BOARD MEETING

STATE OF CALIFORNIA

AIR RESOURCES BOARD

JOE SERNA, JR. BUILDING

CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY

CENTRAL VALLEY AUDITORIUM, SECOND FLOOR

1001 I STREET

SACRAMENTO, CALIFORNIA

THURSDAY, DECEMBER 12, 2002

9:00 A.M.

JAMES F. PETERS, CSR, RPR

CERTIFIED SHORTHAND REPORTER

LICENSE NUMBER 10063

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345ii

APPEARANCES

BOARD MEMBERS

Dr. Allan Lloyd, Chairperson

Mr. Joseph Calhoun

Ms. Dorene D'Adamo

Supervisor Mark DeSaulnier

Professor Hugh Friedman

Mr. Matthew McKinnon

Supervisor Barbara Patrick

Mrs. Barbara Riordan

Supervisor Ron Roberts

STAFF

Mr. Mike Kenny, Executive Officer

Mr. Tom Cackette, Deputy Executive Officer

Mr. Mike Scheible, Deputy Executive Officer

Ms. Lynn Terry, Deputy Executive Officer

Ms. Kathleen Walsh, General Counsel

Mr. Steve Albu, Chief, Engineering Studies Branch

Mr. Robert Barham, Assistant Chief, Staitonary Source

Division

Mr. Richard D. Bode, Chief, Health and Exposure Assessment

Branch

Mr. Steve Brisby, Manager, Fuels Section

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345iii

APPEARANCES CONTINUED

STAFF CONTINUED

Mr. Carl Brown, Manager, Stationary Source Enforcement

Section

Ms. Sara Carter, Air Resources Engineer

Ms. Cindy Castronovo, Air Pollution Specialist

Ms. Barbara Cook, Air Pollution Specialist

Mr. Bart Croes, P.E., Chief, Research Division

Mr. Bob Cross, Chief, Mobile Source Control Division

Mr. Joe Guerrero, Manager, Engineering Evaluation Section

Mr. Paul Hughes, Manager, Low-Emission Vehicle

Implementation Section

Ms. Tracy Hysong

Diane Johnston, Dr. Staff Counsel, Legal Affairs

Dr. Norman Kado, Ph.D, Research Division

Mr. Robert Leonard, Chief, Stationary Source Enforcement

Branch

Mr. George Lew, Chief, Engineering and Certification

Branch

Ms. Judy Lewis, Air Pollution Specialist

Ms. Gloria Lindner, Staff, Stationary Source Division

Mr. Aron Livingston, Staff Counsel

Mr. Bill Loscutoff, Chief, Monitoring and Laboratory

Division

Ms. Laura McKinney, Manager, Vapor Recovery Certification

Section

Mr. Rob Oglesby

Mr. James Ryden, Chief, Enforcement Division

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345iv

APPEARANCES CONTINUED

STAFF CONTINUED

Mr. Dean Simeroth, Chief, Criteria Pollutants Branch

Dr. Linda Smith, Manager, Health and Exocystems Assessment

Section

Mr. Michael Terris, Office of Legal Affairs

Mr. Mike Tollstrup, Chief, Project Assessment Branch

Mr. Peter Venturini, Chief, Stationary Source Division

Mr. Barbara Weller, Manager, Pollution Studies Section

Ms. Beverly Werner, Manager, Regulatory Assistance Section

ALSO PRESENT

Mr. Steven Arita, WSPA

Ms. Diane Bailey, Natural Resources Defense Council

Mr. Adam Cuevas, California Highway Patrol

Ms. Sandra Duval, CIOMA

Mr. Sean Edgar, California Refuse Removal Council

Mr. Richard Hibbs, Golden Gate Transit

Ms. Barbara Lee, North Sonoma APCD

Mr. Jay McKeeman, CIOMA

Mr. Dough Quetin

Mr. Prentiss Searles, American Petroleum Intsitute

Mr. Gene Walker, California Transit Association

Dr. Barry Wallerstein, SCAQMD

Mr. Paul Weubben, SCAQMD

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345v

INDEX

PAGE

Pledge of Allegiance 1

Roll Call 1

02-9-1 13

Chairperson Lloyd 13

Executive Officer Kenny 13

Staff Presentation 14

Q&A 19

02-9-5 21

Chairperson Lloyd 21

Staff Presentation 21

Q&A 25

Motion 39

Vote 40

02-9-2 41

Chairperson Lloyd 41

Executive Officer Kenny 42

Staff Presentation 43

Q&A 56

Paul Wuebben 57

Richard Hibbs 58

Sean Edgar 61

Gene Walker 64

Adam Cuevas 65

Diane Bailey 67

Q&A 70

Motion 80

Vote 80

02-9-3 81

Chairperson Lloyd 81

Executive Officer Kenny 83

Staff Presentation 84

Q&A 95

Jay McKeeman 113

Motion 121

Vote 121

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INDEX CONTINUED

PAGE

02-9-4 122

Chairperson Lloyd 122

Executive Officer Kenny 122

Staff Presentation 123

Q&A 138

Motion 143

Vote 143

Afternoon Session 145

02-9-6 145

Chairperson Lloyd 145

Exective Officer Kenny 145

Staff Presentation 146

Doug Quetin 172

Barry Wallerstein 173

Barbara Lee 173

Sandra Duval 174

Steven Arita 178

Prentiss Searles 185

Motion 189

Vote 189

02-9-7 189

Chairperson Lloyd 189

Executive Officer Kenny 191

Staff Presentation 192

Q&A 198

Motion 207

Vote 207

Public Comment 207

Adjournment 207

Reporter's Certificate 208

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23451

1 PROCEEDINGS

2 CHAIRPERSON LLOYD: Good morning. The December

3 12th, 2002 meeting of the Air Resources Board will now

4 come to order.

5 Supervisor DeSaulnier, would you please lead us

6 in the Pledge of Allegiance.

7 (Thereupon the Pledge of Allegiance was

8 Recited in unison.)

9 CHAIRPERSON LLOYD: The Clerk of the Board,

10 please call the roll.

11 BOARD CLERK DORAIS: Dr. Burke?

12 Mr. Calhoun?

13 BOARD MEMBER CALHOUN: Here.

14 BOARD CLERK DORAIS: Ms. D'Adamo?

15 BOARD MEMBER D'ADAMO: Here.

16 BOARD CLERK DORAIS: Supervisor DeSaulnier?

17 BOARD MEMBER DeSAULNIER: Here.

18 BOARD CLERK DORAIS: Professor Friedman?

19 Mr. McKinnon?

20 BOARD MEMBER McKINNON: Here.

21 BOARD CLERK DORAIS: Supervisor Patrick?

22 BOARD MEMBER PATRICK: Here.

23 BOARD CLERK DORAIS: Mrs. Riordan?

24 BOARD MEMBER RIORDAN: Here.

25 BOARD CLERK DORAIS: Supervisor Roberts?

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23452

1 Chairman Lloyd?

2 CHAIRPERSON LLOYD: Here.

3 I think Professor Friedman is here also. He's

4 just in the back.

5 So you can confirm Professor Friedman is here.

6 Before we get started this morning I need to

7 announce one small change to the agenda today.

8 We're going to start with a health update as

9 shown, but then we're going to skip to number 5, the

10 proposal to fund the second phase of the FACES study

11 before we resume the number 3, the school bus item.

12 Again, I hope that doesn't inconvenience anybody.

13 But it does allow our research staff to come and then go

14 back to their normal work schedule.

15 Also please be forewarned, the Board will not be

16 taking a formal lunch break today since we have five

17 regulatory items to get through.

18 Instead I'll be calling a short 15 minute break

19 every two hours for the court reporter's benefit. And the

20 rest of us can stretch and move around. And then those

21 breaks it is anticipated to be around 11:00 o'clock and

22 around 1:00 o'clock, again for 15 minutes.

23 So if anybody wants to take a longer lunch break,

24 then you might want to work around that and make sure your

25 item is not included.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23453

1 Couple of other things I want to mention here on

2 some personal issues.

3 Later this month Larry Morris, who's been the

4 Head of Administrative Services for ARB for many years is

5 retiring. Many of us -- and unfortunately I've overlapped

6 a relatively short period with Larry. Many of the Board

7 members have worked with him. Larry does not want any

8 ceremony certainly in this forum.

9 But I think it's a tremendous loss to the Air

10 Board, to the Agency. I think Larry epitomizes both in a

11 personal and professional side the very best in a public

12 servant.

13 The good news is that Larry would anticipate, in

14 looking at him, many years of health and happiness just be

15 reserved. But he's going to be a tremendous loss for us,

16 and I think we're really going to miss him.

17 So I would hope that the Board, we can get an

18 appropriate way of recognizing Larry and his

19 contributions. I don't know if anybody on the Board who

20 knows him just wants to say anything?

21 BOARD MEMBER RIORDAN: Mr. Chairman, I would

22 agree. And the years that I've served on this Board I

23 know he means a lot to the organization and the

24 administration of this organization. Many people are

25 involved in their specific fields and are experts in that

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23454

1 field, but Larry had the overall picture of this Board.

2 And I think going into what I would assume is going to be

3 a difficult budget year, you're truly going to miss Larry

4 Morris, because he probably knows where every dollar is

5 that this Board has some responsibility for. And he's

6 going to be a great loss. And I wish him well.

7 CHAIRPERSON LLOYD: Yes, indeed.

8 Well, Thank you.

9 Another comment. And this is not a pleasant one.

10 But since we didn't have a Board meeting in November, I

11 just want to recognize that we actually lost one of our

12 employees who worked in the ledge office in early

13 November. And this was Chris Elms. And I had the -- I

14 attended the service that was held for Chris. And it's

15 one of these unfortunate things. The Mayor turned out,

16 several key legislators, city councilmen, to testify what

17 Chris had accomplished at the State, because he was in a

18 wheelchair disability.

19 And it's one of those things where you wish you'd

20 known all the things he'd accomplished. He did a great

21 job for us working with Rob Oglesby.

22 But I would like again as a tribute to Chris to

23 read something that the ledge office put together so that

24 we recognize what we lost.

25 "Our friend, Chris Elms, passed away last early

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23455

1 November. He left behind an office full of friends and

2 colleagues that cared a great deal about him. Chris

3 started ARB only a couple of years ago in the ledge

4 office. Those fortunate enough to have met him and heard

5 his amazing stories will not forget Chris.

6 "Chris was a self described political junkie who

7 actively followed politics in the business of running this

8 great state and country. As a teenager in the mid-sixties

9 he met Barbra Steisand at an L.A. fund raiser. Chris was

10 a proud Democrat.

11 "Chris followed his interests in public policy to

12 Stanford University and eventually to UC Davis and

13 McGeorge School of Law. While in school he served as a

14 legislative intern in the office of Berkeley Assemblyman

15 Tom Bates and then as an Assembly fellow for Assemblyman

16 Dennis Mountjoy.

17 "After graduating from law school he spent about

18 a decade in the governmental relations office of the

19 California Energy Commission and the University of

20 California Regents before coming to ARB.

21 "One of Chris' passions was baseball. He was a

22 living baseball encyclopedia for the sport. And not just

23 statistics, he really enjoyed the emotion, the drama

24 provided by America's pastime.

25 "Another pastime of Chris was genealogy. He

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23456

1 spent a great deal of time reconstructing his family tree.

2 He recently attended his grandma's 100th birthday in

3 Oklahoma where he was able to conduct additional research

4 from local records.

5 "Chris was also president and long-time member of

6 Californian's for Disability Rights. It is the oldest and

7 largest membership organization of persons with

8 disabilities in California. He was nationally known for

9 his advocacy on disability rights laws.

10 "Those of us who had the opportunity to work with

11 Chris and get to know him understood what a remarkable

12 person he was and that he lived an inspired and productive

13 life in spite of many obstacles in his path.

14 "He will be missed."

15 Thank you.

16 The last thing I wanted to raise before we start

17 today's business meeting is an ongoing -- two ongoing

18 issues actually, which are a growing concern to me

19 personally.

20 And one is the problem of excess emissions from

21 existing on-road motor vehicles. And I think this is

22 particularly apropos as we move into the next few months

23 looking at the front end -- that's new cars -- in

24 zero-emission cars.

25 And then, secondly, the issue of federal sources

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23457

1 and their controls in the State.

2 I think the more I look at our future emission

3 forecast for California, the more convinced I am that we

4 cannot possibly achieve our goals unless we do something

5 to cleanup or perhaps retrofit in-use motor vehicles. I

6 know we've made some start on that on the diesel side.

7 The recent revamping of the State's I&M or Smog

8 Checks Review Committee is a good start. The new

9 committee's first meeting under new chairmanship is

10 tomorrow. I understand Mr. Kenny is going to go to that

11 meeting. And we have high hopes that that'll be more

12 effective, and we certainly need all their efforts. And

13 we hope that the chronic issue of not capturing all the

14 excess emissions that biennial smog check inspection

15 repairs are supposed to catch will help there. And of

16 course expansion of smog check to areas of the State which

17 previously did not have enhanced programs would be

18 helpful.

19 Again, I cannot think of any problems actually

20 bigger than that. We have the cars on the road that meets

21 all the applicable requirements, and yet collectively

22 account for more emissions than one atmosphere can

23 sustain. And this problem is only going to get more acute

24 as we increase populations, we grapple with issues of

25 environmental justice, et cetera.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-23458

1 So on that particular issue I'd like to ask staff

2 if they could look at the issue of existing on-road motor

3 vehicles and report back to the Board on what strategy we

4 might undertake to reduce those emissions at the earliest

5 possible date.

6 And, secondly, on that part of it, if as part of

7 that you could include those in some of the SIP measures

8 so we're not just talking about this, but in fact we look

9 at -- concur by the program that would give us some real

10 tons and we would be held accountable for.

11 The second one area is again federal sources.

12 We've seen quite a lot over the last month about maybe

13 some potential weakening of some of the regulations in

14 Washington. In turn I think we also have to recognize,

15 not only is that a great concern to us and letters are

16 being sent by Mr. Kenny and the Governor to the

17 Administration in DC, but also we shouldn't forget that we

18 are impacted by federal sources where we are preempted in

19 California. I think we -- we would like to remind us --

20 I'd like to be reminded and the Board would like to be

21 reminded how much they could be doing and how much they

22 are doing to help us to get clean air for all the citizens

23 of California.

24 So the second one maybe, Mr. Kenny, you could

25 provide back to us what these federal sources, where we

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1 are preempted, what their contribution is, and how are

2 they going to go over the years. So maybe -- and how

3 effectively -- maybe how we can be more effective in

4 addressing some of those, working in cooperation with the

5 administration there.

6 And I'm hoping that maybe the next couple of

7 months you could bring that back to us. But I'd leave

8 that timeframe to you, given I know the burden of material

9 staff has to do.

10 EXECUTIVE OFFICER KENNY: A Couple of comments.

11 With regard to the on-road vehicles and specifically to

12 passenger cars, I mean I think the Board can take a lot of

13 pride in the fact that what's been accomplished over the

14 last number of years is that we will have the cleanest

15 possible passenger cars over the next number of years that

16 one can imagine. And I think you're absolutely right, Dr.

17 Lloyd, that the problem we're going to have is essentially

18 looking at the existing fleet that is out there and

19 recognizing that we need to figure out ways to get that

20 fleet to be cleaner and cleaner.

21 Smog check will help a lot. But beyond smog

22 check I think we also need to look at ways to retrofit

23 that existing fleet to bring it into kind of the greatest

24 state of cleanliness that we can actually achieve.

25 What we will do is we will follow up on your

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1 direction and we will actually make a SIP measure out of

2 that and place it into kind of the SIP that will be

3 released for -- well, the SIP proposals that will be

4 released for public comment in the next week. We are

5 actually moving forward because of a number of conforming

6 problems that have occurred around the State, and working

7 with the South Coast to try to get the South Coast SIP

8 completed before the first half of next year. And as part

9 of that, we are looking at our mobile source measures to

10 do that. And so we'll put that in there to really kind of

11 try to drive that home.

12 With regard to the federal sources, I mean we

13 agree that the federal sources are a significant

14 contributor. In the 1994 SIP we actually made a number of

15 assignments to the federal government. Very impressively,

16 the federal government came through. And in fact on

17 almost all of the assignments that they were given, they

18 actually did deliver the tons that had been assigned to

19 them. They didn't do it a hundred percent, but their

20 effort and their success was actually impressive.

21 As we move into this next round of SIPs, we will

22 be doing exactly the same thing again, simply because of

23 the fact that the task is getting more difficult, the

24 opportunities are fewer and far between. And so we're

25 going to need every possible bit of assistance we can get

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234511

1 from, you know, all sources and all jurisdictions that

2 have control over those sources.

3 Specifically we'll be looking again at airports

4 and airplanes. We'll be looking at ships. We'll be

5 looking at the heavy-duty vehicle fleets. And, in

6 particular, that we have to look at them because of the

7 number of heavy-duty vehicles that are essentially coming

8 across our borders.

9 We'll be looking at farmer construction equipment

10 under 175 horsepower. And the federal government is right

11 now looking at ways to try to control the off-road

12 sources. And there's a fairly significant and substantial

13 debate occurring with them. So hopefully that will come

14 through for us.

15 But we will be looking at all of those things as

16 a way of trying to ensure that, in fact, we do get those

17 additional emission reductions. Because without them and

18 without the contributions from the federal government, it

19 simply means that we in California will have to look to

20 our own sources and get greater emission reductions as a

21 way of trying to subsidize those emission reductions from

22 the federal sources. And obviously we can't do that.

23 CHAIRPERSON LLOYD: Thank you for a timeframe on

24 coming back to us at all. I know you can move ahead

25 quickly on the SIP one.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234512

1 EXECUTIVE OFFICER KENNY: I think basically in

2 terms of timeframes, we can probably report back to you

3 with regard to, you know, the federal sources in the next

4 three or four months.

5 And then I think with regard to the light-duty

6 measures and kind of retrofitting light-duty vehicles,

7 it's a little bit more difficult there. We actually did

8 have a pilot program underway trying to identify the

9 opportunities that would be associated with a retrofit

10 program. That the pilot program is not yet completed, it

11 probably won't be completed for some time during the next

12 year. But the idea of putting the measure into a sip will

13 probably provide more of a driving force, and that will

14 help both of us and probably the constituents out there,

15 kind of address that issue and talk about that issue and

16 see how we're going to move forward.

17 But, again, I think you're absolutely right.

18 Unless we identify mechanisms to get emission reductions

19 from the existing on-road fleets, it's going to be very

20 difficult to ever achieve attainment.

21 CHAIRPERSON LLOYD: Yeah, and I say on the

22 balance part I know that we've been criticized. And

23 people have pointed out to me personally that, you know,

24 you got all this emphasis on the getting cleaner and

25 cleaner cars, getting to zero; at the same time we need to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234513

1 look at the other side of it, given the number of cars and

2 vehicles out there.

3 So thanks very much. I appreciate that.

4 Move ahead to the first agenda item. I'd like to

5 remind anyone in the audience who wishes to testify on

6 today's agenda items to sign up with the clerk of the

7 Board. And if they have written comments to provide 30

8 copies to the Board clerk.

9 First item on the agenda today the 02-9-1. It's

10 the monthly public health report.

11 In June of this year the Board approved annual

12 standards for PM10 and PM2.5 that are designed to protect

13 sensitive subpopulations, such as the elderly and those

14 with existing cardiopulmonary disease, against the adverse

15 health effects of chronic PM exposure.

16 So today we have a topical presentation talking

17 about recent findings on the relationship between exposure

18 to fine and ultrafine particulate matter and the risk for

19 heart disease. This is some of the new information that

20 directly demonstrates the adverse health effects of

21 short-term exposure to these pollutants.

22 So with that I'd like to turn it over to Mr.

23 Kenny to begin staff presentation.

24 EXECUTIVE OFFICER KENNY: Thanks, Dr. Lloyd and

25 members of the Board.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234514

1 The first standards reviewed under the Children's

2 Environmental Protection Act, SB 25, are those for

3 particulate matter, as you mentioned. In June of this

4 year, the Board adopted new annual average standards for

5 PM2.5 PM10. And staff is still reviewing material on

6 short-term standards for PM.

7 The Board continues to be interested in the

8 health effects of exposure, including a new study area of

9 ultrafine particles. And today staff will provide you

10 with you with an update on some of the more important

11 recent findings on PM health effects. These findings are

12 beginning to show a biological link between short-term

13 exposure to fine PM, including ultrafine particles and the

14 risk of heart disease.

15 Dr. Norman Kado from the Health and Exposure

16 Assessment Branch will make the staff presentation.

17 (Thereupon an overhead presentation was

18 Presented as follows.)

19 DR. KADO: Thank you very much.

20 Good morning, Chairman Lloyd and members of the

21 board.

22 A number of investigators have reported that

23 daily variations in ambient air -- particulate air

24 pollution have been associated with cardiovascular disease

25 and deaths. The Air Resources Board has very recently

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1 adopted annual PM10 and PM2.5 standards and continues to

2 review the latest information to protect the most

3 sensitive members of the public from chronic and acute

4 health effects, including those with cardiovascular

5 disease.

6 The presentation this morning is a discussion of

7 a preliminary study of subjects with coronary heart

8 disease who were monitored with a standard electronic

9 cardiac test. The test results were compared with

10 airborne concentrations of ultrafine and fine particulate

11 matter and other air pollutants.

12 --o0o--

13 DR. KADO: To provide a background, in previous

14 research, investigators have demonstrated a daily exposure

15 to ambient fine particles, PM2.5, are associated with

16 cardiovascular disease and mortality. The biological

17 mechanisms of how PM2.5 may cause cardiovascular disease

18 and mortality are unknown. And the physical and chemical

19 properties of PM that are potentially responsible for its

20 toxicity are also unknown.

21 Investigators have reported that ultrafine

22 particles, those less than 0.1 micrometer diameter, have

23 been associated with respiratory health effects. However,

24 there is little information on the association between

25 exposure to ultrafine particles and cardiovascular health.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234516

1 The research discussed today is an initial study

2 on exposure to PM, including ultrafine PM, and their

3 association with any specific cardiovascular health

4 effects.

5 --o0o--

6 DR. KADO: The research that we will be

7 discussing this morning is entitled "Particulate Air

8 Pollution and Risk of ST-Segment Depression Among Subjects

9 with Coronary Heart Disease," by Dr. Pekkanen and

10 colleagues from the Unit of Epidemiology, National Public

11 Health Institute, Finland. The study was recently

12 published in the Medical Journal's circulation.

13 The research involved evaluating cardiovascular

14 health effects of PM in patients with coronary heart

15 disease. There were 45 adult men and women studied. The

16 average age was 68 years. Exercise tests were conducted

17 every two weeks for six months.

18 The approach chosen by the investigators to

19 evaluate cardiovascular health effects was to examine

20 electrocardiogram, or ECG, patterns and relate the results

21 of any ECG changes with exposure to airborne particulate

22 matter and other air pollutants.

23 --o0o--

24 DR. KADO: The next slide is an illustration of a

25 normal and abnormal ECG, and summarizes the results of the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234517

1 study.

2 The electrocardiogram represents electric signals

3 emitted by the heart for essential normal function. A

4 normal ECG pattern representing a single heartbeat is

5 illustrated in the upper figure.

6 The specific abnormal ECG pattern observed for

7 the study discussed is called an ST-segment depression.

8 This abnormal pattern may be an indicator of an adverse

9 health effect taking place in the heart, namely a high

10 probability of myocardial ischemia, or lack of oxygen to

11 the heart muscle. The lack of oxygen in turn results in a

12 higher risk of heart damage and acute myocardial

13 infarction, or heart attack.

14 An abnormal ECG representing an ST-segment

15 depression is illustrated in the lower figure. Note that

16 the ST portion of the electrical signal shown in the

17 circle is lower than that seen in the normal signal.

18 The authors reported that there was an

19 association between fine PM as well as ultrafine PM

20 exposure and the risk of exercise-induced ST-segment

21 depression, and that the association was most significant

22 two days after exposure. The risk was significantly

23 elevated, approximately three times of that which was

24 normally expected. The association of ST-depression with

25 ultrafine PM was independent fine PM.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234518

1 Carbon monoxide and nitrogen dioxide also were

2 associated with the ST-segment depression. But these

3 associations were weaker. There was no consistent

4 association for coarse particles.

5 --o0o--

6 DR. KADO: This pilot study supports the finding

7 that fine PM is associated with cardiovascular health

8 effects. It is one of the first studies regarding

9 ultrafine PM exposure and cardiovascular health effects.

10 Although this study is considered preliminary regarding

11 the mechanism of fine and ultrafine PM and their effects

12 on the cardiovascular system, it provides insight for

13 developing and testing future hypotheses; that is, fine

14 and ultrafine PM may cause a higher risk of cardiac

15 schemia, a serious health effect.

16 Further, verification of this type of study is

17 needed in larger populations, in a variety of cities, and

18 with different mixtures of air pollutants.

19 Finally, the paper summarized today may help in

20 the effort to focus future research and to review ambient

21 air quality standards, and implies that meeting clean air

22 quality standards can result in significant improvement in

23 cardiovascular health.

24 This concludes the health update. And we would

25 be happy to answer any questions.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234519

1 Thank you very much.

2 CHAIRPERSON LLOYD: Thank you very much indeed.

3 I think it's very interesting as we -- at least

4 I've been listening to some of the fascinating stories on

5 NPR and the 50th anniversary of the London smog to see how

6 far we've come in our knowledge. And yet this is focused

7 on the ultra fines, and in those days it was coal dust. I

8 guess in this terminology, it was more like rocks, but,

9 again, the huge number of deaths that were incurred at

10 that time. So I think this research and your highlighting

11 this is really very significant, very interesting.

12 Professor Friedman.

13 BOARD MEMBER HUGH FRIEDMAN: Was this the result

14 of one of our health research grants or part of it?

15 DR. KADO: No. This pilot study was conducted in

16 Finland as part of an ultrafine risk assessment

17 collaborative effort in Europe.

18 BOARD MEMBER HUGH FRIEDMAN: Well, because my

19 namesake, Dr. Bill Friedman, isn't here yet or perhaps may

20 not be able to join us, I feel some responsibility, though

21 not a medical person, to at least speak to this.

22 I hope we will see the continuation of this kind

23 of research because this is very preliminary and it is not

24 at all determinative yet. But if in the future there's

25 something that we could consider or our research panel

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234520

1 could consider or be presented with, I would hope that

2 we'd have a chance to play a role in continuing this kind

3 of research. I think more and more we're going to have to

4 concern ourselves with particulate issues, particularly

5 coming from overseas as well what we can control directly

6 or try to control directly here.

7 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

8 Professor Friedman, if I could -- can I just

9 inform you too, we are actually working on an ultrafine

10 study. And we're really in the preproposal stage right

11 now. But what it would do is it would actually -- you

12 know, with our -- southern California we have about a 12

13 station ultrafine network, monitoring network. So we're

14 hoping to build off that network and actually fund an

15 epidemiological study here actually in the very near

16 future.

17 BOARD MEMBER HUGH FRIEDMAN: And I understand

18 there is now the technology to measure ultrafine?

19 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

20 There is.

21 BOARD MEMBER HUGH FRIEDMAN: Thank you.

22 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

23 So hopefully in a couple of months we can come

24 back to you.

25 CHAIRPERSON LLOYD: Certainly these types of

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234521

1 studies resonate with us on the Board, pretty sobering in

2 terms of what's going on.

3 Any other comments, questions from the Board.

4 Thank you very much indeed. And thank you; an

5 excellent update.

6 As I indicated, we're going to move ahead. The

7 next item is a research proposals, Agenda Item 02-9-5.

8 And I'll turn it over to Mr. Kenny to introduce

9 the item.

10 RESEARCH DIVISION CHIEF CROES: Tracy Hysong,

11 who's the staff lead on the project, will make the

12 presentation.

13 CHAIRPERSON LLOYD: That was Bart Croes, head of

14 research.

15 MS. HYSONG: Okay. Today we are bringing for

16 your consideration a proposal to continue funding of the

17 Fresno Asthmatic Children's Environment Study, or FACES.

18 FACES was originally designed as a 66-month

19 project.

20 (Thereupon an overhead presentation was

21 Presented as follows.)

22 MS. HYSONG: In 1999, the Board funded the first

23 phase of the project, with funding for the second phase

24 contingent on satisfactory progress during the first

25 phase.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234522

1 The FACES project has made good progress over

2 approximately the first two years of the project, and the

3 investigators have provided ARB with an interim report

4 that states their progress to this point.

5 --o0o--

6 MS. HYSONG: Asthma is a serious problem in

7 California. There are over 2.2 million asthmatics in the

8 State. A number of agencies statewide are developing

9 asthma programs to address this concern.

10 FACES involves 250 asthmatic children in Fresno.

11 The study is designed to look at the effects of

12 environmental factors, including air pollution, on the

13 symptoms and long-term progression of asthma.

14 Fresno is selected because it has a very high

15 prevalence of asthma among children, an ethnically diverse

16 population, and frequent high levels of ambient air

17 pollution, especially ozone and particles.

