MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD BOARD HEARING ROOM 2020 L STREET SACRAMENTO, CALIFORNIA THURSDAY, APRIL 22, 1999 9:30 A.M. Vicki L. Ogelvie, C.S.R. License No. 7871 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii MEMBERS PRESENT Alan C. Lloyd, Ph.D., Chairman Joseph C. Calhoun Mark DeSaulnier Dr. William Friedman C. Hugh Friedman Lynne T. Edgerton Barbara Patrick Sally Rakow Barbara Riordan Ron Roberts Staff: Michael Kenny, Executive Director Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer Lynn Terry, Deputy Executive Officer Kathleen Walsh, General Counsel Jim Schoning, Ombudsman PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii I N D E X --o0o-- Page Proceedings 1 Call to Order 1 Pledge of Allegiance 1 Roll Call 1 Opening remarks by Chairman Lloyd 1 AGENDA ITEMS: 99-3-3 Public Meeting to Consider a Draft Report: Planned Air Pollution Research Fiscal Year 1999-2000 Introductory remarks by Chairman Lloyd 11 Staff Presentation: Mike Kenny 12 Professor Cota 13 Stephen Brown, Ph.D. 21 99-3-4 Public Meeting to Consider Fiscal Year 1998-99 Grant Awards for the Rice Straw Demonstration Project Fund Introductory remarks by Chairman Lloyd 39 Staff Presentation: Mike Kenny 40 Ms. Hrynchuk 41 Public Comment: Mr. Churchill 51 Robert Greer 61 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv I N D E X (Continued) --o0o-- Page Open Session to Provide an Opportunity for Members of the Public to Address the Board on Subject Matters within the Jurisdiction of the Board 65 Adjournment 65 Certificate of Reporter 66 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 P R O C E E D I N G S 2 --o0o-- 3 CHAIRMAN LLOYD: Good morning, everyone. The April 4 Board meeting of the Air Resources Board will come to order. 5 Lynne, would you lead us in the Pledge of 6 Allegiance. 7 (Thereupon the Pledge of Allegiance was recited.) 8 CHAIRMAN LLOYD: Thank you very much. 9 Will the secretary please call the roll. 10 MS. HUTCHENS: Calhoun. 11 BOARD MEMBER CALHOUN: Here. 12 MS. HUTCHENS: DeSaulnier. 13 BOARD MEMBER DeSAULNIER: Here. 14 MS. HUTCHENS: Edgerton. 15 BOARD MEMBER EDGERTON: Here. 16 MS. HUTCHENS: C. Hugh Friedman. 17 BOARD MEMBER C.H. FRIEDMAN: Here. 18 MS. HUTCHENS: Dr. Friedman. 19 BOARD MEMBER FRIEDMAN: Here. 20 MS. HUTCHENS: Patrick. 21 BOARD MEMBER PATRICK: Here. 22 MS. HUTCHENS: Rakow. 23 BOARD MEMBER RAKOW: Here. 24 MS. HUTCHENS: Riordan. 25 BOARD MEMBER RIORDAN: Here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 MS. HUTCHENS: Roberts. 2 BOARD MEMBER ROBERTS: Here. 3 CHAIRMAN LLOYD: It gives me pleasure to introduce 4 Professor Hugh Friedman. 5 He was appointed by the Governor since the last 6 Board meeting. He fills the public Member on the Board, and 7 he is a graduate of Yale University and Stanford in corporate 8 and securities law, and he's been a professor at the San 9 Diego School of Law since 1997. 10 Professor Friedman has been involved in the legal 11 profession for many years, and he has particular emphasis on 12 some of the small businesses. 13 We are delighted to have him, and from my 14 interaction, he is an excellent addition to the Board. 15 I would like to offer him the chance to make some 16 comments. 17 BOARD MEMBER C.H. FRIEDMAN: We are at a distance. 18 Let me start by saying that I like to breathe. 19 I like to breathe clean, pure, good air, like all 20 of you. So, I do consider it is a great privilege to join 21 this very distinguished Board and staff, and team that 22 comprises the ARB, and to have a voice in setting the 23 policies and practices that will ensure or at least improve 24 the quality of the air we all breathe. 25 This is a Board of very distinguished record of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 achievement, which I whole heartedly support. 2 My background is not in science, the science of 3 causes of air pollution, and I have a lot to learn about 4 that, and I will read and listen carefully, and I hope that I 5 will be a good student, and I hope to get good marks. 6 I do have background and professional concerns in 7 problem solving and in the process of relating by legal fiat 8 and imposing on others requirements and standards to achieve 9 established salutary societe goals, and I have experience as 10 you mentioned in advising businesses, large and small, public 11 and private, in their sincere and bona fide efforts to comply 12 with the many requirements imposed on them as they engage in 13 their activities, and I do think that for me in sitting here 14 setting air quality rules and regulations it is important, 15 and I think it is recognized, and I'm not critical, as far as 16 I know, it has been followed faithfully, but it is important 17 that we continue. 18 When solid science tells us that we can identify 19 sources of air pollution, that to the fullest extent 20 possible, we seek to work with those identified sources of 21 pollution and work with them and educate them as to society's 22 imperative that they change what they are doing and that we 23 try to make them part of the solution from the beginning. 24 We bring them in to the extent reasonably possible 25 and make them part of our enterprise from the earliest PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 possible time to the final action. 2 If they find the sources of the problems with us 3 and maybe with our help and maybe with their resources and 4 alternative sources, benign for them, as they go about their 5 work, but no less benign to the rest of us, then to me that 6 is sort of a paradigm, that is part of the model to be 7 followed. 8 I want to say that I really believe that the ARB 9 today has reflected this. I come with no set agenda other 10 than what I have outlined as an approach that I think is 11 useful, and it is reflected in the course of the history, 12 fairy short history of this Department and in its employees. 13 I join with great enthusiasm this Board and this 14 effort. 15 Thank you. 16 CHAIRMAN LLOYD: Thank you very much. 17 Welcome. 18 Before we get started, we have two very special non 19 agenda items involving the children in the audience today and 20 also the Governor's announcement on Tuesday about 21 California's Fuel Cell Partnership. 22 We have a special request to accommodate Members of 23 the State Legislature that wish to address the Board on the 24 subject of reformulated gasoline. 25 I would like to proceed with the items before the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 regular Board Agenda. 2 Again, this is ARB's seventh annual "take our 3 children to work day." 4 The event is nationally known as "take our 5 daughters to work day," but ARB, as usual, is ahead of the 6 curve. We say that what is good for girls is good for boys. 7 In fact, we feel it is a very important day for us 8 to recognize this event, and we recognize that air quality is 9 better for the children today than when their parents were 10 younger. 11 We need to do better to clean the air, and we need 12 to invest in the education of the children of the younger 13 children. 14 I'm glad for the children being here today to learn 15 about what we do, and I hope some of you decide to take up 16 this profession later on. 17 I understand also we may have some children in El 18 Monte participating in a video conference. Welcome to Los 19 Angeles and the people in El Monte. 20 We have goodies to give out here. I guess we will 21 not be able to transmit those that quickly, but there are 22 activities planned in El Monte, such as a tour of the 23 dynamometer facility, and most important, pizza lunch. 24 I think our activities here include some chemistry 25 presentations, as well as rides in an electric vehicle. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 I realize you have a busy day ahead of you. I will 2 not keep you long. We would like to hand the goodies out 3 that provide you energy. 4 Your parent's may not appreciate it, but first I 5 would like to hand this goodie to Board Member Joe Calhoun to 6 give to his daughter, and this is what we will give to all 7 the others. 8 Go, ahead, Joe, pass that out -- oh, his grand 9 daughter. 10 You are still a young man, Joe. 11 BOARD MEMBER ROBERTS: Will Board Members be 12 eligible for those, also? 13 CHAIRMAN LLOYD: Well, I think they are eligible 14 but there is a priority rating there, at the end of the 15 meeting. 16 BOARD MEMBER RIORDAN: If they behave through the 17 meeting. 18 CHAIRMAN LLOYD: That is right. 19 Again, it is wonderful to see you all, and we 20 really appreciate the strong turn out. Excellent. 21 That was great. Thank you very much. 22 Our next special order of business is a brief 23 report on Tuesday's Fuel Cell event at the State Capitol, 24 where Governor Davis announced the formulation of the 25 California Fuel Cell Partnership. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 I would like to say a few words ahead of that. 2 This to me represented a really historic milestone in our 3 meeting on LEV set of requirements on the Board, and now in 4 addition to battery technology, we also have another ally in 5 fuel cells. 6 I think we see continued improvement in batteries, 7 and now we want to see how the fuel cells will do and if they 8 will live up to their promise. 9 I would like to start by showing a little video, 10 first of all, which shows how a fuel cell works. 11 Because many of you may not know, talking about 12 fuel cells, after a while we realize and get complacent, and 13 we felt that particularly maybe people in the audience would 14 like to understand how they work. 15 We also have a fuel cell display outside running a 16 television, and I think that Jim Fischer is seeing to that 17 operating. 18 But I think that the event itself was tremendously 19 exciting. 20 I think the significance of having people come 21 together in California, from Germany, from Canada and the 22 U.S. was a major tribute to the efforts of staff in making 23 that a reality here, so I think I would like to express my 24 personal thanks for all of your efforts. 25 I think it was a tremendous achievement, and I will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 say some more about that. So, let us start off with a short 2 review of what a fuel cell is and then the viewing of the 3 event on Tuesday. 4 (Thereupon a video was shown.) 5 MR. KENNY: That is water vapor. 6 CHAIRMAN LLOYD: Thank you very much, and also 7 thank you to the people for putting that together by the way. 8 I would also like to thank the producers of that 9 first film that was put together by Jeff Holland as the 10 producer and Bill Hogland and put together by Fuel Cells by 11 Hydrogen 2000. 