves to the NOx reclaim program. 

Our members recognize their obligation to reduce 

emissions, but again we ask the AQMD for some certainty to 

plan accordingly. We believe the plan before you today 

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will go a long way to provide the needed certainty to 

reclaim facilities. While the plan still includes a 

reclaim contingency measure for PM2.5, we're both hopeful 

and confident the basin will reach PM2.5 attainment 

without triggering this provision. 

Most significant to our members, the plan 

contains clarifying language stating it is the district's 

intent to perform a thorough analysis in 2013 and '14 to 

be used as a reclaim shave that will be part of the 2015 

AQMP for ozone. With this clarifying language added to 

the plan, we supported adoption by the South Coast 

Governing Board and we do the same with you today. Thank 

you very much.

CHAIRPERSON NICHOLS: Thank you. 

Lee Wallace, and then Harvey Eder. 

MR. WALLACE: My name is Lee Wallace. I'm from 

Southern California Gas. And I filed my testimony with 

you electronically. I understand we don't have an 

overhead projector, but I had three slides there I will 

just describe. 

First of all, we also work with your staff on the 

Vision document. And we looked at what the data showed, 

which is that it is relatively easier for the State to get 

its California CO2 emissions down to the level that is 

necessary for attaining the 2050 goal. But the associated 

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NOx emission reductions are still not enough and not low 

enough to get to the attainment levels that are needed in 

2023 and 2032 under the EPA 8-hour standard. 

So the South Coast, in particular, needs more 

emission reductions a lot sooner than the rest of the 

state. And I can show you the chart. It is a line that 

goes almost straight down, it looks like. So what we are 

suggesting is that planning here has to rely on existing 

technologies and a multi-technology approach. 

The staff and the AQMP took a novel approach at 

defining near zero emissions, and they opened the door to 

multi-technology approaches by saying, start with 

technologies that can go along a path that will get you to 

zero emission technology options. 

In my testimony, I provided just a handful of 

examples of new natural gas truck technologies that are 

going to be even cleaner than the ones that are currently 

available. If we adopt a strategy of this path approach 

starting with these even cleaner natural gas technologies, 

then adopt parts of a strategy which will use such things 

as hybridization, even further emission reductions, blends 

of CNG and hydrogen and other innovations that the private 

sector can come up with, we can keep that progress going 

further down to get to zero emission transportation 

options. 

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We, at the gas company, have met with South 

Coast, CARB. And last week, we met with EPA Region 9 

discussing this. We're going to be putting together more 

information and getting back with your staff about this. 

We look forward to talking to you further about 

this. But we think that this is the right way to go to 

meet the demand for earlier emission reductions that this 

district must have in order to reach the 2023 and 2032 

ozone attainment standards. 

Thank you very much. And we do support the 

adoption of the plan.

CHAIRPERSON NICHOLS: That's great. Thanks. 

BOARD MEMBER LOVERIDGE: Madam Chair.

CHAIRPERSON NICHOLS: Sorry. Question. 

BOARD MEMBER LOVERIDGE: No question. This is my 

18th year of sitting here, and also my 18th year of 

listening to Lee Wallace. I just wanted to say that he 

has been a good champion of the Southern California Gas 

Company. But he's also been -- his comments have been 

clear and he has synergrated his comments with what I 

think are in the public interest. He's an example in my 

judgment of an outstanding participant to these kinds of 

hearings. I just want to acknowledge and thank him. 

MR. WALLACE: Thank you. We want to express our 

great appreciation for all you've given to this region and 

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your work nationally. So we look forward to continuing to 

work with you.

CHAIRPERSON NICHOLS: Thank you. Thanks very 

much. You're right though about Lee and his role in 

particular. He has been a stalwart in these efforts over 

many years. 

Timothy Serie from the American Coatings 

Association. 

MR. EDER: I'm Harvey Eder. 

CHAIRPERSON NICHOLS: I'm sorry. Excuse me. I 

called you first. I apologize. Go ahead. 

MR. EDER: I'm Harvey Eder. I'm speaking for 

myself and for the Public Solar Power Coalition. 

What's needed both from the district and the 

State is immediate total solar conversion plan. And this 

was not done in the 2012 Air Quality Management Plan by 

the district. It's not utilizing the Clean Air Act's 

182(e)(5) and other parts of the Act. We should be using 

the best available control technology, not reasonably 

available control technology, even LAER lowest achievable 

emission rates. 

The cost of solar has gone down considerably. 

It's gone down about 75 percent since '06 and continues to 

go down. 

Also, interest rates are now lower than they have 

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been almost ever. And this greatly effects the cost of 

installing solar. 

Most of the systems that are going now with 

photovoltaics are third-party financed. And the people 

that are installing the systems are saving money and 

reducing emissions. This includes criteria emissions, 

toxic emissions, and greenhouse gases. So this needs to 

be looked at. Needs to be implemented. And I'm talking 

in opposition to the plan. This is something that's got 

to be dealt with now, not waiting for -- could be done in 

the next five to ten years. And I don't think the State 

or the district is doing their job and not implementing 

it. It should be considered as part of the Scoping Plan 

review and whatever else you do on that. And there is 

consideration of litigation. Thank you.

CHAIRPERSON NICHOLS: Thank you. 

Now Timothy Serie and then Mike Freeman. 

MR. SERIE: Thank you, Madam Chair, and members 

of the Board. We appreciate the opportunity to provide 

comment here today. 

My name is Tim Serie, and I'm here on behalf of 

the American Coatings Association. 

And first, we'd just like to acknowledge the 

South Coast Air Quality Management District staff and 

Governing Board for their tremendous work on the Air 

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Quality Management Plan and for considering and responding 

to many of our comments. However, we still have a number 

of significant lingering concerns regarding the plan that 

have yet to be addressed. 

Our chief concern is a lack of justification for 

some of the continued VOC reductions as a part of the 

California's ozone attainment goals. And in particular, 

the VOC reductions for coatings and associated solvents 

contained in CTS 01, 02 and 03. We ask that these 

provisions be removed from the California SIP. 

And in particular for architectural coatings, for 

CTS 01, even though the paint and coatings industry has 

strived to drastically reduce the VOC from its coating 

products, it continues to be a target for further 

reductions. 

From 2002 to 2014, the industry will have reduced 

the VOC content of its products by 70 percent, which is a 

severe drop and well below the district's estimated 

targets. 

And now in the Air Quality Management Plan, there 

is a further two to four tons per day reduction target, 

which is another 25 percent reduction to the VOC 

inventory. And the district is seeking to eliminate a 

critical compliance option referred to as the small 

container exemption, which has been a part of the 

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regulations since their inception. So we believe it's 

time to stop targeting architectural coatings and look for 

further reductions from other sources. 

And we will continue to work with the South Coast 

Air Quality Management District on all these regulations, 

but we ask that CTS 01, CTS 02, and CTS 03 be removed from 

the California SIP. Thank you.

CHAIRPERSON NICHOLS: Thank you. 

Mr. Freeman and then Chris Pearce. 

MR. FREEMAN: Good morning. My name is Mike 

Freeman. I'm President of the Americas with the WD-40 

company, a company that was born in San Diego, was in San 

Diego for our 60 anniversary year coming up. We do 

business in over 180 countries. Thank you for the 

opportunity to share our perspective and concerns. 

We have a long history of working with ARB and 

other regulatory agencies with the result being clean air 

for all of us, and we want to continue in those efforts. 

We thank and fully support the South Coast 

Governing Board's action to do additional research with 

industry regarding CTS 04 and the LVP topic. 

For the past decade, every ounce of WD-40 sold in 

California and for 49 other states was formulated in full 

compliance of CARB VOC regulations. We figured if it 

brings clean air to California, it should bring clean air 

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to the other 49 states. 

And in addition, every ounce of WD-40 sold in 

California has been assessed a VOC fee, regardless of 

where and how it is used. That was worth about $250,000 

last year. 

Proposed control measures CTS 03 regarding mold 

releases used in manufacturing, not the mold in the walls, 

but mold releases used in manufacturing could put an 

additional set of regulations on WD-40 product that is 

already 100 percent CARB compliant with VOCs. Those new 

regulations use a different VOC definition, a different 

VOC testing methodology, and have a different measure of 

success criteria. 

Based on a very similar regulation that's already 

been past several years ago by South Coast, Rule 1144 that 

will to do with metal working fluids, our experience with 

that, the 100 percent CARB-compliant WD-40 would be banned 

from mold release uses in manufacturing, but only in the 

South Coast Air District. It would be perfectly legal to 

use in all the other air districts. 

So we are just asking you, please, can you help 

stop this regulatory overlap and the market confusion that 

comes from it. WD-40 company requests withdrawal of CTS 

03 from the 2012 Air Quality Management Plan. Thank you 

very much.

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CHAIRPERSON NICHOLS: Okay. Thanks. 

Christopher Pearce and then Bob Hamilton. 

MR. PEARCE: Chairman Nichols and members of the 

Board, thank you for the opportunity to testify today. 

My name is Christopher Pearce. I'm Director of 

Government Relations for the consumer product company SJ 

Johnson and Son. We're a family-owned and managed company 

headquartered in Racine, Wisconsin. We manufacture and 

market a number of consumer products that are regulated by 

ARB for VOC content, including products for home cleaning, 

insect control, air care, and shoe care. And many of 

these products are optimally formulated using low vapor 

pressure VOCs. That's what brings me here today. 

Let me stress SJ Johnson strongly supports the 

important goal of improving air quality for all California 

residents. Working both directly and through our 

association, CSPA, Consumer Specially Products 

Association, we have engaged ARB over the years to develop 

and implement regulatory proposals that have resulted in 

significant VOC emission reductions. And we'll continue 

to work on product advances in our formulations to ensure 

that our products deliver maximum benefits for consumers 

and minimal environmental impacts in California and 

elsewhere. 

In the time I have today, I want to touch briefly 

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on two points. We wish to acknowledge the decision by the 

South Coast to remove the proposed control measure you 

just heard reference to, CTS 04 related to LVP VOCs from 

the 2012 Air Quality Management Plan. We realize that the 

proposal was moderated during the drafting process, but we 

believe that the Board's decision to remove that control 

measure in favor of further evaluating exempt LVP VOCs is 

the right decision and will allow for a thorough review 

and understanding of LVPs impact on emissions and air 

quality. We strongly support that decision and appreciate 

South Coast action in this regard. If the AQMP moves 

forward today, we respectfully request it be without the 

CTS 04 control measure. 

Second, SJ Johnson will be very pleased to 

partner with ARB staff to develop the necessary technical 

information that will allow ARB to accurately access the 

environmental fate and effects of LVP compounds and 

ultimately determine whether the current exemption in the 

consumer products regulation should continue as is or if 

it should be modified. 

Our scientists and formulators have significant 

experience and expertise in this area, and our company 

stands ready to collaborate with ARB on this important 

endeavor. 

On behalf of SC Johnson again thank you for this 

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opportunity to testify, and we look forward to working 

with ARB in the future.

CHAIRPERSON NICHOLS: Thank you. 

Mr. Hamilton and then Doug Fratz. 

MR. HAMILTON: Thank you, Chairman Nichols and 

members of the Board. 

I represent Amway Corporation. We are a 

multi-national corporation that has about $11 billion in 

sales in 2011 and produce a wide variety of consumer 

products. 

Amway has a long history of being interested in 

the environment and has expressed that interest by having 

me allocated as a resource to the participation in 

development of air control measures and technical support 

and have done so for the state of California and ARB and 

with other states, the federal government, and 

internationally, including Canada and Hong Kong. 