18 --o0o--

19 MS. HYSONG: Measurements being made include lung

20 function testing, some of which is done by the children at

21 home using a portable spirometer, skin testing and

22 questionnaires and diaries to look at changes in symptoms

23 and the home environment.

24 Environmental factors and pollutants are measured

25 in the children's homes and community. The study focuses

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234523

1 on particulate matter, and measurements include

2 continuous sampling of different particulate matter size

3 fractions, as well as different chemical components of

4 particulate matter.

5 Other criteria pollutants measured include ozone

6 and oxides of nitrogen. Allergens such as pollen and

7 airborne mold spores are measured. Indoor pollution,

8 including environmental tobacco smoke, is also measured.

9 --o0o--

10 MS. HYSONG: The Research Screening Committee

11 reviewed and recommended this proposal for funding in

12 early October. An update on the progress of FACES was

13 presented at the October Board meeting. At that time, the

14 Board requested that the FACES external advisory panel be

15 convened to discuss issues related to the decrease in

16 sample size and the implications this would have on the

17 success of the study.

18 The EAP, a panel of leading health and exposure

19 scientists, determined that despite the problems with

20 recruitment and the smaller number of children being

21 followed, the longitudinal component of the study is still

22 feasible and the investigators should have adequate power

23 to detect long-term health outcomes at a November

24 teleconference.

25 The EAP commented that the higher retention and

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234524

1 increased data quality seen in the subjects recruited for

2 the study tends to offset the reduced sample size.

3 The EAP unanimously recommended full funding for

4 Phase 2 of the proposal and provided ARB with a written

5 statement of their conclusions.

6 --o0o--

7 MS. HYSONG: Based on the comments received

8 during the peer review process, staff recommends funding

9 of Phase 2 of the proposal for $2,396,389.

10 In addition, staff is recommending that the

11 following conditions be met:

12 First, annual meetings will be held of the FACES

13 external advisory panel, with the next meeting anticipated

14 in September of 2003.

15 Secondly, a workshop will be held by the summer

16 of 2003 between the coordinators of the supersites in both

17 L.A. and Fresno to exchange information.

18 Third, quarterly meetings held between the Fresno

19 supersite, ARB, and the FACES' aerometric data managers to

20 facilitate coordination and usage of aerometric data. The

21 first meeting was held December 10th, 2002.

22 Fourth, UCB will continue to enroll children to

23 accommodate additional enrollment from Kaiser, facilitated

24 by Board Member Matthew McKinnon.

25 Fifth, the FACES' investigators are strongly

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234525

1 encouraged to apply for NIH funding.

2 And, lastly, staff will report back to the Board

3 in February of 2004 on the progress of the study,

4 including the subject retention and compliance rates.

5 --o0o--

6 MS. HYSONG: Thank you. And I'd be glad to

7 answer any questions.

8 CHAIRPERSON LLOYD: I just had one, and it's a

9 naive question.

10 On the study measurements, what specific skin

11 testing is done?

12 POPULATION STUDIES SECTION MANAGER WELLER: The

13 skin testing they were speaking of was skin testing for

14 allergens. This is a typical test that's done with

15 asthmatics for allergens.

16 CHAIRPERSON LLOYD: Mr. McKinnon, do you want to

17 comment on --

18 BOARD MEMBER McKINNON: Yes. Just a couple of

19 comments.

20 Dr. Friedman and I have kind of talked back and

21 forth over the last week or so. And I've been in contact

22 with Kaiser about opening up enrollment to try to bring

23 the numbers up to the original target.

24 That discussion -- the pediatrician that was

25 initially involved is no longer involved. So we're sort

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234526

1 of starting from scratch with Kaiser, which means we may

2 want to consider time and some money for accomplishing

3 that. So I don't -- I've heard a figure of $40,000 tossed

4 around from some time back. My understanding, that's for

5 Kaiser to put staff on putting together a database of all

6 the children that would qualify for this study. And then

7 Kaiser doing the mailing to the parents of the children to

8 invite them into the study. And I don't have any way of

9 verifying if that's an accurate figure.

10 But we may want to consider extending the open

11 period for the Kaiser kids for a period of time. And we

12 may want to consider additional money.

13 CHAIRPERSON LLOYD: Thank you.

14 Mrs. Riordan and Mr. Calhoun.

15 BOARD MEMBER RIORDAN: Mr. Chairman, the staff

16 and I spoke recently about this study and their

17 recommendations. And I think critical to this is the

18 February Board update and our assessment as well as the

19 staff's assessment of retention. There are two factors, I

20 think, that are important: One is to expand hopefully

21 through Kaiser and any other medical resources that we

22 have in that general area of Fresno to bring children into

23 the study.

24 But on the other hand we have to retain what we

25 have. And the -- I gather the people who are very much

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234527

1 involved see a high retention rate right now much better

2 than they had hoped for. But we need to be sure that that

3 retention rate stays where it is or moves very little. I

4 suppose it's going to move a little bit.

5 But my emphasis would be that the report to us

6 gives us and staff the ability to be sure that our

7 retention rate is one that we can live with. Because more

8 often than not, children in farming communities move for a

9 variety of reasons. And I think we need to be very sure

10 that we have retained these subjects in the test. And so

11 with that I feel comfortable I think that the external

12 advisory panel meeting was a good one. And thank you,

13 staff, for getting that together as we asked of you to do

14 that.

15 But at the same time we need to be sure of the

16 retention. And I would recommend that we emphasize that

17 for that Board update.

18 CHAIRPERSON LLOYD: Mr. Calhoun.

19 BOARD MEMBER CALHOUN: At the last Board meeting

20 Dr. Friedman expressed some concerns about the study to

21 date. And I wonder -- one of the things as I recall that

22 he was concerned about is that there had been no --

23 CHAIRPERSON LLOYD: Joe, is your mic on. Is the

24 green light on?

25 BOARD MEMBER CALHOUN: I think it's on.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234528

1 One of the concerns as I recall that he expressed

2 was there'd been no collective discussion among the

3 various members of the panel about the impact of some of

4 the test results, that maybe there'd been individual

5 expressions of their views on the impact of the results,

6 but he didn't know and was concerned about their being a

7 collective discussion, if they'd gotten together and

8 they'd done a collective discussion of the results.

9 And I'm wondering as a follow up to that what has

10 transpired?

11 RESEARCH DIVISION CHIEF CROES: This is Bart

12 Croes.

13 Mr. Calhoun, we've had a few discussions with Dr.

14 Friedman where he expressed those same concerns. So at

15 the meeting of the external advisory panel, it included

16 all the members. They had a roundtable discussion. And

17 the report from the Committee that's included in your

18 package is endorsed by all the members.

19 BOARD MEMBER CALHOUN: Does Dr. Friedman -- have

20 you reviewed it with him?

21 RESEARCH DIVISION CHIEF CROES: Yes, he's

22 reviewed all the materials.

23 BOARD MEMBER CALHOUN: And he has bought into

24 what your reporting here today?

25 CHAIRPERSON LLOYD: Yes, we do have a message

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234529

1 from him that he is supportive.

2 Supervisor DeSaulnier.

3 BOARD MEMBER DeSAULNIER: I was just going to ask

4 a question about the cost of the facilitator. Is there

5 some kind of contractual relationship with Mr. McKinnon?

6 (Laughter.)

7 BOARD MEMBER DeSAULNIER: I want to make sure

8 we're getting value for his services.

9 (Laughter.)

10 BOARD MEMBER DeSAULNIER: Just a question -- a

11 comment and a question.

12 In Contra Costa County, I'd mentioned to the

13 Chairman, that we're just embarking our health department

14 on a similar study in the industrial belt of the East Bay,

15 and it's about the same dollar amount. So I hope that as

16 we go through these studies, we have some communication.

17 I just wonder about -- we come across these

18 various studies -- how we can use the information from

19 other studies that are going on to sort of support or

20 allow us for a sort of wider range of information. And

21 maybe it's just communication.

22 EXECUTIVE OFFICER KENNY: Actually I would

23 suggest that we actually have pretty good communication on

24 this, I mean to the extent that it's happening in Contra

25 Costa County and that we're doing it in Fresno. I mean

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234530

1 probably incredibly invaluable to essentially make sure

2 that we have a good link and that we're sharing all the

3 information that each of us is generating.

4 BOARD MEMBER DeSAULNIER: That would be good. As

5 long as Mr. McKinnon isn't the facilitator in Contra

6 Costa.

7 (Laughter.)

8 BOARD MEMBER DeSAULNIER: Thank you, Mr.

9 Chairman.

10 CHAIRPERSON LLOYD: I think one of the things

11 that might be useful in the next year also is something I

12 know I did when I came on board, was to actually have a

13 meeting where we reviewed some of the health data,

14 compared that to what we're doing in the State. And I

15 think we could work with staff on something like that

16 also.

17 A couple of comments I'd like to make. One,

18 again, I think it's just to reiterate I think some

19 concerns may be expressed I think, you know -- personally

20 am fully supportive of the study because it -- we need to

21 look at the impact of asthma. I think the L.A. Times

22 article focusing on the valley focused very heavily on the

23 increasing concerns about health impacts.

24 My understanding from Jerry Martin is the Fresno

25 Bee is going to come out with a large article focusing on

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234531

1 the valley as well. So I think we're in the right place

2 looking at that.

3 And if you look at the concerns of citizens --

4 and I'm sure Barbara and Didi can also comment on that --

5 there's increasing concern about the health impacts so

6 we're doing the right thing.

7 But on the other hand I think it's important that

8 we -- as we did, we sent a message to the investigators

9 that we're appropriating here a large chunk of dollars in

10 a time when the State is facing significant constraints.

11 So I'm very happy the way the staff has handled this, come

12 back with the investigators. I hope that we got the

13 investigators.

14 The intention was never to doubt the importance

15 of this study, but to question whether it was being done

16 in the best way and whether in fact the communication part

17 of it was -- and while I see staff's recommendation coming

18 out and my discussions with staff and with Dr. Prasad of

19 my staff, indicating that we actually accomplished a lot

20 by asking them to work together here. And I think the

21 external advisory panel was not meeting frequently, the

22 investigator was not making -- maybe making every effort.

23 So I think we've come a long way in that part of

24 it. And I think having Mr. McKinnon also look at the

25 aspect to see if we can broaden the base is very, very

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234532

1 important.

2 And I think the question about the comments from

3 my colleagues on the Board are important. And I think

4 we -- I hope that as we move ahead the investigators

5 recommend that we're trying to improve the study, because

6 we have to answer -- as the Board, we have to answer to

7 this.

8 And before I turn over to Ms. D'Adamo, just one

9 question here. My understanding is that this $2.3, $2.4

10 million will also be not given as a lump sum; there will

11 be a -- sort of a progress report. And will that be

12 appropriated before the February meeting, or will we have

13 another chance before the final chunk is given to look at

14 that?

15 RESEARCH DIVISION CHIEF CROES: The plan is to

16 just appropriate about a million dollars this fiscal year.

17 And so there would be an opportunity next fiscal year to

18 review that.

19 CHAIRPERSON LLOYD: So which would be about a

20 year's time?

21 RESEARCH DIVISION CHIEF CROES: Right?

22 CHAIRPERSON LLOYD: So I would hope that the

23 Board, if -- prior to the February Board update, that

24 maybe you could also give us a short update to make sure

25 everything's on track, because, clearly, the question will

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234533

1 come up. You know, it would be nice to, say, before you

2 appropriate the final dollar, just give us some

3 reassurance that things are actually on track.

4 Ms. D'Adamo.

5 BOARD MEMBER D'ADAMO: I have a few questions

6 about staff's suggestions on how we could make some use of

7 this proposal in terms of getting the word out to

8 communities that may not be as keyed in as, say, the

9 Fresno community.

10 I had asked staff to provide some information to

11 me about San Joaquin Valley asthma rates. And I'd like to

12 later on just pass this around for the other Board members

13 to see.

14 It's quite interesting that the San Joaquin

15 Valley average just for children is 11.9 percent as

16 compared to the California average, 9.6. When you look at

17 Fresno in particular though, there's quite a huge jump --

18 16.4 percent -- as compared to some of the other

19 regions -- Kern County, 10 percent; San Joaquin, 10

20 percent; Tulare, 10.5.

21 So a couple of questions. First of all, can

22 staff provide some information as to why Fresno is so much

23 higher? Is it that there is an increased awareness,

24 increased reporting? Or is there something in particular

25 that's going on in Fresno as compared to some of the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234534

1 adjacent San Joaquin Valley communities?

2 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE?

3 Well, I think really the best way to answer it is

4 that's really the purpose of the study itself, is that we

5 don't know why there's a greater number of asthmatics in

6 Fresno. And definitely that was one reason that area was

7 chosen, is because it had such a high asthma prevalence

8 itself.

9 But part of the study -- the FACES study itself

10 is to find out, of the air pollution, what affect that has

11 on triggering asthma attacks, progression of asthma; and

12 then what part of the air pollution -- what part of the

13 mix? Is it, you know, finer particles, is it the ozones,

14 is it something else that's affecting it?

15 So that's really the outcome we're going to find.

16 BOARD MEMBER D'ADAMO: My own personal sense in

17 traveling around is that some of the public health

18 officials in Fresno seem to be keenly aware of this issue.

19 And I'm just wondering if there's anything that we can do

20 in the meantime, assuming that Fresno may not be too far

21 off from other surrounding communities, if parents are

22 more aware, if doctors are more aware, are these children

23 getting in earlier, what's the effect of an earlier

24 diagnosis, can it help them to kind of keep the symptoms

25 at bay a little bit longer in terms of the health of the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234535

1 children in that area?

2 And if that is the case, can we provide some

3 preliminary findings to other communities' public health

4 officials with the hopes that doctors would be able to

5 diagnose asthma sooner?

6 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

7 Actually those are some good suggestions. We do

8 know there are asthma mitigation measures we can inform

9 the public about and families. And I think those things

10 are types of triggers to asthma that we know about

11 already, that I think is important to make the general

12 public know about. Hopefully most of the medical

13 community is aware. But I think that would be an

14 important step to take, is to inform them as well of some

15 of the triggers, either air pollution triggers or allergen

16 triggers as well that are very important to taking care of

17 kids and their health.

18 And getting back -- this is -- the final part of

19 the study is, we're hoping that there's a couple of

20 things. That does provide us with better information to

21 give to health care providers so they can transmit that

22 information on to their patients as well.

23 And of course for the Board, it helps us to

24 identify what we think are the important air pollution

25 measures that we can basically focus on to improve this

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234536

1 vulnerable population's health.

2 RESEARCH DIVISION CHIEF CROES: One thing I'd

3 like to add is that there are a number of efforts, both

4 within the State of California and nationally, to try to

5 put together asthma mitigation plans to try to take

6 advantage of ongoing and future research and past research

7 on asthma triggers and develop plans to reduce exposure of

8 children and adults to those triggers.

9 So those are -- I believe there's a national plan

10 that's being circulated now for review. That should be

11 available by the end of the year or early next year. And

12 there's a California plan under development as well.

13 CHAIRPERSON LLOYD: Thank you.

14 Professor Friedman.

15 BOARD MEMBER HUGH FRIEDMAN: Has the staff

16 considered Mr. McKinnon's suggestion? Is that included

17 here? Or do you intend to see what can be worked out, to

18 include and enlarge the database?

19 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

20 I think we'll talk a little closer to Kaiser and

21 find out exactly what they need. Our initial statements

22 were -- you know, what would really help the investigators

23 I think at this point would be a letter to their asthmatic

24 patients, and those of newly diagnosed kids. And of

25 course with a -- it's going to be a small population. But

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234537

1 if they could focus in, I think that's going to give it a

2 good boost to the recruitment for the FACES program.

3 BOARD MEMBER HUGH FRIEDMAN: And what about the

4 tracking issue that --

5 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

6 That definitely -- that's already something we

7 conveyed to the investigators that we want to keep on top

8 of. And they provide us at routine intervals the -- you

9 know, how the recruitment's going, how the retention is

10 and their data quality. That is, that the kids not only

11 are in the study, but they're following through with their

12 panel studies, with their diaries they're filling out.

13 And so when we come back -- we'll have that on a routine

14 basis. But definitely when we come back in a year we'll

15 be able to update you as well.

16 BOARD MEMBER HUGH FRIEDMAN: Thank you.

17 CHAIRPERSON LLOYD: Just also want to -- oh,

18 Supervisor Patrick.

19 BOARD MEMBER PATRICK: Thank you, Mr. Chair.

20 I just wanted to ask --

21 CHAIRPERSON LLOYD: Is your mic on?

22 BOARD MEMBER PATRICK: It is. So I will get very

23 close to it and he will turn up the volume very high. I'm

24 not noted for being a shrinking violet, so I'm not sure

25 what the problem is.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234538

1 Throughout the valley it's pretty widely known

2 that Fresno has the worst asthma rate of anyplace else.

3 Where are other places in California that have rates

4 similar to Fresno's?

5 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

6 Well, Imperial County in the southern part of the

7 state is I think one of the highest counties in the entire

8 state for asthma. There also are several areas within the

9 San Joaquin Valley that are also high.

10 BOARD MEMBER PATRICK: In the Central region?

11 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

12 I think it was San Joaquin County and Kings

13 County were two of the highest areas.

14 BOARD MEMBER PATRICK: Highest if Fresno?

15 HEALTH AND EXPOSURE ASSESSMENT BRANCH CHIEF BODE:

16 Fresno is actually highest.

17 BOARD MEMBER PATRICK: And I -- I just think that

18 this discussion has actually been very, very useful. I

19 think that it's important that we do give guidance to the

20 investigators in terms of, you know, what can this Board

21 do perhaps to be more of a partner with folks? And I

22 think that that was -- as I recall the discussion that we

23 had in October, that was -- the gist of the conversation

24 was, you know, how --

25 Oh, we got the volume right. Good for you. It's

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234539

1 you guys. It's you in there, where the little green -- I

2 can see the green light, but I can't see anybody.

3 Anyway I've totally lost my train of thought.

4 Oh, they're flashing lights now.

5 You didn't know this meeting was going to be

6 quite this much fun, did you, in the audience?

7 I do think though that, you know, the tenor of

8 the discussion was more how can we assist in the effort

9 and so forth. So I think that the discussion that has

10 gone on, Mr. McKinnon's efforts and your efforts certainly

11 of bringing all the parties together -- I think it's

12 absolutely critical that we bring the best minds to this,

13 and that certainly is -- it sounds as though there's going

14 to be some continuity in that effort. And I think that's

15 very important.

16 And it is, as I say, very widely known that

17 Fresno has the highest numbers. And so we're glad that

18 you're there to help find out why.

19 And I would move on the Resolution 02-32.

20 BOARD MEMBER CALHOUN: Second.

21 CHAIRPERSON LLOYD: Moved and seconded.

22 Again, before we get the vote, I just want to

23 again reiterate Dr. Friedman's support for this --

24 providing there are funds available, which there are --

25 but also to thank him for his excellent efforts on leading

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234540

1 this. So we look to him as the expert in this. And we

2 miss him on that, but we appreciate the efforts that he's

3 put in on this.

4 And we also appreciate the efforts that Mr.

5 McKinnon has and will commit to try to get the Kaiser

6 participation, if possible.

7 So all in favor of the resolution say aye.

8 (Ayes.)

9 CHAIRPERSON LLOYD: It's unanimous.

10 So with that, again thank you, staff, and thanks

11 very much.

12 I think this is coming up with the strongest

13 study. I think you've heard again the sentiments from the

14 Board. Anything that the Board can do, or maybe the two

15 resident board members down in the valley, we can provide

16 them with information that they could educate -- I was

17 meeting with some other groups yesterday, some of the

18 environmental groups who were getting increasingly active.

19 I think that as long as they know about this study, I

20 think it would be very helpful. So I'm looking forward to

21 continuing progress.

22 Thanks very much.

23 Leave a moment while we move on to the next

24 agenda item, which is on school bus idling.

25 (Thereupon an overhead presentation was

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234541

1 Presented as follows.)

2 CHAIRPERSON LLOYD: I guess I should have also

3 stated that this is our first Board meeting after the

4 election. So it's good to be back.

5 (Laughter.)

6 CHAIRPERSON LLOYD: The next agenda item is

7 02-9-2, public hearing to consider an airborne toxic

8 control measure to limit vehicle emissions at schools.

9 As we have heard repeatedly from staff and

10 medical authorities, children are particularly susceptible

11 to the adverse health effects of air pollution. For that

12 reason we need to do everything we can to prevent or limit

13 their exposure to the harmful pollution. That's why I'm

14 so pleased to be considering this proposed school bus

15 idling measure today.

16 Again, I would like to express my appreciation to

17 the California Highway Patrol, the California Department

18 of Education, the California Parent-Teacher Association,

19 school districts, and school bus contractors for the

20 assistance they have provided to our staff in developing

21 the proposed regulations.

22 I think without their help and support we could

23 not have made the progress and we would not be able to

24 implement this Regulation as we would wish. So I again

25 thank them very much for that.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234542

1 And at this time I'd like to turn it over to Mr.

2 Kenny to introduce the item.

3 EXECUTIVE OFFICER KENNY: Thank you, Mr. Chairman

4 and members of the Board.

5 Heavy-duty vehicle exhaust is a source of diesel

6 PM and other toxic air contaminants for which there are no

7 known safe exposure levels.

8 Excessive idling of school buses and other buses

9 and vehicles unnecessarily exposes children and others to

10 these toxic air contaminants.

11 In 2000 the Board approved a comprehensive risk

12 reduction plan for diesel PM. In 2001 the Office of

13 Environmental Health Hazard Assessment identified diesel

14 PM and several other toxic air contaminants associated

15 with the heavy-duty motor vehicle exhaust to be among the

16 top five toxic air contaminants with adverse health

17 effects for children.

18 What we are proposing today is an ATCM because it

19 is simple and it is a pollution-prevention measure that

20 can be easily implemented to reduce children's, parents',

21 teachers', and nearby residents' exposure to diesel PM and

22 the associated potential cancer risks and other adverse

23 health effects.

24 And with that I'd like to introduce Barbara Cook,

25 who will make the presentation.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234543

1 AIR POLLUTION SPECIALIST COOK: Thank you, Mr.

2 Kenny.

3 Good morning, Chairman Lloyd and members of the

4 Board.

5 Today I will explain our reasons for proposing an

6 airborne toxic control measure to limit school bus idling

7 and idling at schools. In addition, I will present

8 information about the regulatory process requirements and

9 impacts associated with our proposal.

10 --o0o--

11 AIR POLLUTION SPECIALIST COOK: Specifically, my

12 presentation will briefly discuss the Regulation's

13 purpose; development process; requirements, including

14 affected emission sources and exemptions; and

15 implementation and enforcement, including anticipated

16 benefits and impacts.

17 I'll conclude with a summary and the staff's

18 recommendation.

19 --o0o--

20 AIR POLLUTION SPECIALIST COOK: The purpose of

21 the regulation is to reduce diesel PM and other toxic air

22 contaminant emissions, primarily by eliminating

23 unnecessary heavy-duty bus and commercial vehicle idling

24 at schools.

25 The proposed ATCM is one step in a comprehensive

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234544

1 strategy to reduce as much as possible the public's

2 exposure and health risk due to such substances.

3 We believe that the proposed ATCM is the right

4 step because it focuses health protection efforts on

5 children, who are especially susceptible to adverse health

6 effects caused by diesel PM and other toxic air

7 contaminants. It represents a simple, practical, and

8 easily implemented measure that makes sense in terms of

9 fuel conservation and vehicle wear as well as health

10 benefits. And it complements and enhances existing and

11 future air quality laws, policies, and programs that

12 affect motor vehicle and other emission sources.

13 --o0o--

14 AIR POLLUTION SPECIALIST COOK: The California

15 Health and Safety Code both requires and sets forth a

16 process for the identification of toxic air contaminants

17 and for the development of air toxic control measures.

18 In 1998, the Air Resources Board identified

19 diesel PM as a toxic air contaminant. Diesel PM is

20 admitted by both stationary and mobile diesel-fueled

21 engines and is the most prominent motor vehicle toxic air

22 contaminant affecting children.

23 In 2000, the Board approved a risk reduction plan

24 for diesel PM. The plan included recommendations for

25 idling measures as part of an overall strategy to reduce

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234545

1 diesel PM emissions and exposure.

2 However, motor vehicle toxic air contaminant

3 emissions are not limited to diesel-fueled vehicles. All

4 except electric-powered motor vehicles emit toxic air

5 contaminants regardless of the fuel used. Other

6 identified toxic air contaminants are shown in the slide.

7 --o0o--

8 AIR POLLUTION SPECIALIST COOK: In 2001, the

9 Office of Environmental Health Hazard Assessment published

10 the prioritization of toxic air contaminants under the

11 Children's Environmental Health Protection Act.

12 This report identified diesel PM and three other

13 substances associated with heavy-duty motor vehicle

14 exhaust among the top five priority toxic air contaminants

15 for children.

16 --o0o--

17 AIR POLLUTION SPECIALIST COOK: As part of the

18 development process the staff conducted telephone surveys

19 of states, air districts, school district transportation

20 officials, and school bus contractors to assess the status

21 of state and local anti-idling laws.

22 We found that California is one of 18 states with

23 an anti-idling law. California statute does not

24 specifically address children's exposure to school bus and

25 other heavy-duty commercial vehicle exhaust. Although the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234546

1 air districts have some limited idling authority under

2 nuisance rules and the California Environmental Quality

3 Act, or CEQA requirements, they do not have specific

4 anti-idling regulations. Also, there are no local

5 ordinances that specifically restrict idling.

6 However, we did learn that a few school districts

7 and school bus contractors have written anti-idling

8 policies, and that many have told us that they verbally

9 advise drivers to avoid excessive idling.

10 --o0o--

11 AIR POLLUTION SPECIALIST COOK: To date, ARB's

12 lower emissions school bus program has assisted in funding

13 the retrofit of about 1,000 existing diesel school buses

14 with diesel particulate filters and the replacement of

15 nearly 400 buses with new alternative fuel or lower

16 emitting diesel school buses.

17 By the end of next year the program will fund

18 retrofits to an additional 1,500 diesel school buses.

19 Also, an additional $5 million of Proposition 40 funds

20 will be available for bus replacement.

21 According to the California Highway Patrol annual

22 safety inspection records, there are approximately 26,000

23 school buses in California today.

24 --o0o--

25 AIR POLLUTION SPECIALIST COOK: In addition to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234547

1 conducting surveys to define current state and local

2 anti-idling laws, the staff consulted with representatives

3 of two state agencies that already have requirements for

4 school transportation bus and vehicle drivers. The

5 California Department of Education requires initial and

6 annual drivers training, and the California Highway Patrol

7 develops tests for and certifies drivers.

8 Meetings and conference calls were also held with

9 representatives of school districts and other

10 organizations as will be explained in the Ombudsman's

11 report following my presentation.

12 One public consultation meeting and two public

13 workshops on the proposed ATCM were held this year.

14 --o0o--

15 AIR POLLUTION SPECIALIST COOK: Initially the

16 proposed ATCM was to apply only to school buses. However,

17 as a result of public comment, we expanded applicability

18 requirements to include other buses and commercial

19 vehicles.

20 We were specifically asked to include other types

21 of school transportation such as school pupil activity

22 buses, youth buses, and general public paratransit buses.

23 For the remainder of the presentation I will use

24 the term "school bus" to refer to all of the buses and

25 commercial vehicles involved in school transportation.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234548

1 We were also specifically asked to include

2 paratransit buses and heavy-duty vehicles other than buses

3 that operate at or near schools.

4 --o0o--

5 AIR POLLUTION SPECIALIST COOK: The proposed ATCM

6 would require drivers of school buses to turn off the bus

7 engine upon stopping at a school or within 100 feet of a

8 school. This would effectively mean no idling at or near

9 schools. At other locations school buses would be allowed

10 to idle up to five minutes.

11 --o0o--

12 AIR POLLUTION SPECIALIST COOK: The proposed ATCM

13 would also require that transit buses and heavy-duty

14 vehicles other than buses not idle when on school grounds,

15 and idle no more than five minutes within 100 feet of a

16 school. The staff added this provision as a result of

17 public comments received.

18 --o0o--

19 AIR POLLUTION SPECIALIST COOK: In addition, the

20 proposed ATCM requires drivers to be informed about the

21 requirements of the proposed ATCM. It also requires that

22 complaints and enforcement actions be tracked and that

23 records be kept on such activities.

24 --o0o--

25 AIR POLLUTION SPECIALIST COOK: An electric

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234549

1 powered bus or commercial vehicle would not be subject to

2 the proposed ATCM; nor would any private passenger

3 vehicles.

4 We recognize that private passenger cars

5 contribute to toxic air contaminant emissions and to

6 traffic congestion at schools, and would recommend

7 discouraging passenger car idling as part of the education

8 measures staff would undertake to implement the proposed

9 ATCM.

10 --o0o--

11 AIR POLLUTION SPECIALIST COOK: The regulation

12 exempts a number of idling activities that are necessary

13 due to safety or operational concerns. Examples of

14 exempting idling activities include idling a bus or

15 vehicle stopped at a stop sign or signal or otherwise

16 stopped in the midst of traffic, and idling necessary to

17 operate defrosters or to reach appropriate brake pressure.