12 Again, I cannot imagine a better start for fuel 13 cell development in California, and I want to thank all the 14 people here at the ARB that made it possible. 15 Starting with our newest Board Member, Hugh 16 Friedman, who prevailed upon the Governor to put time on his 17 personal schedule, and thank you very much, Hugh, for that. 18 I think that was very excellent. 19 Also, I would like to thank Lynne Edgerton and Joe 20 Calhoun for joining us at the ceremony, and I also want to 21 thank Lynne for her efforts in the program. 22 Also, particularly I want to thank all the staff at 23 the Air Resources Board for their dedicated work to bring 24 this into reality, I think, particularly Mike Kenny and Tom 25 Cackette, for their leadership and dedication, and I know in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 Mike's case for not being willing to take no for an answer. 2 So, I think the leadership I think you have shown 3 has been tremendous. 4 Also, Catherine Lentz in talking to the people from 5 the industry affected, that it involved, she has got their 6 tremendous admiration, and I just hope we can hold on to her. 7 Also, Joe Irvin, for his efforts at the event 8 there. 9 So, we have more than 20 staff at the Mobile 10 Sources Monitoring and Laboratory, Compliance and 11 Administrative Services and the Chairman's Office worked on 12 this project, some of them said that they have been involved 13 with it more than a year. 14 I cannot underestimate the accomplishment of making 15 this a reality in California. It is tremendous. 16 And to me, I cannot think of a better way to start 17 my term here. It is just tremendously exciting. 18 As I sat there and wondered, you had to pinch 19 yourself and say, this is Earth Day, and we are not in 20 Disneyland. This is a reality. 21 I would again like to single out in addition to 22 Catherine and Joe, I want to mention the others who were 23 involved, Jack LaBrue, Jim Fischer, Gayle Sweigert, Lisa 24 Kasper, Jack Kitowski, Tom Evashenk, Jerry Martin, Chuck 25 Shulock, Allan Hirsh, Genny Osborn, Demitri Stanich, Charlyn PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 Frazier, Sherri Strong, Gary Zimmerman, Jon Marconi, Michael 2 Poore, Bill Valdez, Rob Oglesby, Kurt Karperos and Terrel 3 Ferreira and John Wahl. 4 Again, all the people there made this an 5 outstanding effort. So, thank you very much indeed. 6 As we look forward, I say this program now means so 7 much to us that we will actually see these cars and buses, at 8 least the cars operating in California in the next three 9 years. 10 So, it is a pretty exciting time for us. 11 At this time, I do not think we have anyone from 12 the Assembly here, as far as I know, so we may have to take a 13 break as we proceed. 14 So, I think we will go on with our first Agenda 15 Item, which is the Planned Air Pollution Research Fiscal Year 16 1999-2000, and this also represents a joint meeting of the 17 Research Screening Committee and the Board Members. 18 I would like to welcome all the Members of the 19 Research Screening Committee. 20 Many of your faces are familiar, and I was in that 21 spot several years ago. So again, I know how much effort you 22 put into your job there and what great rewards you get, 23 financial returns on that. 24 Well, again, I think I would rely on your efforts 25 there to screen these proposals, to work with staff, and I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 think, we think, we really appreciate that very, very much 2 indeed. 3 So, it is a pleasure to have you here today, and we 4 will get to meet with you some more later. So, thank you 5 very much. 6 So, with that, we will move on. 7 I guess I would like to remind everyone in the 8 audience that would like to present testimony to please sign 9 up with the Clerk of the Board, and if you have a written 10 statement, please give that to the Clerk of the Board. 11 As I mentioned, the next item here is the Joint 12 Program. 13 But also, I want to say ahead of that, that in 14 terms of some of the programs sponsored by the Research 15 Division, sometimes they get a lot of publicity and sometimes 16 they do not, but I want to highlight one particular there, 17 and that is the Children's Health Study launched by the Board 18 with the support of the Research Screening Committee. 19 To me, this is unparalleled in the world. 20 And with all the emphasis on children's health 21 these days, I think the Board, the staff, Dr. Holmes, 22 Research Screening Committee can look with pride to the fact 23 that they pioneered this effort many years ago, and that is 24 before it became popular, the need was sort of there and it 25 seemed it was followed through. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 So, I am very proud to have been part of that work 2 when I was on the Research Screening Committee, and I am even 3 prouder when I see what is coming forward and proud to be 4 part of the Board of that now. 5 So, I am very much looking forward to strengthening 6 our Research Program in the months and years ahead so we can 7 attract the best and brightest and continue to do trail 8 blazing work, and one of my goals is to make sure that we get 9 adequate research dollars to do the badly needed research we 10 need, and particularly on some of these, like these health 11 effects areas, where we need to get the basic data. 12 These programs are expensive, and it takes courage 13 to move ahead, and they are typically long-term. But I am 14 sure I can speak for the Board Members when I say we need all 15 the money we can get to study these and to protect the health 16 of the people that we saw here today. 17 So, I think it is a challenge, but on the other 18 hand, I think it is a wonderful opportunity and a wonderful 19 cause. 20 With that, I would turn it over to Executive 21 Officer Mike Kenny. 22 MR. KENNY: Thank you, Mr. Chairman and Members of 23 the Board. 24 Today we want to present for your consideration the 25 Board's Proposed Research for the next fiscal year. This PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 planned research, as you know, is developed over the course 2 of approximately ten months by the staff with the assistance 3 of the Research Screening Committee. 4 We are very appreciative of the assistance by the 5 Research Screening Committee. At this point, though, I would 6 like to introduce Professor Hal Cota, Chairman of the 7 Research Screening Committee, who will present the Committee 8 to us and provide comments on the year's Research Screening 9 Committee highlights. 10 Professor. 11 DR. COTA: Thank you very much, Mr. Kenny. 12 Good morning, Chairman Lloyd and Members of the 13 Board. 14 It is a pleasure to come before you again for our 15 annual meeting. Before I make any comments, I would like to 16 ask the Members of our Committee to introduce themselves, and 17 I will start. 18 I am a Professor of Environmental Engineering at 19 Cal Poly, at San Louis Obispo, and also Director of EPA's 20 Training Center there, whose main mission is to train people 21 that work for State, local and Federal regulatory agencies. 22 My research interest is in the chemical engineering 23 side of air pollution. 24 With that, I guess I will ask the Committee Members 25 to push the switch, they should be able to hear you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 DR. BALMES: My name is Dr. John Balmes. 2 I am a Professor of Medicine, at the University of 3 California, in San Francisco. 4 I am Chief of the Division of Occupational and 5 Environmental Medicine, at San Francisco General Hospital, 6 and also Director of the Occupational Environmental Medicine 7 Residency. 8 So, actually I am involved in the training of 9 physicians to be concerned about environmental health issues, 10 and in turn, my Research Screening Committee, I am the 11 Director of the Human Exposure Laboratory at the Lung Biology 12 Center at UCSF, and in that role I have an exposure chamber 13 where I place individuals, both normal, healthy individuals 14 and those with asthma, in environments that contain air 15 pollution and see what kind of respiratory health effects we 16 have or do not have. 17 DR. HIGDON: My name is James Higdon. 18 I am a Professor of Physics, at Claremont Mechanic 19 College, in Los Angeles. One of my Research Screening 20 Committee areas is the turbulent mixing of dust and passive 21 materials. 22 DR. HOEKMAN: Good morning, ladies and gentlemen, 23 my name is Kent Hoekman. 24 I am employed at Chevron Products Company, and I am 25 trained to be an organic chemist and have spent most of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 last two decades doing air pollution research, both actively, 2 hands-on and managing and overseeing research, most 3 particularly work-related to the impacts of motor vehicle 4 emissions on urban air quality. 5 I have served on this Committee for three years, 6 and I am happy to continue my service. 7 DR. ORTNER: Good morning. 8 I am Jim Ortner, and I manage Technical Services at 9 the Orange County Transportation Authority, and most recently 10 I spear-headed the purchases of over 200 LNG fuel processes 11 for the authority. 12 In addition, I am on the facility at USC and UCLA, 13 where I teach transportation environmental courses. 14 MR. TAYLOR: Good morning. I am Tim Taylor. 15 I am the nontechnical Member of the Committee. I 16 am an environmental attorney in Sacramento. I practice in 17 environmental law, and I have a degree in Environmental 18 Planning as well, and I am also serving as a Professor at UC 19 Davis School of Law, where I teach environmental areas and 20 courses. 21 DR. WILLIAMS: I am Forman Williams. 22 I am a Professor of Engineering Physics and 23 Combustion in the University of California, in San Diego, and 24 I am also Director of the Center of Combustion at UCS, and I 25 hold the University of California Presidential Chair in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 specialty of combustion and such. 2 MR. ZELDIN: Good morning. My name is Melvin 3 Zeldin. 4 I am the Assistant Deputy Executive Officer for 5 Science and Technology Advancements with South Coast Air 6 District. 7 When I first joined the Screening Committee, it is 8 coming up on 11 years now, I was brought on because of my 9 background in meteorology, and I provide that part of the 10 expertise to the Committee. 