1 MEETING 2 BEFORE THE 3 CALIFORNIA AIR RESOURCES BOARD 4 5 6 7 8 9 10 BOARD HEARING ROOM 11 2020 L STREET 12 SACRAMENTO, CALIFORNIA 13 14 15 16 17 18 19 THURSDAY, NOVEMBER 13, 1997 20 9:00 A.M. 21 22 23 24 25 Vicki L. Medeiros, C.S.R. License No. 7871 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii 1 MEMBERS PRESENT 2 John D. Dunlap, III, Chairman 3 Joseph C. Calhoun Mark DeSaulnier 4 Dr. Friedman Lynne T. Edgerton 5 Jack C. Parnell Sally Rakow 6 Barbara Riordan Ron Roberts 7 James W. Silva 8 Staff: 9 Michael Kenny, Executive Director Tom Cackette, Chief Deputy Executive Officer 10 Mike Scheible, Deputy Executive Officer Kathleen Walsh, General Counsel 11 Jim Schoning, Ombudsman 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii 1 I N D E X 2 --o0o-- 3 Page 4 Proceedings 1 5 Call to Order 1 6 Pledge of Allegiance 7 Roll Call 1 8 Opening remarks by Chairman Dunlap 1 9 AGENDA ITEMS: 10 97-9-1 Public Meeting to Consider the 11 Amendments to the Air Toxics Hot Spots Regulation for Fiscal Year 12 1997-98 13 Introductory remarks by Chairman Dunlap 2 14 Staff Presentation: 15 Mike Kenny 3 Mr. Rosenkranz 5 16 Mr. Schoning 22 17 Public: 18 Mr. McConachie 24 Mr. Solganik 31 19 97-9-2 Public Hearing to Consider 20 Adoption of a Hairspray Credit Program 21 Introductory remarks by Chairman Dunlap 81 22 Staff Presentation: 23 Mike Kenny 82 24 Ms. Yee 85 Mr. Schoning 94 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv 1 I N D E X (Continued) 2 Page 3 Public: 4 Mr. Mattesich 96 5 Afternoon Session 125 6 97-9-3 Public Hearing to Consider Amendments 7 to the Area Designations for the State Ambient Air Quality Standards 8 Introductory remarks by Chairman Dunlap 125 9 Staff: 10 Mr. Kenny 126 11 Mr. McGuire 126 12 Public: 13 Mr. Romano 129 14 97-9-4 Public Meeting to Consider the Approval and Verification of California's 15 1995 Emission Inventory Update 16 Introductory remarks by Chairman Dunlap 131 17 Staff: 18 Mr. Kenny 132 Mr. Agid 134 19 Mr. Schoning 158 20 Public: 21 Mr. Block 160 Mr. Lucas 168 22 Mr. Wang 184 23 Adjournment 195 24 Certificate of Reporter 196 25 --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 DUNLAP: We will begin. I think everyone 4 is in their places. 5 Will the November meeting of the California Air 6 Resources Board now come to order. 7 We have asked Supervisor Roberts to lead us in the 8 Pledge of Allegiance, so would the audience please rise. 9 (Thereupon the Pledge of Allegiance was led 10 by Board Member Roberts.) 11 CHAIRMAN DUNLAP: Thank you, Ron. 12 Would the Board Clerk please call the roll. 13 MS. HUTCHENS: Calhoun. 14 BOARD MEMBER CALHOUN: Here. 15 MS. HUTCHENS: DeSaulnier. 16 BOARD MEMBER DeSAULNIER: Here. 17 MS. HUTCHENS: Edgerton. 18 BOARD MEMBER EDGERTON: Here. 19 MS. HUTCHENS: Friedman. 20 BOARD MEMBER FRIEDMAN: Here. 21 MS. HUTCHENS: Parnell. 22 BOARD MEMBER PARNELL: Here. 23 MS. HUTCHENS: Patrick. 24 Rakow. 25 BOARD MEMBER RAKOW: Here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 MS. HUTCHENS: Riordan. 2 SUPERVISOR RIORDAN: Here. 3 MS. HUTCHENS: Roberts. 4 SUPERVISOR ROBERTS: Here. 5 MS. HUTCHENS: Silva. 6 SUPERVISOR SILVA: Here. 7 MS. HUTCHENS: Chairman Dunlap. 8 CHAIRMAN DUNLAP: Here. 9 Thank you. Before we begin today's Agenda Items, I 10 would like to make an opening statement congratulating one of 11 our former Air Resources Board employees. 12 I think my Board Member colleagues are familiar 13 with Dr. Joan Denton, who worked for the past 15 years for 14 our Board. 15 Her most recent position being that of manager of 16 the Substance Evaluation Section in this Stationary Source 17 Division working for Mr. Scheible. 18 Last week Governor Wilson appointed Dr. Denton as 19 Director of the Office of Environmental Health Hazard 20 Assessment, or OEHHA, and yesterday I attended the ceremony 21 in which she was sworn in by the Secretary for Environmental 22 Protection, Peter Rooney, and I have copies of the press 23 release on Dr. Denton's appointment that I will pass out to 24 you. 25 I wanted to bring that to your attention for two PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 reasons. One, that one of our staff members made good and is 2 moving up, and secondly, that it is very important for our 3 Board to have a close working relationship with OEHHA, and we 4 intend to do that, and we appreciate very much the Governor's 5 choice there. 