This has resulted in a continuity of air quality 

management that has built upon the experience of 

California. And that continuity is extremely valuable in 

that it provides a standard for manufacturers to use in 

developing products. 

I'd like to focus on the CTS 04 and the low vapor 

pressure VOC definition and the consumer products 

exemptions that are associated with the current rule. 

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That was a rule that was developed over two decades ago, 

and it has been relied upon by industry extensively. 

Industry at the time commented -- and in fact, I was a 

co-author of a paper for the RRWG, a Federal Government 

Advisory Group, and ARB also participated as well as South 

Coast -- talking about some of the issues that have been 

recently raised about the LVP exemption. 

We would only state that any change in this rule 

should be done extremely carefully and with due 

deliberation to both the science and the practicality of 

the regulation. It is a regulation that has been relied 

upon extensively. And if there are changes, there ought

to be a careful participation on the part of industry and 

other stakeholders to make sure that all of the issues are 

considered. 

I have been particularly appreciative of ARB and 

South Coast as I have met with them, and I expect that 

they will continue to be open to industry suggestions and 

participation in research projects. And I would like to 

encourage the Board to consider this as the recommendation 

goes forward.

CHAIRPERSON NICHOLS: Okay. 

MR. FRATZ: Good morning, Chairman Nichols and 

members of the Board. 

I'm D. Douglas Fratz, the Vice President of 

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Scientific and Technical Affairs of the Consumer Specialty 

Product Association. And we have submitted written 

comments, but I want to make some observations based on my 

25 years or more working the issues for clean air in 

California, and years that I think have had some success 

and where we've had some good progress in the scientific 

area. While we, of course, oppose and are supportive of 

the removal of CTS 04, we are not -- we are fully vested 

in investigating the scientific issues behind the LVP 

exemption and the issues around it that relate to ozone 

strategies. 

We think that there's an opportunity here with an 

investment of some research efforts and some further 

analysis to revolutionize and expand the toolkit for ozone 

attainment. And a tool kit that needs to be expanded 

because of the challenges we're going to face meeting 

newer clean air standards in the future. 

So we are looking forward to this. In fact 

already have started and engaged in it. We met yesterday 

with the South Coast scientists. Had a group of industry 

scientists across the associations. My colleague, Dr. 

Bennett, did a full presentation of what we know today. 

And we had a full discussion of what we think the research 

opportunities are. And in a few weeks, we're going to do 

the same with your ARB staff, and we're going to go over 

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and hopefully come up with a joint research effort. 

We think that there's a -- we have spent over 

20 years and a billion dollars in our industry working 

towards clean air. And we want to make sure that as we go 

forward that we know that we are getting the most 

effective strategies to meet the clean air standards. And 

I appreciate the chance to talk to you.

CHAIRPERSON NICHOLS: Thank you. 

Doug Raymond and then Greg Johnson and Chris 

Shimoda. 

MR. RAYMOND: Good morning, Madam Chair, members 

of the Board. 

My name is Doug Raymond. I'm here representing 

the National Aerosol Association, Stoner, Incorporated, 

WD-40, the Blaster Company, Radiator Specialty Company, 

Spray Products, the CRC Company, and the WMR company. 

We support the South Coast decision to remove the 

draft provision CTS 04 on the lower vapor pressure 

substances from the AQMP. 

We also support the concept of additional 

research on the LVP substances. 

Related to this, CARB regulates the consumer 

products industry through the consumer product regulation. 

We are very concerned with the staff's current proposal 

that will be brought to you in July to modify the low 

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vapor pressure substance definition before the critical 

studies can be done. 

We respectfully request that this Board direct 

staff to not make any changes to the low vapor pressure 

substance definition before those studies can be carried 

out. Thank you very much.

CHAIRPERSON NICHOLS: Thank you. 

Greg Johnson. 

MR. JOHNSON: Thank you for this opportunity, 

Chairman Nichols and members of the Board. My previous 

colleagues covered most of the points I was going to talk 

about, so I'll shorten this up quite a bit. 

I work for the Sherwin-Williams Company. We've 

spent the last 20-plus years working with ARB and the 

South Coast to try to improve our products for the sole 

purpose of improving air quality. 

The other companies that you've heard speak 

before me have also been engaged in those endeavors. And 

there are quite a few other companies here today that I 

would like to have stand just so you can see how important 

these issues are to us. 

We didn't think it was necessary for them all to 

testify. 

CHAIRPERSON NICHOLS: Thank you. Thanks for 

being here. I was wondering who all those folks were. 

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Now I know. 

MR. JOHNSON: We believe we're sort of at a 

crossroads. The science now shows clearly that NOx is 

more important in the ozone equation than VOCs. And we've 

spent a lot of money and time, over 20 years, reducing 

VOCs. And we're now to the point where it is diminishing 

returns. High cost, very little, if any, benefit to the 

air quality for further VOC reductions. 

And just to reiterate the point that Mr. Raymond 

just made, the ARB staff is now considering a measure that 

would eliminate the exemption for low vapor pressure VOCs 

from a category of products. 

The LVPs, it's questionable if they play any role 

in ozone formation, and they certainly are less important 

than the average VOCs. So the study that has been 

requested by the South Coast Board, we fully support that. 

And our industry intends to commit any time and resources 

necessary to further that study so that we can understand 

before we go forward. 

So I would also reiterate that we would request 

the Board to please direct the staff to table that measure 

on LVPs until the science reaches a point where we can 

make an informed decision. Thank you.

CHAIRPERSON NICHOLS: Thank you. 

We also have here Chris Shimoda from California 

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Trucking and Jim Stewart. And then we'll hear from the 

district. Is Chris here? No. All right. Then Jim. 

MR. STEWART: So I'm Jim Stewart, Co-Chair of the 

Energy Climate Committee for Sierra Club California. And 

also an inner-city resident of the city of Los Angeles and 

breathing our polluted air here. 

And the issue that we have to bring before your 

attention is the huge black box. And of course the black 

box is referred to as the technologies that we need you, 

CARB, to implement as soon as possible. 

But what's inside -- the pollution that's inside 

the black box is very clear. It's on Figure 4.2 in the 

plan that the South Coast has submitted to you and the 

biggest one in terms of -- well, the issue is is that 

there are 370 tons per day now, and we need to get to 110 

tons per day of the NOx by 2023. 260 tons down -- wow. 

How are you going to do it? 

The issue is that the biggest contributor to that 

are the heavy duty diesel trucks, as you know. And from 

our perspective, you failed to control that emissions. 

And it's time for CARB to stand up and say, okay, let's 

close this black box. Can we do it sooner than 2023? Our 

lawyers say that maybe you can't even use a black box to 

meet the 1-hour ozone standard. That was passed back 

in -- promulgated back in 1979. We're supposed to wait 

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now 43 years for the attainment of that? This is a 

travesty. I mean, the South Coast has done the best job 

they can in terms of ratcheting down the stationary 

sources, and CARB has failed to control the on-road and 

off-road vehicles. 

So it's time for you to step up and bring us 

clean air. It's your job. Do it. Thank you.

CHAIRPERSON NICHOLS: Mr. Stewart, before you 

leave the podium there, did you see the first presentation 

this morning? Were you here for the opening? 

MR. STEWART: I was. I looked very impressive, 

didn't it.

CHAIRPERSON NICHOLS: No. That's not what I'm 

asking. I'm asking you, did you notice the events that 

are scheduled in April coming up just around the corner 

now? Joint technology conference between AQMD and ARB on 

zero emission freight and the Haagen-Smit Symposium coming 

up in May, be there or be square. 

MR. STEWART: We're going to be there. We need 

those technologies. And thank you for your leadership on 

that. Let's close it up.

CHAIRPERSON NICHOLS: Good. Thanks. Okay. Now 

to the district, Ms. Chang and Ms. Baird, if you would 

come forward, whatever order you arranged. And I don't 

know if you want to respond, but I would suggest you do 

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respond to the specific requests that you heard. Thanks. 

MS. CHANG: First of all, good morning, 

Chairwoman Nichols and members of the Board. I would like 

to first thank you for holding the hearing down here and 

the opportunity to address you today. 

Before I respond to the specific comments, I want 

to concur with your staff presentation that we did make 

great strides toward meeting the PM2.5 standards. In 

fact, our preliminary data indicates that we are hitting 

the annual and 24-hour PM2.5 throughout entire basin 2012. 

We understand we need three years of clean data to declare 

victory, but we believe we're well on our way to get 

there. 

Yes, ozone standards remain our biggest 

challenge. For that effort, we're take kicking off our 

first 2012 AQMP Advisory Group meeting to initiate the 

public process next week, and we are looking forward to 

continue working with your staff. Also participate in 

various events you outlined in this year. 

With respect to the need for the VOC emission 

reductions, I would just say that in our modeling 

analysis, yes, we're NOx heavy. But we still need some 

concurrent very modest VOC emission reductions. 

Therefore, we only committed about six tons reduction in 

this one. 

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It's evident in our modeling analysis that if we 

don't have concurrent VOC emission reductions, we're going 

to simply shift our hot spot from Crest Line today to 

western region. It's already showing in the 2012 AQMP our 

highest ozone area by 2023 with the current program will 

shift it to Glendora. So we don't want to be after the 

fact chasing the hot spot. So we do need to have some 

modest VOC emission reduction. We're going to work with 

our stakeholders and the State Air Resources Board staff 

to design a program in a very common sense and reasonable 

manner to move forward. 

With that, on behalf of the district, I urge you 

to approve the 2012 plan.

CHAIRPERSON NICHOLS: Thank you. 

MS. BAIRD: Good morning, Chairman Nichols, 

members of the Governing Board, and staff. 

I'd like to address specifically a couple of 

comments that were made by representatives of the 

architectural coatings industry and the WD-40 argument 

regarding the mold release compounds measures. 

Basically, the liens address the need for VOC 

generally. With respect to architectural coatings, the 

gentleman suggested it's time to look at other sources and 

not at architectural coatings. 

As your Board probably knows, however, 

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architectural coatings notwithstanding having made great 

progress still remain the largest source of VOC emissions 

within the authority of the South Coast district. So we 

still need the modest reductions that Elaine has described 

from that industry. 

With respect to the measure for mold release 

compounds -- I think that illustrates that we are looking 

at other sources beyond just architectural coatings. The 

gentleman was concerned that there was duplicative 

regulation because WD-40 is regulated as a consumer 

product and it is also used as a mold release compound. 

For many years, our staff and your legal staff 

have concurred that the district may adopt regulations for 

VOC containing products that are used in industrial 

applications, as would be the case for the mold release 

compounds, even though they may also be a consumer product 

that is regulated within the consumer product regulations. 

So we believe that we need to go forward with that. It's 

not being used as a consumer product when it's being used 

in the industrial application. We have other examples, 

such as our solvent regulations, which establish this 

precedent of legal concurrence between your agency and 

ours. 

And finally, just want to note that we have 

already removed from the plan the measure that was to seek 

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to change the LVP exemption. Your staff has agreed with 

our staff to conduct research into that issue and 

determine what changes are appropriate. 

Along with this, I would urge you to make sure to 

adopt the 1-hour ozone standard plan. The reason is there 

is currently litigation in which the environmentalists are 

arguing that we can't use the district's internal bank of 

offsets, which we used for essential public sources and 

other exempt sources because we don't have an approved 

1-hour plan. And although we disagree with that legal 

argument, we would like to moot out that argument by 

having you Board approve the plan as soon as possible and 

forward it onto EPA. Thank you, and I would be happy to 

answer any questions.

CHAIRPERSON NICHOLS: Thank you, Ms. Baird. 