11 Since my tenure here, I have also been involved in 12 a number of activities involving particulates and monitoring 13 data analysis. I am currently also an appointee to the Clean 14 Air Science Advisory Committee of EPA, on Fine Particulate 15 Subcommittee, and most recently, I am now getting involved in 16 Technology Advancement Projects as well. 17 So, I am pleased to be part of the Committee. 18 Thank you. 19 DR. COTA: The Committee has one more Member who 20 could not be here today, Catherine P. Koshland, Ph.D. 21 She is an Assistant Professor of Environmental 22 Health Sciences with the Department of Biomedical and 23 Environmental Health Sciences, at UC Berkeley. 24 Dr. Koshland is an expert in combustion and has 25 performed research on combustion physics, particle chemistry PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 and aerosol droplet formation, and she is also active in the 2 field of environmental toxicology. 3 As you see, we have quite a broad based group here. 4 Speaking on behalf of the Committee, it has been a pleasure 5 to serve the Board over the past year and to provide the 6 staff and the Board with the assurance that the Research 7 Projects brought before you have received careful peer 8 review. 9 The assurance comes from the Screening Committee's 10 technical expertise and dedication. During the past year, we 11 have both completed and initiated a number of projects. 12 I would like to mention one completed project and 13 two ongoing projects. Last year we measured pollutants 14 inside vehicles traveling on roadways in Los Angeles and 15 Sacramento. 16 In-vehicle pollutant levels for volatile organic 17 chemicals and carbon monoxides were about two times higher 18 than roadside levels and about three times higher than 19 measurements at ambient monitoring stations. 20 This study provided information to improve the 21 characterization of Californians in transit exposure to air 22 pollution. 23 One ongoing study that Dr. Lloyd mentioned was the 24 Children's Health Study, and there are 4,000 children 25 involved in this study, and we are now finding that the lungs PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 of children in the most polluted communities are not 2 developing at the rate of children in cleaner communities. 3 The pollutants of most concern are particles and 4 oxides of nitrogen. These findings have been widely reported 5 in the press. 6 This year we will be gathering information to 7 improve estimated exposure to particulate matter and other 8 pollutants. 9 Another ongoing project will determine the best 10 sensor technologies available for continuously measuring NOx 11 levels in the exhaust of on-road heavy duty vehicles, diesel 12 vehicles. The resulting information may help diesel engine 13 manufacturers reduce NOx emissions by allowing a feedback 14 link to emission control systems. 15 In the upcoming year's Research Planning, you will 16 find a variety of topics. In a few minutes, we will present 17 the project plan to you. 18 I would like to thank Dr. Holmes and his staff for 19 their efforts in providing the Research Screening Committee 20 with timely staff reviews. This helps our Committee evaluate 21 the Research Screening Committee projects that come before 22 us. 23 I would also like to express my respect for your 24 Board and your staff. It is pleasure to serve you as you 25 steer a course to provide the maximum environmental PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 protection and the maximum benefit to the economy. 2 We hope that we will be able to assist you as you 3 make decisions that lead to healthful air quality in 4 California. 5 In closing, let me add that our Committee reviewed 6 the Research Plan that you are considering today, and we 7 recommend that you approve it. 8 I will turn this back to Mr. Kenny. 9 MR. KENNY: Thank you, Professor Cota. 10 I do want to repeat mine and the staff's sincere 11 appreciation for the work that the Research Screening 12 Committee does. 13 They provide incredible amounts of their time. 14 They provide assistance to us. They provide valuable advice, 15 and it really is a situation in which the value that they 16 provide to the overall effort at the Air Resources Board 17 truly is inestimable, if I said that word correctly. 18 So, I do really want to kind of make sure that they 19 fully understand how valuable we consider them and how much 20 we appreciate their effort. 21 With that, let me briefly go over the Research 22 Planning process. At the Air Resources Board, the staff has 23 established several research teams. These teams exist within 24 the Air Resources Board, and we are presenting the seven 25 Research Screening Committee categories of the plan. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 These teams meet to develop and review staff 2 research ideas, to review the public's research ideas and to 3 submit priority projects to the Executive Research Review 4 Committee. 5 This Committee, in which I have the privilege to 6 Chair, consists of the three deputies, Tom Cackette, Mike 7 Scheible and Lynn Terry and the Research Division Chief, Dr. 8 John Holmes. 9 The task of the Executive Review Committee is to 10 decide which projects are to be recommended for funding. 11 This year, seven projects are recommended for 12 funding, and eight additional projects are recommended for 13 funding if the money becomes available. 14 This year's projects have concentrations in two 15 areas, particulate matter studies and improvement of the 16 emissions inventories. 17 The proposed extra budget for the next fiscal year 18 is $2.8 million. The plan shows how this budget would be 19 allocated to the recommended projects in the various research 20 categories. 21 I should note that in addition to the extramural 22 Research Screening Committee program, the Board sponsors 23 research under several other programs for which the 24 Legislature has provided more narrowly defined objectives, 25 either in statute or in the Budget Act. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 These programs are periodically reviewed by the 2 Board, are listed for your information on page 4 of the 3 report, but planned research for these programs does not 4 appear in the report before you today. 5 These other programs are carefully coordinated with 6 the Board's extramural program. The resulting Research 7 Screening Committee projects are also reviewed by the 8 Research Screening Committee and the Board before contracts 9 are awarded. 10 Now, I would like to introduce Dr. Steven Brown of 11 the Research Division, and he will take us through next 12 year's planned research. 13 Dr. Brown. 14 DR. BROWN: Thank you, Mr. Kenny. 15 Good morning, Chairman Lloyd and Members of the 16 Board, and Chairman Cota and Members of the Committee. 17 The Air Resources Board conducts a Research Program 18 to support our Clean Air Programs in accordance with the 19 California Health and Safety Code. 20 In planning the program, we look to the future to 21 address potential environmental problems and regulatory 22 needs. The Mobile Source, the Stationary Source and the 23 Planning and the Technical Support Divisions play major roles 24 in designing our Research Program, and each Chair is one of 25 the Research teams established by Mr. Kenny. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 We also closely coordinate our Research with the 2 South Coast Air Quality Management District and host a 3 workshop to solicit public comments. 4 I would now like to give you an overview in the 5 next steps of the Research Program following your approval of 6 this report. 7 The projects that I will mention are now in the 8 conceptual stage. These projects, with your approval, will 9 then be developed into either Research requests for proposals 10 or interagency agreements in consultation with the Research 11 Screening Committee. 12 The resulting proposals or agreements will be 13 evaluated by staff and presented to the Research Screening 14 Committee for review before they come to you for approval. 15 The report you have received includes a summary of 16 its contents, an introduction that outlines the planning 17 process and descriptions of the 15 proposed Research 18 Projects. 19 As Mr. Kenny mentioned, this year we have seven 20 projects listed as recommended for funding and eight projects 21 that are recommended if funding is available. 22 We have grouped the proposed projects identified by 23 the research teams into four research areas as shown on this 24 slide. 25 Proceeding by research area, I will go through the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 proposed projects for the year ahead. 2 Three projects are proposed for the first research 3 area, motor vehicles and fuels. These projects will provide 4 information to improve the mobile source emission inventory. 5 The first will study activity changes in the mobile 6 source fleet from weekday to weekend. 7 The second project will study the use and types of 8 portable gasoline containers. 9 The last project on this slide will equip vehicles 10 statewide with data loggers using global position systems 11 technology to track time and location of vehicle use. 12 One project is proposed in the next research area, 13 toxics air contaminants. This project will investigate air 14 dispersion modeling near pollutant sources to improve 15 exposure assessment. 16 Under the California Clean Air Act, we are 17 proposing eight projects in the resource categories and 18 stationary sources, regional air quality and economics. 19 There are four stationary source projects. The 20 first project will determine maximum incremental reactivity 21 for solvents and architectural coatings. 22 These values allow us to evaluate the ozone forming 23 potential of compounds. 24 The second and third projects will update emission 25 inventories. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 The final project in this category will develop an 2 emissions test method for portable engines. 3 Three regional air quality projects are proposed. 4 The first project will analyze data from the 1997 Southern 5 California Ozone Study. 6 The next project will improve our modeling 7 capabilities, and the last project will investigate methods 8 to reduce wind blown dust and PM 10. 9 The final project in this research area is in the 10 economic study category. This project will provide 11 information on health related cost of particulates and ozone. 12 The California Air, Ambient Air Quality Standards 13 are designed to prevent or minimize adverse health and 14 environmental effects. We have three projects in the health 15 effects research category. 