18 --o0o--

19 AIR POLLUTION SPECIALIST COOK: If the Board

20 adopts the proposed ATCM, it would become effective once

21 the regulatory process is complete and outreach efforts

22 have been made. These efforts are likely to be completed

23 by the fall 2003 school year.

24 --o0o--

25 AIR POLLUTION SPECIALIST COOK: We expect the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234550

1 proposed ATCM to reduce exposure and the associated

2 adverse health impacts due to diesel PM and other toxic

3 air contaminants and air pollutants. For any given

4 community, the degree of health benefit would depend upon

5 the current number and extent of unnecessary idling of

6 affected buses and commercial vehicles that would be

7 curtailed by the proposed ATCM.

8 We also expect a proposed ATCM to benefit the

9 environment with modest reductions in particulate matter

10 and oxides of nitrogen.

11 --o0o--

12 AIR POLLUTION SPECIALIST COOK: We estimate that

13 compliance costs would be minimal, about $2 or less per

14 driver per year, because the proposed ATCM would not

15 require any new or add-on control devices or equipment and

16 existing programs and procedures could be used to comply

17 with training, tracking and record keeping requirements.

18 For example, the California Department of Education and

19 California Highway Patrol already have well established

20 training and testing programs for school bus drivers.

21 --o0o--

22 AIR POLLUTION SPECIALIST COOK: If the Board

23 adopts the proposed ATCM, we would work with the

24 California Department of Education and Highway Patrol to

25 incorporate the regulation's requirements into existing

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234551

1 required training, testing and record keeping programs for

2 school bus drivers. Because of these programs, we

3 anticipate a high degree of compliance on the part of this

4 key segment of drivers.

5 We would develop educational materials for the

6 fleet owners or operators of affected transit buses and

7 heavy-duty vehicles other than buses. These owners and

8 operators are expected to incorporate these materials and

9 existing procedures to inform and keep records on drivers.

10 We would also develop special education materials for

11 school districts and the public. We believe that

12 teachers, school officials, and parents can provide

13 valuable assistance in identifying and reporting suspected

14 instances of noncompliance.

15 The ARB Enforcement Division would have primary

16 enforcement responsibility for the proposed ATCM. They

17 are planning to commit staff and resources to expand their

18 current complaint line for registering smoking vehicle

19 complaints to register complaints about excessive

20 heavy-duty commercial bus or vehicle idling at or near

21 schools.

22 They would also send a warning notice in response

23 to each complaint and investigate repeat complaints with

24 drivers and fleet owner-operators, and they would conduct

25 spot inspections to determine compliance rates.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234552

1 The California Highway Patrol, local peace

2 officers, and air districts could assist in enforcement of

3 the proposed ATCM if and when necessary.

4 --o0o--

5 AIR POLLUTION SPECIALIST COOK: In summary, the

6 proposed ATCM would reduce children's and others' exposure

7 and associated potential cancer risk and other health --

8 adverse health effects due to diesel PM and other toxic

9 air contaminants.

10 It would be implemented easily at minimal cost to

11 school districts, transit agencies, and other regulated

12 fleet owners or operators. And it would complement and

13 enhance our efforts to reduce exposure to diesel PM and

14 other toxic air contaminants.

15 --o0o--

16 AIR POLLUTION SPECIALIST COOK: In response to

17 some comments that we've received this week, there are a

18 few minor changes that staff would like to make to the

19 proposed regulations to clarify certain provisions.

20 We propose to clarify that the regulation does

21 not affect private passenger vehicles of any kind. The

22 propose ATCM would be applicable to heavy-duty commercial

23 vehicles only.

24 We propose to modify the exemption for idling to

25 operate defrosters, heaters, air conditioners, or other

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234553

1 equipment to clarify that such idling is to ensure the

2 safety or health of the driver or passengers, or as

3 otherwise required by federal motor carrier safety

4 regulations.

5 We propose to clarify that the California Highway

6 Patrol are a subset of peace officers, and to recognize

7 that there are designees of piece officers who are

8 authorized to enforce certain laws as peace officers.

9 Finally, as a result of a comment received late

10 yesterday, we propose to add refuse pickup as an example

11 of an exemption for idling necessary to accomplish work

12 for which the vehicle was designed.

13 --o0o--

14 AIR POLLUTION SPECIALIST COOK: Therefore, we

15 recommend that the Board adopt the airborne toxic control

16 measure to limit school bus idling and idling at schools

17 with staff's proposed modifications.

18 This concludes my comments.

19 CHAIRPERSON LLOYD: Thank you very much.

20 Madam Ombudsman, would you share with us the

21 public participation process followed during the

22 development of this regulation, and share any comments or

23 concerns with us at this time.

24 OMBUDSMAN TSCHOGL: Thank you.

25 Mr. Chairman and members of the Board, staff has

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234554

1 worked closely with the following entities in the

2 development of the proposed ATCM: California High Patrol,

3 California Department of Education, the Health Commission

4 of the California Parent-Teacher's Association, Consortium

5 of Northern California School Districts, Los Angeles

6 Unified School District, California Association of School

7 Transportation Officials, CAPCOA Engineering Managers,

8 CAPCOA Mobile Source and Fuels Committee, Environmental

9 Council of the States, Association of State and

10 Territorial Health Officials, Engine Manufacturing

11 Association, and the California Transit Association.

12 During May and June of 2002, staff conducted two

13 extensive telephone surveys. The first one was sent to

14 air quality regulators in all 50 states. In the second

15 survey staff contacted over 882 school district

16 transportation directors and 13 major school bus

17 contractors. Beginning in May 2002 staff made

18 presentations to various school district representatives

19 and the California Association of School Transportation

20 Officials Managers Forum.

21 In addition, staff presented at the CAPCOA

22 Engineering Managers meetings, CAPCOA Mobile Source and

23 Fuels Committee, PTA Health Commission, and the

24 Environmental Council of States and the Association of

25 State and Territorial Health Officials. Staff used these

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234555

1 meetings to receive input on how best to develop the

2 proposed ATCM.

3 One public consultation meeting was held in

4 Sacramento in July 2002 with an attendance of

5 approximately 40 individuals.

6 Also, two public workshops were held: One in

7 Diamond Bar on September 10th, 2002, and the other in

8 Sacramento on September 12th, 2002. Approximately 30

9 people attended these workshops, representing school

10 districts, private schools, school bus contractors, school

11 bus associations, transit organizations, environmental

12 groups, as well as other state agencies.

13 All workshops were noticed on the ARB's website

14 to a list-serve of approximately 5,000 individuals and

15 organizations and to about 12,000 via regular mail.

16 In addition to the above outreach, staff made

17 more than 150 individual phone calls and responded to

18 several E-mails from various interested individuals.

19 Staff has developed a website for this program area that

20 includes an overview, status, schedule, plus links to

21 personnel who can answer additional questions.

22 As mentioned in the staff presentation, staff

23 intends to continue outreach efforts if the Board approves

24 the proposed ATCM to ensure statewide awareness of this

25 regulation.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234556

1 Thank you.

2 CHAIRPERSON LLOYD: Thank you very much.

3 Board members, have any questions?

4 Mr. Calhoun.

5 BOARD MEMBER CALHOUN: This particular regulation

6 is directed at vehicles located in and around schools.

7 And I wonder if the staff has given consideration to

8 expanding it to other locations.

9 EXECUTIVE OFFICER KENNY: Mr. Calhoun, we

10 actually have. But what we wanted to do is actually kind

11 of address the issue of children in schools first because

12 we thought it was kind of a natural place for the Board to

13 go, particularly in light of the children's health

14 protective efforts that we have underway.

15 We wanted to see how this would actually work.

16 And then what we wanted to do was proceed to essentially

17 kind of all heavy-duty vehicles and really proceed

18 throughout the State.

19 BOARD MEMBER CALHOUN: Thank you.

20 CHAIRPERSON LLOYD: Thank you.

21 Any other questions at this time?

22 With that, I'd like to ask the first three

23 witnesses who've signed up to testify today.

24 And Paul Wuebben, Richard Hibbs, and Sean Edgar.

25 MR. WUEBBEN: Good morning.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234557

1 CHAIRPERSON LLOYD: Good morning, Paul.

2 MR. WUEBBEN: Good morning, Mr. Chairman, members

3 of the Board. I'm Paul Wuebben, the Clean Fuels Officer

4 with the South Coast Air Quality Management District. And

5 we certainly appreciate this opportunity to provide

6 comment on this.

7 The district shares the concern of your staff and

8 the Board that idling school bus emissions can represent

9 an adverse health effect and that that's certainly cause

10 for adopting this measure. We strongly support its

11 adoption.

12 I think that perhaps the most eloquent simple

13 testimony I might give on this would be just simply to

14 quote from several letters that have been written on this

15 subject by some local school children at Brentwood Magnet

16 School in Los Angeles on this general issue. They note --

17 that is Michelle, age 7: "Thank you for voting clean

18 buses. I understand you. Was it a hard time to think."

19 (Laughter.)

20 MR. WUEBBEN: The next says: "Thank you for

21 saying clean buses, because some people like me have

22 asthma and can die."

23 And that was Cecilia, age 7.

24 And last from Justin, age 6, who writes a rather

25 long sentence and may be preparing for law school, says:

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234558

1 "If you buy clean buses, we will get sick and all the

2 people will stay home and no one will go to work and we

3 will not be able to breathe, and there will be no people

4 riding in the bus and neighborhood."

5 So with that, I share those sentiments and urge

6 your adoption.

7 Thank you.

8 CHAIRPERSON LLOYD: Thanks very much, Paul.

9 MR. HIBBS: Good morning, Mr. Chairman. My

10 name's Richard Hibbs. Members of the Board, I'm with

11 Golden Gate Transit.

12 Like many other public transit agencies, either

13 testifying today or throughout California, our service by

14 design has several stops adjacent to or in immediate

15 proximity to school grounds.

16 In some instances, by location of school or to

17 size or design of the school, we have more than one bus

18 stop that's immediately adjacent to or within 100 feet of

19 the campus.

20 In reading the recommendations, it's unclear as

21 to whether the five minutes in the aggregate applies to

22 the stop itself or to multiple buses that go through that

23 area. In the instance of multiple service to that area,

24 it would dramatically affect our scheduling of coaches to

25 that area based on customer demand.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234559

1 Also, to properly train and educate our

2 operators, we would need more clarification as to when

3 this rule would be in effect, if it would be in effect

4 only during school hours or when school's in session or,

5 as a school speed limit zone, when children are present.

6 Also in the matter of the record keeping

7 associated with this measure, we would be impacted by the

8 necessity of tracking and archiving these records for

9 three years in the need to devote current staff or hiring

10 staff to monitor compliance. But there's no clear

11 understanding as to if there would be any auditing done by

12 any agency to ensure compliance with this record keeping.

13 I appreciate the efforts of the Board in looking

14 at this measure. I just ask that you consider these

15 points prior to the adoption.

16 And I thank you for your time.

17 CHAIRPERSON LLOYD: Thank you. Maybe staff could

18 clarify -- seems that some of those are very straight

19 forward.

20 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: Mike

21 Tollstrup.

22 As to the first issue, the intent of staff is

23 that the transit buses would be allowed or any other

24 vehicle would be allowed five minutes each time they pull

25 up and stop. It wouldn't be an aggregate of buses coming

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234560

1 through there. One single bus, five minutes.

2 CHAIRPERSON LLOYD: And that's when school

3 children are present?

4 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: Well,

5 actually the regs would apply 24-7. We're looking at

6 behavioral changes and what -- when they're within that

7 school zone, it just becomes automatic. It's just, you

8 know five minutes --

9 CHAIRPERSON LLOYD: And the 100 feet, is that 100

10 feet of the bus or the tailpipe?

11 (Laughter.)

12 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: It's

13 100 feet within the boundaries of the school -- from the

14 boundaries of the school.

15 CHAIRPERSON LLOYD: So it's the front of the bus,

16 or the back of bus, whichever it is. Okay.

17 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: How

18 about midpoint.

19 CHAIRPERSON LLOYD: Okay.

20 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: As

21 far as recordkeeping goes, we tried to design this to be

22 minimal in recordkeeping. What we would want, and one of

23 the reasons we want records kept, is so that if we ever

24 needed to see what went on, we'd be able to check the

25 records to see. We don't plan on doing it ongoing.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234561

1 But, again, recordkeeping is minimal. We expect

2 that they keep notice of training. And if there's any

3 violations, they keep record of that.

4 CHAIRPERSON LLOYD: Okay. Thank you.

5 Sean Edgar, Gene Walker, Adam Cuevas.

6 MR. EDGAR: Good morning, Chairman Lloyd and

7 Board members. Sean Edgar representing the California

8 Refuse Removal Council, more than 100 companies -- locally

9 owned companies providing solid waste and recycling

10 services throughout the State from San Diego through the

11 Central Valley to the Bay Area to the beautiful City of

12 Davis.

13 I appreciate the opportunity to address you this

14 morning. In our capacity as waste collectors and

15 recyclable material collectors, our member companies

16 provide a necessary public health function for schools and

17 the customers that are located near schools. Based on the

18 staff report, we support the modifications to provide an

19 exemption language for solid waste or refuse pickup. We

20 would ask that that language be slightly added or expanded

21 to address the provision of recyclable collection

22 services.

23 We appreciate your efforts to deal with our

24 industry. And as we always attempt to provide the best

25 service and improve our collection efficiencies, ours is

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234562

1 the business of environmental protection going back, in

2 many cases, four or five generations into our family-

3 owned companies where horse-drawn carts were the original

4 method of collection. So we've come a long way since that

5 time.

6 And we appreciate your continuing efforts to

7 recognize that we serve multiple masters. First of all,

8 of course we serve our public health and safety

9 requirement to provide refuse collection for local

10 communities.

11 Secondly, we have a mission to keep waste out of

12 the landfills, which we're progressing: Forty-two percent

13 in the year 2000. Fifty percent was our goal. But we're

14 getting closer.

15 And, third, we have an obligation to provide

16 efficient service to local governments with the collection

17 efficiencies.

18 We do know, specific to schools, I will add, that

19 Senate Bill 373 by Senator Torlakson requires schools to

20 do a little bit more on recycling. So we can anticipate

21 that there will be more recycling effort at schools. Our

22 mission is to provide that collection service as

23 efficiently as possible. And we do so through a variety

24 of means, and appreciate your recognition of that by

25 providing the exemption language.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234563

1 Finally, we'd like to thank Mr. Kenny and the

2 staff for strategizing with our industry to achieve new

3 technology that is available and economically affordable

4 to our industry. And we have continuing discussions about

5 that. So we thank him and his staff for those efforts.

6 And I welcome any questions you may have this

7 morning.

8 CHAIRPERSON LLOYD: Thank you very much. Sounds

9 as if staff has worked to address your concern.

10 I'd just point out also that you wouldn't have to

11 have an exemption because we allow zero emission trucks or

12 whatever. They're not subject to this. So there's

13 incentive for you to, you know, use that if you want. I

14 realize that may not be there today, but hopefully

15 tomorrow.

16 MR. EDGAR: Understood. And we're looking

17 forward to retooling our efforts as we have, going from

18 horse-drawn carts to automated collection. So we're

19 interested to continue to make sure when it's achievable,

20 we can roll it out on the streets.

21 Thank you.

22 CHAIRPERSON LLOYD: Thank you.

23 Gene Walker, Adam Cuevas, Diane Bailey.

24 MR. WALKER: Good morning, Chairman Lloyd, Board

25 members and staff. My name is Gene Walker. I'm the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234564

1 maintenance manager for Golden Gate Transit. But today

2 I'm here speaking as the Chairman of the Maintenance

3 Committee of the California Transit Association.

4 And on behalf of those individuals and agencies,

5 I would certainly like to thank you for your responses to

6 our questions that needed clarification and our concerns.

7 It's made this process much more understandable to us.

8 I would have one suggestion that possibly -- in

9 your ATCM when it is finalized. Some of the questions

10 that you clarified just yet this morning with the

11 aggregate rule, if it's a vehicle or a number of vehicles,

12 et cetera, be added in there just so that everyone is

13 clear on what the intent is.

14 Certainly anything to reduce emissions around our

15 school children or our young children anywhere is an

16 admirable effort.

17 The 100 foot issue -- or I should say within 100

18 feet of school grounds is certainly an issue that transit

19 had feared would be an aggregate of all coaches. And that

20 would include our hubs, et cetera, that are within that

21 100 feet. And that was a major concern. But clearly

22 staff has given this a lot of thought and put a lot of

23 effort in it and made this something that certainly is

24 workable for all involved. And we still reach the joint

25 goal that we want, and that's reduced emissions.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234565

1 In the past we have certainly worked with the

2 Board and staff members in reducing emissions in transit

3 buses. We formed a partnership, worked together to make

4 these things work. Then we made sure that the

5 manufacturers of the engines and the devices, with all

6 their promises, that these devices actually did work and

7 reduced emissions and were reliable.

8 We would like to take this opportunity to again

9 offer our assistance to staff in the implementation of

10 this regulation. And any assistance that we can offer

11 your staff, we are always ready to help.

12 Thank you very much for your time.

13 CHAIRPERSON LLOYD: Thanks for coming, Gene. We

14 appreciate it.

15 CHAIRPERSON LLOYD: We have Adam Cuevas and Diane

16 Bailey.

17 MR. CUEVAS: Good morning, Mr. Chairman and Board

18 members. My name's Adam Cuevas. I'm an Assistant Chief

19 with the California Highway Patrol.

20 We'd like to thank the Board for working with us

21 in addition to staff on such an important issue.

22 California Highway Patrol definitely supports anything

23 that improves safety in any manner. And of course we

24 defer to the Board on expertise on this issue, with the

25 exception of enforcement, which it definitely ties into us

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234566

1 in that respect.

2 I'd like to take a moment to just thank staff for

3 working with us throughout this process, and especially

4 recently because there were ongoing changes and

5 considering late input into this issue. We feel confident

6 that all the technical issues that we've provided input on

7 will be clarified, because that's simply what they are,

8 just clarifications.

9 I would like to point out one issue in the

10 overview, which was extremely informative. But when it

11 touched on the Highway Patrol, there's actually two

12 components that are affected within our department. We do

13 inspect all school buses in California.

14 But in addition to that, we have motor carrier

15 safety specialists, over 200 in the State, that are

16 charged with inspecting the motor carrier facilities. And

17 they do this often times at the school district -- on the

18 grounds of the school where many times the school district

19 is at. So because of that we have -- and ironically it

20 ends up falling into the realm that they drive a

21 commercial vehicle, their vans, that are basically their

22 office, and they are at the school facility.

23 So they might be enforcing a law that they

24 themselves are violating. So it's something that I would

25 like the Board and staff to consider in the exemptions

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234567

1 that -- I believe the way I read the language, because I

2 just got to see them today, is, you know, have some type

3 of exemption for CHP staff that's working there on the

4 grounds.

5 And with that, once again I'd like to thank you

6 for allowing us to provide any input. And I'd be happy to

7 answer any questions.

8 CHAIRPERSON LLOYD: Again, thank you very much

9 for working with us.

10 On that latter point, I presume you couldn't

11 enforce the speed limit unless you violated it also. So

12 maybe staff in this sort of context would be looking at

13 something similar.

14 MR. CUEVAS: I'm sure we can work something out.

15 Thank you very much, sir.

16 CHAIRPERSON LLOYD: Thank you.

17 Last witness is Diane Bailey.

18 MS. BAILEY: Good morning, Chairman and members

19 of the Board. My name's Diane Bailey and I'm with the

20 Natural Resources Defense Council.

21 I'd like to give very brief comments in support

22 of this very important ATCM. And this ATCM is so very

23 important to the health of the school children and staff

24 throughout California. The ARB staff report makes a very

25 solid case justifying the need for this measure.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234568

1 Additionally, the Diesel Risk Reduction Plan

2 released several years ago includes estimates that idling

3 of school buses can create a potential excess cancer risk

4 of almost 101 million over a 70-year life span. The

5 cancer risks and the many other health risks, including

6 exacerbated asthma, from the diesel exhaust due to school

7 bus idling are clearly unnecessary and avoidable.

8 The strength and health protective value of this

9 rule are contained in several very important provisions.

10 Specifically, the 100 foot buffer zone around schools,

11 creating a comprehensive area where idling is restricted,

12 must not be lessened or relaxed in any way.

13 Additionally, including other heavy-duty diesel

14 vehicles is both appropriate and essential to improving

15 air quality at schools. And we support ARB's effort to

16 minimize the idling of these heavy-duty diesel vehicles in

17 addition to the school buses in these school zones.

18 Outside of the school zones we support the

19 general idling limit of five minutes as a reasonable

20 idling restriction which is already required in many

21 areas.

22 However, I want to bring up there are several

23 exemptions in the proposed measure that we feel should be

24 better defined as to avoid possible misunderstandings.

25 And we have detailed these concerns in our written

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234569

1 comments. With these minor suggestions aside, however, we

2 wholeheartedly support this measure and urge the Board to

3 adopt it.

4 We urge ARB to ensure rigorous enforcement of

5 this rule in order to protect children from the harmful

6 effects of diesel exhaust. We also encourage ARB staff to

7 actively survey schools to find out whether any idling

8 problems continue from both school buses and other

9 heavy-duty vehicles on school property and nearby.

10 ARB should be particularly aggressive in

11 enforcing this rule as well as other existing idling

12 restrictions at sites of high levels of heavy-duty diesel

13 vehicle activity that are close to schools.

14 Finally, I'd like to thank ARB staff for doing an

15 excellent job collecting input from the numerous

16 stakeholders, including many school officials, and

17 adjusting this ATCM based on that input.

18 We commend ARB for its effort to produce the very

19 strong school bus idling rule, and we urge the Board to

20 support and accept this rule.

21 Thank you.

22 CHAIRPERSON LLOYD: Thank you very much.

23 Questions?

24 Yes, Ms. D'Adamo.

25 BOARD MEMBER D'ADAMO: Thank you for your

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234570

1 comments. I've got your letter, and would just -- I don't

2 know necessarily that I agree, but I think we ought to

3 have at least a discussion on what you call the exemption

4 loopholes. If staff could respond to the language

5 regarding to prevent a safety or health emergency and the

6 suggestion regarding extreme climate conditions.

7 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: One

8 of the things that staff tried to do in developing the

9 proposal was to provide the necessary outs that would be,

10 you know, necessary to perform functions, work at schools

11 for different types of vehicles and also address the

12 issues of special needs children. We provide an exemption

13 for that.

14 And then the other one that we really struggled

15 with was the temperature extremes, defining when they

16 should turn on air conditioners, when they should turn on

17 heaters.

18 We looked at what other states did. They were

19 all over the place on some of the policies that they'd

20 approved. We weren't able to pin anything down

21 specifically. So what we did was basically leave it as

22 extremes. We figure we'll go through this first phase,

23 see how the program works, see if we have issues to

24 address, and then come back if we need to pin that down

25 somehow. But we were unable to put specific numbers in

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234571

1 the reg. We think that, you know, for the most part if we

2 get people trained, they'll do the right thing and we

3 won't have the idling -- any excessive idling or

4 unnecessary idling.

5 BOARD MEMBER D'ADAMO: But what is your

6 suggestion in training? The comment that NRDC brought up

7 in its letter was some times that the drivers may be

8 unnecessarily idling when temperatures are at, say, 75

9 degrees. I don't really know what goes on out there.

10 Is that common?

11 STATIONARY SOURCE DIVISION CHIEF VENTURINI:

12 Well, I think one of the issues we had, because

13 we did spend quite a bit of time looking at this

14 temperature thing, is the difficulty in trying to enforce

15 that type of temperature thing.

16 Also as another matter, we found out that any

17 time you try to do anything to a bus, there's a whole set

18 of regulations, and they're in governing, even putting a

19 little sticker on a bus. So we ran into that kind of an

20 obstacle.

21 I think where we're coming down on this is

22 that -- the bottom line is you shouldn't be idling the

23 bus. And I think our intent is to follow this closely,

24 particularly during the first year.

25 If we see abuses occurring, then we're going to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234572

1 have to relook at this and come back to you with

2 suggestions to tighten it down. We're optimistic based on

3 the discussions we've had and what we've heard from

4 people, even here today, that there seems to be broad

5 support for this. And through some education effort,

6 particularly training that will be done by the parties of

7 the drivers and so forth, that they will basically turn

8 the engine off unless there's really good cause to leave

9 it idling.

10 BOARD MEMBER D'ADAMO: I guess I'm just still

11 kind of confused about what good cause would be. My

12 definition -- I live in the valley and I've got to get in

13 the car that's been baking in the sun all day long. I

14 don't mean to be unnecessarily harsh, but I don't know

15 what good cause would be, you know, for a school bus.

16 It's been a long time since I've been in one that's been

17 baking all day.

18 How are the operators to define what good cause

19 is? Your definition might be different from mine. Is

20 there anything we can do to kind of help direct them?

21 STATIONARY SOURCE DIVISION CHIEF VENTURINI: What

22 we might be able to do is we're going to prepare some

23 guidance that will help people in doing that. We might be

24 able to provide some guidance as to what we think would be

25 appropriate. We can consult with people involved in this

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234573

1 and try to put something around the outside of a

2 regulation that makes it very difficult -- because that'd

3 be very specific and so forth.

4 BOARD MEMBER D'ADAMO: Do we have a report-back

5 provision in the resolution? I haven't --

6 STATIONARY SOURCE DIVISION CHIEF VENTURINI: No,

7 we'd be very happy to report back to you to give you a

8 progress report.

9 CHAIRPERSON LLOYD: I think that'd be useful.

10 Although I do share Peter's concern about coming up with

11 specific numbers. Because then you couple it with: Is it

12 inside the bus, outside the bus, what's the humidity, how

13 do you translate Palm Desert to Big Bear or Lake Tahoe?

14 All those things get complicated. So I like staff's

15 approach of basically let's get a bit of experience, while

16 at the same time understanding, you know, the comments

17 from the previous person to do that. If we get too

18 prescriptive, I think maybe we'll be creating some

19 unnecessary problems there.

20 Supervisor Patrick.

21 BOARD MEMBER PATRICK: Thank you.

22 You know, I think one of the places that we can

23 look is we can look to Kern County, because we had an

24 article in our paper probably a month ago about the major

25 districts in the Bakersfield area have already implemented

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234574

1 this. And we certainly do have temperature extremes. And

2 I don't know how they handle that. There was not a

3 mention of, you know, if it's over 95, if it's, you

4 know -- and of course we have the cool weather this time

5 of year. But certainly I think it's a good idea to

6 revisit this after we have had an opportunity to look at

7 how it's actually functioning out there.

8 But there are folks that are already doing this.

9 And so certainly folks in areas where we do have

10 temperature extremes that have already put this into

11 effect voluntarily would be a first place that we could

12 look.

13 But I agree with you. It could be a nightmare.

14 You know, if you're talking about, well, is it over 85, is

15 it over 90, you know, what's the cut point there? But we

16 do have folks that are already doing this, and saving an

17 enormous amount of money in fuel costs. And I think that

18 that's a very important thing too, to recognize how this

19 not only is helping public health of our children, but

20 also it's saving an enormous amount of money for the

21 school districts, who are becoming increasingly

22 financially strapped.

23 Thank you, Mr. Chairman.

24 CHAIRPERSON LLOYD: Thank you.

25 Professor Friedman and Supervisor DeSaulnier.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234575

1 BOARD MEMBER HUGH FRIEDMAN: Yeah, I agree that

2 we -- the best approach at this time, it seems to me,

3 would be the flexible approach, to talk about reasonably

4 necessary for the health and comfort, and see how it works

5 out. I just don't see being that overly prescriptive to

6 specify temperature ranges and durations and that sort of

7 thing.

8 I assume in most cases buses are started, they're

9 cold or they're hot, and then they're brought to a

10 reasonable temperature at some point, hopefully before the

11 kids are picked up and that kind of thing. And then it's

12 a question of turning it off if you have to idle at school

13 sites and so forth.

14 And presumably the temperature's maintained, more

15 or less, for long enough to offload or unload, so forth.

16 Anyway, I think this is a very, as usual, a

17 wonderful product from staff. It's a, I think, very

18 carefully well thought out, put together program. And I

19 think to get it jump started the key would be obviously

20 education, as you recognize. And to institutionalize it,

21 I hope that not only the -- those who operate buses and

22 other vehicles affected by it. And law enforcement, who

23 will be used to help monitor or at least to enforce it.

24 But that somehow the school districts and the schools

25 will -- you know, the right people will be told about it

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234576

1 and be watching for it and monitor it so that -- because

2 they're the front line of enforcement.

3 CHAIRPERSON LLOYD: Thank you,

4 Supervisor DeSaulnier.

5 BOARD MEMBER DeSAULNIER: Just briefly, Mr.

6 Chairman. I congratulate staff on the fine work. And I

7 see this as a first step -- and I think we all realize

8 that -- but look forward to the refinements.