The draft resolution that we have in front of us 

does call for us to approve both. 

MS. BAIRD: Yes.

CHAIRPERSON NICHOLS: So I think that would be 

the next order of business. We could have a motion for 

approval. 

BOARD MEMBER LOVERIDGE: So moved. 

BOARD MEMBER DE LA TORRE: Second. 

BOARD MEMBER BERG: Madam Chair. 

CHAIRPERSON NICHOLS: Yes. 

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BOARD MEMBER BERG: I'm going to recuse myself 

from this vote. We've had quite a few people testifying 

specifically asking this Board to remove some coatings 

regulations. Being President of a coatings manufacturing 

company, I think it is appropriate for me to recuse 

myself.

CHAIRPERSON NICHOLS: I understand. And we will 

accept that decision on your part. Thank you. 

Okay. So we have a motion and a second. Is 

there any additional discussion or questions of staff 

before we move on this? 

BOARD MEMBER RIORDAN: Madam Chair, may I just 

ask one question of staff? 

Would you concur with the counsel from the South 

Coast that the WD-40 issue is as they stated? 

DEPUTY EXECUTIVE OFFICER TERRY: Yes. We've had 

a number of meetings, including with our legal staff, to 

distinguish between these products being used in an 

industrial setting in large volumes, as opposed to what 

are typically very small container consumer products. 

BOARD MEMBER RIORDAN: Thank you.

CHAIRPERSON NICHOLS: Okay. Any other -- yes, 

Mayor Loveridge. 

BOARD MEMBER LOVERIDGE: Well, before I vote, 

just a couple of brief kind of big picture comments. But 

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one minor one is that this is the identification I guess 

of monitoring stations, one being Mira Loma, is that Mira 

Loma is now one of the four million incorporated cities in 

Riverside County. It's the Jurupa Valley. Most all 

monitoring stations seem to be identified by the city. I 

think that it would be appropriate that the Mira Loma name 

be changed to what is now the name of that city, Jurupa 

Valley.

CHAIRPERSON NICHOLS: I think we can just do 

that. I don't think we have to do anything formal. We 

just start calling it by another name. 

BOARD MEMBER LOVERIDGE: Mayor Dan Welders once 

made a comment about Southern California as being the most 

complex and diverse social, economic, and political 

society in the history of mankind. And I thought it is a 

defensible, defensible premise. 

And I say that because you look at the number of 

speakers who are here today, it really is quite 

remarkable. It's only 15 speakers. And I don't think 

that's because this is not a very important plan 

establishing priorities and emphasis. But it speaks well 

of the outreach, and the, I think, sitting down at the 

table and identifying accepting that there is a problem 

and trying to figure out the best solutions. 

So I just want to -- I think if we do this, I 

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want to acknowledge the good work of the South Coast and 

this matter of outreach. 

And the last is obviously sort of self-serving. 

As you look at what has taken place over the last 

ten years, both for PM2.5 and ozone on Table 6, 7, and 8, 

it is remarkable how much change is taking place in ten 

years. And it gives you kind of hope that ten years from 

now whoever is sitting up here at the dias will see a 

similar chart with better numbers even than what we have 

here. 

So I'm honored to be able to have a chance to 

make a motion to approve what I think is a constructive 

and important plan that the South Coast has taken broad 

and received general endorsement of. 

DEPUTY EXECUTIVE OFFICER TERRY: Chairman 

Nichols, I'm sorry to interrupt. We had a very minor 

wording correction in the Resolution that counsel for the 

district requested. So the Board could just delegate to 

the Executive Officer to make the minor clarification in 

the resolution.

CHAIRPERSON NICHOLS: I'm a lawyer, so I want to 

know what it is. 

DEPUTY EXECUTIVE OFFICER TERRY: Oh, okay. 

Absolutely. 

EXECUTIVE OFFICER GOLDSTENE: I want to know what 

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it is, too. 

DEPUTY EXECUTIVE OFFICER TERRY: It has to do 

with which contingency measures are being referenced. So 

this will be, I hope, our page number six on the 

resolution, the fourth whereas.

CHAIRPERSON NICHOLS: Section 182(e)(5) measures. 

DEPUTY EXECUTIVE OFFICER TERRY: I'm going to 

have Kurt Karperos read it because it's his handwriting. 

ASSISTANT DIVISION CHIEF KARPEROS: It's a 

finding that relates to the background about the 

contingency measures in the approved SIP. 

So whereas Section 182(e)(5) contingency measures 

in the 2012 AQMP, we would change the reference in 2012 

AQMO to read "approved SIP meet," and the rest of the 

whereas would follow. 

It's a finding that the contingency measures that 

we've already adopted, EPA approved, meet the letter of 

the law.

CHAIRPERSON NICHOLS: Got it. 

BOARD MEMBER RIORDAN: I'll second the motion.

CHAIRPERSON NICHOLS: I just have one final 

comment. I know I really probably shouldn't do this. But 

I was taken by the comment from the gentleman who wanted 

us to go to the 100 percent solar plan and the need to 

move in that direction. 

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And I just wanted to say on behalf of the state 

of California that we have a very aggressive plan in this 

state for moving all forms of renewables, including solar, 

both base load and distributed generation. And although 

we certainly haven't reached the limit of what's possible, 

it's becoming very clear that there is a need for some 

phase-in as we do this in order to accommodate things like 

the distribution system and reliability of the grid and 

the ability to integrate not only the renewables, but also 

maximum efficiency, which is really our number one 

resource when it comes to meeting our state's needs for 

energy, both in residential and business applications. 

So lest anybody think that this AQMP is the 

state's only energy plan or the only thing that's going on 

with respect to renewables, I feel like on behalf of my 

administration I need to at least say a word to correct 

that, this impression. 

So without further ado, if there is nobody who 

wants to do a role call vote, could we just agree we will 

vote all in favor please say aye. 

(Ayes) 

CHAIRPERSON NICHOLS: Any opposed? Or 

abstentions? We have one recusal. 

If not, the AQMP is unanimously adopted. And 

thanks and congratulations to the South Coast.

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CHAIRPERSON NICHOLS: We have another regulatory 

item, which is adoption of regulations to amend fuel test 

procedures. 

We are now going to be considering some 

regulations, as I mentioned, to amend fuel test 

procedures. 

The Board has, from time to time, changed the 

test methods that are specified in our fuel regulations. 

And while these are very technical changes, they are 

extremely important to the people who are regulated as 

well as to air quality as a whole. We've over the years 

provided new test methods for enforcing regulations and 

reflected improvements in existing test methods for 

measuring the physical and chemical properties of fuels. 

At this time, I'm going to ask Mr. Goldstene to 

introduce this current set of proposed amendments. 

EXECUTIVE OFFICER GOLDSTENE: Thank you, Chairman 

Nichols. 

In 1999, the Board approved California Phase III 

reformulated gasoline regulations prohibiting the use of 

NTBE in California and establishing standards for 

denatured ethanol intended for blending with gasoline. 

Today's proposed amendments to the fuel regulations serve 

to address short comings in the analytical test methods 

used to enforce these regulations. 

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The presentation will include background 

information on how ARB's fuel enforcement program 

operates. 

I'm now going to ask Judson Cohen of our 

Monitoring and Laboratory Division to present the item. 

Judson. 

(Thereupon an overhead presentation was 

presented as follows.)

MR. COHEN: Thank you, Mr. Goldstene. Good 

morning, Chairman and members of the Board. 

The previous item discussed the significant 

reductions in ozone that California has seen in recent 

years. ARB's clean fuels program was an important factor 

in achieving these reductions. Due to the continuing 

importance of clean fuels in improving air quality, the 

associated regulations are periodically updated. 

I'm going to be presenting proposed changes to 

several of the fuel test methods specified in ARB's fuel 

regulations.

--o0o--

MR. COHEN: Here's a brief outline of today's 

presentation. I'll begin with some background information 

on ARB's fuel testing program, what we test and why test 

it. 

I'll then discuss the new fuel specifications 

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that were added with the Phase III reformulated gasoline 

regulations. 

After that, I'll present the new test methods 

being proposed, followed by the test methods we're 

recommending to update to their latest versions. 

I'll conclude with a discussion of the costs of 

the proposals and a statement of the staff's 

recommendation.

--o0o--

MR. COHEN: The millions of vehicles and people 

in the state, combined with the state's unique climate and 

geography, have dictated our wholistic approach to 

reducing air pollution from the vehicles themselves, the 

vehicle miles traveled, and the fuels used. Accordingly, 

ARB has had the most advanced motor vehicle fuels program 

in the US since the early 1970s. Our reformulated 

gasoline and ultra-low sulfur diesel fuel regulations are 

among the most effective programs we have, yielding 

substantial reductions in criteria pollutant and toxic 

emissions. 

Our clean fuels programs substantially improve 

the state's air quality and provide core contributions to 

regional attainment strategies because they are more 

stringent than the federal requirements on fuels.

--o0o--

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MR. COHEN: As noted, California has unique air 

quality needs and the Legislature has given ARB statutory 

authority to adopt fuel specifications in order to reduce 

harmful emissions from vehicles. 

Moreover, the Federal Clean Air Act acknowledges 

California's authority to set standards, which are 

separate from and more protective than federal standards. 

Accordingly, ARB has established gasoline and 

diesel fuel standards that are cleaner than those 

promulgated by U.S. EPA, covering more fuel parameters or 

having tighter specifications. This requires the use of 

different test methods, which are chosen and developed 

after consultation with stakeholders. 

In addition to providing ARB with a mechanism for 

enforcing its fuels regulations, the test methods also 

make it possible for the refiners themselves to check 

their own compliance status.

--o0o--

MR. COHEN: This is a list of the primary 

chemical and physical properties that ARB regulates for 

gasoline and diesel fuel. The chemical compounds limited 

by the regulations can occur due to either their presence 

in crude oil or their production during the refining 

process, or they can be deliberately added in order to 

improve fuel quality. 

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For each of the regulated properties, the main 

associated air pollutants are listed. 

Next, I would like to discuss ARB's fuel 

enforcement program.

--o0o--

MR. COHEN: ARB has a strong program for the 

enforcement of its fuel regulations. Inspectors from the 

enforcement division obtain samples of gasoline, denatured 

ethanol and diesel fuel throughout the state. The samples 

are analyzed for regulated chemical and physical 

properties by the staff of the monitoring and laboratory 

divisions. 

The purpose of the fuel regulations, as well as 

the testing which enforces them, is the reduction of 

harmful air emissions. ARB's fuel testing program does 

not determine the quality of the fuel or its energy 

content.

--o0o--

MR. COHEN: ARB's enforcement division samples 

gasoline and diesel fuel at all points within the 

production and distribution system. Inspectors can enter 

any refinery or terminal at any time, with no advance 

warning, and obtain samples of any fuel currently being 

offered for sale. Enforcement division staff also obtain 

samples from service stations and ships delivering 

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imported fuels at California ports.

--o0o--

MR. COHEN: In most cases, fuel samples are 

analyzed the same day they are obtained. This rapid 

turn-around time depends on ARB's mobile fuel analysis 

laboratory, pictured here. The mobile lab is a completely 

self-sufficient chemistry laboratory. It carries enough 

supplies to operate for weeks without restocking and 

provides its own electricity and cooling. 

Same-day analysis is crucial for keeping 

non-complying fuels out of the marketplace. When a 

non-complying fuel is discovered, its source can be 

notified immediately and its sale halted, minimizing any 

excess air emissions. Additionally, a duplicate sample 

can be obtained in order to confirm the violation, while 

the suspect material is still available at its source.