16 The first two projects are designed to help us 17 better assess the effects of PM exposure, providing the Board 18 with an improved scientific basis for establishing standards. 19 Please note that the second project is focused on 20 improving exposure estimates for children in Southern 21 California. 22 The last project will plan an asthma study that 23 will include health and exposure assessments. 24 As Mr. Kenny stated, we anticipated an extramural 25 research budget of just under $3 million. This corresponds PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 to the total cost for the seven recommended projects for next 2 fiscal year. 3 This figure shows the proposed allocations for 4 these projects among the program areas. 5 Air quality standards would receive 45 percent of 6 the funding. The California Clean Air Act would receive 32 7 percent, and motor vehicles and fuels would receive 18 8 percent, and toxic air contaminants would receive 5 percent. 9 This concludes my presentation. Each team is 10 represented here today to answer questions you may have on 11 specific projects. 12 Thank you. 13 CHAIRMAN LLOYD: Thank you very much. 14 Do we have questions from the Board Members? 15 BOARD MEMBER PATRICK: Yes, Mr. Chairman. 16 My question is really of a general nature, and that 17 is, you have proposed seven of the projects be funded, and 18 you have eight others, and how would you add those back in if 19 more money becomes available? 20 Is there a relative priority for those, or which 21 one would you add first? 22 DR. HOLMES: Well, I think that decision would have 23 to be made in a way that we have done in picking the seven 24 that we propose to fund, that is through the Executive 25 Research Review Committee. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 That might not be a formal process, and they might 2 differ slightly depending on how much money is available. 3 That category is usually funded out of savings that we have 4 from the bidding bidders that we use and also from co-funding 5 from our colleagues at the South Coast AQMD and US EPA. 6 There is likely to be money available, and there is 7 a process by which those projects will be proposed for 8 funding to the Screening Committee and to your Board. 9 BOARD MEMBER PATRICK: Thank you, Mr. Chairman. 10 CHAIRMAN LLOYD: Yes, Mr. Calhoun. 11 BOARD MEMBER CALHOUN: I am happy to see the staff 12 take on as one of their projects, I should not call it a pet 13 project of my own, but the weekday, weekend vehicle activity. 14 This is something that gets a lot of visibility, 15 and I do not think that we know the true answer, and I 16 realize that staff is starting some discussions already in 17 terms of trying to get at this particular project. 18 I just hope we give as much publicity and 19 visibility to it so we can get all the stakeholders involved 20 in trying to resolve this difficultly. 21 CHAIRMAN LLOYD: Thank you very much. 22 Yes, Lynne. 23 BOARD MEMBER EDGERTON: Mr. Chairman, I wanted 24 to -- and Members of the Board and staff, I wanted to report 25 on the concern that I have which arose one night when I was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 watching the public TV channel in Los Angeles, shortly after 2 some of the results of the Children's Report came out, and 3 they had a discussion about the report, and then Hugh Hewitt, 4 which most of us know, the commentator on that program, and 5 the others sort of, laughingly, said to each other, well, why 6 do they need to spend all this money on this report for? 7 Don't we all know that air pollution is bad for children, and 8 they sort of said, I wish somebody would explain to me why 9 this had to be studied? 10 And the concern that I have, and I do not know if 11 you all know that I am a great believer in this study, and it 12 is very important, and I have understandings that are very 13 strong why it is vital, not the least of which is we know 14 which pollutants are causing the most damage, then we will 15 know which industries and other emitters are most responsible 16 for that, then we can target those, and then that way we are 17 not regulating something that really is not making a 18 difference. 19 However, I was wanting to make a request that 20 perhaps maybe an official note be sent down to the 21 commentators and ask for an explanation on how we appreciated 22 the coverage on it and that if they do cover it again that 23 they would bring this point to the attention of their 24 viewers, which are in the millions. 25 Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 CHAIRMAN LLOYD: Yes. Good point. 2 Maybe we could ask staff if after we could get a 3 copy of that video, and we could know how to respond. 4 Dr. Friedman. 5 BOARD MEMBER EDGERTON: Did you see it? 6 BOARD MEMBER FRIEDMAN: No. 7 I am glad that I did not see it. 8 The purpose of the Children's Health Study is to 9 provide longitude or the undisputable data for the first time 10 we will take all the nay-sayers and get rid of all their 11 arguments, I think, and the fact that this person failed to 12 ask what the significance of the study was and then expressed 13 his ignorance over the air wave does not move me at all. 14 It is not our job to educate the uneducatable. 15 Really, it is a frighteningly appalling comment problem in 16 every area these days. 17 So, I do not think we should do a darn thing except 18 the right thing through the constituency that we serve, and 19 we do not serve the commentators. That is my own view. 20 Amazing. 21 CHAIRMAN LLOYD: Thank you, Dr. Friedman. 22 BOARD MEMBER FRIEDMAN: You are welcome. 23 CHAIRMAN LLOYD: It is so delightful to have you 24 comment on that, and also coming from your technical 25 background, with authority and your knowledge. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 Do you have any comments on the plan while you have 2 the microphone? 3 BOARD MEMBER FRIEDMAN: No. 4 I have reviewed the plan in great detail, and I 5 really appreciate the prioritization which I thought was 6 perfectly commendable, and I wanted to follow-up Supervisor 7 Patrick's question. 8 What is our track record of funding beyond the 9 recommended proposals in the last couple of years? Do we get 10 into the second tier of proposals? 11 DR. HOLMES: The answer is, yes, Dr. Friedman. 12 I do not have precise numbers. It does vary from 13 year to year. However, because of, for example, South Coast 14 has ups and downs in funding available for them to sponsor or 15 cosponsor projects. 16 It is even more up and down with US EPA. US EPA is 17 down right now, but I think South Coast is probably going to 18 be up. 19 We will probably be able to work closely with them 20 and extend the research budget in this plan beyond just the 21 seven projects that are recommended. 22 BOARD MEMBER FRIEDMAN: Good. 23 CHAIRMAN LLOYD: I would recommend, Dr. Holmes, 24 that you make every effort with Dr. Zeldin there to help in 25 designing this program and spend his money. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 DR. HOLMES: He is a valuable asset to your 2 Committee. 3 CHAIRMAN LLOYD: Supervisor Roberts. 4 BOARD MEMBER ROBERTS: Thank you, Mr. Chairman. 5 I was wondering if perhaps the staff could expand a 6 little on two of these projects for my benefit, and the first 7 being what they characterize as statewide auto activity 8 tracking by GPS. 9 DR. HOLMES: One of the important factors that has 10 to go into the mobile source emission inventory is the 11 distribution of the vehicles over the basin, or even over the 12 State by type and by estimated emission rates. 13 These are used by the modelers to generate, to help 14 generate the ozone control strategies that you need to have. 15 Currently, we have been using CalTrans data to develop those 16 kinds of emission patterns, but we think that the CalTrans 17 database, while it serves their purposes, it does not fully 18 serve our purposes, and that this data base that would be 19 generated would be far more useful to our staff. 20 BOARD MEMBER ROBERTS: Basically then, are you 21 talking then just tracking cross-section of all types of 22 vehicles? 23 It was not clear to me. 24 DR. HOLMES: Yes. 25 It would be light-duty vehicles, plus the trucks as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 well. 2 BOARD MEMBER ROBERTS: And basically these are 3 citizens throughout the entire State? 4 DR. HOLMES: We would ask a random cross-section of 5 the population of the State to allow these devices to be 6 installed in their vehicles for a period of several days. 7 BOARD MEMBER ROBERTS: And basically this helps us 8 to fine tune the models. 9 DR. HOLMES: Yes, exactly. 10 BOARD MEMBER ROBERTS: Could you also comment on 11 air dispersion modeling over short distances. 12 DR. HOLMES: I think the principal purpose for 13 developing a fine scale model that would help us predict 14 emissions or exposures over short distance is to result or to 15 help us deal with emergency situations where hazardous 16 chemicals are being released into the atmosphere. 17 BOARD MEMBER ROBERTS: It could be a spill or 18 accident of some sort? 19 DR. HOLMES: Exactly. 20 Where does that go and to what concentrations are 21 people being exposed, and this helps the health folks in the 22 aftermath of situations like this, and it also helps the air 23 district, because they will be able to alert the particular 24 area of the community that needs to be evacuated or needs to 25 remain indoors or whatever. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 BOARD MEMBER ROBERTS: It was my understanding that 2 a fair amount of this work had been done in conjunction with 3 emergency preparedness, and in fact, I talked to somebody at 4 the State level not too long ago on this, and I was wondering 5 maybe how these things come together. 6 DR. BARHAM: I am Bob Barham, and maybe I can 7 amplify a little bit. 8 Another aspect of this work is to look at 9 stationary sources, existing sources. We've run into 10 incidents in the past where we have facilities that are 11 emitting various toxic materials, chrome plating is a good 12 example, next to school yards, and in situations like that we 13 find it very difficult to use the modeling techniques that we 14 have to accurately represent what those exposures might be in 15 that particular situation. 16 What this effort would do, using tracers, and more 17 refined meteorology and other tools that we have available, 18 is to better represent what the modeling or what the modeling 19 results would be, more accurate modeling results. 20 BOARD MEMBER ROBERTS: And we are looking at 21 distances less than a hundred meters? 