6 With that we will get into today's Agenda. Again, 7 I would like to remind those of you in the audience who would 8 like to present testimony to the Board on any of today's 9 Items to please sign up with the Clerk of the Board, Ms. 10 Hutchens. 11 If you have a written statement, please give 20 12 copies to her. The first Item on the Agenda today is 97-9-1, 13 a public hearing to consider amendments to the Air Toxics Hot 14 Spots Regulation for fiscal year 1997-98. 15 The Air Toxics Hot Spots Information and Assessment 16 Act of 1987 requires California industries to inventory toxic 17 air emissions, to notify the public of potentially 18 significant health risks and to reduce significant risk 19 emissions. 20 The Act also places Program implementation and the 21 management responsibilities on local air districts, the 22 Office of Environmental Health Hazard Assessment and our Air 23 Resources Board. 24 The law requires that the cost of the State and 25 local districts to implement and maintain the Hot Spots PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 effort be recovered by assessing fees on facilities subject 2 to the Program. 3 This State Fee Regulation is designed to generate 4 the revenue to recover the State's costs from all districts. 5 The proposed fee reg today that's before us also 6 recovers cost for the seven districts that have requested the 7 ARB to adopt their fee schedules. 8 At this point, I would like to ask Mr. Kenny to 9 introduce the Item. Good morning, Mike. 10 MR. KENNY: Good morning. Thank you, Mr. Chairman 11 and Members of the Board. 12 With the adoption of the Hot Spots Fee Regulation 13 for fiscal year 1997-1998, the ARB continues the effort by 14 reducing the fees and continuing to focus the Program on high 15 risk. 16 We are at the point that much has been 17 accomplished. The program is focused on high risk and those 18 little or no risk exempt, those with potentially high risk 19 are tracked by the district. As past year we evaluated where 20 to focus the efforts. 21 During the development of the hot spot, the staff 22 balanced the physical requirements of the State to reduce the 23 burden on the regulated community. Staff worked closely with 24 the public, regulated local air districts and Office of 25 Environmental Assessments. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 The proposed amendment considers to use the fees 2 based on facilities health impact. Fees will not continue 3 for those facilities that are considered no impact. 4 This year, the core facilities reduced by 1,000 5 facilities, 800 core facilities in the program. We are 6 within State costs to administer. 7 With that introduction, Kirk Rosenkranz. 8 MR. ROSENKRANZ: Thank you, Mr. Kenny, Mr. Chairman 9 and Members of the Board. 10 My presentation that the Board amendment for the 11 hot spot fee regulation for fiscal year 1997-1998. I will 12 begin with the background information about the program. 13 Next I will discuss development of and method used 14 to amend the fee regulation. I will present the proposed 15 amendment and the fee schedules that ARB adopts for the seven 16 districts. 17 I will start with general background information on 18 the program. In September 1997, the Hot Spots Assessment Act 19 was signed into law. The Air Toxics Hot Spot Program is a 20 fee-based, right-to-know program, under stationary types and 21 quantities of certain toxic substances routinely emitted in 22 the air. 23 The goals of the program, and we will discuss the 24 goals, the primary goals of the Air Toxics Program is to 25 inventory the nature and extent of the sources, identify the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 facilities posing the risks, notify the public of those 2 health risks, reduce the risks for high risk, below 3 significant and provide the information for prioritization of 4 toxic air contaminants. 5 In working to the goals, the program resulted in a 6 number of benefits for the people of California. The Air 7 Toxic Hot Spots Program has benefited citizens in California 8 in a number of ways. 9 We have one of the few statewide databases for 10 toxic substances in the United States and the risk assessment 11 to the public. The program has served as impetus for 12 facilities throughout the state, large and small, to evaluate 13 the quantities of substances. 