9 But to Joe's comment, question earlier, the idea

10 of expanding this. Thinking about being at the Port of

11 Oakland recently during the labor management problems

12 where their were literally hundreds of trucks idling for

13 hours, and the public health consequence of that, plus the

14 shear stupidity of it. It would be really nice to come

15 back at the nearest opportunity to really look at that.

16 Thank you.

17 CHAIRPERSON LLOYD: Thank you.

18 Mr. Calhoun.

19 BOARD MEMBER CALHOUN: As I understood the

20 testimony from the Chief from CHP, that he's asking for an

21 exemption. And I didn't quite understand the basis for

22 the request. I thought I heard you say the CHP would be

23 enforcing the law, but is asking that they be exempted

24 from complying with the law. Is that my understanding?

25 MR. CUEVAS: Sir, the exemption that I'm talking

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234577

1 about is -- it deals with the motor carrier inspection

2 specialists that often time work -- their office is a van.

3 It's a Chevy or Ford van that they have all their

4 equipment inside the van. And they actually go in and

5 inspect these -- all the motor carriers, which many times

6 are these school districts, and they write their reports

7 right there on the spot.

8 They inspect some vehicles, and then go back, in

9 and out. So it does -- it touches on the issue of the

10 comfort issue. If you're up in Tahoe, they have to be

11 there all day. They don't have an office there at the

12 facility. So the exemption, once again, is the

13 reasonableness of, are you expecting them to sit in the

14 van for eight hours, whether it be like 120 degrees, and

15 do their work -- because they have to, that's what they're

16 required to do -- or turn on the van, drive 100 yards --

17 or 100 feet from the school and then, you know, write some

18 reports and then come back? Then you have to consider the

19 issue of how much pollution did that cause.

20 So to answer your question simply, yes, we are

21 looking for an exemption because there is one in there for

22 all work-related issues, such as cranes -- and I think

23 that's what staff was looking at and the Board was looking

24 at. But with regards to our employees, it's actually

25 doing the inspections and writing reports there in their

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234578

1 vehicle, which is their office.

2 Does that make sense?

3 BOARD MEMBER CALHOUN: I guess.

4 Staff, do you have any comments to make regarding

5 this?

6 PROJECT ASSESSMENT BRANCH CHIEF TOLLSTRUP: The

7 proposal that we have before you now, what we're

8 proposing, is that there would be no exemptions on the

9 school campus. One of the things we're trying to get away

10 from is people doing things for comfort. We've provided

11 an out for extreme temperatures, and they would be able to

12 use that. But, you know, when you weigh comfort with

13 children's health, we just decided that it was probably

14 best that everybody shut their vehicles off unless there

15 was an extreme need to run the air conditioning or

16 heaters.

17 BOARD MEMBER CALHOUN: I'm asking for something

18 that's a little more specific regarding the request that

19 the CHP made.

20 STATIONARY SOURCE DIVISION CHIEF VENTURINI: I

21 think we're -- where our perspective is, there's

22 provisions in the regulation right now that allow the

23 idling when necessary for health and safety and so forth.

24 So the extremes that Mr. Cuevas is mentioning we believe

25 is already addressed in the regulation.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234579

1 BOARD MEMBER CALHOUN: Thank you.

2 CHAIRPERSON LLOYD: Professor Friedman.

3 BOARD MEMBER HUGH FRIEDMAN: Just on that point,

4 Mr. Calhoun.

5 I would think the rule of reason would suggest

6 that somebody needing for comfort sake, health sake to

7 idle for a substantial period of time in order to work in

8 the vehicle, such as highway patrol inspection, would be

9 willing to move 110 feet away to do that so as not to run

10 the risk of affecting children's health and other's health

11 there.

12 I mean just common sense would suggest -- now, I

13 realize that if they have to go in and out regularly,

14 frequently -- but then presumably they could turn it off

15 and turn it on again. And they close the door -- quickly

16 jump out, close the door, and it wouldn't let the cold air

17 or the hot air escape. I mean I think we need to see how

18 it works.

19 We don't want to -- I'm sure nobody here wants to

20 be an impediment to the legitimate and important function

21 of the Highway Patrol or anyone else in doing their job.

22 So hopefully it will work, but we ought to look

23 at it from experience.

24 CHAIRPERSON LLOYD: Mrs. Riordan.

25 BOARD MEMBER RIORDAN: With those good remarks,

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234580

1 let me offer to move the approval of Resolution Number

2 2-33 with the amendments proposed by staff.

3 CHAIRPERSON LLOYD: Mr. McKinnon had a --

4 BOARD MEMBER McKINNON: I'm fine. I'll second.

5 CHAIRPERSON LLOYD: Ms. D'Adamo.

6 BOARD MEMBER D'ADAMO: I just wanted to make

7 certain that we're going to include a report back. And

8 also could we maybe keep the pressure on us as far as

9 expanding this to include commercial vehicles and include

10 a provision in the resolution as to that as well?

11 EXECUTIVE OFFICER KENNY: Oh, we'd be happy to

12 essentially look at the commercial vehicles generally and

13 include that in the resolution and then try to do that as

14 expeditiously as we can.

15 In terms of report back on this, we're also happy

16 to do that. We anticipate that this regulation would

17 actually be effective, as we mentioned, probably toward

18 the summer of 2003. And so it probably makes sense to

19 report back some time in 2004, if that's okay with the

20 Board.

21 BOARD MEMBER RIORDAN: I would include that in

22 the motion because I know you're going to start it with

23 the new school year -- a normal school year, because I

24 recognize we have it around schools.

25 CHAIRPERSON LLOYD: Well, I can tell, you've got

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234581

1 Ms. D'Adamo's interest. We're going to have some personal

2 reflection on the implementation of this rule also.

3 So we have a proposal and we have a seconder.

4 All in favor say aye.

5 (Ayes.)

6 CHAIRPERSON LLOYD: That's unanimous.

7 So thank you very much. Thank you, staff. We

8 look forward to the implementation of that.

9 Given that we're now very close to 11:00 o'clock

10 and we're going to change items, why don't we take a

11 15-minute break, till 10 after on that clock back there.

12 (Thereupon a recess was taken.)

13 CHAIRPERSON LLOYD: I'd like to continue with the

14 next agenda item, 02-9-3, staff update on the

15 implementation status of California's Phase 3 reformulated

16 gasoline program and proposed amendments to those

17 regulations.

18 Just a reminder, in 1999 ARB approved Phase 3 RFG

19 regulations in response to the Governor's Executive Order

20 D-5-99, directing ARB to phase out methyl tertiary butyl

21 ether, or MTBE, from California gasoline and to retain all

22 environmental benefits of the preceding Phase 2 RFG

23 regulations while doing the same.

24 On July 25th of this year, the Board amended its

25 RFG regulations in response to the new Executive Order,

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234582

1 D-52-02, postponing the prohibition of MTBE for one year.

2 The Governor issued the second Executive Order in response

3 to the unavoidable delays some oil companies were

4 experiencing in transitioning to non-MTBE blends, and in

5 light of the significant risk of supply disruptions if

6 California continued with its phase-out schedule and the

7 fact that we continually didn't have the waiver from EPA.

8 The amended rule prohibits the use of MTBE or

9 other oxygenates other than ethanol after December 31st,

10 2003. The amended rule also postpones the imposition of

11 Phase 3 standards by one year.

12 Today the Board will consider additional

13 amendments that further clarify the prohibition against

14 the use of MTBE and other oxygenates in Phase 3 gasoline.

15 Today staff is also responding to a request the

16 Board made in December 1999. At that time we asked staff

17 to further evaluate the residual limits for MTBE and to

18 report back on whether those limits should be revised.

19 And I think that was in the face of some statements of how

20 did you find phasing out MTBE and what levels should be

21 allowed. This evaluation is necessary because MTBE can

22 find its way into California gasoline either as an

23 additive to imported fuel or as an unavoidable byproduct

24 of the production process.

25 Finally, as part of this agenda item, we will

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234583

1 hear an update on RFG implementation status. As we

2 recall, we directed staff to report back periodically when

3 we adopted Phase 3 regulations in 1999, which we have done

4 several times and again are doing so today to bring us

5 fully up to speed, I guess, about a year before the due

6 date.

7 So with that I'll turn it over to Mr. Kenny to

8 begin the staff presentation and to introduce the item.

9 EXECUTIVE OFFICER KENNY: Thank you, Mr. Chairman

10 and members of the Board.

11 Today's presentation will be given in two parts.

12 The Staff's presentation will include an update on the

13 implementation status of the Phase 3 reformulated gasoline

14 regulations. The update will include a report on the

15 status of refinery, terminal, and distribution system

16 modifications to produce Phase 3 gasoline by the new

17 mandatory deadline of December 31st, 2003.

18 It will also include a progress report regarding

19 the issues of permeation and the expected quality of Phase

20 3 reformulated gasoline.

21 Staff will begin the presentation with the

22 update. Since the first part of the presentation is only

23 a status report, no action is required on the part of the

24 Board.

25 In the second part of the presentation staff will

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234584

1 present the proposed amendments to the Phase 3

2 reformulated gasoline regulations. Staff's objective in

3 proposing these amendments is to provide an orderly

4 transition away from MTBE use and to prevent any major

5 disruptions to the production and supply of gasoline in

6 California.

7 And with that, I'd like to ask Ms. Gloria Lindner

8 to make the presentation.

9 (Thereupon an overhead presentation was

10 Presented as follows.)

11 MS. LINDNER: Thank you, Mr. Kenny.

12 Good morning, Mr. Chairman and members of the

13 Board.

14 CHAIRPERSON LLOYD: Is the microphone on?

15 MS. LINDNER: Today I will be presenting an

16 update on the progress towards the implementation of the

17 California Phase 3 reformulated gasoline program.

18 BOARD MEMBER HUGH FRIEDMAN: Excuse me. I'm

19 sorry. But I for one can't hear you. Maybe we can get

20 the mic turned up a little bit.

21 Thank you.

22 MS. LINDNER: Okay. Let me try this again.

23 Today I will be presenting an update on the

24 progress towards the implementation of the California

25 Phase 3 reformulated gasoline program. Following this

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234585

1 update I will discuss staff proposals for the Phase 3

2 regulations.

3 --o0o--

4 MS. LINDNER: Now I will begin the update on the

5 implementation efforts for the Phase 3 gasoline program.

6 --o0o--

7 MS. LINDNER: As you know, pursuant to Governor

8 Davis' 1999 Executive Order, you approved the Phase 3

9 reformulated gasoline regulations in December 9th, 1999.

10 Among other things, the Phase 3 regulations

11 prohibited the addition of MTBE to California gasoline

12 beginning December 31st, 2002. However, at the hearing in

13 July of this year pursuant to Governor Davis' Executive

14 Order issued in March 2002, you amended the Phase 3

15 reformulated gasoline regulations to extend the MTBE

16 phase-out deadline by one year.

17 On November 8th, staff submitted the final

18 regulation package to the Office of Administrative Law, or

19 OAL, for review. The last date OAL may act on the

20 amendments in this rule making is December 26th, 2002, 30

21 working days after November 8th.

22 We expect the rule-making package to be approved.

23 In the meantime staff will post information on the ARB's

24 website regarding the status of the rule making and our

25 enforcement intent.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234586

1 --o0o--

2 MS. LINDNER: Now, earlier this year four

3 refiners announced that they will eliminate the use of

4 MTBE in California reformulated gasoline early. Since

5 then Kern Oil has announced that they will follow suit.

6 These five refiners represent about 55 percent of the

7 State's gasoline production.

8 --o0o--

9 MS. LINDNER: As can be seen on this slide, the

10 five refiners eliminating MTBE use early operate 8 of the

11 13 California refineries producing RFG. Four of these

12 refineries are in the South Coast, two are in the Bay

13 Area, and two are in the San Joaquin Valley. The

14 remaining refineries are expected to be fully compliant by

15 December 31st, 2003.

16 --o0o--

17 MS. LINDNER: The delivery of ethanol into the

18 State is expected to occur by both train and marine

19 vessel. In southern California Shell has begun

20 construction on a unit train facility in Carson to expand

21 and improve the ability to receive ethanol.

22 In northern California, facilities in the Bay

23 Area and San Joaquin Valley have indicated that they are

24 ready to receive, store, and blend ethanol.

25 The remaining infrastructure for the transport of

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234587

1 ethanol in gasoline within the State is also on track for

2 the December 2003 deadline.

3 Kinder Morgan, the State's largest common

4 carrier, has indicated that most of their facilities are

5 ready to receive, store, and blend ethanol into California

6 Phase 3 gasoline, and that the remaining terminals will be

7 ready by December 2003.

8 The other common carrier is presently ready.

9 --o0o--

10 MS. LINDNER: In approving the Phase 3

11 reformulated gasoline regulation, you directed staff to

12 provide status reports in several follow-up items,

13 including the monitoring of sulfur levels and drivability

14 index of California gasoline and an evaluation of

15 permeation emissions. In July of this year you were

16 briefed on the results of staff's field study of their

17 commingling issue.

18 Board Resolution 99-39 also directed the staff to

19 further evaluate the practicality of allowable MTBE

20 residual limits for California Phase 3 gasoline and return

21 with recommendations.

22 Staff's recommendation from their evaluation will

23 be discussed later.

24 --o0o--

25 MS. LINDNER: Staff met with refiners to collect

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234588

1 projected fuel quality data, which were then aggregated.

2 The actual fuel quality values will probably vary somewhat

3 when Phase 3 gasoline is produced.

4 As shown here, compared with Phase 2 gasoline

5 California Phase 3 gasoline will maintain fuel quality.

6 And sulfur's expected to be significantly reduced, to less

7 than 10 parts per million by weight.

8 --o0o--

9 MS. LINDNER: As you directed, staff has been

10 monitoring potential changes to the drivability index, or

11 DI, associated with the implementation of California Phase

12 3 gasoline. Based on the projected fuel quality that are

13 provided by refineries, the Phase 3 regulations are

14 expected to maintain the current high quality DI of

15 California gasoline. The average DI of Phase 2 RFG and

16 the projected DI of Phase 3 RFG are below the ASTM

17 specification of 1250. And lower values of DI correspond

18 to better engine performance.

19 --o0o--

20 MS. LINDNER: Regarding permeation, the ARB is

21 participating in a test program with the coordinating

22 research council to investigate the effect of ethanol in

23 gasoline on permeation emissions from motor vehicles.

24 Industry has started some work in this area.

25 Staff will continue their work on permeation and

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234589

1 plan to report their findings in 2003.

2 And this completes our report to the Board on the

3 implementation of the Phase 3 gasoline regulations.

4 --o0o--

5 MS. LINDNER: I will now present the staff's

6 proposal to further amend the Phase 3 California

7 reformulated gasoline regulations.

8 --o0o--

9 MS. LINDNER: This slide provides an overview of

10 the proposed amendments to be discussed today. These

11 amendments are to address practical issues regarding the

12 production and distribution of California Phase 3

13 reformulated gasoline.

14 --o0o--

15 MS. LINDNER: Staff is proposing revisions to the

16 oxygenate prohibitions of the Phase 3 reformulated

17 gasoline regulations to clarify the requirements of the

18 regulation. The intent of the current prohibition is

19 twofold: To prohibit the intentional blending of MTBE or

20 other prohibited oxygenates into California gasoline; and

21 to control the amount of these prohibited oxygenates

22 present in California gasoline as contaminants.

23 --o0o--

24 MS. LINDNER: Some contamination with the

25 prohibited oxygenates may be unavoidable because trace

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234590

1 amounts are formed as byproducts of the production

2 process. Trace amounts may also be acquired during

3 transport and storage.

4 One of the concerns of refiners is that the

5 current regulation could exclude blend stocks that contain

6 trace amounts of the prohibited oxygenates.

7 Staff is proposing to revise the specific

8 regulatory text of the prohibitions to gasoline produced

9 with the use of MTBE or other oxygenates other than

10 ethanol.

11 --o0o--

12 MS. LINDNER: The proposed amendment would

13 continue to prohibit the deliberate addition of MTBE or

14 other specified oxygenates to gasoline or blend stocks.

15 However, the proposed amendment will increase the

16 flexibility for refiners by allowing the refiner to use

17 blend stocks containing trace amounts of the prohibited

18 oxygenates.

19 The proposed amendments include enforceable

20 criteria that will limit the levels of these contaminants

21 and blend stocks.

22 --o0o--

23 MS. LINDNER: Because of its widespread use we

24 expected it to have trace amounts of MTBE in the

25 distribution system even after it is no longer added to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234591

1 gasoline in California.

2 To address this issue, the Phase 3 reformulated

3 gasoline regulation establishes a schedule to reduce

4 residual levels of MTBE in California gasoline once the

5 MTBE ban goes into effect. As mentioned earlier, Board

6 resolution 99-39 directed staff to further evaluate the

7 practicality of the allowable MTBE residual limits for

8 Phase 3 gasoline and return with recommendations.

9 Today staff is proposing to adjust the schedule

10 to reduce residual MTBE levels in four steps instead of

11 three steps as currently required. Staff is also

12 proposing to extend the current implementation dates by

13 six months.

14 As required by the current regulations, these

15 restrictions on residual MTBE levels will be in force

16 within the distribution system on the finished gasoline.

17 This table summarizes the requirements of the

18 current schedule and the proposed revisions. Staff is

19 proposing to reduce allowable residual MTBE levels in four

20 steps instead of three, and allow 18 months instead of 12

21 months to reduce each interim allowable residual level.

22 This extension will provide staff with adequate time to

23 evaluate the practicality of the allowable limits at each

24 stage of the timetable and, if necessary, propose changes

25 to the Board.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234592

1 --o0o--

2 MS. LINDNER: Like MTBE, the other oxygenates

3 prohibited by the Phase 3 reformulated gasoline

4 regulations, such as ETBE can occur as trace contaminants

5 of blend stocks in finished gasoline.

6 Therefore, the rationale for establishing

7 allowable residual levels for MTBE also applies to these

8 other oxygenates. However, the current regulation does

9 not define allowable residual levels for these specified

10 oxygenates.

11 Today staff is proposing to define allowable

12 residual levels for prohibited oxygenates other than MTBE

13 to improve the enforceability of the regulation. As with

14 MTBE, the limits on residual levels for these specified

15 oxygenates will be enforced on finished gasoline once it

16 is in the distribution system.

17 --o0o--

18 MS. LINDNER: This table summarizes staff's

19 proposal for reducing allowable residual levels of

20 specified oxygenates other than MTBE and ethanol in two

21 steps. These other oxygenates are generally not

22 intentionally added to gasoline. Therefore, staff does

23 not believe that the multi-step reduction similar to MTBE

24 is necessary.

25 Unlike MTBE, the proposed amendment will not

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234593

1 specify residual levels for each oxygenate. Instead staff

2 is proposing allowable residual levels based on the

3 combined oxygen concentration in gasoline from the

4 prohibited oxygenates other than MTBE.

5 --o0o--

6 MS. LINDNER: The staff is proposing a new

7 provision that would require any person delivering

8 gasoline to a retail outlet to provide documentation that

9 states whether the gasoline does or does not contain

10 ethanol. The documentation must be provided to the outlet

11 operator or a responsible employee at the time of delivery

12 of the fuel, and may be an invoice, bill of lading,

13 shipping paper, or other documentation.

14 This proposal would provide retailers and

15 distributors with the information needed to help prevent

16 inadvertent mixing of gasoline containing ethanol with

17 gasoline not containing ethanol.

18 --o0o--

19 MS. LINDNER: Staff is also proposing an

20 amendment that would sunset the requirement for a

21 documentation of the presence of MTBE in deliveries to

22 retail outlets.

23 This documentation will no longer be necessary

24 after December 31st, 2003, the scheduled date for

25 prohibition of gasoline produced with MTBE or other

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234594

1 oxygenates other than ethanol.

2 The other proposed amendment is intended to

3 clarify the oxygenate prohibition requirements for Phase 3

4 gasoline produced prior to the December 31st, 2003,

5 deadline when the Phase 3 standards become mandatory.

6 --o0o--

7 MS. LINDNER: I will now summarize the expected

8 impacts of today's proposal.

9 --o0o--

10 MS. LINDNER: There will be no significant

11 negative environmental impacts. The proposed changes will

12 not significantly affect the formulation of California

13 gasoline. The basic prohibitions against adding MTBE and

14 other oxygenates that could affect water quality remain

15 unchanged. The proposal will improve the enforceability

16 of the prohibition of oxygenates other than MTBE and

17 ethanol.

18 --o0o--

19 MS. LINDNER: The proposed amendments are

20 generally designed to ensure effective enforcement of the

21 oxygenate provisions of the Phase 3 reformulated gasoline

22 regulations and facilitate the MTBE phase-out.

23 Proposed amendments do not fundamentally alter

24 regulations and should have no negative economic impacts.

25 In fact, they may provide an economic benefit to refiners

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234595

1 and consumers by removing ambiguities that could have

2 unnecessarily limited a refiner's access to imported blend

3 stocks.

4 In addition, the more practical schedule proposed

5 for reducing residual levels of prohibited oxygenates

6 could mean the prevention of interruptions in the supply

7 and availability of gasoline for California consumers.

8 --o0o--

9 MS. LINDNER: The staff recommends that the Board

10 adopt the staff proposal to help assure the practical

11 implementation of the oxygenate prohibitions to the

12 California Phase 3 reformulated gasoline regulations.

13 And this concludes my presentation.

14 CHAIRPERSON LLOYD: Thank you.

15 I had a couple of questions. One, on your slide

16 20, where you talk about the allowable residual of other

17 oxygenates. I presume these are in some, so it could be

18 TAME or tertiary butyl or whatever.

19 What's the significance of making that .06 rather

20 than making it .05, the same as MTBE? Is there any magic

21 to that number, .06, whereas MTBE is .05?

22 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

23 CHIEF SIMEROTH: Mr. Chairman, this is Dean Simeroth with

24 the Stationary Source Division.

25 The oxygen concentration, the .1 percent, is a --

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234596

1 that's based upon an oxygen -- that's the same oxygen that

2 would be contributed by the .6 percent MTBE.

3 So on a volume percent of the molecule basis,

4 they're the same.

5 CHAIRPERSON LLOYD: So the .06 is the same as .05

6 for the future?

7 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

8 CHIEF SIMEROTH: Yes. We tried to make it -- it's a

9 percent oxygen adjustment to a prohibition against a

10 specific molecule.

11 CHAIRPERSON LLOYD: So it's the equivalent.

12 Okay.

13 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

14 CHIEF SIMEROTH: It's equivalent.

15 CHAIRPERSON LLOYD: Okay. And then the other

16 part of it, the letter from AMI talking about the --

17 again, the propagation of BTX plumes in ethanol, which

18 doesn't seem to -- has the same concern given the fact

19 also that the new specs could potentially increase

20 aromatics by one percent. So BTX may be more concerned

21 there.

22 What are we doing to monitor that? And the

23 question, basically the bottom line is that: Why aren't

24 we concerned about that migration in the plume as much as

25 we are with the MTBE?

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234597

1 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

2 CHIEF SIMEROTH: Mr. Chairman, the Governor's

3 Environmental Policy Council asked the State Water

4 Resources Control Board to investigate that issue. They

5 consulted or hired Lawrence Livermore National Laboratory

6 to investigate the issue and report back the results of

7 their investigation about a year ago last March at a

8 workshop.

9 They found while the phenomena did occur under

10 certain circumstances, it wasn't enough to significantly

11 increase the risk of contamination of water wells. And it

12 was basically -- it was there, it's real, but it didn't

13 change the basic situation.

14 The Water Board is continuing to monitor the

15 situation and will inform us if anything additional shows

16 up. But it's been investigated by the State agency. It

17 was responsible and found to be within reason.

18 CHAIRPERSON LLOYD: Yeah, I remember looking at

19 the data at that time and it did show that it's less of a

20 concern, but I guess it wasn't negligible.

21 But I'm reassured by the fact you're saying that

22 this is going to be monitored. So if there is a problem,

23 it will be addressed.

24 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

25 CHIEF SIMEROTH: Mr. Chairman, that is correct. They'll

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234598

1 continue to monitor the situation.

2 CHAIRPERSON LLOYD: Okay. Thank you.

3 Maybe I'm kind of jumping ahead of myself again

4 here. Sorry.

5 Madam Ombudsman, would you please describe the

6 public participation process during this rule development

7 process, and express any concerns or comments to the Board

8 at this time.

9 OMBUDSMAN TSCHOGL: Mr. Chairman and members of

10 the Board. The proposed regulations were developed with

11 input from the California Energy Commission, Water

12 Resources Control Board, oil and automotive industries,

13 pipeline operators and other interested parties.

14 Since the summer of 2001, staff has held five

15 workshops on the California Phase 3 reformulated gasoline

16 regulations. The first workshop was held on August 29th,

17 2001, in Carson. The second March 5th, 2002, in

18 Sacramento. The third, April 24th, 2002, in El Monte.

19 The 4th, July 16th, 2002, in Sacramento. And the 5th,

20 October 8th, 2002, also in Sacramento.

21 The agenda for all five workshops included

22 discussions of the oxygenate prohibitions and the

23 allowable residual levels for MTBE and other prohibited

24 oxygenates. The agenda for the last two workshops also

25 included discussions of blending of gasoline and the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-234599

1 proposed documentation requirement for gasoline

2 deliveries.

3 The attendance for each meeting ranged from 25 to

4 30 people.

5 In addition to the workshops, 13 meetings and

6 discussions were held with representatives from the

7 Western States Petroleum Association, WSPA; individual

8 refiners; environmental organizations; the ethanol

9 industry; representatives of other interests such as

10 pipeline operators, fuel suppliers, and marketing

11 associations such as the California Independent Oil

12 Marketers' Association, CIOMA.

13 And, finally, November 19th the staff posted the

14 report on ARB's website and used a list-serve to notify

15 more than 300 individuals and companies about the

16 availability of the document.

17 This concludes my comments. Thank you.

18 CHAIRPERSON LLOYD: Thank you very much.

19 Questions or comments from the Board?

20 Mr. Calhoun.

21 BOARD MEMBER CALHOUN: I have a question of the

22 staff.

23 Is MTBE used in locations other than in

24 California?

25 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345100

1 CHIEF SIMEROTH: MTBE is used extensively across the

2 United States. It is progressively being prohibited in

3 other states, primarily in the midwest.

4 The other significant concentration of MTBE use

5 is in the northeastern states where it's the oxygenate of

6 choice in the federal RFG areas, centered from New York

7 and north and south, out of that area.

8 BOARD MEMBER CALHOUN: But there's no federal

9 prohibition against the use of MTBE; is that correct?

10 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

11 CHIEF SIMEROTH: Mr. Calhoun, there's no federal

12 prohibition.

13 BOARD MEMBER CALHOUN: Is there concern about the

14 impact on vapor pressure of switching from MTBE to

15 ethanol?

16 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

17 CHIEF SIMEROTH: Board Member Calhoun, yes, we've had

18 considerable concern. The requirements will result in

19 refiners making adjustments in the vapor pressure control

20 to reject additional amounts of like components to further

21 lower the vapor pressure, the blend stocks to accept the

22 ethanol.

23 We've been concerned about the issue of

24 commingling, which is mixing a finished gasoline that

25 contains -- and does not contain ethanol in it. That was

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345101

1 the results of the commingling study we mentioned earlier

2 that we presented last July. Our regulation required an

3 additional offset under RVP to adjust against increase in

4 emissions resulting from the commingling.

5 The permeation study is another expression of our

6 concern about it where we're looking at the potential for

7 ethanol to preferentially permeate through the engine fuel

8 system components.

9 BOARD MEMBER CALHOUN: Thank you.

10 CHAIRPERSON LLOYD: Supervisor DeSaulnier.

11 BOARD MEMBER DeSAULNIER: I have a question,

12 Peter. It goes to my favorite subject about this. And I

13 should have asked it during the briefing.

14 Can you refresh my memory on the sulfur caps,

15 both the federal and ours, the caps and the averaging.

16 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

17 CHIEF SIMEROTH: Supervisor DeSaulnier, the federal sulfur

18 cap is 80 parts per million, to be implemented starting in

19 2004. And it takes them several years to finish their

20 implementation. The average for the federal is to be 30

21 parts per million, with a cap of 80. That's our current

22 Phase 2 sulfur cap and averaging standard.

23 The Phase 2 flat limit is 20 parts per million

24 and the averaging limit I believe is 15 parts per million.

25 We're stepping down the -- or Phase 3. Excuse me. Let me

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345102

1 make sure I say that correctly. We're stepping down the

2 Phase 3 sulfur caps at two steps. The first cap will be

3 60 parts per million and going down to 30 parts per

4 million two years after the implementation of Phase 3.

5 So we'll still be lower sulfur than the national

6 average.

7 BOARD MEMBER DeSAULNIER: But the report has it

8 projected at 9?