22 DR. BARHAM: Yes. 23 In some cases, it is literally fence line. 24 MR. SCHEIBLE: Supervisor Roberts, right now the 25 model is okay if you live a block or more away from a source, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 but if you are two doors down, the model is just not designed 2 to give you accurate -- if you live in a crowded environment, 3 there is a local dry cleaners, and you live two doors down, 4 right now we have to tell you we do not know, unless we 5 monitor what the exposure could be, but if you move two 6 blocks away, we can tell you by the modeling. 7 We want to get out of that situation. 8 BOARD MEMBER ROBERTS: So, it is that very, very 9 close distance that we have a lack of ability. 10 MR. SCHEIBLE: And the fear is that these people 11 would be right in the plume, and therefore, could be getting 12 a much higher exposure than the model predicts for. 13 BOARD MEMBER ROBERTS: That is what I was looking 14 for. 15 Thank you. 16 CHAIRMAN LLOYD: I also think this works both ways. 17 Clearly the science involved with these models at 18 the moment needs improvement, and I think this has been a 19 chronic problem with those models. 20 They're not just emergency response but the typical 21 toxics coming out of there, and the other part of it is 22 sometimes you can over-estimate the impact there, so if you 23 have a business or a factory there, and you are looking at 24 predicted concentration of the model, you may be coming up 25 with much higher numbers, so we need to put better science PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 into that so that we can understand that much better. 2 BOARD MEMBER ROBERTS: Thank you. 3 CHAIRMAN LLOYD: Any more questions from the Board? 4 I would like to ask a couple of questions. Maybe 5 Dr. Holmes could answer, or even Mike Scheible. 6 The dollars we have now for the Research Program, 7 how do they compare with five years ago or ten years ago, 8 approximately? 9 DR. HOLMES: I think it has been a downward trend, 10 mostly because we have had to take real cuts under some of 11 the more difficult economic conditions that the State 12 Government has experienced, and also the inflation factor has 13 taken it down. 14 So, it costs much more than a hundred thousand 15 dollars a year to have a monthly professional out in the real 16 contracting world. 17 It was probably half that ten years ago, or maybe a 18 little more than half. 19 So, I think it is, we are able to do less and less, 20 and one indication of that is we are seeing, there are seven 21 projects. In years past, perhaps ten years ago when you were 22 involved in the projects, it was more like perhaps 20 23 projects. 24 We are down by quite a bit, but because of the 25 economic situation in the State and inflation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 Now, as Mike pointed out earlier, there are other 2 programs we have funding for. Part of the funding for the 3 Children's Health Study, and part of the funding for the 4 Indoor Air Quality Program, all of these are reviewed by -- 5 all of these different kinds of projects are reviewed by the 6 Committee and brought to the Board for your approval, but 7 they are not in the plan today. 8 That is good news, because the Legislature has seen 9 fit to give us money to do the specified tasks. On the other 10 hand, the amount of money on research where the Board has 11 full discretion as to how that money is allocated has gone 12 down significantly. 13 BOARD MEMBER RAKOW: Following on that, do you have 14 a percentage amount that the other program supplement, our 15 research dollars compared to the research amount? 16 DR. HOLMES: There is a list on page 4 of the item 17 in your Agenda book that adds up to nearly $4 million. 18 BOARD MEMBER RAKOW: Thank you. 19 BOARD MEMBER FRIEDMAN: Now, there is another 20 element of concern, I believe, and it is not just the size of 21 the pie now, but how that pie may be sliced between direct 22 cost for research and indirect cost for research, 23 particularly with respect to the University of California 24 potentially altering the indirect that they charge and have 25 charged in the past. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 Is that not correct, John? 2 We are concerned that they may double or triple or 3 even more quadruple the indirect attached to the cost, and if 4 they do, it will put a big dent in the effective budget, and 5 it is clear to me that we are going to have to take some 6 steps and gather our forces to remind them how mutually 7 beneficial the relationship has been with the University. 8 They are worried about the infrastructure of the 9 research, and we are worried about getting the science done, 10 and we will need to work together effectively, I think, with 11 that. 12 CHAIRMAN LLOYD: And I think you are exactly right, 13 Dr. Friedman. 14 I think they should be reminded also that if you 15 like the type of deal that they get with the Air Resources 16 Board, because coming from the other side, to compete with 17 some of those dollars, you have to spend a lot of time and 18 effort in proposals, and the staff, together with the 19 Research Screening Committee, they give you a rigorous review 20 of that, so your chances of getting a proposal passed on the 21 outside means you have to spend a lot of dollars, and the 22 University does not have to do that. 23 They have to pass some of the rigors clearly, but I 24 think they get a good deal. So, I think that is worth 25 reminding them of, and I appreciate you saying that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 Okay. 2 DR. HOLMES: We share Dr. Friedman's concern. 3 We have put together some data, and I think it 4 looks, over the past five years, the University of California 5 campuses have received over $2 million per year in support, 6 in grants and contracts, that is. 7 And for that $2 million, we are getting about $1.8 8 million worth in research, and 200,000 goes to indirect. 9 As these changes come about as proposed by the 10 Administration, then we only get about $100,000 or $1 million 11 of work for $2 million worth of funding, and that is a big, 12 big difference. 13 CHAIRMAN LLOYD: A huge difference. 14 With being proactive in alerting administrators on 15 what they are doing here and are the researchers fully 16 informing their chains of command that this could have a 17 significant impact on what they are doing -- 18 DR. HOLMES: Yes, and Dr. Friedman has offered to 19 help us in this. 20 CHAIRMAN LLOYD: Again, I have some comments from 21 people, not in the UC system, people from Cal Tech, who feel 22 they cannot compete on some of these. 23 I am sympathetic to what they are saying. We 24 wanted to look at the best people, but I also recognize that 25 the University of California has a tremendous resource and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 that we have essentially a very good deal going, but if the 2 deal gets changed significantly, it will be important. 3 Any more questions or comments? 4 Again, I would like to encourage staff to try to 5 maximize the dollars. Again, we very much appreciate the 6 support of South Coast and US EPA and others in private 7 industry in working in cooperation here to maximize the 8 dollars. 9 I think these programs are expensive, and so it is 10 great to be able to share the load and get the first class 11 results. 12 I would like to thank the staff for the 13 presentation there. Thank you. 14 I do not think there are any people signed up here 15 to testify on this. I do not know if we have any additional 16 written comments that need to be entered into the record. 17 No comments. 18 Since this is not a regulatory item, it is not 19 necessary to officially close the record. However, we do 20 have a Resolution before the Board requiring action. 21 So, we will take a brief pause while you look at 22 the Resolution, and this is Resolution 99-10. 23 BOARD MEMBER RIORDAN: Mr. Chairman, while the 24 discussion was going on, I did read the Resolution, and I 25 certainly support it and would like to move the approval of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 Resolution Number 99-10. 2 BOARD MEMBER FRIEDMAN: Second. 3 CHAIRMAN LLOYD: Thank you. 4 Call a vote on that. 5 All those in favor, say aye. 6 Nays? 7 Thank you very much. 8 We will have a short break to give the court 9 reporter a minute to pause and rest before going on to the 10 next, I think it is, the last item. 11 (Thereupon a brief recess was taken.) 12 CHAIRMAN LLOYD: Okay. We are about to start. 13 I need to specify when I take a break that it will 14 be short. 15 The next item on the Agenda is 99-3-4, Public 16 Meeting to Consider Fiscal Year 1998 Grant Awards for the 17 Rice Straw Demonstration Project. 18 This fund was created to support the rice growers 19 in the environmental community to help create new markets for 20 rice straw so that open burning can be reduced. 21 Last May the Board awarded $2 million to three 22 projects, and I understand these projects are making good 23 progress. 24 This year the staff is recommending four new 25 projects be awarded grants for a total of $2.25 million. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 This is the last year of the Rice Funding Program, 2 and I am delighted that the Air Resources Board has had the 3 opportunity to be part of this very positive program to 4 investigate the problem that's been existing for a long time 5 in the Sacramento Valley and working with the community to 6 solve it. 7 At this point, I would like to ask Mr. Kenny to 8 introduce the item and begin the staff presentation. 9 MR. KENNY: Thank you, Mr. Chairman and Members of 10 the Board. 11 The staff's recommendation today reflects a several 12 month process where we invited grant requests, worked with 13 the applicants and evaluated requests according to the 14 criteria adopted by the Board in January of 1998. 15 The Evaluation Team consists of four experts in 16 business and economics, and three technology experts and two 17 rice straw experts. Three of the team were ARB staff 18 members, and the remaining six were experts in these matters 19 from other organizations. 20 Staff recommends that four of the applicants be 21 awarded grants from the Rice Fund. We believe that these 22 four projects meet the criteria of the program, and they 23 offer us the best prospect to successfully create markets for 24 Sacramento Valley rice straw. 