14 The process, the program has resulted in reduced 15 emissions from facilities in the State and as a result of 16 reduced risk to the general public. I would like to discuss 17 the fee regulation in more depth. 18 I will begin that with review of Legislation. 19 In '87, the original act, Assembly Bill 1988 20 mandated that the Hot Spots Fee Program be fee based. Two 21 subsequent amendments to the original Act have had major 22 impacts on the Fee Program as it currently exists. 23 Those amendments include Senate Bill 1378 in 1992, 24 and Assembly Bill 564 in 1996. In 1992 the Act was amended 25 by Senate Bill 1378. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 SB 1378 directs the ARB to adopt a regulation that 2 requires that the Program's fees be based on the releases of 3 toxics emissions and on the level of priority the district 4 assigns to that source. 5 Assembly Bill 564 amended the Act in 1996. This 6 Legislation exempted from the Program facilities whose 7 emissions pose a low risk to the public. 8 AB 564 also set forth reinstatement criteria for 9 facilities exempted from the Program. Finally, AB 564 caps 10 the State portion of Program cost at $2 million for fiscal 11 year 1997-98 at $1.35 million for fiscal year 1998-99 and 12 each succeeding fiscal year. 13 I will now discuss the purpose of the fee 14 regulation as defined in the Legislation. The Legislation 15 requires that the State Board adopt a regulation that 16 recovers State cost for both the ARB and the Office of 17 Environmental Health Hazard Assessment, or OEHHA. 18 The Regulation also allows districts to request the 19 ARB adopt fee schedules for them. The Regulation is to also 20 include authorization for other districts to adopt their own 21 fee regulations for the purposes of recovering costs of 22 implementing this Program. 23 The fee that the facility is assessed is composed 24 of the State's portion of Program cost and the district's 25 portion of Program cost. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 The fee regulation distributes the State costs 2 amongst the districts. It requires them to collect fees to 3 recover those costs. 4 The fee regulation is reviewed and amended annually 5 to include the most current data available. The fee 6 regulation funds various State and district activities. 7 The State's program activities that have been 8 funded through the Hot Spot Fees include development and 9 implementation of the Emission Inventory Criteria and 10 Guidelines Report and Fee Regulations, development and 11 maintenance of the Statewide air toxic emission inventory, 12 development and maintenance of the statewide risk assessment 13 database, risk assessment guidelines development, public 14 notification guidelines and assistance, risk reduction 15 guidelines and assistance and health risk assessment 16 consultation and training of district staff. 17 The review of health risk assessments by OEHHA is 18 done on a fee-for-service basis and is separate from this fee 19 regulation. 20 The districts program activities occur at the local 21 level. The district's responsibilities include the 22 acquisition, approval and transmittal of the most current 23 emission inventory to the ARB. 24 Districts are also responsible for the following: 25 determining prioritization scores for facilities, reviewing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 and approving health risk assessments, implementing 2 notification requirements for significant risk facilities, 3 implementing risk reduction audits and plans, providing data 4 to the ARB and collecting Program fees. 5 The toxic emission inventory data are used to 6 determine a facility's status in the Fee Program. The 7 districts are responsible for keeping the facilities in their 8 jurisdictions informed about and in compliance with the 9 Program. 10 The district's Program activities are also funded 11 through Hot Spots Fees. 12 I will now discuss the development of the fee 13 regulation and the methodology used to calculate the fees. 14 The staff developed the proposed amendments to the 15 fee regulation with the assistance of the Fee Regulation 16 Committee, a working group composed of the staff's of OEHHA 17 and districts. 18 During the process of reviewing and developing the 19 proposed amendments to the Hot Spots Fee Regulation, we 20 hosted 13 conference calls and meetings with the Fee 21 Regulation Committee. 