9 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

10 CHIEF SIMEROTH: Based upon information supplied by most

11 of the refiners in the State, their predicted model work

12 shows that they should meet 9 parts per million on average

13 in use. And that will obviously have a range of

14 concentrations between batches and between refineries.

15 BOARD MEMBER DeSAULNIER: That's good. That's

16 great.

17 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

18 CHIEF SIMEROTH: Oh, it's very good.

19 BOARD MEMBER DeSAULNIER: They asked us to allow

20 them that flexibility. So I have to congratulate WSPA and

21 its members for doing it. I guess the question would

22 be -- I don't know how that would affect the cap. But the

23 potential for bringing the cap even further down and what

24 that would do to the drivability index and whatever public

25 health benefit would get out of that.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345103

1 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

2 CHIEF SIMEROTH: The sulfur content really does not affect

3 the drivability index. The great vapor pressure and the

4 50 and 90 percent distillation temperatures are the

5 drivers for the DI.

6 The concern on the sulfur is, quite frankly,

7 adequacy of supply of blend stocks from outside of

8 California. And that we have to wait and see how the

9 federal program goes and what they're actually producing

10 for the federal program.

11 BOARD MEMBER DeSAULNIER: So we'll keep an eye on

12 this and from time to time there'll be some kind of

13 reports back?

14 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

15 CHIEF SIMEROTH: Supervisor DeSaulnier, not only us, but

16 the California Energy Commission's also tracking that

17 issue.

18 BOARD MEMBER DeSAULNIER: Okay. Thank you.

19 CHAIRPERSON LLOYD: So are we saying then that in

20 about 2006 the sulfur content in diesel and gasoline will

21 be about the same?

22 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

23 CHIEF SIMEROTH: Mr. Chairman, in 2006 -- June of 2006

24 the sulfur content for diesel starts being phased in at

25 15. It takes multiple years for the phase-in. But they

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345104

1 start lining up at about the same number starting there

2 for fuels that are fully compliant with both our

3 requirements and the diesel -- our gasoline requirements

4 and the diesel requirements.

5 CHAIRPERSON LLOYD: So was that a yes?

6 (Laughter.)

7 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

8 CHIEF SIMEROTH: It's a very qualified yes.

9 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Let's say at

10 2007 they should be pretty close.

11 CHAIRPERSON LLOYD: Yeah. Well, it's interesting

12 for me to -- I'm quite surprised actually we're getting

13 both about the same. I thought that the gasoline may be a

14 bit lower. But diesel is down there, too.

15 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Yeah, the

16 other bit of good news on that chart is that the benzene

17 level was somewhat lower than what we had anticipated. So

18 down to .5. So two of the things that you really want to

19 reduce in gasoline are going down. And that I think, at

20 least in my mind, helps to offset the fact that the

21 aromatics went up slightly.

22 CHAIRPERSON LLOYD: So where is that aromatics

23 going? Or what likely aromatic will that be?

24 DEPUTY EXECUTIVE OFFICER SCHEIBLE: I think it

25 was up one percent over our expectation. I don't know

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345105

1 what it is over current.

2 CHAIRPERSON LLOYD: No, no. But -- no, if it's

3 not Benzene, it's something else. Is it toluene or

4 xylene?

5 DEPUTY EXECUTIVE OFFICER SCHEIBLE: It's toluene

6 or xylene. And --

7 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

8 CHIEF SIMEROTH: It's primarily those two compounds, Mr.

9 Chairman.

10 DEPUTY EXECUTIVE OFFICER SCHEIBLE: I mean the

11 fact of the matter is when you take the pentanes out,

12 you've taken something out that is going to raise the

13 percentage of the other compounds. See, they are kind of

14 in a box for some of these things. It all has to add up

15 to 100.

16 CHAIRPERSON LLOYD: Another question while I've

17 got the microphone.

18 One of the responses triggered a question that

19 probably Tom could answer. And, that is -- and I'm aware

20 that the Executive Officer is going to certify some new

21 PZEV vehicles. Are these being tested and verified on

22 Phase 3 with ethanol or are they with MTBE? Or are they

23 with endolene or something?

24 EXECUTIVE OFFICER KENNY: They're being certified

25 on MTBE fuel.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345106

1 CHAIRPERSON LLOYD: Okay. So do we expect any

2 change? I guess we can't say because the permeation study

3 is still going on.

4 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

5 CHIEF SIMEROTH: Mr. Chairman, the federal government for

6 the evaporative tests that they require require that that

7 evaporative test be done with an ethanol-containing

8 gasoline. So between our requirements and the federal

9 requirements, we're requiring the evap test be done both

10 with and without ethanol for the new vehicles.

11 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And I believe

12 that -- we have a high level of confidence that you can

13 build new vehicles with materials that stopped the

14 permeation of ethanol, MTBE, and virtually everything

15 else. The major permeation concern is the 20 million

16 vehicles that are out there on the road, many of which may

17 have materials that aren't nearly so good.

18 CHAIRPERSON LLOYD: I understand. But then you

19 confused me now because I don't know whether I have full

20 confidence seeing that the certification of the vehicles

21 that are currently happening have been tested with MTBE,

22 but you're saying the feds require both and -- let me --

23 EXECUTIVE OFFICER KENNY: I think what Mr.

24 Simeroth was saying was essentially that the federal

25 government was requiring essentially a certification for

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345107

1 federal vehicles with ethanol-laden fuel, and our

2 certification requirements are with MTBE fuel. And so

3 between the two, the federal and California systems, we

4 are essentially and effectively getting both fuels.

5 CHAIRPERSON LLOYD: So they're being certified at

6 the federal level, but not as a PZEV; we are the only ones

7 that can do that?

8 EXECUTIVE OFFICER KENNY: That's correct.

9 CHAIRPERSON LLOYD: But that federal ones don't

10 do zero evap?

11 EXECUTIVE OFFICER KENNY: That's correct.

12 CHAIRPERSON LLOYD: And also then what we're

13 assuming is that the materials used for these current

14 generation of vehicles will not suffer a problem with

15 ethanol permeation?

16 My point was, supposing -- okay, the PZEV, you

17 have to certify that for zero evap what, 150,000 miles.

18 After 100,000 we suddenly find out that, gee, the

19 material is not so good with ethanol gasoline. What will

20 happen?

21 DEPUTY EXECUTIVE OFFICER CACKETTE: Well, I'm

22 reasonably confident that the materials that they're using

23 for both zero and the near zero evap standard that applies

24 to all the rest of the cars are sort of permeation proof.

25 The reason is is that the standard is so low, that it

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345108

1 would reveal itself from just normal gasoline permeation.

2 And they're aware of the ethanol issues. So I'm pretty

3 confident that it -- the new materials are impermeable, so

4 to speak. As Mike said, it's really the ones out there

5 that have a lot of rubber hoses and stuff like that that

6 are more of a problem.

7 CHAIRPERSON LLOYD: But if we found I say after

8 100,000 miles, would they then be subject to recall?

9 DEPUTY EXECUTIVE OFFICER CACKETTE: No.

10 CHAIRPERSON LLOYD: Okay.

11 DEPUTY EXECUTIVE OFFICER CACKETTE: Not from our

12 standpoint because it's based on the commercial fuel that

13 they were tested on, not a change in the commercial fuel

14 that would occur years later, which is the case with

15 ethanol.

16 CHAIRPERSON LLOYD: So then if we found that they

17 were not zero evap at that time, what would happen?

18 DEPUTY EXECUTIVE OFFICER CACKETTE: With the

19 ethanol?

20 Well, I'm not sure we want to wait till that

21 time. We'll probably find out much earlier than that,

22 before 10 years, whether there are any ethanol by just

23 using ethanol fuels in testing.

24 CHAIRPERSON LLOYD: But then we may have excess

25 emissions in the system not accounted for in the SIP.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345109

1 DEPUTY EXECUTIVE OFFICER CACKETTE: Well, I guess

2 that would be possible if the outcome that you are

3 describing did occur, yes. But we'll find out, I guess,

4 earlier than 10 years. But, you're right, it could

5 happen.

6 CHAIRPERSON LLOYD: All right. I won't worry

7 about it till that time.

8 Any questions?

9 Professor Friedman.

10 BOARD MEMBER HUGH FRIEDMAN: This goes to the

11 status of our regulations. We amended the RFG in the

12 middle of last year. And am I correct, according to some

13 of this correspondence, that we have not yet gotten OAL

14 approval to make them final?

15 SENIOR STAFF COUNSEL JENNINGS: Yes --

16 BOARD MEMBER HUGH FRIEDMAN: But where does that

17 stand? Are we going to get it before the next 10 days or

18 --

19 SENIOR STAFF COUNSEL JENNINGS: As Ms. Lindner

20 indicated, we submitted the package to OAL on November

21 8th. They have 30 working days to review it. We asked

22 that they expedite the review. But it appears that they

23 may not be able to complete it until their last day, which

24 is December 26th.

25 We fully expect that they're going to approve it.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345110

1 But we also plan to post on the website today a notice to

2 people that if in the very unexpected event that they were

3 to be disapproved, that in order to effectuate the Board's

4 intent and the reliance of the refiners, that we will not

5 be enforcing the MTBE ban in any event on December 31st,

6 2002, pending remedy of any deficiencies. But I want to

7 emphasize, we have no reason to believe that it's not

8 going to be approved.

9 BOARD MEMBER HUGH FRIEDMAN: And given that some

10 of -- that over half of the distribution is now meeting

11 the new standards to be further amended, what can we do to

12 expedite any further amendments that we would approve

13 today getting those final approvals as early as possible

14 next year?

15 SENIOR STAFF COUNSEL JENNINGS: I think we can do

16 a couple things. We can try to submit it to OAL as

17 quickly as possible. There are very few comments. So

18 there are not a lot of comments we're going to have to

19 respond to in the FSOR. We have today identified a 15-day

20 change that we feel we need to make. And that will also

21 include a response -- something incorporated in light of

22 the CIOMA comments that you're going to hear.

23 Our Compliance -- our Enforcement Division and

24 Stationary Source staff and the Legal Office have

25 determined that it would be appropriate to apply the rules

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345111

1 as being approved today for determining whether gasoline

2 has been produced with the use of MTBE or not. So we

3 intend to start applying that as of January 1st as a

4 matter of enforcement discretion.

5 BOARD MEMBER HUGH FRIEDMAN: Thank you.

6 CHAIRPERSON LLOYD: Thank you.

7 SENIOR STAFF COUNSEL JENNINGS: Well, I should

8 say actually earlier than January 4th. Assuming the Board

9 approves it now, we would be applying it as early as

10 today.

11 BOARD MEMBER CALHOUN: I guess I have one other

12 question. I want to go back to this evap issue. Maybe I

13 shouldn't, but I'm going to raise the question anyway.

14 Most of the confirmatory tests for the

15 certification of vehicles are done -- the confirmatory

16 testing is done by EPA, correct?

17 You've done some of it in the past?

18 DEPUTY EXECUTIVE OFFICER CACKETTE: No, we both

19 do it, roughly in equal amounts.

20 BOARD MEMBER CALHOUN: Now, the evap testing

21 and -- I thought I heard someone say that the feds require

22 the evap test to be done with ethanol and California

23 requires MTBE. Does the --

24 DEPUTY EXECUTIVE OFFICER CACKETTE: We require --

25 actually it's commercial fuel, which may or may not have

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345112

1 MTBE in it. But it doesn't have ethanol in it, for our

2 testing.

3 BOARD MEMBER CALHOUN: Okay. I'll stop there.

4 DEPUTY EXECUTIVE OFFICER CACKETTE: Let me just

5 add one thig that Bob Cross whispered to me, was that all

6 the developers of the hosing and the materials in the

7 evaporative system and fuel system all use ethanol to

8 design and confirm the quality of their materials because

9 it is the hardest thing for the materials to hold back on.

10 So I think that perhaps makes it less likely that what we

11 were discussing, Dr. Lloyd, would occur.

12 CHAIRPERSON LLOYD: I appreciate that

13 clarification.

14 And the other part, I agree. Compared to years

15 ago at least now we do the testing with the gasoline that

16 people would buy outside, which is a much better

17 representation.

18 Professor Friedman.

19 BOARD MEMBER HUGH FRIEDMAN: I just had one more

20 quick question that was triggered by the amendment or at

21 least a 15-day notice proposed change in response to

22 CIOMA's concern regarding leaving documentation at the

23 outlet.

24 And I'm just wondering, is there any risk -- and

25 it makes sense, if there's nobody there, no person to whom

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345113

1 to deliver it if it's a night delivery or something, that

2 you should be able to leave the documentation in the

3 outlet. But just throwing it on the floor -- on the

4 macadam or whatever -- I'm wondering, is there any risk

5 that that's not secure, that there ought to be some slip

6 space under the door or a box or something where they can

7 leave -- if the documentation's important to have and for

8 the recipient outlet to have, it seems to me there ought

9 to be some way to leave it not at the outlet but in it.

10 SENIOR STAFF COUNSEL JENNINGS: Perhaps the

11 language could be modified to say, rather than "left at

12 the outlet," change it to "left at a secure location at

13 the outlet."

14 BOARD MEMBER HUGH FRIEDMAN: So a secure or

15 reasonably secure location or something like that?

16 SENIOR STAFF COUNSEL JENNINGS: Or reasonably

17 secure --

18 BOARD MEMBER HUGH FRIEDMAN: Yeah, as long as

19 you're going to put out a 15-day notice. Small point,

20 but --

21 But I don't know much about olefins and --

22 CHAIRPERSON LLOYD: With that I see no more

23 questions.

24 I'd like to call the first and only witness to

25 the stand. This is Jay McKeeman from CIOMA.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345114

1 It's nice to see you back, Jay.

2 MR. McKEEMAN: It's nice to be back.

3 CHAIRPERSON LLOYD: Not opposing.

4 I appreciate your comments in the written

5 testimony too.

6 MR. McKEEMAN: You bet.

7 My name is Jay McKeeman. I'm the Executive Vice

8 President for the California Independent Oil Marketers'

9 Association. We're an organization that represents small

10 businesses that are engaged in the fuel and petroleum

11 products delivery commerce in this state. We represent

12 approximately 220 independent fuel marketers, about 90

13 percent of the fuel marketers in the State. Our customers

14 include agriculture, construction, industry, local

15 government agencies, school districts, and independently

16 supplied fuel stations.

17 To cut to the amendment that was suggested, we're

18 fine with that. Typically, our members drop in a drop box

19 or through a mail slot. So that doesn't present any

20 problems for us.

21 On the larger issue, we are very concerned that

22 this transition is not going to go smoothly. And we know

23 from past history, in 1993 when California changed its

24 diesel fuel specifications, and in 1996 when the gasoline

25 specifications were changed, we saw significant problems

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345115

1 in the marketplace. And we anticipate that there are

2 going to be problems in the marketplace as we go through

3 this transition.

4 The primary problem is that for the first time in

5 recent history we'll have what's called an nonfungible

6 fuel supply. In other words, right now gasoline is pretty

7 interchangeable until it gets to the delivery rack. And

8 that provides a lot of flexibility in the distribution

9 system.

10 With the stair-step implementation of ethanol

11 fuels into this state, we're going to have two types of

12 fuels that cannot be mixed. And there's very significant

13 penalties for mixing the fuels during the summer RVP

14 season.

15 Another problem that that creates is that at

16 independently supplied service stations if there is a

17 shortage of unbranded fuel of one type or the other, it

18 creates the necessity of that fuel station literally to

19 run out of gas before new gasoline -- an opposing type of

20 gasoline can be brought in. And that's something that

21 concerns us greatly.

22 There are a lot of logistical issues in terms of

23 how our deliveries are made, the timing, and the ability

24 to make sure that people get gasoline when they need it,

25 are involved. The paperwork complexities are also

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345116

1 significant in terms of making sure that the load that

2 you're dumping into is not a non-conforming load.

3 In any case, we have been working closely with

4 the Air Resources Board and the Energy Commission on these

5 issues. We've received excellent support so far in terms

6 of developing contingency plans on how to deal with these

7 situations.

8 But I don't want to gloss over this. There is

9 still a significant amount of work that needs to be done.

10 And we know that the agencies are working carefully on

11 this. But it needs to be done fairly quickly because our

12 members need to be well prepared and they need to prepare

13 their customers adequately as we go into this transition.

14 One thing that caught my attention in the staff

15 analysis is -- and it's a bone that we've been picking

16 since 1999, is that there are no -- the analysis indicates

17 that there are no economic impacts to the adoption of

18 these regulations. That is not the case. Our members are

19 going to go through significant economic impacts and

20 significant increased liability as we move through this.

21 And I just ask that the Air Resources Board carefully look

22 at these economic situations. Small businesses are very

23 intolerant of relatively small economic impacts. And we

24 would just ask a more careful scrutiny of the potential

25 impacts to our members as we move forward with regulations

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345117

1 like this and others.

2 Thank you.

3 CHAIRPERSON LLOYD: Thank you very much, Jay.

4 And I think your comments are well taken. I think the

5 Board and the staff appreciate, you know, working with

6 small business. And your members are very important to

7 us. So I'm sure staff will continue to work with you as

8 this introduction evolves.

9 Any comments or questions from the Board?

10 Mr. McKinnon.

11 BOARD MEMBER McKINNON: Just a comment. And it's

12 sort of a response to something said earlier. And, that

13 is, I just -- we send signals when we talk. And I want to

14 send this signal and, that is, that in terms of reducing

15 the sulfur in gasoline, it seems to me that the industry

16 really met their end of the bargain. And that took

17 significant investment. And the signal I send is that I

18 have some respect for that, and that I'm not in a rush to

19 change the rules any time soon. We changed them. They

20 came a long way. And in fact an auto company remarked to

21 me the other day that it was a big deal to them in terms

22 of them meeting what they had to do.

23 So that's it.

24 Thanks.

25 CHAIRPERSON LLOYD: I think also to --

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345118

1 BOARD MEMBER DeSAULNIER: We're just having fun

2 down here. Was it something I said in my comments?

3 CHAIRPERSON LLOYD: But I think it's also

4 important that -- I think it came back to one of the

5 discussions we had when I think Michael was involved. And

6 the fact is that Honda is marketing some of their, I

7 guess, ULEV or SULEV vehicles, they're not marketing to

8 all parts of the country, and they can only market them to

9 those parts of the country which have lower sulfur.

10 So I think it translates directly to the benefits

11 that the breathers in California have. In fact, so that

12 we're working together, the oil industry, fuel industry

13 working together with the -- and the auto industry's

14 responding to our regulations, which is leading to that

15 direct benefit.

16 So I thought there was a nice -- a really nice

17 linkage there to demonstrate what's going on and why in

18 fact we push for those cleaner fuel standards. And your

19 comments, both Supervisor DeSaulnier and Mr. McKinnon, I

20 think are very, very important in that.

21 Professor Friedman.

22 BOARD MEMBER HUGH FRIEDMAN: Well, just picking

23 up on the comment that there are economic -- adverse

24 economic consequences here, I'm assuming that the staff

25 has carefully considered ameliorating them to the fullest

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345119

1 extent possible, that is, that there are no ways that have

2 been suggested or proposed by the industry or otherwise

3 that, given what our task is, what our requirement is,

4 that we could further reduce that impact.

5 I haven't heard any. But if there -- certainly

6 if those affected and subjected to these additional costs

7 have any additional suggestions, I think we have an

8 obligation to hear them and consider them very carefully.

9 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And I think

10 there's -- there's actually two sets of regulations in

11 play here in terms of the reference to significant

12 economic impacts. The phaseout of MTBE and the fact we're

13 going to go through a transition this year with mixed

14 fuels, and there does have the potential to have very

15 significant economic impacts on users depending on which

16 fuel they choose and how the supply situation works out.

17 Our analysis of economic impacts in terms of the

18 Board's action today on the set of regulations is that the

19 changes you're making today to the regulations aren't

20 going to have much effect. But that's in the context of

21 this larger phaseout. And, yes, we did consider it and

22 we've tried to minimize them. But we are charged with a

23 big task, which is to get the MTBE out of the gasoline and

24 go to something else. And that task was made bigger by

25 the fact the federal government wouldn't allow us to go to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345120

1 the better option, which is the flexibility to use no

2 oxygen at all.

3 CHAIRPERSON LLOYD: Thank you.

4 And I guess I may have asked this before. What

5 sort of progress are we making on getting in-state ethanol

6 production? How is that going?

7 CRITERIA POLLUTANTS STATIONARY SOURCE DIVISION

8 CHIEF SIMEROTH: Mr. Chairman, we're not aware of any

9 significant increase of in-state production. There are a

10 number of projects under consideration. The California

11 Energy Commission is tracking those projects. But to my

12 knowledge at this time, there's none under actual

13 construction. There's mostly studies and seeking

14 financing.

15 DEPUTY EXECUTIVE OFFICER SCHEIBLE: And it's

16 harder right now because most of these proposals need a

17 jump start of someone who's going to invest money, to say

18 we'll invest now and hope for a better future. And the

19 State's in a poorer position to invest its money right

20 now.

21 CHAIRPERSON LLOYD: Thank you.

22 Mr. Kenny, do you have any more comments?

23 EXECUTIVE OFFICER KENNY: No.

24 CHAIRPERSON LLOYD: So I'll now close the record

25 on this agenda item. However, the record will be reopened

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345121

1 when the 15-day notice of public availability is issued.

2 Written or oral comments received after this hearing date

3 but before the 15-day notice is issued will not be

4 accepted as part of the official record on this agenda

5 item.

6 When the record is reopened for a 15-day comment

7 period, the public may submit written comments on the

8 proposed changes, which will be considered and responded

9 to in the final statement of reasons for the regulation.

10 Are there any ex parte revelations from my

11 colleagues?

12 Seeing none, then maybe we ought to take a minute

13 to review the resolution as amended.

14 And I'll entertain a motion.

15 BOARD MEMBER HUGH FRIEDMAN: I'll make a motion

16 to approve Resolution 02-34.

17 BOARD MEMBER D'ADAMO: I'll second it.

18 BOARD MEMBER McKINNON: Second.

19 CHAIRPERSON LLOYD: All in favor say aye.

20 (Ayes.)

21 CHAIRPERSON LLOYD: Anybody against?

22 So thank you. Thank you, staff, for the

23 presentation.

24 What we'd like to do now is to take the next

25 agenda item. Hopefully, based on staff's expectations

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345122

1 here, we can cover this. And then we will take just a

2 15-minute break where we can give the court reporter and

3 staff lunch.

4 (Thereupon a recess was taken.)

5 CHAIRPERSON LLOYD: The next item on the agenda

6 today is 02-9-4, public hearing to adopt federal exhaust

7 emission standards for 2008 and later model years for

8 heavy-duty gasoline engines.

9 The proposed amendments align California's

10 heavy-duty otto-cycle exhaust emission standards with the

11 more stringent federal standards recently promulgated by

12 U.S. EPA.

13 That's a novel approach.

14 (Laughter.)

15 CHAIRPERSON LLOYD: This item also includes minor

16 amendments to the low-emission vehicle regulation and to

17 the heavy-duty diesel engine test procedures.

18 At this point I would like to turn it over to Mr.

19 Kenny to introduce the item and begin staff presentation.

20 EXECUTIVE OFFICER KENNY: Thank you, Mr. Chairman

21 and members of the Board.

22 In January of 2001, the U.S. EPA adopted new

23 emission standards for heavy-duty otto-cycle engines that

24 reduce emissions by more than 50 percent compared to

25 current California standards. In this rulemaking staff

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345123

1 proposes that the Board align California's exhaust

2 emission standards for heavy-duty engines with the federal

3 program to ensure that Californians continue to receive

4 only the cleanest engines available.

5 Staff is also proposing minor administrative

6 amendments to facilitate implementation of the LEV II

7 program for light- and medium-duty vehicles. These

8 amendments include requirements that fuel-fire heaters

9 used in conventional vehicles meet the same standards as

10 those used in zero-emission vehicles, modifications to the

11 allowable maintenance schedule for test vehicles, and some

12 administrative revisions.

13 Finally, a number of minor amendments to the

14 heavy-duty diesel engine test procedure are being

15 proposed. These consist of a nonsubstantive

16 reorganization and update to the certification

17 requirements and test procedures.

18 And with that, I'd like to turn it over to

19 Sarah Carter, who will make the presentation.

20 AIR RESOURCES ENGINEER CARTER: Thank you, Mike.

21 (Thereupon an overhead presentation was

22 Presented as follows.)

23 AIR RESOURCES ENGINEER CARTER: Good morning,

24 Chairman Lloyd and members of the Board.

25 Today I will be presenting staff's proposal to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345124

1 incorporate for California more stringent federal exhaust

2 emission standards for heavy-duty otto-cycle or gasoline

3 engines as well as minor amendments to the low-emission

4 vehicle program.

5 This proposal also contains a number of minor

6 modifications to California's on-board refueling vapor

7 recovery requirements and heavy-duty diesel engine test

8 procedures.

9 --o0o--

10 AIR RESOURCES ENGINEER CARTER: I will first

11 discuss staff's proposal for heavy-duty otto-cycle

12 engines. These are typically gasoline engines used in

13 vehicles over 8,500 pounds gross vehicle weight.

14 --o0o--

15 AIR RESOURCES ENGINEER CARTER: In California

16 gasoline vehicles that weigh over 8,500 pounds gross

17 vehicle weight are divided into three categories. The

18 first of these is the complete medium-duty vehicle, or

19 MDV. A complete medium-duty vehicle is one that's between

20 8,500 and 14,000 pounds that a manufacturer sells, fully

21 assembled, directly to the customer, such as a Dodge Ram

22 2500 pickup truck with a V-10 gasoline engine.

23 Complete medium-duty vehicles are required to

24 meet chassis-based emission standards as set forth in the

25 low-emission vehicle program and, as such, are not a part

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345125

1 of today's rulemaking.

2 The second category of vehicle that uses a

3 heavy-duty gasoline engine is the incomplete medium-duty

4 vehicle. An incomplete medium-duty vehicle is also one

5 that weighs between 8,500 and 14,000 pounds gross vehicle

6 weight. However, with an incomplete medium-duty vehicle

7 the manufacturer does not sell directly to the customer.

8 Rather the engine manufacturer generally sells a bare

9 chassis and engine to a secondary manufacturer who puts a

10 body on the chassis, for example, a motor home. Then the

11 secondary manufacturer sells the vehicle to the customer.

12 In this situation the engine manufacturer is

13 responsible for certifying the engine to engine-based

14 emission standards. The new standards for heavy-duty

15 gasoline engines being proposed today will apply to

16 engines used in incomplete medium-duty vehicles.

17 The third category of vehicles that uses a

18 heavy-duty gasoline engine is the heavy-duty vehicle. The

19 heavy-duty vehicle is one that weighs over 14,000 pounds

20 gross vehicle weight. This proposal applies to all

21 engines used in heavy-duty gasoline vehicles.

22 --o0o--

23 AIR RESOURCES ENGINEER CARTER: In early 2001,

24 the U.S. EPA adopted new regulations to reduce exhaust

25 emissions from heavy-duty gasoline engines used in 2008

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345126

1 and subsequent model year vehicles. These new standards

2 are more stringent than California's current standards for

3 these engines that are applicable during the same

4 timeframe.

5 Staff is, therefore, proposing to harmonize

6 California's regulations with the more stringent federal

7 standards. Staff is also proposing to allow manufacturers

8 to participate in the federal averaging, banking, and

9 trading, or ABT, program for heavy-duty gasoline engines.

10 --o0o--

11 AIR RESOURCES ENGINEER CARTER: California

12 currently requires that heavy-duty gasoline engines

13 certify to a combined nonmethane hydrocarbon, or NMHC,

14 plus oxides of nitrogen or NOx standard of 1.0

15 grams-per-brake-horsepower-hour in 2005. The regulations

16 allow compliance with this standard to be delayed if a

17 manufacturer introduces cleaner engines earlier than

18 required. These two alternative compliance options will

19 not be discussed here.

20 These California requirements are identical to

21 the federal requirement within this same timeframe.

22 However, the U.S. EPA recently adopted new

23 regulations for 2008 and subsequent model year heavy-duty

24 gasoline engines. These reduce exhaust emissions of ozone

25 precursors by roughly 2/3 compared to the 2005 standards

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345127

1 to 0.14 grams-per-brake-horsepower-hour NMHC and 0.2

2 grams-per-brake-horsepower-hour NOx.

3 Federal regulations also require these engines to

4 meet new particulate matter standards. Since California

5 will benefit from these new standards, staff is proposing

6 to align California's standards with the federal

7 standards. The new standards would apply to heavy-duty

8 engines used both in incomplete medium-duty vehicles and

9 in heavy-duty vehicles. It is expected that adoption of

10 these standards will reduce emissions of NMHC plus NOx in

11 the South Coast Air Basin by 3.6 tons per day in 2020.

12 These engines would also be required to meet a

13 new formaldehyde standard that would align with the 2004

14 California urban bus standard. In addition, staff is

15 proposing new optional standards for medium-duty

16 supra-ultra low-mission vehicle engines. A manufacturer

17 that elects to certify to this standard may generate extra

18 credits that could provide more flexibility in its

19 implementation plan.