25 The staff will begin its presentation with an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 update of the three projects funded last year, and then the 2 staff will describe the four projects being recommended today 3 and offer recommendations for the projects to be funded today 4 and explain why we ask that the Board award these grants. 5 Finally, staff will ask the Board to consider 6 amending the criteria to allow a procedure for reallocating 7 unspent grant monies in the event that a grant is terminated. 8 Lesha Hrynchuk of our Planning Technical Support 9 Division will now make the presentation. 10 Lesha. 11 MS. HRYNCHUK: Good morning, Chairman Lloyd and 12 Members of the Board. 13 I will present to you the staff's recommendation 14 for this fiscal year's grant awards from the Rice Fund and 15 recommendation for modifying grant criteria. 16 The outline of my presentation, I will first 17 present some background information about the Rice Fund 18 Program and give a brief update on the progress of last 19 year's grant projects and describe the application review 20 process and then summarize the four projects which staff is 21 recommending for grant awards today and finally present 22 staff's recommendation for modifying the funding criteria to 23 allow reallocating grants in the event that a grant may be 24 terminated. 25 First, a brief background. Since 1992, State law PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 has required phase down in the burning of rice straw in the 2 Sacramento Valley. 3 Starting September 2001, the maximum that can be 4 burned will be 25 percent of planted acreage, and then only 5 under a special burn permit for disease control. 6 Commercial uses for rice straw must be found for 7 the burning phase down to be successful. The State 8 Legislature created the Rice Fund Program with the goal of 9 helping to create a market for Sacramento Valley rice straw, 10 over a million tons of straw per year. 11 The program was funded for two years, and this is 12 the last year. Two and a quarter million dollars is 13 available for grants this fiscal year. 14 The funding criteria used to evaluate the grant 15 request were adopted by the Board at the January 29, 1998 16 public meeting. 17 The criteria include that applicant provide 50 18 percent of the project costs. We have worked closely with 19 Mr. Robert Berry of the Trade and Commerce Agency, and Mr. 20 Steve Schafer, of the Department of Food and Agriculture. 21 They and the rice industry have been extremely 22 helpful in implementing this program. 23 Three projects were awarded grants last year, and I 24 will present a brief update on their progress. Anderson Hay 25 and Grain received a three-year grant for infrastructure PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 development for cattle feed export and erosion control 2 blankets. 3 During last October, Anderson harvested about 2500 4 tons of rice straw. Most of this straw is being used to 5 manufacture erosion control blankets. 6 They submitted a progress report describing and 7 evaluating the harvesting procedure used during the first 8 straw harvest and made an initial identification of equipment 9 needed for commercial scale harvest. 10 Because of the work on infrastructure, the Anderson 11 Company has become a point of contact for other potential 12 users of straw. Anderson is working with the Japanese 13 Ministry of Agriculture, and the USDA to establish the 14 protocol for exporting rice straw for cattle feed. 15 The project manager is currently in Asia to show 16 rice straw to potential customers, and so he was not able to 17 attend today's meeting. 18 Fiber Tech is progressing with its project to build 19 a manufacturing facility to produce particle board out of 20 rice straw. The equipment installation is almost completed 21 after being modified to use rice straw. 22 The equipment they purchased is projected to use 23 even more rice straw than initially expected, between 40,000 24 and 60,000 tons. 25 Production of rice straw particle board is expected PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 to start this summer. The President of Fiber Tech, Mr. Chris 2 Churchill is here today and would like to address the Board 3 after my presentation. 4 MBI International was awarded a grant for 5 value-added cattle feed and has completed most of its lab 6 experiments, the preliminary design of the commercial scale 7 plant and has just completed the feeding trials at an USDA 8 experimental farm in Wisconsin and is awaiting the final feed 9 trial report. 10 The initial assessment was that feed trials had 11 gone well, and in the packet is a letter for your reference. 12 Application Review Process, this year 13 grant 13 requests were received. One did not pass the prescreening, 14 leaving 12 applications evaluated, using funding criteria 15 adopted by the Board. 16 The evaluation reviewed technical, business and 17 rice straw experts, from the rice industry trade and 18 commerce, Department of Food and Ag and ourselves. 19 Applications were evaluated for technical and business merit, 20 program goal association and policy assessment. 21 The eight top applicants made presentations about 22 their projects in public meetings in January. This was 23 followed by clarification in which the eight applicants met 24 with reviewers to respond to questions and comments. 25 The reviewers completed the evaluation of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 projects and recommended ratings of the proposed projects and 2 staff concurred in the evaluation. 3 Based on this review process, staff recommends that 4 the four high scoring applicants be awarded the grant. 5 The first two recommended projects in Phase 1, 6 development of Agriboard Industries L.C. rice fiber based 7 structural panel plant in Sacramento Valley, submitted by 8 Agriboard Industries L.C. 9 The second is medium density fiberboard 10 manufactured from Sacramento Valley rice straw residuals, 11 submitted by Louisiana-Pacific Corporation. 12 The third and fourth recommended projects are 13 Colusa rice straw project, submitted by Enviro Board 14 Corporation, and production of citric acid from Sacramento 15 Valley rice straw, submitted by Arkenol Holdings, L.L.C. 16 Staff concurs that the four projects have the best 17 chance of success, are a good mix for projects for this year. 18 The next six slides will summarize the proposals 19 and evaluations. 20 Agriboard Industries currently manufactures 21 structural insulate panels made of wheat straw, and the 22 project is product testing on panels made of rice straw in 23 order to meet the building code certification, reengineering 24 the mill to process rice straw and producing architectural, 25 engineering designs of building shells for residential PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 commercial buildings in use to market and produce to the 2 California Building Industry. 3 The completion of work under the grant would take 4 about eight months. Agriboard plans to have the 5 manufacturing plant in operation 18 months later. 6 After five years, they expect to use 46,000 tons of 7 rice straw a year. 8 This slide summarizes the evaluation of Agriboard's 9 practical business and manufacturing experience. Having 10 buildings already constructed with wheat straw product market 11 makes entry easier, the competency of the team, including the 12 partners Raytheon's mill design and USDA's commercialization, 13 which owns about 30 percent of the company. 14 Staff recommends grant award of $665,000 for the 15 Agriboard Industries project. 16 Louisiana-Pacific Corporation manufactures medium 17 density fiberboard in Oroville. They propose to convert the 18 existing facility to use rice straw. 19 That involves installing new handling equipment and 20 modifying existing equipment. The initial composition is 30 21 percent rice straw. 22 The proposed project is eight months, and the 23 company estimates after five years it could use 70,000 tons 24 of rice straw a year. 25 Evaluation summary of the project, reviewers found PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 the project promising since it involves an existing 2 operational plant and experienced work force, established 3 customer base and sales network that replace the existing 4 product. 5 Louisiana-Pacific is well established with 6 financial capability and business competency. After the 7 grant, full production would be achieved. 8 The proposed project is undergoing internal 9 corporate review which is expected to be completed in six 10 weeks. 11 Staff recommends grand award of $575,753, with the 12 contingency that it receives the corporate approval. 13 Enviro Board Corporation has a facility in Colusa 14 to make fiber board panels to replace dry wall, door cores, 15 office partitions and sound walls, many under the grant 16 project. 17 Enviro Board is working on marketing program, 18 getting building code approval and creating home shell 19 building kits and a demonstration house. 20 The project is expected to last one year, and after 21 five years could use 80,000 tons of straw a year. 22 This slide is a summary of the reviewers evaluation 23 of the Enviro Board proposal. It's close to 24 commercialization, having completed the manufacturing 25 facility and having modified the mill to use the rice straw, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 the facility is operational during the grant period, the 2 manufacturing process is clean, and flexible board sizes 3 allow a multiple market targets. 4 It has strong technical and business teams and has 5 demonstrated a strong commitment to the project. 6 Staff recommends a grant award of $500,000 to the 7 project. 8 Arkenol Holdings proposal is to demonstrate 9 economic production of citric acid from rice straw. Under 10 this grant, Arkenol will optimize the conversion process, 11 engineer the design of the commercial plant, site the plant, 12 secure commitments for sale of citric acid and produce the 13 pro-forma financial analysis. 14 The work is expected to last eight months, and the 15 first full scale plant will be in operation by 2001. 16 Arkenol projects after the plant is built and in 17 five years using 160,000 tons of rice straw a year. 18 Summarizing the proposal, Arkenol has a patented 19 technology and existing lab facilities to conduct the 20 project. 21 Citric acid is a high value product in a growing 22 market. They have letters of interest from potential major 23 capital investors, excellent technical and business teams on 24 the project. 25 The project has high volume potential, and staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 recommends a grant award of $519,247 to Arkenol. 