--o0o--

MR. COHEN: This is the interior of the mobile 

laboratory. MLD chemists are shown here analyzing 

gasoline and diesel samples obtained earlier that day, 

determining whether the fuels comply with the State's 

regulations.

--o0o--

MR. COHEN: When the Phase III reformulated 

gasoline regulations were adopted, several of the new 

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specifications presented analytical challenges for 

compliance determination. 

The maximum allowable levels for prohibited 

oxygenates, including MTBE, in gasoline were below what 

the existing test method could measure. 

In addition, no test methods existed for 

measuring benzene, total aromatics or olefins in denatured 

ethanol. The regulations were written to specify testing 

for these compounds in the denaturant before it is added 

to the ethanol. 

However, neither ARB enforcement, nor downstream 

purchasers of the denatured ethanol have access to the 

denaturant. As a result, there is no mechanism for 

determining whether denatured ethanol in California 

complies with the regulations.

--o0o--

MR. COHEN: In response to these challenges, ARB 

staff has worked with ASTM International, instrument 

manufacturers, and the Western States Petroleum 

Association to develop new test methods capable of 

determining compliance with the new Phase III 

specifications. 

Staff is proposing to designate a new test method 

for trace oxygenates, which is sufficiently sensitive for 

enforcement of the Phase III RFG regulations. 

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Staff is also proposing to add an option to test 

denatured ethanol with the other two new methods. Ethanol 

producers would still be able to analyze the denaturant 

for benzene total aromatics and olefins. 

ARB enforcement and downstream users would be 

able to use the new test methods in order to determine 

whether a batch of denatured ethanol complies with the 

regulations.

--o0o--

MR. COHEN: Staff is proposing to update the four 

existing test methods shown to their most recent published 

versions. Three of these test methods are for gasoline, 

the last is for diesel fuel. The updated versions contain 

various improvements to make their use easier.

--o0o--

MR. COHEN: Staff is proposing to remove one of 

the adopted test methods for sulfur in gasoline, 

D2322-94. This test method cannot measure sulfur at 

concentrations below ten parts per million. And most 

gasoline in California contains less than ten parts per 

million of sulfur. 

ARB's enforcement division stopped using this 

method in 2000 and recent discussions with WSPA members 

indicated that no California refiner is currently using 

it. Its removal would leave ASTM D5453-93 as the adopted 

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test method for sulfur in gasoline.

--o0o--

MR. COHEN: Only one of the proposed new test 

methods is expected to create any costs. The cost of the 

instrument for measuring trace oxygenates is $86,000 

including five years' worth of maintenance and upkeep. 

Across all 14 gasoline refineries in California, the total 

five year cost comes out to $1.2 million. And at current 

levels of gasoline production, that works out to about 

two-thousandths of a cent per gallon. 

Since ethanol producers are not expected to use 

the proposed new ethanol test methods, no costs are 

associated with their adoption. There is no additional 

cost associated with any of the test methods being updated 

to their most recent versions. 

Production levels of California fuels should not 

be affected by staff's proposal, since no changes to the 

fuel specifications are required.

--o0o--

MR. COHEN: The low carbon fuel standard 

co-exists with and does not supercede or otherwise modify 

ARB's other fuel regulations, including the test methods 

used to implement those other regulations. 

The industry subject to the LCFS program comply 

primarily via a reporting tool, in which they report the 

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volumes and carbon intensities of the fuels they provide 

and have to meet other specified recordkeeping and 

reporting requirements. Because the LCFS is based on 

reducing a fuel's life cycle, or wells to wheels, 

greenhouse gas emissions, no analytical testing of the 

fuel itself can measure those life cycle emissions. 

Therefore, no analytical testing of the fuel is used in 

support of the LCFS program.

--o0o--

MR. COHEN: Staff will propose two 15-day 

changes. 

First, the refining industry has requested a 

defined effective date since at least up with terminal 

operator will require the use of the new trace oxygenates 

test method as soon as the regulation takes effect. Staff 

will propose a specific date or two months after filing 

with the Secretary of State, whichever comes later. 

Second, the proposed ethanol test methods are 

intended to be an optional alternative to testing the 

denaturant. Staff will change the language of the 

proposed regulation to make this cleaner.

--o0o--

MR. COHEN: In conclusion, staff recommends that 

the Board adopt a resolution approving the proposed fuel 

test method amendments. Thank you for your time and 

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attention. And I would be happy to answer any questions 

you may have.

CHAIRPERSON NICHOLS: Thank you. That was an 

excellent presentation on a very difficult topic. That 

was very clear. I also like the picture of the mobile 

testing lab. That was very cool. Okay. 

We have one witness who signed up to testify on 

this item, Jim Stewart from the Sierra Club. Oh, it was 

not for this item. Okay. We have no one who signed up to 

testify on this item. 

Any other comments? Dr. Sperling. 

BOARD MEMBER SPERLING: Thinking a little forward 

with a lot of new fuels coming into the fuel stream, you 

know, slight variations we're talking about drop-in -- 

so-called drop in biofuels that have attributes very 

similar to gasoline and diesel. Are these test methods 

anticipating all that? Is there an issue here that -- and 

kind of associated with that also is EPA keeps trying to 

push E15 as a fuel. So as the fuel mix changes, are we 

all over this? 

MR. COHEN: Well, we're certainly trying. Those 

test methods we develop are through ASTM International. I 

do try to attend these meetings every six months and keep 

them aware of California's needs. And of course, there's 

representatives from EPA apprising them of the federal 

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needs. 

That being said, new test methods are difficult 

and slow to produce. So this is an area where we and I 

are working very hard. 

But as you can see from the fact that it's 

ten years after the Phase III regulations were put in and 

now we finally have test methods. So it can be a slow 

process. 

DEPUTY EXECUTIVE OFFICER COREY: This is Richard 

Corey. 

I wanted to add to that, because with respect to 

alternative diesel, both bio and renewable diesel, staff 

are working on some standards for those fuels that they 

plan to return to the Board late in 2013 and are working 

with the lab in terms of establishing ATSM methods or the 

need for some supplemental methods.

CHAIRPERSON NICHOLS: So we're not exactly in a 

position to anticipate everything new that might be 

happening in the world of fuels. It is a very methodical 

process, which is very important, especially when 

enforcement is at stake. 

But at the same time, given the pace of change 

that you're talking about, you really ought to be thinking 

about whether there's some sort of break through-in 

testing that could go along with the break-throughs in 

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fuels. It sounds like the kind of thing that maybe our 

Research Program should be looking at. 

BOARD MEMBER SPERLING: Brilliant idea.

CHAIRPERSON NICHOLS: I didn't want to put words 

in your mouth, of course. I think that is really 

something we should ask staff to take a look at and come 

back to us as well. 

Okay. Any other comments? Yes, Ms. Berg. 

BOARD MEMBER BERG: After reviewing the written 

testimony, I think that staff is to be congratulated with 

the work with the industry, because you do have very 

strong support for the changes. And that is fabulous. 

The one overriding theme that I am seeing is the 

need for time to be able to adjust equipment, such as GC 

equipment, and also for sufficient transition time. 

Does staff feel that we've had the opportunity to 

address this and that we do have the timing we're 

sensitive to the fact that these things need certainty and 

we've given them that? 

MR. COHEN: Yes. We have actually developed or 

have been thinking about our proposed 15-day changes, 

which we will be putting in formally. And discussions 

with the refining community have indicated that they are 

happy with what we are going to propose. 

BOARD MEMBER BERG: Thank you.

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CHAIRPERSON NICHOLS: Great. Do we have a motion 

to approve the Resolution to adopt this -- I should close 

the record. The record is closed. Okay. Now, a motion 

to approve. 

BOARD MEMBER BERG: So moved. 

BOARD MEMBER SHERRIFFS: Second.

CHAIRPERSON NICHOLS: And second from Dr. 

Sheriffs. 

All in favor say aye. 

(Ayes) 

CHAIRPERSON NICHOLS: Opposition? None. 

No recusals or abstentions. Good. All right. 

We have one last item on today's agenda, which is 

an extremely important item. This is another one that 

we've done before from time to time. 

In 2008, the Board adopted the initial guidelines 

and funding targets to implement Proposition 1B, which is 

a bond funded incentive program for cleaning up the 

freight sector. 

We've awarded more than $500 million in funding 

to local agencies for projects to reduce emissions from 

diesel freight equipment, primarily trucks. 

With the current economy and regulatory deadlines 

approaching, we all appreciate the importance of these 

incentives, and we want to continue to pursue our ability 

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to get funding from new bond sales as the State's economic 

position is also improving. We want to be sure that we're 

present in the bond market and able to capture as much of 

those funds as is appropriate under the authorization. 

So Prop 1B has really been a tremendous success 

in terms of both public health benefits and economic 

stimulus, benefits because the funding has helped 

thousands of business owners to clean up diesel equipment. 

This financial assistance also helps to create and retain 

jobs in California, while supporting businesses that 

design, sell, and install green products here. 

We need to act today to update the program 

guidelines so that we're ready and able to quickly deploy 

the next round of funds. 

One of the hallmarks of this program, I have to 

say -- and this is in the nature of bragging about ARB -- 

is that we have been very efficient at getting the money 

out and doing it for projects that have really withstood 

all questions or audits in terms of their cost 

effectiveness. 

So without further ado, Mr. Goldstene, please 

introduce this item. 

EXECUTIVE OFFICER GOLDSTENE: Thank you, Chairman 

Nichols. 

In this update to the Prop1B Goods Movement 

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Program, we're recommending improvements and modifications 

based on upcoming regulatory deadlines, current economic 

conditions, and experiences gained through implementation 

of the program. 

Prop. 1B has played a critical role in ARB's 

suite of incentive programs by supporting thousands of 

clean diesel projects in the most polluted areas of 

California. 

While Prop 1B compliments other incentive 

efforts, it is unique because funding comes from periodic 

bond sales instead of annual appropriations. The priority 

of the program will continue to be on reducing the diesel 

health risk in communities near freight facilities by 

getting clean equipment into operation. 

However, the focus of the program is shifting 

because regulations such as the truck and bus drayage 

truck rules are currently in effect, there are limited 

opportunities to obtain more early emission reductions. 

Therefore, the program must focus instead on funding 

projects that go beyond regulatory requirements to provide 

extra emission reductions. This includes proposing more 

project choices for hybrid and zero emission technologies 

which will also achieve climate change benefits. 

The proposed updates also incorporate suggested 

improvements that we've heard over the last year from 

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local air districts, ports, truckers, railroads, and 

environmental advocates. These include administrative 

changes to streamline and improve the effectiveness of the 

program. 

Mike Ginty of the Stationary Source Division will 

now provide the staff presentation. Mike. 

(Thereupon an overhead presentation was 

presented as follows.)

AIR RESOURCES ENGINEER GINTY: Thank you, Mr. 

Goldstene. 

Good morning, Chairman Nichols and members of the 

Board. 

Today, I'll be presenting staff's recommendations 

to update the Goods Movement Emission Reduction Program 

guidelines.

--o0o--

AIR RESOURCES ENGINEER GINTY: After a brief 

review of the existing program, I'll highlight the 

progress of the program to date and then summarize the 

proposed changes to the program. 

I'll conclude with staff's recommendation for 

Board action today.

--o0o--

AIR RESOURCES ENGINEER GINTY: In 2006, 

California voters approved Proposition 1B authorizing one 

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billion dollars in bond funding to reduce emissions from 

freight transport in the four priority trade corridors. 

The funds provide incentives to owners of diesel 

equipment to upgrade the cleaner models and reduce the 

health risk related to diesel emissions in 

heavily-impacted communities.