20 --o0o--

21 AIR RESOURCES ENGINEER CARTER: Federal

22 regulations allow manufacturers to use emissions

23 averaging, banking and trading, or ABT, to demonstrate

24 compliance with heavy-duty gasoline engine requirements.

25 The federal ABT program allows manufacturers to certify

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345128

1 engine groups above and below the required standard as

2 long as their average emissions meet the required

3 standard. Thus, similar to the emissions averaging

4 program for light- and medium-duty vehicles the ABT

5 program provides compliance flexibility to the

6 manufacturer.

7 The emission standards can also be met by banking

8 credits earned or trading credits with other

9 manufacturers.

10 California engines are not currently included in

11 this program. This is because California has historically

12 maintained separate and more stringent emission standards,

13 phase-in requirements, and credit trading programs for

14 engines used in incomplete medium-duty vehicles. With the

15 adoption of this proposal, California's exhaust emission

16 standards for heavy-duty gasoline engines used both in

17 incomplete medium-duty vehicles and in heavy-duty vehicles

18 will be identical to federal standards beginning with the

19 2008 model year. Staff is therefore proposing that

20 manufacturers be allowed to participate in the federal ABT

21 program for heavy-duty gasoline engines.

22 --o0o--

23 AIR RESOURCES ENGINEER CARTER: I will now

24 discuss light- and medium-duty vehicles.

25 --o0o--

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345129

1 AIR RESOURCES ENGINEER CARTER: In 1990 the Air

2 Resources Board adopted the low-emission vehicle, or LEV

3 I, program, which significantly reduces exhaust emissions

4 from the light- and medium-duty vehicle fleet between 1994

5 and 2003.

6 The second phase of these regulations, LEV II,

7 adopted in November 1998, expands the scope of the LEV I

8 regulations beginning in 2004.

9 LEV II changes include increasing the stringency

10 of emission standards for both the light- and medium-duty

11 vehicles and requiring light-duty trucks, including sport

12 utility vehicles, to meet the same emission standards as

13 passenger cars.

14 Similar to the LEV I program, LEV II contains

15 tiers of exhaust emission standards for increasingly more

16 stringent categories of low-emission vehicles. Each

17 manufacturer may produce any mix of these vehicles in

18 these emission categories provided that it meets a

19 progressively cleaner fleet average nonmethane organic gas

20 requirement each year with the option of credit banking

21 and trading.

22 Subsequent changes to the LEV II regulations in

23 2001 and 2000 ensure that vehicles sold in California

24 remain the cleanest in the nation.

25 --o0o--

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345130

1 AIR RESOURCES ENGINEER CARTER: These are the

2 emission standards for passenger cars under LEV II. They

3 include low-emission vehicle, or LEV, ultra-low-emission

4 vehicle, or ULEV, super-ultra-low emission vehicle, or

5 SULEV, and zero-emission vehicle, or ZEV.

6 The benefits of these new standards compared with

7 LEV I range from 75 percent reduction in NOx emissions

8 from passenger cars to 90 percent reduction in NOx

9 emissions from the largest sport utility vehicles and

10 trucks.

11 The nonmethane organic gas, or NMOG, standards

12 remain unchanged from the already stringent LEV I

13 standards.

14 --o0o--

15 AIR RESOURCES ENGINEER CARTER: Today's proposal

16 contains minor changes to LEV II emission and testing

17 requirements and also a number of administrative

18 amendments to the regulations.

19 --o0o--

20 AIR RESOURCES ENGINEER CARTER: New emission and

21 testing requirements being proposed today for LEV II

22 vehicles include requiring that fuel-fired heaters used in

23 conventional vehicles meet the same requirements as those

24 used in zero-emission vehicles and to change to the

25 allowable maintenance schedule for test vehicles.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345131

1 --o0o--

2 AIR RESOURCES ENGINEER CARTER: The LEV II

3 program currently requires that emissions from fuel-fired

4 heaters used in zero-emission vehicles meet the ULEV

5 passenger car exhaust emission standard. Furthermore,

6 these heaters are not permitted to operate above 40

7 degrees of ambient temperature. These requirements were

8 adopted to ensure that equipping vehicles with fuel-fired

9 heaters would not cause an increase in emissions during

10 times when ozone levels are high.

11 While there are no currently certified

12 conventional vehicles equipped with those auxiliary

13 fuel-fired heaters, one manufacturer has approached staff

14 and indicated its intent to equip its diesel trucks and

15 sport utility vehicles with the fuel-fired heaters. This

16 is because very efficient diesel engines may generate

17 little excess heat that can be used to warm the passenger

18 compartment at colder temperatures.

19 If a manufacturer installs an auxiliary

20 fuel-fired heater, the heater would not be subject to any

21 emission requirements under current regulations. Staff is

22 therefore proposing that fuel-fired heaters used in light23 and medium-duty vehicles be required to meet the same

24 requirements as heaters used in ZEVs. This is a

25 preventative measure to minimize the ozone impact due to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345132

1 used auxiliary fuel-fired heaters.

2 At this time I'd like to note that the

3 requirement that fuel-fired heaters used in conventional

4 vehicles not be allowed to operate in ambient temperatures

5 above 40 degrees F is being proposed as a 15-day change.

6 This 15-day change is needed because the originally

7 proposed regulatory language is not sufficiently clear

8 about this requirement. Additional regulatory language

9 has therefore been added to clearly say that these heaters

10 may not operate above 40 degrees F.

11 --o0o--

12 AIR RESOURCES ENGINEER CARTER: The Code of

13 Federal Regulations, or CFR, specifies allowable

14 emission-related scheduled maintenance that a manufacturer

15 must follow in demonstrating durability during

16 certification testing.

17 Specifically, the CFR identifies vehicle and

18 engine components that can be cleaned, repaired, or

19 replaced at specified mileage intervals. These

20 maintenance schedules have also been incorporated into

21 California regulations. These minimum maintenance

22 intervals are long to ensure that vehicle emission control

23 systems are durable. This information is also provided to

24 a vehicle owner as part of the vehicle maintenance

25 instructions.

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1 Currently manufacturers are allowed to replace a

2 number of emission control components, including the

3 catalytic converter, at 100,000 miles. This first

4 maintenance interval corresponds to the 100,000 mile

5 full-useful-life standards for passenger cars and

6 light-duty trucks under the LEV I program.

7 Under the LEV II program, however, these vehicles

8 must now meet 120,000 mile full-useful-life standards.

9 Staff is accordingly proposing that the first allowable

10 scheduled maintenance interval be aligned with the 120,000

11 mile full-useful-life requirements of the LEV II program.

12 --o0o--

13 AIR RESOURCES ENGINEER CARTER: In addition to

14 the proposed revisions just discussed, today's proposal

15 contains a number of administrative amendments. The first

16 of these amendments is a revision to the California

17 vehicle specifications. Staff is proposing to eliminate

18 the requirement that a machine-readable vehicle emission

19 control information, or VECI, bar code label be placed on

20 vehicles. This label was originally intended to be used

21 as part of California's smog check program to

22 electronically register test results. However, the Bureau

23 of Automotive Repair has not developed a system to use

24 this information and has no plans to do so.

25 Staff is also proposing to harmonize California's

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1 tune-up label specifications with U.S. EPA requirements

2 that will provide a cost savings to vehicle manufacturers.

3 Finally, if California and federal label

4 requirements are identical, California would no longer

5 need a separate emission control label specification

6 document. Therefore, California's label requirements have

7 been moved from a separate label specification document to

8 the various test procedure documents. The test procedures

9 will now refer to and incorporate the appropriate federal

10 label requirement.

11 Staff is also proposing a number of wording

12 changes to the LEV II regulations to clarify some of the

13 regulatory language. These changes would not affect the

14 content of the regulations.

15 Finally, staff is proposing to modify the various

16 test procedure documents to change the references for

17 on-board diagnostic requirements. These changes reflect

18 recent on board diagnostics regulatory changes.

19 --o0o--

20 AIR RESOURCES ENGINEER CARTER: In addition to

21 the 15-day change I've already discussed, adding

22 regulatory language to specifically say that the

23 fuel-fired heaters used in conventional vehicles may not

24 operate above 40 degrees F, one additional 15-day change

25 is being proposed. Staff is proposing to make consistent

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1 the in-use compliance testing interval for vehicles

2 certifying to 150,000 mile standards with other LEV II

3 vehicles. That is 75 percent of the vehicle's useful life

4 or 112,500 miles. This allows a comparable evaluation of

5 the in-use emission performance of these vehicles. These

6 proposed 15-day changes are available at the back table.

7 --o0o--

8 AIR RESOURCES ENGINEER CARTER: Staff is also

9 proposing a couple of minor changes to California's

10 on-board refueling vapor recovery, or ORVR, requirements

11 and to the heavy-duty diesel engine test procedures.

12 The proposed changes to the ORVR requirements

13 would specify that only gasoline meeting the federal

14 specifications may be used in ORVR certification testing,

15 and vehicles fueled with natural gas or liquefied

16 petroleum gas would be subject to ORVR requirements

17 identical to those in the federal program.

18 These changes were requested by U.S. EPA when it

19 granted California a waiver for our ORVR regulations.

20 Finally, staff has updated and reorganized the

21 heavy-duty diesel engine test procedure documents to make

22 them easier to read. The new document applicable for 2004

23 and subsequent model year engines does not contain any

24 substantive modifications compared to the current

25 document.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345136

1 --o0o--

2 AIR RESOURCES ENGINEER CARTER: To summarize,

3 staff's proposal is primarily intended to rely on

4 California's exhaust emission standards for heavy-duty

5 otto-cycle engines with federal requirements. These

6 regulatory amendments along with the other changes

7 mentioned today will help ensure California continues to

8 receive the cleanest vehicles and engines available. They

9 will also avoid potential emission increases in the future

10 and help eliminate unnecessary costs to vehicle

11 manufacturers.

12 For these reasons staff recommends the Board

13 adopt this proposal, including the proposed 15-day

14 changes.

15 And one additional issue is an E-mail

16 correspondence from Tom and D. Robert Shaw that you have

17 in your folders. This E-mail relates to battery-powered

18 vehicles and was inadvertently put in your folder. It

19 doesn't relate to our item.

20 And, finally, Mr. Steve Albu needs to comment on

21 a letter regarding fuel-fired heaters.

22 Thank you.

23 CHAIRPERSON LLOYD: Thank you.

24 ENGINEERING STUDIES BRANCH CHIEF ALBU: One

25 supplemental comment that we did receive was from Espar, a

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345137

1 manufacturer of fuel-fired heaters, a German company.

2 They had concerns about our proposal, and that while it

3 may be adequate for 5 kilowatt heaters that will be used

4 in the upcoming Ford Excursion F-series trucks, larger

5 capacity heaters might have trouble meeting the standards.

6 And they wanted us to consider another approach to setting

7 the standards, though it might be geared towards the

8 capacity of the heater.

9 Unfortunately, we don't have enough data to

10 really evaluate their request. And we agreed to work with

11 them to get this kind of data for the near future, and

12 look at our proposal and look at our standard-setting

13 processes to see if there's a better way to do this. One

14 example might be that we might just want to add in the

15 emissions from the fuel-fired heater to the actual

16 tailpipe emissions of the vehicle being tested and see if

17 it complies with the standard. That might actually avoid

18 even having a restriction on the temperature which the

19 heater operates and so on.

20 They do point out that there are advantages to a

21 fuel-fired heater and that, for example, in the CHP

22 example we had early today, it might be better to run the

23 fuel-fired heater and leave the diesel engine shut off.

24 You might have lower emissions overall and yet still

25 provide cabin heat in lower temperatures.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345138

1 So there are some aspects of their request that

2 make sense. And we do want to work with them and are

3 committed to do so. And so that would be occurring in the

4 near future.

5 CHAIRPERSON LLOYD: What about other

6 manufacturers of heaters?

7 ENGINEERING STUDIES BRANCH CHIEF ALBU: Babosta

8 is also another manufacturer that is linked. And in terms

9 of interests with Espar, they're actually very -- they

10 have a high market penetration in Europe particularly.

11 And they are also going to be working with us.

12 There's one other company that will probably

13 enjoin as well.

14 CHAIRPERSON LLOYD: So you're saying all the

15 heater companies have some concerns?

16 ENGINEERING STUDIES BRANCH CHIEF ALBU: Well,

17 Babosto didn't submit a letter, but I would suspect that

18 they would also have the same concern.

19 CHAIRPERSON LLOYD: Okay.

20 ENGINEERING STUDIES BRANCH CHIEF ALBU: But we're

21 not -- we're quite willing to work with them and look at

22 the issues and evaluate them relative to our needs and

23 what makes sense.

24 CHAIRPERSON LLOYD: All right.

25 One of the things that would be useful I know --

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345139

1 and, Steve, you're fully engaged with the Pavley bill.

2 But when we talk about early-on the nonmethane

3 hydrocarbons -- it might be useful at least for

4 educational purposes -- then how much methane typically

5 would accompany that?

6 You know, I'm not asking you now to put down --

7 ENGINEERING STUDIES BRANCH CHIEF ALBU: Yeah, I'm

8 just looking at that --

9 CHAIRPERSON LLOYD: But it would just be

10 informational as we get sort of educated along the way,

11 and methane is something that we're going to have to look

12 at, it would be nice to say, well, we got the .14

13 grams-per-brake-horsepower hour nonmethane. Now, well,

14 what sort of methane numbers would we be expecting so we

15 can become educated and interested in that sort of stuff.

16 ENGINEERING STUDIES BRANCH CHIEF ALBU: Okay.

17 CHAIRPERSON LLOYD: And I presume also in that

18 case you've got the nonmethane hydrocarbon there with a

19 separate formaldehyde standard and a couple of size -- you

20 got the nonmethanol organic gases, which I presume

21 includes oxygenates. Or am I wrong?

22 ENGINEERING STUDIES BRANCH CHIEF ALBU: Yes, it

23 does.

24 CHAIRPERSON LLOYD: Okay. Are there questions or

25 comments?

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345140

1 Mr. Calhoun.

2 BOARD MEMBER CALHOUN: I don't see any comments

3 from the heavy-duty engine manufacturers. Are they happy

4 with your proposal or does it create a problem for them?

5 ENGINEERING STUDIES BRANCH CHIEF ALBU: Well,

6 we're aligning with the EPA in large part for the gasoline

7 side of the issue here. And when it comes to fuel-fired

8 heaters, the only manufacturers using these heaters will

9 be General Motors and Ford that we're of. And for the

10 size of heaters that they're interested in, they can meet

11 the standards that we're proposing. It's a 5 kilowatt

12 heater.

13 We're looking more at the gasoline side or the

14 fuel-fired heater issue? I wasn't sure.

15 Heavy duty?

16 BOARD MEMBER CALHOUN: Yes, heavy duty.

17 ENGINEERING STUDIES BRANCH CHIEF ALBU: Yeah,

18 just heavy duty alone I think we're okay because we're

19 aligning again with EPA.

20 BOARD MEMBER CALHOUN: Thank you.

21 BOARD MEMBER HUGH FRIEDMAN: I just wanted to ask

22 about the word "happy." As in happy Christmas or --

23 (Laughter.)

24 BOARD MEMBER HUGH FRIEDMAN: They're sanguine?

25 It's not a problem for them?

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345141

1 ENGINEERING STUDIES BRANCH CHIEF ALBU: Not a

2 problem.

3 CHAIRPERSON LLOYD: Okay. Coming back to Madam

4 Ombudsman. Would you please describe the public process

5 and participation that was incurred during the development

6 of this regulation and provide us with any comments or

7 concerns that you may have.

8 OMBUDSMAN TSCHOGL: Mr. Chairman and members of

9 the Board, because of the narrow focus of this item and in

10 response to the desire of the stakeholders, there were no

11 formal outreach activities such as workshops or meetings

12 held. Initially the staff conferred directly with the

13 automobile and equipment manufacturers via one-on-one

14 meetings.

15 Staff worked the Alliance of Automobile

16 Manufacturers during the development of this proposal and

17 E-mailed the staff report, title 13 regulatory changes,

18 and the proposed changes to the various test procedure

19 documents on September 23rd.

20 On September 27th the 45-day notice was posted to

21 the ARB's website.

22 Thank you.

23 CHAIRPERSON LLOYD: Thank you very much.

24 Board have any other questions?

25 Mr. Kenny, any further comments?

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345142

1 EXECUTIVE OFFICER KENNY: No.

2 CHAIRPERSON LLOYD: I will now close the record

3 on -- since we don't have anybody to testify, I will close

4 the record on the proposed amendments to Title 13,

5 California Code of Regulations Section 1961.

6 The record for these amendments will pertain to

7 low-emission vehicles. Section 1961 will be reopened when

8 the 15-day notice of public availability is issued.

9 Written or oral comments received after this hearing date

10 but before the 15-day notice is issued will not be

11 accepted as part of the official record for these

12 amendments. When the record is reopened for a 15-day

13 comment period, the public may submit written comments on

14 the proposed changes, which will be considered and

15 responded to in the final statement of reasons for the

16 regulation.

17 I'm also officially closing the record on the

18 remaining proposed amendments. These amendments, which

19 pertain to heavy-duty engine and vehicles and to emission

20 label specifications affect Title 13, California Code of

21 Regulations Sections 1956.1, 1956.8, 1965, 1978, and

22 documents incorporated by reference in those sections.

23 All testimony, written submissions, and staff

24 comments on the proposed amendments pertaining to

25 heavy-duty engines and vehicles and labor specifications

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345143

1 have been entered into the record. And the Board has not

2 granted extension of the comment period for these

3 amendments. Written or oral comments on these amendments

4 received after the comment period has been close will not

5 be accepted as part of the official record for those

6 amendments.

7 Any ex parte disclosures?

8 Seeing none.

9 Moment to review the resolution, and then I'll

10 entertain a motion on that.

11 BOARD MEMBER D'ADAMO: Mr. Chairman, I'd like to

12 move that we adopt Resolution 02-31.

13 BOARD MEMBER HUGH FRIEDMAN: Second.

14 CHAIRPERSON LLOYD: All in favor say aye.

15 (Ayes.)

16 CHAIRPERSON LLOYD: Anybody against?

17 No.

18 With that we will continue.

19 I was hoping that we could take lunch, but lunch

20 isn't here yet. So we will allow a moment.

21 The next agenda item is enhanced vapor recovery.

22 So I guess we changed that. And thank you very much,

23 staff.

24 Actually I think what we're going to do, given

25 the fact we've got a half hour presentation, maybe the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345144

1 easiest thing to do would be to take a break now just

2 because it's -- it looks as though we're in good shape in

3 terms of our overall time. And I think we could do with

4 that additional break.

5 So why don't we actually try to break for half an

6 hour or so. Maybe 5 after 1, is that reasonable, or 10

7 after 1?

8 Yeah, 10 after 1 would be good.

9 Thank you. And we'll come back then.

10 (Thereupon a lunch break was taken.)

11

12

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15

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24

25

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345145

1 AFTERNOON SESSION

2 CHAIRPERSON LLOYD: Next agenda item is 02-9-6,

3 proposed amendments to the enhanced vapor recovery

4 technology requirements for gasoline service stations.

5 In March 2000 the Board approved the enhanced

6 vapor recovery, or EVR, program which made major changes

7 to certification standards and specifications for vapor

8 recovery systems at service stations. At that time, the

9 Board requested the staff conduct a technology review of

10 future effective standards and specifications considered

11 to be technology forcing. The results of the EVR

12 technology review, as well as the proposed amendments to

13 the EVR program will be presented today.

14 At this point I would ask Mr. Kenny to introduce

15 the item and begin staff presentation.

16 EXECUTIVE OFFICER KENNY: Thank you, Mr. Chairman

17 and members of the Board.

18 The proposed amendments include necessary changes

19 as identified during the EVR technology review,

20 improvements to the certification process for vapor

21 recovery equipment used at service stations, and the

22 modifications of the EVR implementation schedule.

23 Five new test procedures are proposed for

24 standards and specifications which currently lack

25 procedures for determining compliance. Staff has also

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345146

1 taken this opportunity to make several modifications and

2 clarifications to the existing test procedures to improve

3 testing measurements.

4 And at this time I'd like to turn the

5 presentation over to Cindy Castronovo, who will actually

6 make the presentation.

7 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: Thank

8 you, Mr. Kenny.

9 Good afternoon, Chairman Lloyd and members of the

10 Board.

11 (Thereupon an overhead presentation was

12 Presented as follows.)

13 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: Today

14 I will present the results of the EVR technology review

15 and proposed revisions to the ARB vapor recovery

16 certification and test procedures.

17 --o0o--

18 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: Our

19 presentation will begin with some background on the

20 enhanced vapor recovery program for vapor recovery systems

21 at gasoline dispensing facilities. Then we will review

22 the six EVR program modules and discuss our findings as to

23 the technological feasibility of the standards in each

24 module, and any proposed regulatory changes associated

25 with the module.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345147

1 We'll talk about how the EVR cost effectiveness

2 has changed based on information collected during the

3 technical review period. As we proceed we'll discuss

4 several issues relating to EVR program implementation and

5 staff's recommendations to address stakeholder concerns.

6 --o0o--

7 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: The

8 EVR regulations affect two types of gasoline transfer

9 which take place at service stations, which are

10 characterized as Phase 1 and Phase 2.

11 As shown by this video, Phase 1 vapor recovery

12 returns vapors, shown in pink, from the service station

13 underground storage tank to the cargo tank truck, and

14 eventually to the terminal vapor control system.

15 Phase 2 vapor recovery routes the vapors

16 displaced from fueling vehicles back into the underground

17 storage tank.

18 Phase 1 and Phase 2 equipment must be certified

19 by ARB to meet emission standards. The ARB certification

20 is the standard for most other states and many countries

21 around the world.

22 --o0o--

23 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: Vapor

24 recovery is an important program for control of reactive

25 organic gas emissions. This chart compares the emission

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345148

1 reduction in tons per day for the South Coast Air Basin

2 for three major emission control strategies.

3 As shown here, the emission reductions

4 attributable to vapor recovery, VR, are estimated at 108

5 tons per day, more than the reductions for low-emission

6 vehicles and cleaner burning gasoline.

7 --o0o--

8 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: In

9 March of 2000 the Board approved the enhanced vapor

10 recovery, or EVR, regulations, which established new

11 standards for vapor recovery systems to reduce emissions

12 during storage and transfer of gasoline at gasoline

13 dispensing facilities. Because several of the EVR

14 standards were thought to be technology-forcing, the Board

15 directed staff to conduct a technology review for

16 standards with future effective dates. The results of the

17 technology review are presented in Appendix 4 of the staff

18 report.

19 Amendments to the vapor recovery regulations are

20 proposed based on the findings of the technology review

21 and also to address issues raised during certification of

22 equipment to EVR standards.

23 --o0o--

24 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: The

25 EVR program is divided into six EVR modules. Each module

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345149

1 represents one or more standards for vapor recovery

2 systems.

3 The first module applies to Phase 1 vapor

4 recovery systems. Modules 2 through 6 are requirements

5 for Phase 2 vapor recovery systems.

6 In the next several slides we will review the EVR

7 technology review findings for each module and discuss

8 proposed regulation amendments relating to that module.

9 --o0o--

10 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: As

11 mentioned earlier, Phase 1 equipment controls gasoline

12 vapor emissions during the transfer of gasoline from the

13 cargo tank truck to the service station underground

14 storage tank. The Phase 1 standards are not

15 technology-forcing and thus were not included in the

16 technology review except in the cost update.

17 Two EVR Phase 1 systems have already been

18 certified and are required to be used now for new vapor

19 recovery installations. No changes are proposed to the

20 Phase 1 standards.

21 The proposed amendments include modifications to

22 five test procedures associated with certification of

23 Phase 1 systems. These test procedures can also be used

24 to check compliance as part of a district enforcement

25 program. The changes would clarify the test methods to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345150

1 make sure the vapor recovery equipment is tested in the

2 field the same way it was certified. These modifications

3 do not change the results of the test method and thus

4 remain consistent with test procedures used to certify the

5 first two EVR Phase 1 systems.

6 --o0o--

7 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: It is

8 helpful to quickly review criteria we use for assessing

9 the technological feasibility of Phase 2 vapor recovery,

10 modules 2 through 6. If a certified vapor recovery system

11 has met the EVR standard, then it is clear that the

12 standard is feasible.

13 Similarly if ARB or manufacturer data

14 demonstrates that standard is achievable, then we also

15 assigned a yes to that standard.

16 In some cases we did not have data collected

17 using our test procedures, but had other information or

18 data that suggested strongly that the standard is

19 achievable. Those standards are described as likely to be

20 technologically feasible.

21 If we have limited or no data regarding an EVR

22 standard, we classify the standard as a "maybe." The last

23 category is intended for any EVR standard which at the

24 completion of the technical review does not appear

25 achievable at this time.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345151

1 --o0o--

2 STAFF AIR POLLUTION SPECIALIST CASTRONOVO:

3 Module 2 includes many Phase 2 standards designed to

4 maximize collection of vapors during vehicle fueling and

5 contain the vapors in the facility underground storage

6 tank. All of the 18 standards and specifications were

7 found to be feasible or likely to be feasible. Thus no

8 changes are needed for these Module 2 standards.

9 --o0o--

10 STAFF AIR POLLUTION SPECIALIST CASTRONOVO:

11 Although no changes are proposed for Module 2

12 standards, we are proposing changes to test procedures

13 associated with Module 2. When EVR was originally

14 adopted, some standards lacked formal methods to determine

15 if the equipment was in compliance with the standard.

16 Three new test procedures are proposed to address this

17 deficiency:

18 TP 201.2G will measure the rigidity of

19 vapor-return piping.

20 TP 201.2J will determine pressure drops across

21 balance system components.

22 And TP 201.7 will specify requirements for

23 measuring underground storage tank pressures during

24 certification.

25 Changes are proposed to TP 201.2F to correct

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345152

1 biases and standardize the calculation of pressure related

2 fugitives during certification testing. Clarifications

3 are proposed to TP 201.2 and TP 201.2B to update equations

4 and refine method applicability.

5 --o0o--

6 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: The

7 third EVR module requires compatibility of Phase 2 vapor

8 recovery systems with ORVR vehicles. On-board refueling

9 vapor recovery, or ORVR, provides for collection of the

10 refueling vapors in a carbon cannister on the vehicle. It

11 performs the same function as a Phase 2 vapor recovery

12 system for newer cars. Phase 2 systems certify as

13 compatible with ORVR vehicles have been available since

14 1998, and thus this standard is indeed feasible. No

15 changes are proposed for Module 3 requirements.

16 --o0o--

17 STAFF AIR POLLUTION SPECIALIST CASTRONOVO:

18 Module 4 controls emissions from a liquid

19 retention. Liquid retention emissions occur when gasoline

20 retained in nozzles and hoses evaporates between vehicle

21 fuelings. Field tests indicate that 82 percent of

22 existing nozzles meet the 100 mil for a thousand gallon

23 liquid retention standard now.

24 Module 4 also contains a nozzle spitting

25 standard, which addresses spitting that can occur if the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345153

1 nozzle latch is squeezed before activating the dispenser.

2 The one milliliter spitting standard is currently met by

3 balanced nozzles and data submitted for an EVR

4 certification application --

5 CHAIRPERSON LLOYD: You are to place that nozzle

6 carefully, I can see that.

7 (Laughter.)

8 STAFF AIR POLLUTION SPECIALIST CASTRONOVO:

9 -- indicates that the spitting standard can also

10 be met for assist nozzles. So this shouldn't happen.

11 Both requirements are considered feasible and no

12 changes are proposed.

13 --o0o--

14 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: The

15 spillage standard limits the combined amount of spillage

16 from all use and operation of the Phase 2 system. The

17 adopted standard is designed to reduce emissions by 60

18 percent compared to current systems.

19 Field tests and data submitted by nozzle

20 manufacturers demonstrate that the standard can be met.

21 Thus we are proposing no changes to these requirements.

22 The Board adopted a separate requirement limiting

23 the drops that occur after the act of vehicle refueling.

24 Although the emissions from these drops is included in the

25 spillage standard just discussed, we believe it is

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345154

1 important to provide a more stringent requirement that

2 reduces the chance of getting gasoline on clothes or

3 shoes. The Board adopted standard allows one drop. As a

4 result of the technology review, we proposed an amended

5 standard of three drops and a revised test procedure.

6 Since the staff proposal was issued we have

7 conducted additional testing of manufacturer prototype

8 nozzles. The testing has led to two new findings. First,

9 the revised test procedure contained in the staff proposal

10 is too lax in that it allows current nozzles that drip

11 excessively in actual operation to pass the test. Thus we

12 propose as a 15-day change to withdraw the proposed

13 revised test procedure and retain the one already in

14 regulation.

15 Second, we have recently tested a manufacturer's

16 prototype nozzle. And it has past the three-drop limit

17 using the original, more stringent test. Thus we consider

18 a three-drop standard feasible and propose to revise the

19 current one-drop limit to three.