2 Staff believes these four high ranking projects 3 have the best chance of success in using significant volumes 4 of rice straw. We ask award of these grants to these 5 projects by passing the proposed Resolution that directs the 6 Executive Officer to execute the necessary documents to 7 implement the Rice Fund Grant Awards to Agriboard Industries, 8 Louisiana-Pacific Corporation, Enviro Board Corporation and 9 Arkenol Holdings. 10 This concludes the first part of the staff 11 presentation for our recommendations for grant awards. 12 Chairman Lloyd received four letters of support for 13 the Louisiana-Pacific project, letters from Assemblyman Sam 14 Aanestad, Assemblywoman Helen M. Thomson, Dan Eaton, Chairman 15 of the Integrated Waste Management Board and Rick Best, 16 Policy Director for Californians Against Waste. 17 All four letters urge award to the 18 Louisiana-Pacific project. 19 Now for the second recommendation. Staff is 20 recommending that the Board consider a procedure for 21 reallocating grants. 22 The grant monies are disbursed to grantees based on 23 projects making suitable progress, based on meeting the 24 milestones. It is possible that grants can be terminated 25 before the project is completed, leaving unspent grant money. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 It was the intent of the Legislature to make full 2 use of the allocated grant money. Therefore, staff 3 recommends to amend the criteria to allow the grants to be 4 augmented with unspent monies in the event that a grant is 5 terminated. 6 Staff has drafted the criteria change in 7 consultation with the Trade and Commerce Agency and the 8 Department of Food and Agriculture and the University of 9 California. 10 The criteria change would allow existing grant 11 recipients whose projects are in good standing to submit 12 proposals to expand their current projects, either shortening 13 the time to commercialization or increasing their projects 14 straw usage. 15 The proposed grant augmentation projects would be 16 competitively evaluated based on existing funding criteria, 17 and staff would make its recommendation to the Board at a 18 public meeting. 19 Staff recommends that the Board adopt Resolution 20 99-12 modifying the funding criteria previously adopted on 21 January 28, 1998, to include a procedure for reallocating 22 grants as described in the staff report, pages 15 and 17, and 23 in the Board book, pages 47 and 48. 24 That concludes my presentation, and now Mr. Chris 25 Churchill, President of Fiber Tech, recipient of last year's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 grant award, would like to say a few words to you about his 2 project. 3 Chris. 4 CHAIRMAN LLOYD: Dr. Friedman. 5 BOARD MEMBER FRIEDMAN: I just have a brief 6 question, Chris, before you start. 7 The consumption is about 356,000 tons a year. What 8 fraction is that of the total rice straw produced? 9 MS. HRYNCHUK: About a fourth to a third. 10 It is a little over a million tons of straw are 11 harvestable annually. 12 BOARD MEMBER FRIEDMAN: Thank you. 13 MR. CHURCHILL: Thank you. Good morning, ladies 14 and gentlemen. 15 As Lesha outlined, Fiber Tech USA is one of the 16 grant recipients from 1998 and is progressing well with its 17 project to produce a manufacturing facility to produce 18 particle board out of rice straw. 19 Fiber Tech originally projected the use of between 20 25,000 and 40,000 tons of rice straw in the facility. Since 21 the original application, Fiber Tech has expanded its project 22 and presently plans to use between 40,000 and 60,000 tons of 23 rice straw in the facility. 24 Last year Fiber Tech baled 10,000 tons of rice 25 straw, which is stored at the site in Colusa. Fiber Tech is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 in the midst of installing its manufacturing equipment and 2 expanding its site in Colusa. Much of the equipment has been 3 installed or is presently being installed. 4 We plan to be in operation early this summer. 5 Fiber Tech would like to thank the Air Resources Board and 6 its staff for all the assistance and support during this 7 project. 8 The Rice Fund Demonstration Project Fund has played 9 an important role in allowing Fiber Tech to move forward. 10 The Air Resources Board should be commended for its efforts 11 in solving and assisting in solving the rice straw disposal 12 situation in Sacramento, California. 13 Thank you. 14 If there are any questions, I will be happy to 15 answer them. 16 CHAIRMAN LLOYD: Thank you very much. 17 Does the Board want to ask any questions on this 18 item? 19 BOARD MEMBER RAKOW: Yes. 20 Did the one-fourth to one-third use of rice straw, 21 is that the whole project or just this year's project? 22 MS. HRYNCHUK: That is this year's project. 23 BOARD MEMBER RAKOW: Didn't you -- if I recall, 24 didn't you tell me that the total grant would be about 50 25 percent use of rice straw? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 MS. HRYNCHUK: If all the projections -- 2 BOARD MEMBER RAKOW: That is significant. 3 MS. HRYNCHUK: If all the projects are successful. 4 There is a certain amount of risk in each of the 5 projects. 6 BOARD MEMBER RAKOW: Of course. 7 CHAIRMAN LLOYD: Any questions from the Board 8 Members? 9 Yes, Professor Friedman. 10 BOARD MEMBER C.H. FRIEDMAN: If I may, to what 11 extent do you look at business plans and financing and 12 projections and have some means of evaluating the realism of 13 those, and for example, Arkenol? 14 MS. HRYNCHUK: Okay. We had, as Mike Kenny had 15 stated, four business and economists review the business 16 plans. 17 We did, as part of the application process, ask 18 very detailed questions about providing what their marketing 19 projections were, what their three-year forecast after 20 commercialization would be, to make sure that they would be 21 self-sustaining, and we had a separate criterion from which 22 they were evaluated, based on the financial integrity of the 23 project team, and many of the companies have relied on 24 matching funds, and we looked at what the likelihood was of 25 receiving those matching funds. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 In the Arkenol project specifically, it is a 2 demonstration project, and building the full scale commercial 3 plant would cost about $140 million, and that initially is 4 seen as a very large figure and a large risk. However, they 5 have supplied us with letters from two major corporate 6 investors stating their interest in the Arkenol 7 project and participating in the commercial facility based on 8 the successful demonstration of the pilot project, showing 9 that it is commercially viable, and that would return a 10 suitable rate of return. 11 We have a representative from Arkenol here, and I 12 am sure she could answer much better than I can in more 13 detail. 14 We also have a representative from Trade and 15 Commerce who was on the Review Panel as a business advisor. 16 BOARD MEMBER C.H. FRIEDMAN: Well, I do not want to 17 prolong this for the others, but either now or perhaps 18 privately, I would be interested in knowing what the basic 19 assumptions are that they are making, the business 20 assumption. 21 I assume that they can convert into citric acid. 22 MS. HRYNCHUK: Yes. 23 The demonstration says it can be economically 24 converted. 25 BOARD MEMBER C.H. FRIEDMAN: Exactly, and I just PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 wondered what some of the financial assumptions are, and I 2 really do not have any doubts about it. 3 I was just interested. 4 Thank you. 5 CHAIRMAN LLOYD: Yes, Mr. Calhoun. 6 BOARD MEMBER CALHOUN: The staff has indicated the 7 status of our existing projects, several that are still 8 ongoing, and I would like to get a feel if I can for the 9 likelihood of ultimately being a successful project, I guess 10 what I am concerned about is, are we continuing to spend 11 money on a project that we know now will not be successful, 12 or do you have strong feelings one way or the other about it? 13 One other way to put it is, which one of these 14 three projects do you think stands the best chance of being 15 successful in terms of overall efforts to use up as much of 16 the straw as possible? 17 MS. HRYNCHUK: In terms of this year's project or 18 last year's? 19 BOARD MEMBER CALHOUN: Last year. 20 MS. HRYNCHUK: Well, as Mr. Chris Churchill just 21 stated, they plan to be in production by summer. 22 They have most of their equipment in place, and 23 based on their marketing efforts so far, it seems they have 24 customers already lined up to use their product, and I would 25 expect that the Fiber Tech project would be the first project PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 on line in Sacramento to use any significant amount of rice 2 straw, and I think it would also be certainly a motivator to 3 other projects using rice straw and potential investors and 4 loan officers to fund other projects. 5 I see Fiber Tech as being the closest at this 6 point. We do have, to let you know, as we implement the 7 grant, we do not give them the entire grant award up front. 8 It is basically cost reimbursable based on meeting 9 project milestones. So, we do have provisions in place that 10 would suspend the grant if we find the project is not making 11 suitable progress. 12 BOARD MEMBER CALHOUN: And how often do you get the 13 progress reports? 14 MS. HRYNCHUK: We get them about every three 15 months. 16 CHAIRMAN LLOYD: Dr. Friedman. 17 BOARD MEMBER FRIEDMAN: Yes. 18 As a follow-up to Mr. Calhoun's question, I would 19 like to speak favorably for the second aspect of your 20 proposal, which gives you the enhanced degree of freedom to 21 spend money wisely, and the way that you have described it 22 also keeps everyone in the loop, so that we will actually 23 have a say and understand any reorganization funding within 24 all of the grants themselves. 25 I think that is very good idea. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 MS. HRYNCHUK: Thank you. 2 CHAIRMAN LLOYD: Any other questions? 3 BOARD MEMBER RIORDAN: It is not a question, Mr. 4 Chairman, but just a comment. 5 That is, these are very important projects for some 6 of the areas. Let me just comment on Fiber Tech in Colusa. 7 I would tell you if we could solve the problem not 8 only are we going to help the rice growers but in general the 9 economic welfare of that particular county. I had a chance 10 to visit Colusa when I was the Chairman, and I am very 11 impressed with its ability to do with very little. 