--o0o--

AIR RESOURCES ENGINEER GINTY: The program 

focuses on reducing emissions in four priority trade 

corridors which encompass the most heavily traveled 

regions of the state. 

Program funding is available to owners of 

equipment that operate at least 50 percent of the time 

within these corridors. This slide shows the existing 

trade corridor funding percentages the Board approved in 

2008. We are not recommending changes to the funding 

percentages.

--o0o--

AIR RESOURCES ENGINEER GINTY: The implementing 

statute defines the core requirements of the program. 

First, ARB must adopt guidelines for 

implementation and award grants to qualifying local 

agencies. The local agencies administer the 

implementation of equipment projects. 

Another requirement is that bond funds must be 

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used to achieve early or extra emission reductions, 

compared to what is required by regulation or enforceable 

agreements.

--o0o--

AIR RESOURCES ENGINEER GINTY: The program 

typically pays one-third to one-half of the total project 

cost. The remainder of the matching funds can come from 

the equipment owner, local agency, or federal sources. 

Finally, projects must compete for program 

funding based on emission reductions and cost 

effectiveness.

--o0o--

AIR RESOURCES ENGINEER GINTY: The emission 

reductions achieved with program funding must be early or 

extra in comparison to the regulations shown on this 

slide. 

As we move closer to or pass the compliance dates 

of these regulations, the opportunities for early emission 

reductions diminish. 

Therefore, to continue offering incentives, the 

program will need to shift its focus toward projects that 

achieve extra emission reductions with equipment that is 

cleaner than required by regulations in effect.

--o0o--

AIR RESOURCES ENGINEER GINTY: To administer this 

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program, the Legislature appropriates funding to ARB 

through the State budget. Funding is obtained through 

bond sales administered by the State. 

Next, ARB adopts the program guidelines to define 

how the program will work and to specify eligible 

projects. We then solicit project proposals and the Board 

awards funds to local agencies, like air districts and sea 

ports. 

Finally, the local agencies solicit and evaluate 

applications from equipment owners, and then fund eligible 

projects in a competitive process for each source 

category. 

Of the one billion total, so far this program has 

received approximately $587 million through bond sales.

--o0o--

AIR RESOURCES ENGINEER GINTY: Now I'll discuss 

the progress that ARB and the local agencies have made to 

implement the program.

--o0o--

AIR RESOURCES ENGINEER GINTY: This graph shows 

the distribution for each funding category. So far, over 

80 percent of the project funds have been dedicated to 

cleaning up old diesel trucks, including those used at 

ports and rail yards.

--o0o--

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AIR RESOURCES ENGINEER GINTY: We expect over 

10,700 cleaner truck projects and 37 upgraded ship berths 

funded by the program to be operational by the end of this 

year. 

In addition, most of the 25 low-emission 

locomotives are operational with the rest to be completed 

by next year. 

We estimate that these projects will eliminate 

around five million pounds of particulate matter and over 

130 million pounds of NOx from our California skies over 

their lifetime of five to 15 years.

--o0o--

AIR RESOURCES ENGINEER GINTY: Maintaining 

transparent and accountable project results are a key 

component of the program. 

A new tool is our online database which will soon 

provide program implementation details to the public. 

The database allows access to detailed program 

information that can be filtered by trade corridor, 

legislative district, project category, and a number of 

other details. 

This slide shows a screen shot of the home page.

--o0o--

AIR RESOURCES ENGINEER GINTY: Now let's move 

on to discuss ARB staff recommendation on the updates to 

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the Goods Movement Program guidelines. 

ARB staff released a concept paper and held three 

workshops in the trade corridors in November 2012. Input 

was received at the events in comment letters and during 

follow-up discussions with stakeholders. 

The proposed update to the guidelines 

incorporates many of the suggestions we've heard from 

local agencies, equipment owners, affected industries, and 

environmental advocates.

--o0o--

AIR RESOURCES ENGINEER GINTY: ARB staff is 

proposing to revise two main areas of the program 

guidelines: Project eligibility and program 

administration requirements. 

Each project category was analyzed and staff has 

incorporated the most current information available 

regarding regulatory implementation dates, available 

technologies, and potential project costs. This included 

looking for opportunities to further incentivize zero 

emission and advanced technologies. This proposal also 

includes administrative changes to improve effectiveness 

and expedite the implementation of projects that achieve 

emission reductions.

--o0o--

AIR RESOURCES ENGINEER GINTY: The largest 

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project category in the program is heavy duty diesel 

trucks. The truck and bus and drayage truck rules will 

require that most trucks have a particulate filter within 

the next several years. Therefore, there are 

significantly fewer opportunities to obtain early emission 

reductions from these vehicles. 

Based on this, we see an opportunity to obtain 

additional emission reductions by expanding the 

eligibility to include vehicles without near-term 

replacement requirements, such as class six delivery type 

trucks, and trucks with 2004 to 2006 model year engines. 

Similarly, to ensure a reasonable amount of 

emission reductions are achieved, it has become necessary 

to exclude trucks with 1993 or older engines, increase the 

minimum mileage, and require that replacement trucks must 

meet the model year 2010 emission level. 

Staff is also recommending changes to the truck 

documentation requirements to streamline the 

implementation of projects.

--o0o--

AIR RESOURCES ENGINEER GINTY: Since there are 

now fewer emission reductions available from truck 

projects, staff is also proposing to reduce the funding 

levels for trucks. As a point of comparison, the program 

currently provides $60,000 for a class eight truck, which 

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is a line haul type truck. This change would ensure cost 

effective use of funds as required by the Legislature. 

Although funding would be reduced, these proposed 

amounts would still be able to cover 40 to 60 percent of 

the cost of a truck. Additionally, this would extend 

program funds further by allowing more trucks to 

participate. 

For small and medium truck fleets, we expect that 

loan guarantees will also be available to increase their 

access to finance the remainder of the cost.

--o0o--

AIR RESOURCES ENGINEER GINTY: As the program 

continues to transition to the cleanest engines, we are 

working closely with the AB 118 incentive program to 

enhance the funding opportunities for zero emission 

trucks. Equipment owners could receive the same amount of 

Prop 1B funding as those meeting the 2010 engine standard, 

plus additional AB 118 funding, if available, for choosing 

a zero emission replacement truck. 

The ability to combine Prop 1B and AB 118 funding 

would enhance the incentive for truck owners to switch 

over to zero emission technology. In addition, we are 

proposing that zero emission replacement projects be given 

the highest priority in the competitive process.

--o0o--

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AIR RESOURCES ENGINEER GINTY: Now let's talk 

about opportunities for locomotive projects. 

Locomotives can be in operation for 30 years or 

more. Due to this long life, it's critical to upgrade 

existing locomotives with the cleanest technology to 

maximize the emission reductions achieved in the future. 

Tier 4 locomotive engines are over 90 percent 

cleaner than those with no emission controls and are 

expected to become available in 2015. Since there is an 

opportunity to achieve a significant amount of emission 

reductions in this category, we propose locomotive 

projects in the future be limited to this Tier 4 

technology.

--o0o--

AIR RESOURCES ENGINEER GINTY: In order to 

encourage manufacturers and railroads to accelerate the 

introduction of Tier 4 locomotive engines in California as 

soon as they become commercially available, we are 

proposing that the program pay a greater share of the cost 

along with an added incentive for projects implementation 

in 2015.

--o0o--

AIR RESOURCES ENGINEER GINTY: Let's move on to

discuss ships at berth and cargo handling equipment. For 

ships at berth, it is necessary to revise the eligibility 

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requirements due to the 2014 compliance deadline under the 

at-berth or shore power rule. For cargo handling 

equipment, we are proposing to increase funding for zero 

emission technologies and include a minimum cost 

effectiveness requirement.

--o0o--

AIR RESOURCES ENGINEER GINTY: The Governor 

directed ARB to provide flexibility in reimbursing ports 

for payments on grid-based shore power projects, and this 

has been included. Container and refrigerated cargo ships 

need to begin plugging into shore power in January 2014. 

The berths for these ships already received Prop 1B 

funding awards. The opportunity for extra reductions now 

comes from equipping berths that handle only other types 

of ships with shore power or the bonnet system to capture 

and control emissions. 

Because all the benefits are extra, we are 

proposing that the program offer greater funding for this 

category. 

For rubber tired gantry cranes, funding would be 

increased for zero emission engines, and the program would 

allow reimbursement of infrastructure expenses that supply 

electricity to the equipment.

--o0o--

AIR RESOURCES ENGINEER GINTY: Our final 

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equipment category is commercial harbor craft. Staff is 

proposing to fund only Tier 3 or cleaner engines at 

increased funding levels for this project category and is 

also recommending to extend the operational boundary for 

upgraded vessels further out to sea. ARB staff is also 

recommending a minimum cost effectiveness for this 

category.

--o0o--

AIR RESOURCES ENGINEER GINTY: Staff's proposal 

includes increased funding to align with the higher cost 

of Tier 3 engines and allow a higher funding amount for 

vessels that are not subject to the in-use requirements of 

the harbor craft regulation. 

We are also proposing to fund the installation of 

hybrid power systems in all vessels to reduce both fuel 

consumption and emissions. Funding for a hybrid system 

can be combined with one of the other funding sources.

--o0o--

AIR RESOURCES ENGINEER GINTY: The last revisions 

I'd like to discuss are those to streamline the program 

administration requirements. ARB staff would like to 

thank the air districts for their extensive coordination 

over the last six months in developing and refining the 

proposed modifications to the administrative requirements 

within the guidelines. 

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These changes will streamline implementation of 

the program by reducing documentation and simplifying 

reporting requirements while including robust 

accountability standards. 

The proposal also allows local agencies the 

ability to solicit equipment projects prior to the award 

of grant funds by the Board and thus expedite the process. 

As a result, more truck owners would be eligible for the 

next round of grant funding in 2013.

--o0o--

AIR RESOURCES ENGINEER GINTY: ARB and the local 

agencies are poised to move quickly. If the Board adopts 

the update to the program guidelines, ARB will seek 

funding in the spring bond sale and issue a call for local 

agency project proposals. If funds are received from a 

spring bond sale, the program will move ahead with the 

public process to recommend funding awards for your 

consideration in June.

--o0o--

AIR RESOURCES ENGINEER GINTY: ARB staff 

recommends that the Board adopt Resolution 13-5, the 

attachment to the resolution, which describes additional 

minor clarifications, and the proposed 2013 update to the 

Proposition 1B Goods Movement Program guidelines. 

Staff also requests that the Board establish 

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trucks, locomotives, and the transition to zero emission 

technologies as priorities for upcoming program funding. 

This concludes the staff presentation. Thank 

you, and we'd be happy to answer any questions you may 

have.

CHAIRPERSON NICHOLS: Thanks. 

I didn't see anywhere in the presentation the 

information as to where in terms of the overall 

authorization that's in Prop 1B. So we talked about all 

that's been achieved so far with the bonds that have been 

sold and the grants that have been made. But where do we 

stand with respect to the overall goals of 1B? 

BRANCH CHIEF KITOWSKI: At this point, we have 

expended about 600 million of the one billion dollars. So 

we would expect about another -- we're hopeful for about 

another 150 million in the spring bond sale in that 

ballpark. 

CHAIRPERSON NICHOLS: We're reaching the end of 

this program is the point, really like maybe one more year 

and that would be -- 

BRANCH CHIEF KITOWSKI: In our view, we believe 

this is the penultimate guidelines. And we'll have one 

more coming back to the Board.