20 --o0o--

21 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: The

22 6th and last EVR module is in-station diagnostics. First

23 we will talk about how ISD works and then discuss ISD

24 feasibility.

25 In-station diagnostics provides continuous

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345155

1 monitoring of emission related parameters and alerts the

2 station operator when a failure mode is detected so that

3 repairs can be made. Currently inspections and field

4 tests are necessary to ensure installed systems are

5 operating correctly.

6 Even if a district requires annual testing, many

7 defects in the vapor recovery system do not interfere with

8 gasoline dispensing. And thus an emission related failure

9 may not be noted until the next test. Thus, without ISD,

10 excess emissions can occur for many months before

11 corrective action is taken.

12 ISD is similar in concept to the ARB on-board

13 diagnostics for motor vehicles. Also many service

14 stations already have a diagnostic system to detect liquid

15 leaks from underground storage tanks. We expect

16 integration of vapor recovery diagnostics with existing

17 liquid leak detection systems will be the first ISD

18 systems to be certified.

19 --o0o--

20 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: The

21 main features of the ISD system are illustrated here. The

22 ISD system monitors system performance parameters,

23 including vapor flow and underground storage tank

24 pressure. The monitor informs the station operator when a

25 failure or degradation of the vapor recovery system

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345156

1 occurs. If the problem is not corrected, the ISD system

2 will shut down the field dispenser. The ISD monitor

3 maintains an electronic archive of system performance

4 which may be used to generate reports.

5 In the next few slides we will illustrate with

6 animation how the ISD monitors vapor collection during a

7 vehicle fueling.

8 --o0o--

9 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: This

10 slide shows how ISD monitors the vapor return during a

11 typical fueling event. As the gas is dispensed into the

12 car, the vapor is drawn out of the tank and sent back to

13 the underground storage tank.

14 As the vapor flows to UST, it passes through a

15 displacement meter which sends an electronic signal to the

16 ISD system. The ISD system interprets the signal and

17 calculates the air-to-liquid ratio, or A over L, reading.

18 The hatched area on the A over L bar represents a

19 dispenser operating within the certified limits.

20 --o0o--

21 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: The

22 ISD system has two warning modes: Degradation and gross

23 failure.

24 This slide illustrates the ISD system issuing a

25 degradation warning for pump number 1 after one week in

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345157

1 which the vapor collection is 25 percent out of the

2 certified range.

3 If the system is operating from 25 to 75 percent

4 or 125 to 175 percent, the system will indicate a

5 degradation warning.

6 In this slide the system is operating just below

7 the 75 percent level. The one-week period allows

8 collection of sufficient data to ensure that the

9 degradation is real.

10 If the system continues to operate outside the 25

11 percent range for a second consecutive week, then the

12 dispenser is shut down by the ISD system. Thus for

13 degradation warnings there is ample opportunity to repair

14 the problem before dispensing is affected.

15 This slide shows the second type of ISD warning,

16 for a gross failure. The gross warning is at first

17 similar to the degradation warning, except that you'll

18 notice that the reading is far outside the acceptable

19 range. Since the vapor collection is severely reduced,

20 the ISD system goes into a warning mode after one day.

21 --o0o--

22 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: If

23 the gross failure continues for a second day, the

24 dispenser is shut down by the ISD system.

25 One feature of the ISD system is that although

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345158

1 the system is required to be shut down, there will be a

2 reset button on the unit which will allow restarting of

3 the system if local district rules allow the reset

4 function to be used before repairs are made. Under most

5 circumstances maintenance would be performed prior to

6 pressing the recess button. An electronic record is

7 created each time the reset button is pressed.

8 --o0o--

9 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: The

10 printout capabilities on-site will provide both station

11 managers and district personnel a means of immediately

12 assessing the current past performance of the vapor

13 recovery system.

14 --o0o--

15 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: This

16 sample printout shows the typical information that is

17 included in a daily report. Note that the A over L value

18 for dispenser number 1 is recorded below the gross warning

19 level limit.

20 In this example, dispenser number 4 indicates

21 that the A over L of 0.82 is out of specification, which

22 is typically 0.9 to 1.1. However, it is above 0.75, which

23 is the trigger for the ISD warning system. Thus ISD

24 assigns a pass for dispenser 4. This information helps

25 identify problems early and could trigger maintenance

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345159

1 before ISD warnings occur.

2 ISD stores daily reports for the last 30 days and

3 monthly reports for the previous 12 months. Also a record

4 of reset is included on the print out.

5 --o0o--

6 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: As

7 part of the EVR technology review you directed us to

8 conduct an ISD pilot program. An ISD work group was

9 formed, which included representatives from districts and

10 petroleum marketers, to develop the protocol to evaluate

11 the ISD systems. Five stations throughout California were

12 instrumented with ISD systems and subjected to hands-off

13 operation as well as challenge mode testing.

14 The ISD system tested in the pilot program

15 successfully provided warnings of system failures or

16 degradation and demonstrated the capability to shut down

17 fuel dispensing if the problem was not corrected.

18 The ISD systems were found to detect system

19 failures with at least 99 percent probability. With the

20 testing we conducted, no false alarms were found.

21 The ISD systems in the pilot study demonstrated

22 at operating service stations that 13 out of 14 ISD

23 requirements are feasible. The requirement for self

24 testing was not evaluated, but is considered likely to be

25 feasible, as UST leak detection systems have the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345160

1 capability to automatically check censors at prescribed

2 intervals. And this technology can also be used for ISD.

3 This completes our discussion of the EVR modules.

4 Next we will talk about proposed amendments to the

5 certification procedures.

6 --o0o--

7 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: We

8 proposed several changes to certification procedure CP 201

9 to help improve certification of EVR systems. These

10 include clarification of what materials are required for

11 EVR applications, discussion on how we handle equipment

12 failures during the certification tests, and when failures

13 constitute test termination.

14 Since the purpose of in-station diagnostics is to

15 identify failures quickly to allow immediate repair, we

16 propose to allow limited equipment maintenance during the

17 operational test for systems equipped with ISD.

18 Allowing Phase 2 equipment to certify either on a

19 unihose or multihose dispenser will help make more test

20 sites available.

21 Gasoline marketers would like choices for

22 equipment components comprising a vapor recovery system.

23 Staff proposes changes to the certification procedure to

24 allow components to be certified on multiple systems, with

25 abbreviated testing after the equipment has first

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345161

1 successfully completed a full system certification.

2 --o0o--

3 STAFF AIR POLLUTION SPECIALIST CASTRONOVO:

4 Other proposed amendments to the certification

5 procedure include new language to avoid missuse of the

6 innovative system provision. We propose to remove

7 language relating to spill containers at Phase 1 delivery

8 points to avoid any conflicts with State Water Board

9 regulations.

10 As discussed in the EVR technology review, the

11 maximum hydrocarbon rate is proposed to be evaluated at

12 the exhaust rather than the inlet to the processor.

13 Finally, we suggest amendments to the information

14 required for in-station diagnostics reporting and will

15 clarify what information must be available to the station

16 operator and district inspector.

17 --o0o--

18 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: That

19 completes our discussion of the regulatory changes

20 associated with the EVR program modules and the

21 certification process.

22 Next we will cover proposed amendments that

23 affect the implementation of the EVR program.

24 --o0o--

25 STAFF AIR POLLUTION SPECIALIST CASTRONOVO:

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345162

1 Several concerns were raise during the technology

2 review workshops that were separate from whether the

3 standards were technologically feasible. This slide

4 summarizes the major issues raised by districts and

5 station operators. We'll discuss proposed amendments to

6 address these points in the next several slides.

7 --o0o--

8 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: Phase

9 2 vapor recovery systems are not only used for ROG

10 emission control, but are a primary means of reducing

11 Benzene exposure as required by a state air toxics control

12 measure.

13 Thus even stations in federal and state ozone

14 attainment areas are required to have Phase 2 systems for

15 Benzene control. These attainment districts pointed out

16 that their stations should not have to pay to upgrade

17 stations if ROG and Benzene emissions were sufficiently

18 controlled by their existing equipment.

19 We agree with this assessment with two caveats.

20 Phase 2 systems that are not compatible with ORVR vehicles

21 will cause excess emissions which could increase Benzene

22 exposure.

23 Also, new gasoline facilities and facilities

24 undergoing major modifications should be required to

25 install EVR systems to keep districts in attainment

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345163

1 status. There are six districts in northern California

2 that are eligible for this exemption.

3 --o0o--

4

5 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: The

6 impact of EVR was evaluated for five service station

7 categories with annual throughputs ranging from up to

8 300,000 gallons to above 2.4 million gallons. These five

9 levels are identified as GDF 1 through GDF 5.

10 This table provides the annual throughput range,

11 the percentage of total state gasoline throughput, and the

12 percentage of facilities for each GDF category.

13 Ninety-four percent of the total gasoline

14 throughput, which corresponds to 94 percent of the

15 emissions, is associated with the larger GDF 3, GDF 4, and

16 GDF 5 facilities. Six percent of emissions is

17 attributable to the stations in GDF 1 and GDF 2, which

18 comprise about 20 percent of existing service stations.

19 --o0o--

20 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: In

21 March 2000 the Board exempted from ISD requirements

22 stations with a throughput of no greater than 160,000

23 gallons annually based on cost effectiveness. All other

24 EVR requirements apply to these stations. Since 160,000

25 represents the average throughput of GDF stations, we

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345164

1 propose to raise the ISD exemption level to 300,000

2 gallons annually to reflect the Board's intent to exempt

3 all of the stations in the GDF 1 category.

4 Districts do not feel it appropriate to implement

5 ISD for GDF 2 facilities at this time due to the capital

6 cost impact on smaller GDF's, their potentially rural

7 locations, and limited overall emission reduction

8 potential.

9 We agree with the district's request that the

10 Board exempt GDF 2 facilities. We have also agreed to

11 evaluate the progress of ISD implementation within 18

12 months after certification of the first ISD system. We

13 will have better data at that time to decide whether to

14 continue, modify, or eliminate the proposed ISD exemption

15 for GDF 2.

16 Exempting GDF 2 will raise the ISD exemption

17 level to 600,000 gallons per year. The combination of

18 exempting both GDF 1 and GDF 2 would make about 20 percent

19 of the total service stations in California eligible for

20 the exemption. But represents about a 6 percent loss, or

21 0.5 tons per day in the total ISD emission reductions.

22 --o0o--

23 STAFF AIR POLLUTION SPECIALIST CASTRONOVO:

24 Before we review the EVR timeline, it is helpful to review

25 the definitions of the EVR implementation dates. The

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345165

1 example shown is for Phase 1, which is the system that

2 interfaces with the gasoline delivery truck.

3 State law provides that existing vapor recovery

4 equipment may be used for a period up to 4 years after the

5 effective date of a new standard. The effective date, or

6 start of the 4 year clock, is shown by the beginning of

7 the dotted bars. The start of each colored bar indicates

8 the operative date of the standard or when the standard is

9 applicable to new and modified facilities.

10 As we shall see, for some standards the effective

11 and operative dates are the same, so there will not be

12 dotted boxes for all the standards.

13 --o0o--

14 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: The

15 end of each colored bar indicates when all existing

16 facilities must modify their vapor recovery systems to

17 comply with the standards, which is the end of the 4 year

18 clock.

19 --o0o--

20 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: Here

21 is the existing EVR timeline, showing the EVR

22 implementation dates for Modules 1 through 6. The

23 operative dates are staggered to allow time to develop EVR

24 systems which could meet the technology-forcing standards.

25 --o0o--

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345166

1 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: As

2 discussed in the staff report, we propose to align the

3 schedule for the 100 mil liquid retention, 1 milliliter

4 spitting, and spillage standards with the schedule for the

5 dripless nozzle to group all the nozzle standards

6 together. This proposed change will help simplify the EVR

7 requirements for service station owners and reduce

8 complications for district inspectors in enforcing

9 multiple nozzle standards.

10 --o0o--

11 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: This

12 slide shows a new proposal for modifications to the EVR

13 implementation schedule, which was not proposed in the

14 staff report. We proposed to delay the effective dates

15 for the Phase 2 standards and specifications, the nozzle

16 standards and the ISD module by six months to allow time

17 to complete certification of EVR systems, this can take up

18 to nine months. We expect systems to begin certification

19 testings by January of 2003.

20 Note that the ORVR compatibility standard,

21 represented by the pink bar, is not changed. And systems

22 installed after April 2003 must be ORVR compatible.

23 As mentioned earlier, three vapor recovery

24 systems have already been certified as ORVR compatible.

25 And preliminary data from ARB field tests have recently

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345167

1 demonstrated that balance systems also meet the ORVR

2 compatibility standard.

3 --o0o--

4 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: Since

5 our experience is that not all certification tests are

6 successful, we cannot guarantee that Phase 2 systems

7 meeting all the EVR requirements will be available by

8 October of 2003. Language is proposed to be added to the

9 certification procedure to allow the Executive Officer to

10 extend the operative date by up to six months, if

11 necessary. In the interim period only ORVR compatible

12 systems would be permitted to be installed.

13 --o0o--

14 STAFF AIR POLLUTION SPECIALIST CASTRONOVO:

15 Additional changes to the staff's proposal as

16 originally noticed are summarized on this slide. These

17 include the increase in the ISD exemption throughput and

18 changes to the EVR implementation schedule.

19 The modifications to the EVR implementation

20 schedule are proposed to be processed as an emergency

21 regulation in order to adopt the proposed amended

22 schedule, but for the original effective date of April

23 1st, 2003.

24 We also propose minor changes to the

25 certification procedure, adding definitions of technical

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345168

1 terms and corrections and clarifications to five of the

2 proposed test procedures.

3 --o0o--

4 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: The

5 last section of our presentation reviews the cost

6 effectiveness of enhanced vapor recovery.

7 --o0o--

8 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: As

9 discussed in the staff report, the EVR cost analysis

10 prepared in February 2000 was updated as part of the EVR

11 technology review. The equipment costs, particularly for

12 ISD, were discovered to have been underestimated in the

13 original analysis. The emission reductions were

14 recalculated based on information from in-use system

15 emissions that was not available in 2000.

16 Also, errors in the original analysis were noted

17 and corrected. The end result was an increase in the

18 overall cost effectiveness from $1.80 to $5.24 per pound

19 of ROG reduced.

20 --o0o--

21 STAFF AIR POLLUTION SPECIALIST CASTRONOVO:

22 This is a significant increase. But the EVR cost

23 effectiveness is still comparable to other recent ARB

24 regulations, as illustrated here.

25 --o0o--

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345169

1 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: We

2 worked closely with the stakeholders identified here in

3 preparing the staff's proposal. A summary of the outreach

4 efforts will be presented by the Ombudsman following this

5 presentation.

6 --o0o--

7 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: What

8 happens next for vapor recovery? We will be very busy

9 over the next few years certifying systems to meet the new

10 standards. We are working with CAPCOA to improve district

11 staff involvement on systems seeking certification.

12 We will be further evaluating the implementation

13 of ISD per CAPCOA's request and provide our findings

14 within 18 months of the first ISD certification.

15 --o0o--

16 STAFF AIR POLLUTION SPECIALIST CASTRONOVO: In

17 conclusion I'd like to restate that this proposal was

18 developed with extensive outreach to affected parties,

19 with adjustments made to address concerns over the last

20 two years. Our economic analysis shows that the proposed

21 measures remain cost effective. The EVR standards are

22 necessary to fulfill the ozone SIP settlement agreement,

23 protect public health, and help districts meet their

24 attainment goals.

25 Finally, we recommend adoption of our amended

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345170

1 proposal, with the understanding that changes to the

2 original proposal will undergo a 15-day comment period.

3 This concludes my presentation.

4 CHAIRPERSON LLOYD: Thank you very much.

5 Madam Ombudsman, would you kindly provide

6 information on the public participation process followed

7 in developing this regulation, provide us any comments or

8 concerns you may have.

9 OMBUDSMAN TSCHOGL: Mr. Chairman and members of

10 the Board, this staff report was developed with input from

11 the California Air Pollution Control Districts, Water

12 Resources Control Board, vapor recovery equipment

13 manufacturers, testing contractors, gasoline marketers and

14 associations, and other interested parties.

15 In developing the EVR technology review the tech

16 review work group advised staff during the early drafts of

17 the report during three conference calls. Two public

18 workshops were also held before the draft report was

19 released in April. Two additional workshops were held to

20 solicit comments on the draft review -- the draft tech

21 review and also to discuss the proposed amendments to the

22 vapor recovery regulations. Approximately 60 people

23 attended each workshop.

24 Internet audio broadcasts were made available for

25 the third a fourth workshops. Staff also had over 20

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345171

1 individual meetings with stakeholders. In addition, they

2 participated in several CAPCOA committee meetings to keep

3 districts informed and to solicit input. Over 500

4 stakeholders on the vapor recovery list-serve received

5 E-mails when new information was posted on the vapor

6 recovery web page.

7 On October 25th staff mailed the notice of public

8 hearing and the availability of the staff report to

9 approximately 300 interested parties. These documents

10 were also posted on the ARB's website.

11 This concludes my comments.

12 Thank you.

13 CHAIRPERSON LLOYD: Thank you very much.

14 Colleagues have any questions at this time?

15 All right. So with that I'd like to call up the

16 first three witnesses.

17 We have Dr. Wallerstein, Barbara, Doug Quetin.

18 DR. WALLERSTEIN: Good afternoon, Chairman Lloyd,

19 members of the Board.

20 If it's okay with the Board, we'd like to have

21 Doug Quetin go first since he's the President of CAPCOA at

22 this time.

23 CHAIRPERSON LLOYD: That's fine.

24 MR. QUETIN: One of Barry's happier days was to

25 relinquish presidency, I think.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345172

1 Good afternoon. I'm, as Barry said, Doug Quetin.

2 I'm the APCO with the Monterey Air District and the

3 current president of CAPCOA.

4 CHAIRPERSON LLOYD: Congratulations.

5 MR. QUETIN: Thank you.

6 Chairman Lloyd and members of the Air Resources

7 Board, we appreciate that you are conducting this

8 technology review as promised at your March 2000 meeting.

9 And you committed to developing enhanced vapor recovery

10 systems designed to address a host of problems with the

11 existing equipment.

12 The performance of these systems is crucial to

13 reducing ozone precursors and the toxic air contaminant

14 Benzene. Unlike most air pollution equipment, these

15 systems are used regularly by the public, and who are

16 directly exposed if they're malfunctioning.

17 Public use also results in exceptional wear and

18 tear to these air pollution systems. As local air

19 districts we pledge to work as full partners with your

20 staff to assure that enhanced vapor recovery systems and

21 the ISD systems operate at their most effective levels.

22 We do have concerns with the cost effectiveness

23 analysis, especially for ISD, as well as the reasons that

24 staff cited. And we're pleased to see that the threshold

25 recommendation for the requirement of ISD is raised to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345173

1 600,000 gallons a year. This should bring the cost

2 effectiveness numbers to more within acceptable ranges.

3 I'd like to thank for this opportunity to

4 comment. And on behalf of the 35 local air districts, we

5 do wish you happy holidays.

6 CHAIRPERSON LLOYD: Thank you very much.

7 Questions, comments from the Board?

8 Thank you, Doug.

9 MR. QUETIN: Thank you.

10 DR. WALLERSTEIN: I'll be very brief.

11 The South Coast Air Quality Management District

12 staff is in full support of the proposal that your staff

13 has provided to you this afternoon. I want to personally

14 thank the CARB staff for working well with the air

15 districts. This is an important step forward. It's a

16 good measure for ozone control and it's also a good

17 measure for air toxics.

18 CHAIRPERSON LLOYD: Thank you very much, Barry.

19 MS. LEE: Chairman Lloyd, members of the Board,

20 I'm Barbara Lee. I'm the Air Pollution Control Officer in

21 northern Sonoma County. I had the opportunity a couple of

22 years ago as CAPCOA president to serve on your vapor

23 recovery advisor group. I've worked with staff since then

24 representing rural district concerns about this program.

25 I want to commend staff for your efforts to work

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345174

1 with us on an ongoing basis, to interface with our

2 committees, and to try to respond to the issues that we

3 raised with you.

4 We're very pleased that you included the higher

5 threshold. This was a very important issue for the rural

6 districts. Northern Sonoma is here in full support of

7 your regulation, and I would like to express my personal

8 thanks to staff for their efforts in working with us.

9 Thank you.

10 CHAIRPERSON LLOYD: Thank you.

11 And, again, I'd like to thank the districts and

12 CAPCOA for really working with us very well. I know how

13 important this measure is to you as well. Thank you.

14 We have Sandra Duval, Steven Arita, and Prentiss

15 Searles.

16 MS. DUVAL: Good afternoon, Mr. Chairman and

17 members. My name is Sandra Duval. I'm with the

18 California Independent Oil Marketers Association. And our

19 members deliver gasoline to independent retail gasoline

20 stations. And many of them operate stations as well.

21 I'm here today to talk about the change in the

22 test procedure for Phase 2 systems that allows some -- I

23 think it was characterized today as maintenance of the

24 system with an ISD detected failure.

25 Our members' experience with currently certified

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345175

1 vapor recovery equipment has been poor. Much of the

2 equipment is of substandard quality and it needs frequent

3 repairs. We also frequently find ourselves in violation

4 of air pollution control standards, resulting in numerous

5 and expensive fines that have been paid by our members.

6 And this experience has led to our current

7 position, that new EVR equipment must demonstrate that it

8 can meet the CARB emission control standards and that it

9 is reliable enough to maintain those standards without

10 excessive repairs or maintenance.

11 And we think the only way to ensure that is with

12 the rigorous 180-day certification test. And that it is

13 not allowed to malfunction during that test period.

14 We understand that should the system have a

15 malfunction that is detected by the ISD system and it is

16 allowed to complete the test, that the system will be

17 certified only with an ISD system. And that alarms us

18 because we are afraid that what will happen is in the

19 worst case scenario the only equipment available will have

20 to be paired with an ISD system.

21 And the exemption that is being proposed to be

22 increased to the GDF 1 and GDF 2 will become meaningless

23 because there won't be any EVR Phase 2 systems that you

24 can use that don't have ISD. And that significantly

25 increase the cost for the GDF 1 and GDF 2 stations.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345176

1 SO we very much would implore you to hold the

2 line on your rigorous testing standard. We believe that

3 both our members, station owners, and the public deserve

4 to have to equipment that not only is rigorous enough to

5 be able to maintain itself without excessive repairs, but

6 also will meet the air pollution control standard.

7 Thank you.

8 CHAIRPERSON LLOYD: Thank you very much.

9 Any comments from staff at all?

10 MONITORING AND LABORATORY CHIEF LOSCUTOFF: I'll

11 respond to that.

12 My name is Bill Loscutoff, Chief of the

13 Monitoring and Laboratory Division.

14 I first of all want to thank Ms. Duval for her

15 comments and to reassure her that we at staff want to make

16 sure that the integrity of the EVR certification process

17 is not in any way compromised.

18 We do believe that the alternative certification

19 procedure that we're including is something that is sound

20 and will not compromise the overall process.

21 Just briefly, let me highlight a couple of key

22 features of the ISD maintenance-based certification

23 proposal.

24 First of all, in order to even qualify for an

25 ISD-based certification you must pass your first 90 days

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345177

1 without any failure whatsoever. So even to get to the

2 point of possibly qualifying, you've got 90 days that --

3 the first the 90 days that you can't have anything fail at

4 all.

5 Secondly, in the second 90-day period no more

6 than 9 days of that 90 days can the system be out of

7 service. And that's including any kind of maintenance

8 that you must do that was identified by the ISD.

9 Third, the maintenance that is performed must be

10 identified in the system manufacturer's maintenance

11 provisions. That will be a formal part of their

12 maintenance manual.

13 And then I think lastly, maybe most important, we

14 retain discretion as to whether or not to allow a specific

15 failure to qualify for ISD maintenance base. So it really

16 is important, you know, what actually fails.

17 With those major provisions, we feel that the

18 certification process integrity is maintained.

19 CHAIRPERSON LLOYD: Thank you.

20 Thank you very much.

21 We have Steven Arita and Prentiss Searles.

22 MR. ARITA: Good afternoon, Mr. Chairman, members

23 of the Board. For the record, my name is Steven Arita

24 with the Western States Petroleum Association.

25 First of all I'd like to start by expressing our

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345178

1 appreciation and thanks to Mr. Kenny and Mr. Loscutoff and

2 the staff for their willingness to work with our

3 association and members of our association.

4 Staff has been very supportive in considering our

5 concerns. And we certainly appreciate their willingness

6 to continues to work with our association and certainly

7 our members.

8 WSPA supports the EVR program and the goal of

9 ensuring that gasoline dispensing equipment will be

10 durable and meet the new EVR certification standards.

11 We also recognize the challenges and the

12 difficulties CARB has experienced implementing the EVR

13 program, and how these challenges are beginning to impact

14 the EVR timeline -- implementation timeline. In that

15 regard I reference back to staff's presentation.

16 WSPA supports staff's recommendation of adjusting

17 the Module 2 and 6 effective in final timeline dates;

18 certainly given the fact the ability to certify an EVR

19 system by April 1st, 2003, most likely would not be met.

20 As we have stated in the past and in discussions

21 with staff, it's certainly our members's primary goal to

22 have to install EVR certified equipment once and avoid the

23 need to retrofit several times over in order to meet all

24 of the EVR timeline requirements.

25 We have had several discussions with staff

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345179

1 regarding the upcoming deadline date as it relates to

2 ORVR. And in the course of those discussions we certainly

3 would support the reference to Resolution 2-35 where staff

4 is proposing that staff conduct an assessment of the

5 adequacy of the lead time to minimize having operators to

6 upgrade vapor recovery systems more than once in order to

7 comply with the EVR and ORVR timeline requirements.

8 To summarize, again we support staff's

9 recommendations on adjusting the timelines as well as the

10 proposed Board resolution.

11 It is our understanding that there are several

12 systems scheduled to soon begin testing -- EVR

13 certification testing. And we certainly look forward to

14 working with the CARB staff as these systems become EVR

15 certified and can be installed to meet upcoming EVR

16 deadlines in a timely manner.

17 Thank you, Mr. Chairman, for this opportunity to

18 speak before you.

19 CHAIRPERSON LLOYD: Thank you very much, Steve.

20 Questions, comments, members?

21 Mr. Calhoun.

22 BOARD MEMBER CALHOUN: I don't have a question

23 for him.

24 I want to go back to the previous speaker, who

25 suggested that -- I think she made a statement or someone

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345180

1 made the Statement that the Phase 1 systems that -- or the

2 Phase 2 we're talking about, were routinely breaking down,

3 causing problems. And she suggested 180 days for

4 certification.

5 Do we have any feedback on the frequency with

6 which these systems have failed?

7 MONITORING AND LABORATORY CHIEF LOSCUTOFF: I

8 think Ms. Duval was referring to the existing systems

9 under the old certification process. We are just now in

10 the process of implementing the EVR systems, and have very

11 little information yet as to any failure frequencies.

12 In terms of the older systems, there was a lot of

13 problems with them. And I can't give you a specific

14 frequency ratio because we'd have to break it down by

15 component and system type. But there are a lot of

16 problems with the existing systems that were certified

17 under the old process. And that's basically why we came

18 to you two years ago with the EVR process. It's very

19 substantial.

20 BOARD MEMBER CALHOUN: Now, are there systems out

21 there now with in-station diagnostics?

22 MONITORING AND LABORATORY CHIEF LOSCUTOFF: Not

23 with the sort of level of in-station diagnostics that

24 we're proposing. There are some older systems that

25 certified roughly 10 years ago that had some basic

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345181

1 diagnostics; but nothing that's comparable to what we're

2 proposing.

3 BOARD MEMBER CALHOUN: What happens if there is a

4 failure and the reset button is pushed and -- at least

5 there's an indication made of this. But how are the

6 regulatory agencies to know that reset button has been

7 pressed?

8 MONITORING AND LABORATORY CHIEF LOSCUTOFF: We

9 have some specific requirements of, number one,

10 tamperproof data recording, similar to -- analogous to

11 what you would find on an automobile. We have

12 requirements for data retention, I believe it's 30 days

13 worth, within the electronics of the ISD. And plus we

14 have capabilities of printouts. And those could be

15 required by, for example, a district on a routine basis.

16 So if somebody did make -- do a reset, it should

17 be very well recorded and a record of that maintained.

18 BOARD MEMBER CALHOUN: She may not know about it

19 though.

20 MONITORING AND LABORATORY CHIEF LOSCUTOFF: The

21 District might not -- excuse me?

22 BOARD MEMBER CALHOUN: Yes, the local districts,

23 who would be the enforcer of this, would not normally know

24 about it unless they went out and inspected the records.

25 MONITORING AND LABORATORY CHIEF LOSCUTOFF:

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345182

1 That's correct.

2 BOARD MEMBER CALHOUN: Ms. Duval, do you have any

3 other comments to make?