22 We have also worked closely with our industry and 23 environmental stakeholders group. We invited 90 24 representatives of the regulated community and of 25 environmental groups to participate in the stakeholders PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 group. 2 The ARB has hosted four conference calls with this 3 group. In an effort to get input from the public at large, 4 we held four public workshops to discuss amendments to and 5 the impacts of the fee regulation. 6 The staff also conducted numerous smaller meetings 7 and conference calls with interested parties. All of these 8 meetings have been invaluable in the development of these new 9 amendments for assessing fees. 10 During all of these meetings staff stayed focused 11 on the goals of the fee regulation. During the development 12 of the amendments to this fee regulation there are a number 13 of goals we have kept in mind. 14 Those include recovery of Program cost, use of 15 potential risk as a primary consideration when developing 16 facility program categories, placing a greater burden of fees 17 on higher risk facilities and exempting low risk facilities 18 from paying fees. 19 These goals also influence the method used to 20 calculate fees. The ARB staff proposes to use the same 21 method to assess Program fees in fiscal year 1997-98, that 22 the Board approved last year. 23 The fee calculation method is based on the number 24 of facilities in the seven facility program categories. 25 Facilities with low prioritization scores, a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 preliminary estimate of risk, or demonstrating low risk are 2 excluded from the fee regulation. 3 The fee regulation focuses on facilities with high 4 prioritization and higher risk. This method is a health 5 based method with fees increasing as risk increases. 6 I will now discuss the key components that ARB 7 staff must consider when developing a fee regulation for any 8 particular fiscal year. 9 Those are the State Program costs, the number of 10 facilities subject to the Fee Program and the level of risk 11 facilities present. 12 I will now discuss each of these individually. The 13 first component of the fee regulation is the revenues to 14 cover State cost. 15 The staff's original proposal was to reduce State 16 cost to $1.49 million for fiscal year 1997-98, from the $1.49 17 million in fiscal year 1996-97. 18 The staff is proposing today a firmer reduction in 19 the State's revenues from Program fees from $1.35 million. 20 This is an additional $140,000 reduction in State 21 cost from the cost proposed in the staff report and released 22 in August of this year. 23 This further reduction is the result of reduction 24 in the OEHHA budget. This additional cut brings the total 25 reduction in State costs from fiscal year 1996-97 to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 $586,000. 2 The overall reduction proposed today represents a 3 37 percent reduction in State Program cost from fiscal year 4 1996-97, and is also 33 percent less than the $2 million 5 statutory cap on State fees for this fiscal year. 6 The State's portion of the Hot Spots Program budget 7 has been reduced over the years due to the completion of 8 tasks. 9 We have also streamlined the Programs requirements 10 as we focused the Program on the highest risk facilities. 11 As the Program has matured we have attempted to 12 balance the cost of the Program with the requirements of the 13 Program. 14 As a result, the State's program costs have been 15 reduced 74 percent since the peak years of the Program. 16 This slide shows how Program costs are split 17 between the State comprised of the ARB and the OEHHA and the 18 districts. 19 We are here today to propose a fee regulation that 20 recovers the Program cost for the State and for seven of the 21 35 districts for fiscal year 1997-98. 22 The second component in the development of the fee 23 regulation is the number of facilities subject to the 24 regulation. 25 The process of determining which facilities are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 subject to the fee regulation and determining the appropriate 2 facility program category began when the ARB received 3 district's final facility program data on July 1, 1997. 