CHAIRPERSON NICHOLS: Well, I don't think that's 

inappropriate, given the goals of the program, which is to 

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see the turn over happen. And I think that the timing may 

actually sort of work out well in terms of where you're 

headed with the plans for the next iteration of a clean 

freight program. 

But I just want to flag for people's attention 

that there's going to be a need for major funding for that 

as well. And we should be thinking about how that can 

happen. 

Okay. We have a number of witnesses. Oh, yes. 

Sorry, Dr. Sherriffs. 

BOARD MEMBER SHERRIFFS: If staff could comment 

in terms of the cost effectiveness question. Thinking 

about what we've achieved with, say, the first 600 million 

and what we are looking at achieving with the next 400 

million, if it's there. 

AIR RESOURCES ENGINEER GINTY: Yes, the cost 

effectiveness is not quite as good since we've lost the 

opportunity to get most of the PM reductions on the truck 

projects. And I assume you're talking about trucks 

mostly. And so the reduced funding level allows us to 

keep most of the cost effectiveness that we've previously 

gotten on projects that are being funded right now. 

ASSISTANT DIVISION CHIEF MARVIN: This is Cynthia 

Marvin. 

If I could add to that. Part of the shift we're 

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seeing is right now grants have been going to help fund 

the incremental cost or help aid the incremental cost 

primarily for cleaner trucks to a lesser extent for the 

ships at berth, the shore power projects. 

As we look beyond the current guidelines in front 

of you, as we look at the last increment of funding, the 

last roughly 250 million because we expect that would be 

focused on zero emission technology, there will be again a 

delicate balancing act we will bring to you to say how 

much money does it take to get people to be leaders and 

innovate and jump into that technology ahead of the rest 

of the world. And what then happens in terms of cost 

effectiveness. 

So when we come back to you with the final set of 

guidelines focused on zero emission technology, you'll be 

able to specifically deliberate on how much is it worth to 

get that technology out there and get everyone comfortable 

with it so that we can then look at what's possible in the 

future potentially in terms of regulatory requirements for 

that same technology.

CHAIRPERSON NICHOLS: Yes. Go ahead. 

BOARD MEMBER SHERRIFFS: And also in terms of -- 

thank you for that answer -- the commercial harbor craft, 

it seems like a small -- a very small piece of this whole 

project. And it seems like a very small impact on all the 

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harbor craft that must be out there. Do you want to 

comment on why spend any money there? Do we get branding 

rights on the side of the tugboats? 

BRANCH CHIEF KITOWSKI: I think we have a 

strategy to fund the program moving forward now. 

Harbor craft is one of those -- it is part of 

goods movement. It is a fundamental component. I think 

we need to do everything we can in each of the areas. 

What we've found with this program as we've 

coordinated with other incentive programs, like the Carl 

Moyer program, it was easier for the participants to go 

into the Carl Moyer program rather than to fit into this 

one. And so we have not had a whole lot of applicants for 

that category. 

We've made a few teaks. And basically, this is 

our chance to see if participants do come or not. We've 

made some changes. We think it will provide some more 

pull into the program. If it works, well, great. We'll 

go from there. If it doesn't, I think as you said, we've 

tried.

CHAIRPERSON NICHOLS: Yes, Sandra. 

BOARD MEMBER BERG: Thank you very much. Been a 

great report. And this has been a fabulous program. I 

think that we have a lot to be proud of. I was looking at 

the funding to date. If my memory serves me correctly, 

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didn't we have 200 million on school buses in the Prop 1B 

bond money? 

BRANCH CHIEF KITOWSKI: Yes, the original 

legislation had a billion dollars for the Prop 1B goods 

movement portion and an extra $200 million for school 

buses. That funding is mostly all spent. I think they're 

dealing with some reversions and some funds that came 

back. But for the most part, that was successful in 

replacing the oldest, unsafest school buses, putting clean 

retrofits on those buses. 

BOARD MEMBER BERG: So even though it was a tag 

onto a billion, I always like to take the opportunity to 

remind us that we did take the dirtiest school buses off 

the road and that was also a job well done. Thank you.

CHAIRPERSON NICHOLS: Great. Thanks. 

Okay. Turning to the people who have signed up 

to speak to us here, we'll start with Tim Carmichael 

followed by Mike Watt and Spencer Richley. 

MR. CARMICHAEL: Good morning again, Chairman 

Nichols, members of the Board. 

Tim Carmichael with the California Natural Gas 

Vehicle Coalition. 

Some comments on this important item. 

First, context. I didn't hear the staff share 

with you that this pot of money is actually the largest 

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pot of money that will be given to clean up goods movement 

anywhere in the country this year. It is very, very 

significant. For a long time, our organization has been 

encouraging ARB to modify this program to use the funds to 

get more benefits from, albeit a billion, a limited pot of 

funds. A billion goes quickly, as you have witnessed, and 

do more to support alternative fuels with this pot of 

funding and achieve fuel diversity, fuel security, 

greenhouse gas benefits, and the criteria emission 

reduction benefits that you are proposing to get with this 

program. 

In this round of guideline revisions, we're 

pushing for more money per vehicle. There was some 

discussion of reducing the per truck money to 30,000 

dollars and they bumped that up. That's a good thing. 

And we were pushing for an augmentation for 

alternative fuels and/or a carve out for alternative 

fuels. We're finally some signal to the air districts 

that you want to prioritize alternative fuels. 

The staff proposals increases the funding per 

vehicle, which is good but it's not enough. I'll explain 

why in a second. It augments the funding for zero 

emission vehicles and hybrids. And the problem with this 

is in the goods movement sector, there is limited 

applicability of these technologies today. So you're 

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going to be able to fund some vehicles, but in a limited 

range of applications in the goods movement sector and, in 

our opinion, not get as much benefit as you could with 

those funds if they were available to all fuels more 

broadly. And there is no carve out recommended by the 

staff for alternative fuels. 

The reason why increasing the money per vehicle 

isn't enough to support alternative fuels is that this 

program and the projects that come forward are measured on 

their cost effectiveness. And so you have a diesel truck 

project versus a natural gas truck project, for example. 

Diesel trucks today cost less money per vehicle than 

natural gas trucks. So a proponent for those could ask 

for less money per vehicle and still make their project 

look more -- have their project be more cost effective for 

the evaluators. So going head to head with the same 

amount available per vehicle with no signal that you want 

to prioritize alternative fuels, it's not going to work, 

we don't think. 

And my final comment is staff indicated that you 

are prioritizing zero emission projects in this round of 

funding, which is okay. I get that. But it would be 

wonderful if the Board also said we want to prioritize 

alternative fuel projects ahead of diesel projects.

CHAIRPERSON NICHOLS: Tim, you're in negative 

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time now. You delivered the message. 

MR. CARMICHAEL: My parting message is, Mayor 

Loveridge, it's been a pleasure working with you all these 

years. Thank you.

CHAIRPERSON NICHOLS: Thanks. 

Mr. Watt. 

MR. WATT: Good morning, I guess. Mike Matt, 

Manager of Mobile Source Incentives with the San Diego 

Mobile Air Pollution Control District. 

We've been involved with the program since its 

inception working with ARB staff. And I do want to extend 

my thanks to them in working with us on some of the 

streamlining measures that ended up in this version of the 

guidelines. 

We submitted a comment letter to you guys for 

review. There is one item in particular that I want to 

discuss. It has to do with the requirement for new 

equipment funded under this program to operate at least 90 

percent of the time within the state of California. 

Down in San Diego, we're home to one of the 

busiest border crossing ports in the entire country. And 

one of the priorities outlined in these guidelines is to 

do something to reduce emissions from border crossing 

activities. 

We found that that requirement for new equipment 

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to operate 90 percent of the time within the state has 

been a hindrance to the ability of those border-crossing 

vehicles that take advantage of the funds. What we'd like 

to see is that number reduced to 75 percent, which will 

align with the requirement that existed in these 

guidelines for the existing vehicle, as well as lining up 

with the requirements that already are in place for the 

Carl Moyer program. We feel that will encourage more 

participation from these trucks that operate at the border

and allow us to achieve some additional reductions from 

those vehicles. While maybe not operating as much time in 

California, some of those vehicles are much older and 

dirtier, and we think they could get some significant 

reductions. 

Additionally, those vehicles will still have to 

compete on the cost effectiveness scale with the other 

vehicles. So we're not going to be funding vehicles that 

are less cost effective. 

With that, like I said, we do support these 

guidelines. And we appreciate the way the program has 

worked out. I think we've cleaned up somewhere on the 

order of 300 trucks in San Diego, reducing more than 1200 

tons of emissions. So it's been of great benefit to us so 

far. Thank you.

CHAIRPERSON NICHOLS: Thank you. 

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BOARD MEMBER RIORDAN: Madam Chair, could I just 

ask staff if they want to comment on the request? I had 

not thought about that. And might make good sense. 

BRANCH CHIEF KITOWSKI: Absolutely. And I want 

to echo Mike's comments that we've worked closely with the 

San Diego Districts over the past months and other 

districts as well and working through a variety of 

different streamlining measures. So we really appreciate 

the cooperation of the districts in working with us and 

having a more efficient program. 

With regard to this specific point, the Board may 

remember that during the last guideline changes in 2010, 

they made modifications that would change the minimum 

requirement in California where we were limited to 

100 percent in California previously, and we modified that 

down to 90 percent. 

And the concept behind that, the idea behind that 

flexibility was to allow for various operational 

flexibility. Once in a while, you need to go out of 

state. But fundamentally, these were still California 

vehicles. Their primary use was in California. They may 

need a trip to Las Vegas or Phoenix once a week or 

something like that. But for the most part, they're still 

California vehicles. 

Our concern is a change to 75 percent 

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fundamentally changes the types of vehicles that would be 

coming into this program. Yes, it would bring in more 

vehicles. We think it may bring in a lot more vehicles. 

We're already well subscribed now. Suddenly, it's not 

just an occasional trip out of state. We have vehicles 

that would make regular service to Oregon, Nevada, 

Arizona, and Mexico now pulling into this program. And 

that creates more pressure on the program. We are well 

subscribed to the current level. We thought it was 

appropriate to keep it where it's at.

CHAIRPERSON NICHOLS: Just to follow up on that 

though. If San Diego found itself or we found ourselves 

through some happy circumstance with extra funds, would 

that be an appropriate thing to use funds from this border 

issue in San Diego is obviously fundamental to their 

quality problem. They do have a large border and a lot of 

trucks that go back and forth. That seems like that would 

be something that you would want to give special 

consideration for, even if you weren't changing the whole 

program. 

BRANCH CHIEF KITOWSKI: The difficulty is it's a 

statewide program. We have consistent requirements across 

all districts. And it's an interesting -- it's a 

difficult dynamic to try to carve out a San Diego border 

Mexico issue. I mean, I think we could.

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CHAIRPERSON NICHOLS: I think Cynthia might have 

an idea. 

ASSISTANT DIVISION CHIEF MARVIN: Well, I usually 

like to jump in with the positive and what we can do. 

That's not the case here.

CHAIRPERSON NICHOLS: In that case, I didn't call 

on you. Go ahead. 

ASSISTANT DIVISION CHIEF MARVIN: What I wanted 

to do was just say, you know, we are very interested and 

concerned about what's happening in the border regions in 

both San Diego and Imperial County because we're aware of 

the severity of the pollution there. 

What I wanted to point out was that we are right 

now working through our drayage truck program to get more 

information about the trucks that are making those border 

crossings, where are they coming from and too, what are 

they carrying. 

I think it's important to note for the Board's 

benefit that many of those trucks are carrying goods that 

are destined to or from ports or rail yards. You may 

recall that with the changes that you made to the drayage 

truck rule, those are, by definition, now drayage trucks. 