12 But to those of you who are supervisors on this 13 Board, they do not have a CAO in that county, because the 14 budget of Colusa County cannot afford a CAO. The Air 15 Pollution Control Officer is in charge of many departments 16 and not just the air pollution control of that area. 17 So, these are significant opportunities to enhance 18 the economic stability of an area and the economy of an area. 19 I think it is very exciting, and I wish the very best to 20 those who are participating, because they are going to make a 21 difference. 22 CHAIRMAN LLOYD: Thank you very much. 23 Anything else? 24 Professor Friedman. 25 BOARD MEMBER RAKOW: And I have one quick question. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 BOARD MEMBER C.H. FRIEDMAN: I just want to add one 2 more comment. I did not want anything that I said about 3 Arkenol to in any way suggest that I have any concerns about 4 it. 5 To the contrary. If I read it right, in a few 6 years, five years, Arkenol is estimating it could be using up 7 to, what I understand would be, 16 percent of our rice straw, 8 in a new facility that would be in the Sacramento Valley, 9 that would hire people and do all the things that you are 10 describing up here. 11 When I asked what the assumptions were, I am 12 praying that it all comes true. I am rooting for it. 13 MR. KENNY: Mr. Friedman, I also took your question 14 there with regard to the assumption this morning that you 15 have a background that relates to those assumptions, and we 16 will be happy to sit down with you and kind of go through 17 those and just give you a full understanding. 18 BOARD MEMBER C.H. FRIEDMAN: At your leisure. 19 At your convenience. I have no hesitancy to vote 20 on this. 21 CHAIRMAN LLOYD: Ms. Rakow. 22 BOARD MEMBER RAKOW: Yes. 23 I wonder if, since this is the second and last year 24 of the grant program, if you have given some thought to what 25 future programs may possibly be put in place to continue with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 the rice straw efforts? 2 MR. KENNY: We would obviously like to see 3 additional funding from the Legislature so we could continue 4 this particular type of program, but at least at this point 5 in time that funding is not available. 6 I guess we are hopeful. 7 BOARD MEMBER RAKOW: Is there any thought to, say, 8 direct loan or pay back loans? 9 MR. KENNY: Well, again, the difficulty there is we 10 do not have the funding source to provide the initial loans. 11 BOARD MEMBER RAKOW: Maybe we should think about 12 that. 13 MS. HRYNCHUK: As a partial answer to your 14 question, maybe we did include some measures that could be 15 taken to speed up the development of uses for rice straw, and 16 in our report that we submitted to interested members of the 17 Legislature late last year, the Rice Straw Diversion Plan, we 18 were directed by the same bill that created the Rice Fund 19 Grant Program to evaluate the entire situation and come up 20 with ideas on how we can use 50 percent of the straw by the 21 year 2000. 22 So, we have listed some of those measures, and 23 various people are looking at those. 24 CHAIRMAN LLOYD: Okay. Thank you. 25 MR. SCHONING: Mr. Chairman, I would just like to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 point out that, if I am correct, this matter will come back 2 before you in a few months, because I think we are going to 3 write a report to the Legislature on progress, as stated, so 4 the success of this program will be very much in the news and 5 amongst those Legislators who are concerned with this program 6 toward the end of this summer. 7 CHAIRMAN LLOYD: Thank you very much, Mr. Schoning. 8 Any question on the Louisiana-Pacific project? 9 You have the caveat there. That still has to go 10 about six weeks of internal review, and there are also four 11 written support letters focusing on that project. 12 Do I detect any uncertainty that may not go ahead? 13 Explain the significance of those two issues. 14 MR. McGUIRE: Mr. Chairman, we are a little 15 concerned at the fact that Louisiana-Pacific has not 16 expressed eagerness to accept a grant when offered. 17 They explained to us that they have a corporate 18 procedure that they have to go through to pencil out the rate 19 of return and assure themselves and their corporate 20 accountants that this would be a profitable project for them. 21 In just conversations with them, it seems there is 22 the appearance that this would turn out to be favorable, but 23 they were not at liberty to make a final commitment until 24 after the six-week process. 25 Very candidly, one of the reasons that we added in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 the provision for possible reallocation for grant monies if 2 something should happen with Louisiana-Pacific, we wanted to 3 have a way to capture that money and keep it doing what it 4 was appropriated for. 5 We are guardedly optimistic. 6 CHAIRMAN LLOYD: Is anyone here from 7 Louisiana-Pacific? 8 Do you have anything to add to that sir? 9 Would you like to come to the mike? 10 Just the fact that you are here is obviously a very 11 positive sign. 12 MR. GREER: Good morning. I am Robert Greer. 13 I am a Facility Manager, at Oroville. I am sorry, 14 I really could not hear the last comment. 15 CHAIRMAN LLOYD: The question was, you heard the 16 discussion as to the status of the internal review, and I 17 just wonder if you could shed any more light on that or if 18 you could give us the probability of a go ahead, internal go 19 ahead? 20 MR. GREER: I have been assured that the corporate 21 commitment is there for this project, and it is just a matter 22 of protocol. 23 We have the facilities across the country that also 24 have projects waiting in line for that approval process, but 25 I am assured from senior management that there is a strong PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 Louisiana-Pacific commitment here for the rice straw project 2 at Oroville. 3 CHAIRMAN LLOYD: Great. That is excellent to hear. 4 So, again, you have heard that you have our support 5 here, and we certainly look forward to a positive outcome. 6 Thank you for coming. 7 BOARD MEMBER EDGERTON: Just for the record, I 8 would like to say that I recall several years ago the 9 Co-chairman of the Board of Enviro Board Corporation making a 10 wonderful presentation to those of us who were on the Board 11 at that time, with a lot of wonderful slides and brought some 12 of the Board so that we could see that it would work, and it 13 helped those of us that, perhaps not in the field, to 14 visualize and understand what was going forward. 15 I see Glen Camp is here today, and I just wanted to 16 let you know that I was pleased to see that he and his 17 program are in our program and continuing with their 18 outstanding efforts, because he did educate me. 19 Thank you. 20 CHAIRMAN LLOYD: I will not comment on his 21 abilities there. 22 The other question I have, what is the possibility 23 of using the product here for our new building, at least not 24 that it is a house of straw, but the possibility of just 25 using this as a sample in one of the areas would be a great PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 thing to show that we can actually use that. 2 MS. HRYNCHUK: Well, there are possibilities. 3 For instance, using the fiber board, the particle 4 board product can be used for desks, counter tops, and once 5 it is laminated, the Enviro Board product is being marketed 6 for door cores and for office partitions. 7 CHAIRMAN LLOYD: Who would be the best person for 8 them to talk with? 9 I am sure they would be very anxious for that idea, 10 also. 11 MR. KENNY: On that issue, there has been some 12 discussion with regard to greening the new Cal EPA building, 13 and those discussions have involved a fair amount of interest 14 and effort by the Waste Board. 15 The difficulty there has been that the contract is 16 fairly far along, and so there has been an effort to try to 17 sort of retro the contract so in fact those kinds of greening 18 efforts can be incorporated into the building. 19 We can follow-up and find out what the status of 20 that effort is, because I do not know at the moment. 21 CHAIRMAN LLOYD: And I realize that any time you do 22 a modification, it costs dollars, so I am not suggesting 23 that, but in the areas or something at least you could have a 24 posted exhibit, and that would be very nice to see that 25 coming to fruition. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 MR. KENNY: I think there were some efforts along 2 those lines, but it was not as comprehensive as a lot of us 3 would have liked for it to have been. 4 It simply got started a little bit too late, and 5 the budget was a little too small. 6 CHAIRMAN LLOYD: Any other Board comments? 7 Any other public comments? 8 BOARD MEMBER C.H. FRIEDMAN: I move approval of 9 Resolutions -- Are we going to do them separately? 10 CHAIRMAN LLOYD: Yes. 11 So, all those in favor of the first Resolution, say 12 aye. 13 BOARD MEMBER ROBERTS: Second. 14 CHAIRMAN LLOYD: All in favor of the first 15 Resolution. Very good. 16 And now I am looking for a motion on number two. 17 BOARD MEMBER RAKOW: I so move. 18 BOARD MEMBER C.H. FRIEDMAN: Second. 19 CHAIRMAN LLOYD: All in favor, say aye. 20 That is unanimously approved there. 21 I guess for the open comment period, it looks as 22 though we have no comments for the open comment period. 23 Nobody to present any other information. 24 So, anything else that the Board Members would like 25 to say? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 Anything? 2 If not, we will officially adjourn the meeting for 3 April. 4 We will reassemble, and we will meet for lunch on 5 the fifth floor. It is indoors because of the wind. So, it 6 is the fifth floor conference room, whenever we get there. 7 (Thereupon the meeting of the Air Resources Board 8 was adjourned at 11:40 a.m.) 9 --o0o-- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 I, VICKI L. OGELVIE, a Certified Shorthand 4 Reporter of the State of California, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing hearing was reported in shorthand by me, Vicki L. 7 OGELVIE, a Certified Shorthand Reporter of the State of 8 California, and thereafter transcribed into typewriting. 9 I further certify that I am not of counsel or 10 attorney for any of the parties to said hearing nor in any 11 way interested in the outcome of said hearing. 12 IN WITNESS WHEREOF, I have hereunto set my hand 13 this twenty-fifth day of April, 1999. 14 15 16 VICKI L. OGELVIE 17 Certified Shorthand Reporter License No. 7871 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345