4 SENIOR STAFF COUNSEL JOHNSTON: I'm Diane

5 Johnston. I'm the attorney on this item.

6 And, Mr. Calhoun, one of the things that could

7 happen at the district level in regard to resetting the

8 system is that in the district permits the district might

9 require that when a station is going to push the reset

10 button, that they notify the district. So that would come

11 up -- if districts chose to adopt that kind of provision,

12 they could do so.

13 CHAIRPERSON LLOYD: Professor Friedman and Mr.

14 McKinnon.

15 BOARD MEMBER HUGH FRIEDMAN: While we're on the

16 subject, does the staff have any response to the request

17 for a timeline process, a review and check in 2004?

18 MONITORING AND LABORATORY CHIEF LOSCUTOFF: We

19 did include language that we worked out together with

20 WSPA, that is included in the resolution. And we believe

21 it's a reasonable request to do an evaluation after a EVR

22 system is certified to determine whether or not it is

23 certified soon enough to meet also the ORVR requirements,

24 availability and permitting and all that.

25 BOARD MEMBER HUGH FRIEDMAN: Would that include a

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345183

1 review of the diagnostic systems?

2 It would not?

3 MONITORING AND LABORATORY CHIEF LOSCUTOFF: No.

4 It would -- just the availability of --

5 BOARD MEMBER HUGH FRIEDMAN: But you'd have

6 ongoing monitoring of whether they're working, breaking

7 down?

8 MONITORING AND LABORATORY CHIEF LOSCUTOFF:

9 Absolutely.

10 BOARD MEMBER HUGH FRIEDMAN: Fault periods and so

11 forth.

12 I'm just addressing both speakers.

13 CHAIRPERSON LLOYD: Mr. McKinnon.

14 BOARD MEMBER McKINNON: Yeah, I don't feel like

15 I'm technically equipped to even go here. But --

16 (Laughter.)

17 BOARD MEMBER McKINNON: -- one of things that I

18 think is really important is to take the time to make sure

19 that we got it right. And it may be there's enough

20 changes here in how we're testing its -- did we used to

21 test components and now we're testing the system? That's

22 a big change. That's a big difference.

23 But my concern is that we get it to the point

24 where we have some that are right, we know they're right,

25 we know they work. I'm not qualified to talk about minor

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345184

1 failure and major failure. I imagine there's some minor

2 failures that may not have air impacts.

3 But do you feel comfortable that we have enough

4 time here built in to make sure the systems work before we

5 have people go in the business of installing them in gas

6 stations throughout the State?

7 Let -- I'm sorry. Along with time, I also think

8 rigor in testing is important. I mean there was sort of a

9 suggestion that, you know, maybe we didn't do enough. But

10 rigor of testing is also important. So in other words,

11 making sure they work.

12 EXECUTIVE OFFICER KENNY: I think the key answer

13 on that is that we actually were proposing additional time

14 for exactly that reason. I mean we share your concern

15 that in fact we have systems out there that are reliable

16 and that are effective. And so instead of basically

17 holding to an April 2003 date -- which the reality is we

18 could not make, we don't have systems that have met that

19 level of rigor at this point we are proposing a six month

20 extension. And then that gives us the opportunity to

21 essentially make sure that in fact we can get systems

22 proposed to us, and then run them through a rigorous

23 testing process that's been proposed, so that in fact they

24 will work. And then to provide a little bit of insurance

25 policy. Proposal also did provide essentially for the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345185

1 potential of an additional six month extension that I

2 could actually propose if in fact, you know, the

3 additional six months that we're proposing through the

4 Board wasn't sufficient.

5 So where we ultimately could go is we take the

6 April 2003 date, we add six months on to that, and so

7 we're in October of 2003, which is where we're proposing

8 the Board go. And then if in fact we still continue to

9 have problems, there's an additional six months, which

10 would run us into roughly April of 2004. And so with

11 those things there we think we're okay and we think we

12 have enough time to ensure that in fact what's required

13 will work. And if in fact it doesn't, we'll know that and

14 then we'll be back to you.

15 CHAIRPERSON LLOYD: Sounds like a good approach.

16 Last witness is Prentiss Searles.

17 We have your written statement and we recognize

18 you're going to support. So maybe just highlight the key

19 aspects here.

20 MR. SEARLES: Yes. Mr. Chairman, thank you,

21 members of the Board. Good afternoon. My name is

22 Prentiss Searles. I'm the Senior Marketing Issues

23 Associate of the American Petroleum Institute. We

24 represent more 400 member companies involved in all

25 aspects of the oil and natural gas industry.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345186

1 Our members operate retail service stations

2 throughout the more than two dozen states that require

3 Stage 1 and Stage 2 vapor recovery systems as part of

4 their state implementation plans. And this is the reason

5 that I'm here today.

6 I appreciate the opportunity to testify before

7 the Board, as the decisions that you make do have

8 implications for many of the States outside California.

9 We want to thank you for conducting the technology review.

10 And we also appreciate the time that staff has taken to

11 spend with us to work out the concerns that we have on

12 this process -- or, no, I'm sorry, not with the process --

13 but with some of the technical issues.

14 We do have in that light several technical issues

15 that we have shared with staff, and we look forward to an

16 agreeable solution. Just briefly I'll touch on a few of

17 those.

18 The first is in regards to a test procedure. And

19 we've identified several specific technical issues that I

20 won't try to describe to you. And we have -- CARB staff

21 has indicated that they will be working with us to address

22 those issues.

23 The second issue is that we're looking -- we

24 understand that there was some new data that shows that

25 there were excess emissions at the fill neck on vehicles

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345187

1 that are equipped with on-board refueling vapor recovery

2 systems. In our written comments we have asked that that

3 data be reviewed by CARB, and to look at it with the

4 impacts of that new data on the emissions calculations

5 through ORVR compatibility.

6 The third issue that we have is that we believe

7 that there is an incorrect fill factor for product drops,

8 which is where the product goes from the tank truck to the

9 underground storage tank. And we have -- we understand

10 that CARB is working on a project to clarify the emissions

11 from Phase 1, and we'll look forward to working with them

12 to better understand what the implications are and how

13 that should be changed.

14 Finally, I want to support WSPA's comment and the

15 discussions that was regarding the time schedule.

16 With that, I would like to thank you again for

17 the opportunity to participate in these hearings. And we

18 look forward to working with staff to resolve our concerns

19 that are detailed in writing.

20 CHAIRPERSON LLOYD: Thank you very much, and

21 thanks for coming out from Washington. Also, I'd hope you

22 would reflect the comments made earlier by -- particularly

23 by Mr. McKinnon and Supervisor DeSaulnier on the positive

24 steps that the industry is taking -- I know API, you got

25 the same members as WSPA -- but the positive steps to

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345188

1 actually meeting our goals on cleaner gasoline and RFG 3.

2 So We really appreciate the efforts there as

3 well. So please bring that back to your members.

4 MR. SEARLES: Will do. Thank you.

5 CHAIRPERSON LLOYD: Any questions?

6 Thank you very much.

7 Any further comments from staff?

8 EXECUTIVE OFFICER KENNY: No.

9 CHAIRPERSON LLOYD: Okay. Then with that I guess

10 we'll close the record on this agenda item.

11 However, the record will be reopened when the

12 15-day notice of public availability is issued. Written

13 or oral comments received after this hearing date but

14 before the 15-day notice is issued will not be accepted as

15 part of the official record on this agenda item. When the

16 recorded is reopened for a 15-day comment period, the

17 public may submit written comments on the proposed

18 changes, which will be considered and responded to in the

19 final statement of reasons for the regulation.

20 Any ex parte communications on this issue?

21 So I'll entertain a motion.

22 BOARD MEMBER McKINNON: Mr. Chairman, I'd like to

23 move Resolution 02-35.

24 BOARD MEMBER HUGH FRIEDMAN: Second.

25 CHAIRPERSON LLOYD: All in favor say aye.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345189

1 (Ayes.)

2 CHAIRPERSON LLOYD: Anybody against?

3 No.

4 Thank you. And thank you, staff, for -- again

5 it's always great to hear the positive comments from the

6 industry and from CAPCOA. So thank you very much.

7 Our last official agenda item will give our legal

8 friends some opportunity to shine.

9 (Thereupon an overhead presentation was

10 Presented as follows.)

11 CHAIRPERSON LLOYD: The final agenda item today

12 is 02-9-7, proposed amendments to ARB's administrative

13 hearing procedures.

14 Historically, most enforcement actions brought by

15 the Air Resources Board are resolved through negotiated

16 settlements. When a negotiated settlement cannot be

17 reached, the matter must be pursued in the courts. The

18 latter process, while clearly necessary, is costly and

19 burdensome.

20 However, there's an alternative, and that is

21 administrative penalties imposed through a process

22 overseen by administrative law judges. ARB currently uses

23 that process for fuel violations and for heavy-duty

24 vehicle roadside inspections. Until recently, those were

25 the only categories for which ARB had administrative

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345190

1 penalty authority.

2 In 2001, thanks to Senator Byron Sher authoring

3 legislation, SB 527, expanding ARB's authority to use

4 administrative penalties for more emission source

5 categories. Today staff is proposing the regulatory

6 changes that will enable ARB to use this statutory

7 authority.

8 As I indicated earlier, I think the two lawyers

9 on the Board here can now shine in their areas of

10 expertise and we can take a back seat.

11 But also before staff presentation I would also

12 like to recognize and congratulate Jim Ryden, the new head

13 of enforcement. I think he first appears before the

14 Board.

15 Congratulations, Jim.

16 ENFORCEMENT DIVISION CHIEF RYDEN: Thank you very

17 much.

18 CHAIRPERSON LLOYD: Before I turn it over to Mr.

19 Kenny to begin to introduce the item and begin staff

20 presentation.

21 EXECUTIVE OFFICER KENNY: Thank you, Mr. Chairman

22 and members of the Board.

23 The proposal before you today is in response to

24 Senate Bill 527, legislation enacted in 2001, that

25 specifically directs the ARB to use its existing

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345191

1 regulations to implement an administrative civil penalty

2 program. With this proposal the administrative penalty

3 program will provide for the issuance of administrative

4 citations and complaints for all violations within the

5 purview of the ARB.

6 SB 527 sets limits on the dollar amounts that can

7 be assessed administratively an further specifies that in

8 no event can an administrative assessment exceed what

9 could be assessed under the Health and Safety Code for

10 that violation. These limits are reflected in the

11 proposal.

12 The most serious and complex violations will of

13 course continue to be referred to the courts for

14 enforcement. However, the administrative process allows

15 for less complex and less serious violations to be handled

16 through a less cumbersome process, while still allowing a

17 party a fair hearing on the merits of the case before an

18 administrative law judge appointed by the State Office of

19 Administrative Hearings.

20 I will now turn the presentation over to Ms. Judy

21 Lewis, who will make the staff presentation and provide

22 the staff recommendations.

23 MS. LEWIS: Thank you, Mr. Kenny.

24 Good afternoon, Mr. Chairman and member of the

25 Board.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345192

1 Today I will present to you ARB's administrative

2 penalty program.

3 --o0o--

4 MS. LEWIS: We have proposed modifications to

5 ARB's existing administrative hearing procedures in order

6 to comply with the relevant provisions of Senate Bill 527

7 which was enacted in 2001.

8 Senate Bill 527 provides that as an alternative

9 to seeking judicial civil penalties through the courts,

10 the ARB may impose administrative civil penalties for

11 violations of all ARB adopted rules and regulations

12 pertaining to mobile and stationary sources.

13 --o0o--

14 MS. LEWIS: Historically, most enforcement

15 actions brought by the ARB are resolved through mutual

16 settlement negotiations. In rare cases where ARB is

17 unable to reach an acceptable settlement with a violator,

18 the case is pursued through the courts. The judicial

19 process, while necessary, is costly, burdensome, and very

20 time intensive.

21 --o0o--

22 MS. LEWIS: In 1990 the Legislature authorized

23 the ARB to adopt an administrative hearing process to

24 adjudicate violations of the heavy-duty vehicle inspection

25 program.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345193

1 That authority was expanded in 1995 where under

2 the ARB was provided with the authority to establish

3 administrative procedures to assess and adjudicate civil

4 penalties for violations of ARB fuel-related regulations.

5 --o0o--

6 MS. LEWIS: Prior to the enactment of Senate Bill

7 527 all other provisions within the ARB's purview could

8 only be enforced judicially.

9 In Senate Bill 527 the Legislature enacted Health

10 and Safety Code Sections 42410 and 43023. These sections

11 expand ARB's authority to impose administrative civil

12 penalties.

13 --o0o--

14 MS. LEWIS: SB 527 limits the amount the ARB may

15 assess to $10,000 per day per violation, with a maximum

16 not to exceed $100,000. Also, in any case the

17 administrative penalties for a violation may not exceed

18 the judicial civil penalty that could be assessed under

19 the Health and Safety Code.

20 In initially adopting the administrative hearing

21 procedures, the ARB established a three-tiered enforcement

22 process. The most serious and complex cases will continue

23 to be referred to judicial courts if mutual settlement is

24 unsuccessful.

25 But for other violations administrative penalties

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345194

1 could be pursued.

2 The administrative process provides that

3 complaints may be issued for the more serious and complex

4 of these remaining violations and citations issued for the

5 least serious clear-cut violations.

6 --o0o--

7 MS. LEWIS: Staff's proposal would broaden the

8 existing administrative process to allow for the issuance

9 of administrative citations and complaints for all

10 violations covered by Senate Bill 527.

11 Existing administrative penalty provisions for

12 the issuance of citations and fuel-related complaints

13 would remain unchanged.

14 The amendments would separately set forth the

15 ARB's authority to assess penalties for violations covered

16 by Senate Bill 527.

17 --o0o--

18 MS. LEWIS: In response to other directives the

19 staff has proposed the following modifications:

20 Modifications to clarify that an administrative

21 civil penalty would be issued as an alternative to a

22 judicial civil penalty;

23 Make clear the ARB's administrative penalty

24 authority only extends to those categories of violations

25 for which it maintains authority to impose judicial civil

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345195

1 penalties;

2 Clarify that and administrative law judge

3 appointed by the State Office of Administrative Hearings

4 would conduct all hearings authorized by Senate Bill 527;

5 Amend both hearing procedure regulations to add

6 civil penalty limits in accordance with Senate Bill 527;

7 Amend to the existing criteria used for assessing

8 penalties for fuels violations to also apply to

9 assessments for violations covered under Health and Safety

10 Code Section 43023;

11 And add a new provision establishing penalty

12 assessment criteria for violations covered under Health

13 and Safety Code Section 42410.

14 --o0o--

15 MS. LEWIS: The regulation sets forth the new

16 criteria as follows:

17 The extent of harm caused by the violation, the

18 nature and persistence of the violation; the length of

19 time over which the violation occurs; the frequency of

20 past violations; the record of maintenance; the unproven

21 or innovative nature of the control equipment;

22 --o0o--

23 MS. LEWIS: Any action taken by the respondent,

24 including the nature, extent, and time of response of the

25 cleanup and construction undertaken to mitigate the

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345196

1 violation; the financial burden to the respondent; and the

2 penalties or range of penalties set forth in the

3 underlying rules or regulations.

4 --o0o--

5 MS. LEWIS: Additionally, the staff is proposing

6 other minor modifications to the hearing procedures for

7 purposes of clarity and conformity.

8 --o0o--

9 MS. LEWIS: A typical situation where these

10 administrative hearing procedures may be used would be in

11 the case of a disputed cargo tank violation. The citation

12 caries $1,000 penalty. In a case where the violation is

13 disputed and the citee has requested a hearing, ARB staff

14 would state their case on why they believe the citation

15 was the properly issued.

16 Then the citee is given the opportunity present

17 their case and tell their side of the story.

18 The process is streamlined, however, as no jury

19 is involved and the rules of evidence and discovery are

20 less stringent. It is also a less expensive process for

21 citees because attorneys are not required.

22 --o0o--

23 MS. LEWIS: The proposed modifications would not

24 adversely impact the environment or raise any

25 environmental justice issues. The amendments also would

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345197

1 not adversely affect California businesses or have any

2 economic or fiscal impact on state and local governments.

3 --o0o--

4 MS. LEWIS: ARB has found that administrative

5 assessments in the adjudication were less complex, and

6 serious violations affords a more efficient and

7 expeditious process for all parties and allows the ARB to

8 better utilize its enforcement resources.

9 It follows that improved enforcement will result

10 in greater compliance with air quality laws. These

11 hearings assure due process and a full and fair hearing to

12 all parties.

13 --o0o--

14 MS. LEWIS: Staff has determined that no

15 alternative to this proposal would be more effective in

16 carrying out the purpose for which the regulations are

17 proposed or would be as effective and less burdensome to

18 the affected persons than the proposed action.

19 The staff has received no suggested alternatives

20 to the proposed amendments from interested stakeholders.

21 --o0o--

22 MS. LEWIS: During the 45-day comment period

23 staff has received no comments on the proposal. No issues

24 have been identified and no opposition has been raised.

25 --o0o--

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345198

1 MS. LEWIS: Our report to the Legislature and the

2 Governor is due on January 1, 2005, summarizing the

3 administrative penalties imposed by the ARB under this new

4 program.

5 --o0o--

6 MS. LEWIS: The staff recommends that the Air

7 Resources Board approve the proposed amendments to ARB's

8 existing administrative hearing procedures.

9 This concludes our presentation. And we would be

10 happy to answer any questions any of you may have.

11 CHAIRPERSON LLOYD: Just one clarification. This

12 money does not go to ARB?

13 MS. LEWIS: No, it goes into the General Fund.

14 It does not go into the Air Pollution Control Fund.

15 CHAIRPERSON LLOYD: Ms. D'Adamo.

16 BOARD MEMBER D'ADAMO: Do you know what the

17 impact would be to this agency then, to the Board, fiscal

18 impact?

19 ENFORCEMENT DIVISION CHIEF RYDEN: Basically what

20 I envision using the administrative process for would be

21 for the smaller level violations. For example, if we had

22 one or two 49-state vehicles that were brought in

23 illegally, we would probably utilize the administrative

24 process since the penalty amounts would be $5,000 per

25 vehicle.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345199

1 So what we'd find is that to enforce law if we

2 ever took it to hearings, it would probably be an economic

3 benefit to the agency because we wouldn't have to expend

4 attorney resources. Meaning we'd have to hire the AG's

5 office to litigate a case for $10,000 penalty.

6 So in that sense I would see it as a benefit.

7 BOARD MEMBER D'ADAMO: But how about in terms of

8 the penalties once they've been assessed, do they go into

9 the General Fund rather than to the Board?

10 ENFORCEMENT DIVISION CHIEF RYDEN: We have the

11 discretion in terms of choosing which venue we're going to

12 litigate the case in. So I think probably if it was a

13 large penalty situation, we might choose to go on and

14 judicially enforce it.

15 BOARD MEMBER D'ADAMO: Oh, and then in that

16 instance it remains unchanged.

17 ENFORCEMENT DIVISION CHIEF RYDEN: That's true.

18 And at least in my view, unless the hearing is held and

19 the Office of Administrative hearing takes jurisdiction

20 in the settlement of those cases, we could can probably

21 direct where the funds go.

22 BOARD MEMBER D'ADAMO: When staff briefed me on

23 this the other day I asked the question -- and no one on

24 the phone knew the answer, but I see Mr. Oglesby is here

25 today. What was the reason behind the bill being

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345200

1 introduced? Was this part of an overhaul on

2 administrative penalties with regard to the number of

3 agencies or --

4 MR. OGLESBY: No, actually it was -- Rob Oglesby,

5 with the legislative -- Air Resources Board.

6 And first let me preface the comment by saying

7 that I was glad to hear Mr. Ryden's testimony because that

8 was the way we testified about fiscal impact in the

9 Legislature. So I'm always comforted when our regulatory

10 testimony matches our legislative testimony.

11 But this actually was a bill that was a

12 stand-alone bill carried over a couple of sessions the

13 Assembly negotiated, and had a lot of involvement in

14 direct scrutiny. And so it wasn't a matter of a larger

15 administrative procedures bill. It was a dedicated bill

16 for one subject.

17 BOARD MEMBER D'ADAMO: Who was the sponsor, do

18 you recall?

19 MR. OGLESBY: Well, it was Assemblyman Sher was

20 the author and active on it, but it had the involvement of

21 lot of industry groups as well as us, as well as the Air

22 Resources Board.

23 BOARD MEMBER D'ADAMO: Okay. Thank you.

24 CHAIRPERSON LLOYD: Supervisor DeSaulnier.

25 BOARD MEMBER DeSAULNIER: No, just making a side

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345201

1 comment about it was trial court lawyers were

2 interested --

3 BOARD MEMBER CALHOUN: Will staff describe the

4 process involved in assessing a fine, starting from the

5 time that the person, the inspector, whatever it is,

6 observes a violation.

7 ENFORCEMENT DIVISION CHIEF RYDEN: You want us to

8 go through the process for you?

9 BOARD MEMBER CALHOUN: Yeah, briefly.

10 ENFORCEMENT DIVISION CHIEF RYDEN: Well, let's

11 take an example of a cargo tank, since that was our

12 example here.

13 BOARD MEMBER CALHOUN: Example of what?

14 ENFORCEMENT DIVISION CHIEF RYDEN: A cargo tank

15 inspection. We do run tests on the cargo tanks. And they

16 receive a citation because they failed the pressure tests.

17 Typically what they used to do is they'd come in for an

18 office conference. And they'd try to resolve it with

19 staff and staff would assess a penalty, which would be

20 anywhere between $500 and $1,000 is the statutory

21 requirement. Statutory requirement of $1,000 is the

22 maximum amount.

23 The cargo tank folks that we've met with

24 indicated they wanted an additional appeal, much like to a

25 neutral administrative law judge. So if in fact we can't

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345202

1 agree on the facts of the citation, meaning whether they

2 truly passed the test or not, whether the test was run

3 correctly, all types of other issues that can surround it,

4 if in fact we can't agree upon it, then we would set up a

5 hearing with the Office of Administrative Hearing, get on

6 their calendar, schedule in a judge to hear the case. And

7 the citee would be able to go in and essentially voice

8 their complaint. The burden of proof would be on the

9 staff because staff establish the elements of the

10 violation, which would be the test was properly conducted

11 and the proper circumstances, it wasn't in the sun, we

12 observed it correctly and, therefore, we think the test

13 results were valid.

14 And it would be -- then the venue -- or the form

15 would shift to the citee challenging it to argue why he

16 maybe didn't believe that was true, or he could put on

17 witnesses or present evidence indicating that maybe the

18 test wasn't run correctly or he ran another test almost

19 simultaneously with it and they passed. Things that would

20 challenge the allegations of the staff.

21 The administrative law judge then would take this

22 information under submission and render a decision either

23 upholding the citation or dismissing it.

24 And the actual decision they render would be a

25 proposed decision to the Air Resources Board for probably

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345203

1 an action by the executive officer if they disagreed with

2 it. And then if in fact you wanted to challenge it

3 further --

4 BOARD MEMBER HUGH FRIEDMAN: Just hold it there

5 if you would.

6 What if the violator offers to pay $500?

7 ENFORCEMENT DIVISION CHIEF RYDEN: Well, that

8 would be a negotiated settlement that we would --

9 BOARD MEMBER HUGH FRIEDMAN: And then offers to

10 pay in cash?

11 (Laughter.)

12 ENFORCEMENT DIVISION CHIEF RYDEN: Well, cash we

13 always take. We also do VISA and Master Card too.

14 BOARD MEMBER HUGH FRIEDMAN: We actually take

15 cash?

16 ENFORCEMENT DIVISION CHIEF RYDEN: No, we don't.

17 We take checks. But we do take VISA and Master Card.

18 So I mean if in fact they were then dissatisfied

19 with that decision, you could appeal it into the Superior

20 Court under a Writ of Administrative Mandamus under Code

21 of Civil Procedure 1094.5. And then you can get review up

22 to the California Supreme Court or further. In fact you

23 can allege federal jurisdictional issues.

24 MR. TERRIS: My name is Mike Terris. I'm Legal

25 Office.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345204

1 In response to your question, there's actually

2 two parts to it. It basically says per day of violation

3 $10,000 -- up to $10,000 per day of violation. And which

4 means for the stationary source violations that you

5 would -- it could be accumulate per day of violation. For

6 Part 5, the mobile source violations, the way the statutes

7 read it's per vehicle. And so those wouldn't be

8 accumulating per day, it would be total penalty per

9 vehicle.

10 BOARD MEMBER CALHOUN: Okay. I guess you guys

11 are jumping way down the process here. I'm starting with

12 the guy that's out in the field and he has observed a

13 violation. Does he issue a violation notice at that time?

14 ENFORCEMENT DIVISION CHIEF RYDEN: Yes.

15 MR. TERRIS: He can, and either under the

16 citation -- under the citation program, it could be a

17 field ticket under -- or the larger types of violations

18 that would be held under complaints, that would probably

19 go back to the office where the complaint issued from the

20 office.

21 So there's two different types of programs that

22 are going. One can include field citations. The other

23 one would basically be complaints issued from the office.

24 EXECUTIVE OFFICER KENNY: Mr. Calhoun, generally

25 what we're looking at here is essentially a ticket that

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345205

1 would be issued in the field. And then if the person

2 disagrees with the ticket, they would have an

3 administrative process that they could appeal that ticket

4 through.

5 And in order to basically provide a perception of

6 impartiality as well as the fact of impartiality, we would

7 not actually do the review of that ticket. We would kick

8 it over to the Office of Administrative Hearings, a

9 separate agency. And an administrative law judge at that

10 agency would make a determination as to whether or not

11 that ticket was properly issued by us. If the

12 administrative law judge did make that determination, then

13 a penalty would be assessed. Otherwise the administrative

14 law judge could dismiss that ticket.

15 CHAIRPERSON LLOYD: Mrs. Riordan.

16 BOARD MEMBER RIORDAN: Mr. Chairman, I think that

17 the key to this that makes me very supportive is that it

18 really is going to cut down the time that would normally

19 have to be given to some of these citations. And I'm

20 speaking both -- not only for us, but for the citee. And

21 those sometimes, I suspect, are smaller companies or

22 individuals, and that's going to be a real help to them.

23 So I think this is a great way to go.

24 CHAIRPERSON LLOYD: Ms. D'Adamo.

25 BOARD MEMBER D'ADAMO: One other quick question.

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345206

1 Percentage-wise, what percentage gets settled

2 under the current system versus that end up going to

3 refer --

4 ENFORCEMENT DIVISION CHIEF RYDEN: I would say we

5 settle about 99 percent of our cases, which is sort of in

6 line with general litigation.

7 BOARD MEMBER D'ADAMO: What are you expecting

8 under this new process?

9 ENFORCEMENT DIVISION CHIEF RYDEN: I'd expect

10 that to continue.

11 CHAIRPERSON LLOYD: Any more comments from staff?

12 With that, since all the testimony, written

13 submissions, and staff comments for this item have been

14 entered into the record, and the Board has not granted an

15 extension on the comment period, I'm officially closing

16 the record on this portion of the agenda item, 02-9-7.

17 Written or oral comments received after the comment period

18 has been closed will not be accepted as part of the

19 official record on this agenda item.

20 Any ex parte communications?

21 Seeing none.

22 Move ahead, and entertain a motion on --

23 BOARD MEMBER McKINNON: Mr. Chairman, I'd like to

24 move Resolution 02-36.

25 BOARD MEMBER RIORDAN: And I'd like to second

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345207

1 that, Mr. Chairman.

2 CHAIRPERSON LLOYD: All in favor say aye.

3 (Ayes.)

4 CHAIRPERSON LLOYD: Anybody against?

5 No.

6 Thank you very much, staff. We appreciate it.

7 Open comment period.

8 Any -- nothing on the open comment period?

9 Well, with that I'd like to wish my colleagues

10 and staff very happy holidays. And thank you all very

11 much. Look forward to --

12 BOARD MEMBER RIORDAN: Thank you.

13 CHAIRPERSON LLOYD: We have a busy new year, I

14 see from agenda. So please rest up well. And I know some

15 of the staff can't rest well over the holidays.

16 With that I officially close this Board

17 meeting -- and thank you all very much -- December 12

18 Board meeting of the Air Resources Board.

19 (Thereupon the California Air Resources Board

20 meeting adjounred at 2:30 p.m.)

21

22

23

24

25

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345208

1 CERTIFICATE OF REPORTER

2 I, JAMES F. PETERS, a Certified Shorthand

3 Reporter of the State of California, and Registered

4 Professional Reporter, do hereby certify:

5 That I am a disinterested person herein; that the

6 foregoing California Air Resources Board meeting was

7 reported in shorthand by me, James F. Peters, a Certified

8 Shorthand Reporter of the State of California, and

9 thereafter transcribed into typewriting.

10 I further certify that I am not of counsel or

11 attorney for any of the parties to said meeting nor in any

12 way interested in the outcome of said meeting.

13 IN WITNESS WHEREOF, I have hereunto set my hand

14 this 2nd day of January, 2003.

15

16

17

18

19

20

21

22

23 JAMES F. PETERS, CSR, RPR

24 Certified Shorthand Reporter

25 License No. 10063

PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345