Even if those trucks themselves don't make it all the way 

to the port or the rail yard, they are subject to the 

accelerated cleanup requirements initiated drayage truck 

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rule. 

So what that means is for all of those trucks, 

even if we were to look at changing this 90 percent, 75 

percent, they wouldn't be eligible because the drayage 

truck rule is nearly fully implemented now. So it's a 

practical consideration.

CHAIRPERSON NICHOLS: Okay. Good point. But 

thank you for raising it and reminding us of the issue. 

Spencer Richley and then Fred Minassian. 

MR. RICHLEY: Good morning again, Chairman 

Nichols and the Board. 

Again, my name is Spencer Richley with Clean 

Energy, and I share similar concerns with Tim Carmichael. 

We're pleased with the fact that Prop 1B funding 

is based on meeting standards, because it makes it 

available not only to diesel, but alternative fuels as 

well. However, in its current form, there is no incentive 

for trucks to use alternative fuels like natural gas, 

which is currently the cleanest fuel available for large 

heavy duty trucks. Because natural gas and diesel are 

certified at the same PM and NOx level, they're viewed in 

the eyes of Prop 1B as the same, essentially. 

Furthermore, applicants receive a higher ranking 

the less money they request. And because natural gas 

trucks have about a $20,000 premium cost over diesel, 

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diesel truck applicants are, therefore, ranked higher than 

natural gas. 

To change this, we believe that greenhouse gases 

should be a factor in ranking applicants because 

California has aggressive greenhouse gas reductions goals 

that need to be met. This would also encourage the use of 

alternative fuels over diesel. 

We also support an optional low NOx standard 

which we understand is being considered but would not be 

put into place until possibly the fall. And there is a 

large chunk of money, about $150 million, which is 

expected from the sale of these bonds in the spring and 

summer that even if he optional low NOx standard was put 

into place, it might be too late. 

Again, as Tim stated, zero emission vehicles 

receive a priority status under Prop 1B, and we ask that 

natural gas also receives a similar higher ranking and/or 

more funding so that there is an incentive to chose 

alternative fuels over diesel. This will maximize the 

benefits from the Prop 1B funding. Thank you.

CHAIRPERSON NICHOLS: Mr. Minassian. 

MR. MINASSIAN: Chairman Nichols, members of the 

Board, good morning. I'm Fred Minassian, the Director of 

Technology Implementation at the South Coast AQMD. 

On behalf of my agency, I would like to thank 

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your staff for having worked closely with us in amending 

and finalizing the proposed Proposition 1B Goods Movement 

Program guidelines. 

We appreciate your staff's consideration of our 

comments, specifically those related to the increased 

grant amount per truck, compared to the initial proposal 

and the simplificiation of some of the reporting 

requirements. 

Our one comment is related to page one of the 

proposed guidelines. It currently states that CARB may 

extend or shorten the obligation and expenditure deadlines 

of the grant funds. We believe the ability to shorten 

this deadline would create uncertainties both for air 

districts and applicants. Thus, we request further 

clarification of the proposed language that the obligation 

and expenditure of the grant funds won't be shortened 

after the excuse of grant agreement between CARB and local 

air districts. 

The South Coast AQMD supports the adoption of the 

proposed Proposition 1B Goods Movement Program guidelines, 

and we look forward to working closely with your staff. 

Thank you.

CHAIRPERSON NICHOLS: Thanks. I think we'll wait 

until the end, and there's going to be some other 

questions probably. Appreciate that. 

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Mr. Palomares. We have your letter also. Thank 

you. 

MR. PALOMARES: You're welcome. Good morning, 

Chairman Nichols and members of the Board. 

My name is Andrew Palomares. I'm the Chief 

Financial Officer for the Port of Hueneme. I'm here on 

behalf of our Port Director Kristin Decas, who is 

traveling on port business and could not be here today. 

We are here today to express our support for the 

proposed guideline amendments related to short power 

projects. The proposed amendments are crucial for the 

Port of Hueneme to successfully implement the shore power 

infrastructure project. Accordingly, reimbursement will 

ensure the port meets its contractual financial 

obligations. 

The port has a $12 million operating budget and 

slightly six million in unrestricted reserves to support 

our critical capital repairs for the port's $63 million 

net capital assets. 

The shore side power for our port is about eleven 

and a half million. Without an early reimbursement plan, 

the port would exhaust its reserves, break our debt 

covenants with our bond debt, and would have to defer our 

critical maintenance projects. 

As a matter of update, we are meeting all of our 

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project milestones. We have ordered equipment, are 

executing construction contracts, and are scheduled to go 

live by January 1st, 2014. 

Our proposed reimbursement plan is also attached 

with our letter of written testimony for your information. 

We'd like to express our gratitude to Chairman 

Nichols for her support. Chairwoman Nichols has made time 

to meet with the port's CEO and learn about our project 

challenges and was open to hear our ideas on how to ensure 

the project's success. 

In addition, the ARB staff has been extremely 

helpful and collaborative. And we are deeply grateful for 

that. 

Thank you all for your leadership on this 

program. This promises to realize significant benefits to 

industry and the environment, my grandchildren. So I'm 

personally grateful. Please accept our letter of support 

from the Port of Hueneme. And thank you for your time.

CHAIRPERSON NICHOLS: Thank you. 

Matt Schrap and then Jim Stewart who seems have 

taken over the old Tim Carmichael role on the person who 

speaks last on every item. 

MR. SCHRAP: Thank you, Madam Chairman and Board 

members. My name is Matt Schrap. I represent Crossroads 

Equipment Lease and Finance, as well as California Fleets 

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Solution, CFS, the Grants and Compliance Division of the 

Velocity Vehicle Group, VVG here in southern California. 

Our organizations have been very supportive of 

the 1B program over the years. And its solicitation 

alone, we are able to help our customers obtain millions 

of dollars in fundings for clean diesel and alternative 

fuel. In fact, of the 900 applications that we submitted 

to the South Coast Air Quality Management District, over 

400 of them were selected for funding. 

Crossroads, the finance company, was able to 

supply over $20 million in residual financing using the 

Cal Cap Program, very successful program from the 

treasurer's office. I know ARB has been very supportive 

over the years. 

We stand before you today in full support of the 

changes to the guidelines, and we look forward to 

continued work with the local districts in upcoming 

solicitations as well as new applicants for these 

programs. 

These improvements are consistent with 

stakeholder feedback from the workshops late last year, 

including suggestions contained in the formally submitted 

comments by Crossroads and California Fleet Solutions from 

November 29th. 

We are especially encouraged by the level of 

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detail committed to the compliance check, the flexibility 

and G WR consideration, lease to own revisions, along with 

the streamlined district requirements pertaining to preand post-inspections, along with other administrative 

considerations, to name a few. 

With monumental enforcement challenges facing ARB 

staff over the next few years, it is of the utmost 

importance the onroad requirements are clearly 

communicated to end users, as well as third parties who 

seek to assist applicants with eligibility requirements. 

We look forward to the upcoming solicitation and 

offer ourselves and our sister divisions any assistance 

that we can provide. 

Thank you for your consideration.

CHAIRPERSON NICHOLS: Thank you. You have a 

minute to spare and you're such a fast talker. It's 

amazing. Okay. 

MR. STEWART: Hi. Jim Stewart representing the 

Sierra Club. And really, I think I can say on behalf of 

the whole environmental and environmental justice 

community, we're certainly thrilled about the prioritizing 

of the diesel locomotives and the people that have been 

suffering so long among those rail yards. And so let's 

keep up that cleaning up that mess there. 

We're also thrilled with the enhanced funding for 

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the zero emission trucks. And I think I need to go toe to 

toe with my former colleague, Tim Carmichael, on this 

natural gas baloney. The issue, as you well know -- and 

if you haven't, I'll be glad to supply you with the 

studies is that the escaping natural gas, especially, of 

course, from the fracking fields, is contributing more to 

global warming than oil or coal even. And if you don't 

believe that, I'll be glad to distribute the recent 

scientific studies that have demolished this myth of 

natural gas being clean. 

So let's -- I mean, it sure does have less PM, 

but it's global warming impacts from the fracking in 

itself as well as, of course, the transportation, as well 

as the leaks are around the system and on the truck are 

not acceptable. 

The question of the subsidy of the cost of the 

trucks is an interesting one, because I don't understand 

why you actually did decide to raise the price. If this 

is such a popular -- we need to get the maximum benefit 

out of every dollar. Right? We're down to the last 400 

million here. And I'm disappointed actually that the cost 

per truck has gone up. And I'm hoping that there's some 

way that you can use this cost effectiveness and keep that 

down. 

And also, I don't know anything about the 

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regulations relative to the ARB's issue on this thing, but 

is there a way of getting cost benefit from true 

greenhouse gas reductions included? I mean, we're all 

trying desperately to make the AB 32 goals. If we can get 

to these zero emissions, let's do it. 

So thank you very much. Good program.

CHAIRPERSON NICHOLS: Thank you for your 

comments. 

I'm certainly not going to get into the middle of 

the natural gas debate. 

I do want to say something though about sort of 

the principles behind this program. And staff may correct 

me or want to add something as far as the amount of 

subsidy per vehicle. 

But having been involved in this program since 

I've been at ARB, I've tried to keep in mind a couple of 

basic principles, which we don't always articulate. One 

is that Proposition 1B was a bond. And a bond means that 

the people of the state of California voted on it. There 

is a contract with the people. And if you spend money not 

in accordance with what the bond said, it's illegal. 

In this case, the purpose behind this was very 

clearly to deal with air pollution related to heavy duty 

transportation. The whole purpose of this bond was to 

facilitate -- I mean, it's part of the bigger bond act, 

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but it was really a Goods Movement Program for the state 

of California. And this wonderful chunk of money was set 

aside to deal with the terrible pollution problems around 

ports, rail yards, and associated with the goods movement 

system in general. 

So, you know, despite the desire to tack on our 

other goals relevant to climate, which, you know, 

obviously is an overarching part of what we do, we've 

implemented this program in a way that just focused on 

cost effectiveness for tons of toxic contaminants taken 

out of the air and not -- and resisted the temptation to 

use it for broader purposes. I know that's frustrating to 

our friends in the natural gas industry and probably to 

other alternative fuels people that are not here 

represented today. 

But it just seems to me that our obligation was 

to do as much as we could in as short a time as possible 

to make air quality better for the people who are 

subjected to these particular sources. So that's really 

kind of the underlining principle of this whole thing as 

it has played out. 

In terms of how much we're giving per truck, 

perhaps Mike or someone else you might want to just 

explain why we've gotten to the point of being willing to 

put more money into each one. 

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BRANCH CHIEF KITOWSKI: Certainly. We'll start 

with the base line of previous solicitations. We offered 

$60,000 for a line haul type truck. It was a conventional 

amount. 

As we're moving forward, as we mentioned during 

the presentation, we're losing about half of emission 

benefits. It shouldn't really say losing because the 

truck and bus rule is being implemented. The State is 

getting those benefits. That's all a positive thing. It 

is a good thing. But there's less emission reductions as 

we're buying emission reductions with this funding, 

there's less emission reductions for us to buy. 

Since we're losing half, a little less than that, 

our official proposal was to cut that dollar amount in 

half at about $30,000. As we started talking to the 

stakeholders and looking at the dynamics of what a new 

truck will cost, a used truck will cost, we felt that 

might be a little severe. 

We also have the benefit of looking at other 

factors, such as in 2013, there will be new on-board 

diagnostic requirements coming up for all new trucks. And 

so we feel if they're buying a new truck, the State will 

have greater assurance that those trucks will be cleaner 

through the life of their entire usage. And so there were 

some other factors like that that we thought, okay, we can 

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incrementally bump this up. And we came to the proposed 

levels that you see before you.

CHAIRPERSON NICHOLS: Okay. Thank you for that. 

I see that you've distributed some additional minor 

changes and corrections in the Resolution that was before 

us. 

BOARD MEMBER BERG: Chairman Nichols, may I make 

one comment? This is Board Member Berg. 

Just following up, I did have some extensive 

conversations with staff on the dollar amount. And one 

thing is is that the stakeholders that are available are 

the small businesses, small trucks. We still can get some 

early emissions from them. And I felt pretty strongly 

that we wanted to make sure that the dollar amount was 

fair, since usually when we get to the tail end these 

programs, they're the ones that it's their turn. So I 

would support that.

CHAIRPERSON NICHOLS: Good point. Okay. Do you 

want to go over whatever changes you're proposing to the 

resolution? 

BRANCH CHIEF KITOWSKI: It turned out the 

original resolution that was in front of the Board 

attachment was left out. We were able to swap out those 

attachments. So what you see in front of us is the final 

version. And the change was simply giving staff the 

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flexibility to make minor corrections, fix typos, and make 

changes.

CHAIRPERSON NICHOLS: Do you want to address the 

one question that was raised by South Coast? 

BRANCH CHIEF KITOWSKI: Yes. Thank you. 

We've been working with South Coast as well as 

San Diego who had a similar question about that, about the 

length of time and that the State allowed for them to 

finish up grants and contracts. And we're supportive of 

the language that Mr. Minassian relayed. We will work 

with them and just finalizing it and incorporating it into 

the guidelines lines.

CHAIRPERSON NICHOLS: Okay. Great. Any other 

Board member questions or comments? If not, can we get a 

motion on the resolution? 

BOARD MEMBER RIORDAN: I move approval, Madam 

Chairman. 

BOARD MEMBER BALMES: I second. 

CHAIRPERSON NICHOLS: All in favor, please say 

aye. 

(Ayes) 

CHAIRPERSON NICHOLS: Any opposed? Any 

abstentions? Great. Good work. It's nice to have this 

done. 

Before we adjourn, we do have one public comment, 

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one person who's asked to address us in general if he's 

still here, Mr. Eder. Wanted to come back as I understand 

it. Yes. There you are. 

MR. EDER: Thank you. 

I'd like to agree with what the gentleman from 

the Sierra Club just said about natural gas. 

Also, I'd like to incorporate into your record by 

reference everything that happened at the district in 

reference to their plan. This was done in writing and 

submitted to you. There were three separate written 

submissions. 

About 12 or 14 years ago, I came before you and 

talked -- you had a ZEV plan. And Alan Lloyd was here 

with CARB then, and he had been with the district before 

that. And I got to know him a little bit there. And did 

testify before you about using zero emission vehicles, 

solar electric vehicles, could be solar hydrogen as well 

with electrolysis. 

But there are quite a bit of people that are 

doing this. I know you weren't portrayed or the old CARB 

was not portrayed very favorably in "Who Killed the 

Electric Car?" And there is a new movie out. And one of 

the fellows that was involved in that movie now sells 

Leafs. And he said he's had 80,000 miles of solar powered 

travel in his vehicle, and there is a lot of other people 

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that are doing this. And it's something that should be 

looked at. Stationary sources with solar and the 

connection with mobile sources, which you basically 

regulate, except for fleets. 

So I think this should really be looked at. And 

the connection should be made there. I think it's really 

important. 

Back to natural gas, there are toxics, and there 

are particulate matter and the ultrafines and natural gas 

that aren't even being looked at now. And this has to be 

considered as well when compared to solar. By solar I 

mean the sun makes the wind blow, the water flow, and the 

plants grow. It's the engine of our ecosystem. It's the 

way of the world works. Thank you.

CHAIRPERSON NICHOLS: Thank you. 

That is the conclusion of the public comment 

list. But it's not quite the end of our meeting because 

now we turn to the moment we have not been waiting for, 

which is an opportunity to hear a few words from our 

departing Board member, Mayor Loveridge. 

BOARD MEMBER LOVERIDGE: Chairman, thank you. 

This really is my last time to comment. It's 

time to say thank you and kudos to the Chair, to the 

Board, to the staff, and to offer my reflections and 

highlights of making a difference over the past eight 

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years. 

I was appointed in 2004. The Board has become 

importantly a world leader in addressing climate change as 

well as continuing the innovations and reducing 

smog-forming emissions. 

And my comments really that we tend to see at 

Board meetings, it's meeting after meeting. And this is 

trying to take a step back and see what has happened over 

the some eight years that I have been on the Board. 

2004, the Board adopted the first passenger 

vehicle regulations to reduce greenhouse gas emissions. 

This is obviously a response to Senator Pavely's 

legislation and a prelude to the enactment of AB 32 in 

2006. 

Before the climate program, I think to highlight 

the actions taken to improve air quality here in the South 

Coast and in all our communities that are highly impacted 

by diesel pollution, during my first years on the Board we 

were very active in adopting a number of regulations to 

implement ARB's Diesel Risk Reduction Plan. These 

regulations were focused on reducing diesel particulate 

matter to improve air quality where people live. Remember 

these Board meetings as being highly contentious in terms 

of public comment and participation. 

It's also important to reduce NOx emissions in 

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order to meet the air quality standards for PM2.5 and 

ozone. As a result, this Board adopted a series of major 

rules for diesel engines, both on- and off-road covered 

private trucks, buses, and construction fleets, public and 

utility fleets, refrigeration and trucks, restrictions on 

truck idling, on-board diagnostic systems for trucks, Tier 

4 standards for new off-road engines. 

This Board also adopted a plan with a special 

focus in reducing emissions from freight transport. A 

number of rules were adopted to address port-related 

emission, including controls for cargo handling equipment, 

a rule specific to drayage trucks, cleaner fuels for 

locomotives, oceangoing vessels, harbor crafts, emission 

controls for ships at berth. We recognize we're a part of 

the south coast SIP, as well as ARB's Goods Movement Plan. 

Taken in combination, these regulations have 

helped the South Coast remain on track to meet 2014 

federal deadlines for particulate pollution as well as 

progress on requirements for ozone standards. The diesel 

regulations along with Prop 1 bond and other incentives, 

which we've heard discussions today, reduce monitored 

diesel pollution by estimated over 50 percent in our 

harbor communities, 50 percent in our harbor communities. 

And it's clear there are more reductions to follow. 

2007, we adopted a major rule to improve indoor 

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air quality in homes and schools. And this air toxic 

control measure put tight limits on the cancer-causing 

chemicals formaldehyde and building materials. 

Let me just move to the climate program beginning 

with the Scoping Plan that ARB adopted in 2008. I've 

looked at a lot of State plans. And I think the Scoping 

Plan is the most impressive policy document, State 

document that I've read. 

ARB was obviously assigned to develop the game 

plan for the goal of AB returning to 1990 emissions levels 

by 2020. You know, this involved evaluating the sources 

of greenhouse gases in ways even more complex than 

conventional air pollution, the term life cycle emissions 

introduced to our thinking, energy and transportation, 

systems rather than individual facility emissions, and to 

be considered. And what AB 32 did is challenge us to have 

a new way of analyzing and responding. 

SB 375 then followed, requiring ARB to set 

greenhouse gas reduction targets for regional 

transportation plans for the development of sustainable 

community strategies. The success of this program 

depended on effective outreach of particularly CARB staff, 

other MPOs. 

And I think this Board's effort to reduce the 

SCAG's issues was particularly important. The Regional 

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Transportation Plan and the Sustainable Community Strategy 

Plan by everyone who has observed this and participated in 

it in the South Coast said it was the most important plan 

that's been adopted. 

But what's interesting, it was done unanimously 

from right to left, from BIA to even to Jim probably said 

good words about this. 

The implementation of AB 32 Scoping Plan requires 

a range of new activities new to the Board and staff, both 

technical and policy. And new challenging issues were 

raised. The Board deliberated a number of regulations to 

reduce greenhouse gases, including advanced clean cars, 

low carbon fuel, emission reporting, cap and trade, 

reporting regulations, and greenhouse gases. 

Each of these efforts required partnerships with 

other agencies and the academy, as well as outreach to 

stakeholder groups. Participation -- and Mary, it must 

have been interesting. The Western Climate Initiative is 

one example of the scope of new activities undertaken to 

engage with others on the climate issue. 

But all of these Board actions and activities 

that helped build the foundation and I think the word 

important here is transformation of our energy and 

transportation systems, which are necessary to meet our 

air quality and climate goals. 

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CARB's leadership has been essential to focusing 

attention on the possibilities for the future. Our 

strength has been on advancing technology, and that's a 

key going forward. 

The new challenge -- and I would emphasize 

encompasses more than engineering and technology-forcing. 

It's the social context of change and the potential of 

economic development become equally important. 

As regions implement 375, there is a real 

opportunity for individuals, groups, and cities to engage 

in the broad discussion of urban form. Quality of life 

begins with our homes and jobs and communities, but also 

relies on investment and energy and transportation systems 

to serve our local, regional, and global economy. 

Sort of in summary, you think about the last 

eight years. We have made a difference. See it in the 

numbers. This region's air quality continues to improve. 

And ARB has played a major role through its regulations 

and mobile sources, fuels, consumer products, toxic air 

contaminates. ARB's leadership on climate is there for 

the world to see, take measure of, and to share. 

Finally, going forward, the Board must continue 

to develop and nurture the many partnerships which have 

been identified this past morning that are necessary to 

support our air quality and climate goals. 

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And finally, as a representative of the South 

Coast District, it was my opportunity and honor to serve 

for the past eight years. Thank you to the best in the 

world Chair, supurb Board, and outstanding staff. Thank 

you. 

(Applause)

CHAIRPERSON NICHOLS: Last month, we presented 

Mayor Loveridge with our Haagen-Smit award, which is the 

Board's most prestigious award. It's our only award, 

actually. And we were very pleased to do so. 

But you're not going to escape without a little 

further embarrassment or decoration for your walls. So I 

have two items that I would like to present to you today. 

One is just a small plaque from the Air Resources Board 

itself with the seal of California on it recognizing your 

contribution. 

(Applause)

CHAIRPERSON NICHOLS: And then the other, which 

was somebody took the initiative to frame it, but I guess 

you don't have to keep it in its frame, is a letter from 

our Governor Jerry Brown, who remembers your career. As 

you know, he was around for a lot of it, too. And I 

wanted to share some thoughts with you as well. 

BOARD MEMBER LOVERIDGE: Thank you.

CHAIRPERSON NICHOLS: That's it. We are 

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adjourned. 

(Whereupon the Air Resources Board meeting

adjourned at 12:13 PM)

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CERTIFICATE OF REPORTER

I, TIFFANY C. KRAFT, a Certified Shorthand 

Reporter of the State of California, and Registered 

Professional Reporter, do hereby certify:

That I am a disinterested person herein; that the 

foregoing hearing was reported in shorthand by me, 

Tiffany C. Kraft, a Certified Shorthand Reporter of the 

State of California, and thereafter transcribed into 

typewriting.

I further certify that I am not of counsel or 

attorney for any of the parties to said hearing nor in any 

way interested in the outcome of said hearing.

IN WITNESS WHEREOF, I have hereunto set my hand 

this 8th day of February, 2013.

 

TIFFANY C. KRAFT, CSR, RPR

Certified Shorthand Reporter

License No. 12277 

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