4 The districts were then required to submit emission 5 inventory data, or other supportive information, documenting 6 any changes in the facilities program category. 7 We received this documentation to assure 8 consistency and accuracy of the data submitted in July. 9 After reviewing the emissions data that we 10 received, we found that many facilities have lowered their 11 risks. As a result, many facilities will pay either reduced 12 or no fees for State cost. 13 It appears that in fiscal year 1997-98, a number of 14 facilities that will pay fees be reduced by 1,000 from 15 approximately 1800 to 800 facilities. 16 These larger facilities have formed the core of the 17 fee regulation to date and it is these facilities that are 18 distributed in the fee categories that I will discuss in a 19 minute. 20 An additional 3,000 industry-wide facilities will 21 also be exempted leaving approximately 15,000 remaining in 22 the Program. 23 Industry-wide facilities are generally small 24 businesses. Examples include gas stations and dry cleaners. 25 The districts are responsible for doing the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 emissions inventory and risk assessments for these facilities 2 because the districts have not completed the inventories and 3 risk assessments for this group, and because typical Program 4 fees might pose economic burdens for these facilities we have 5 always put them into a single category and charged them a 6 small fee and I will talk more about that fee later. 7 The third component involves the level risk of risk 8 in a facility. The health risk information is determined 9 using the guidelines developed by the California Air 10 Pollution Control Officers Association and toxicity 11 information from OEHHA. 12 Facilities are first prioritized by the districts 13 in consultation with the ARB and OEHHA. The prioritization 14 method takes into account the emissions, the toxicity of 15 substances and sometimes proximity of receptors. 16 The prioritization scores generated are used to 17 determine which facilities need to complete a comprehensive 18 health risk assessment. 19 High priority facilities have been required to go 20 on and do a more refined and extensive health risk assessment 21 to determine the cancer risk and non cancer risk. 22 Non cancer risks are termed hazard indices. Risk 23 assessment results are used when available. 24 Prioritization scores are used when risk assessment 25 results are not available. The State's Facility Program Fee PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 categories approved by the Board last year are based on the 2 health information just discussed. 3 The ARB staff proposes to continue to use the same 4 Facility Program Fee categories as used in fiscal year 5 1996-97. 6 These categories are based on prioritization scores 7 and health risk assessment results to reflect specific 8 requirements in the Legislation as to when a facility must 9 pay State and district fees or pay district only fees. 10 Each of these categories pays a different fee with 11 the higher risk facilities paying the highest fees. 12 The Facility Program categories are: health risk 13 assessment results greater than 100 cancer cases per million 14 risk; health risk assessment results between 50 and 100 15 cancer cases per million risk; health risk assessment results 16 between 10 and 50 cancer cases per million risk; or a hazard 17 index greater than one; a prioritization score greater than 18 10 and no health risk assessment. 19 Tracking, these facilities have a prioritization 20 score greater than 10 and a health risk assessment result 21 with cancer risk between one and 10, or a hazard index value 22 between 0.1 and 1. 23 District update. These facilities have 24 prioritization scores between one and ten. 25 These facilities are not assessed a State portion PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 of fees, on prioritized facilities and industry-wide 2 facilities. 3 Clarification will be made to several of the 4 Program fee categories. I will now discuss proposed 5 amendments for fiscal year 1997-98. 6 The staff released a staff report and proposed 7 amended regulation for public comment in August of this 8 year. 9 The hearing for that proposal was originally 10 scheduled for September, 1997. At that time we reduced the 11 State cost 23 percent from fiscal year 1996-97. 12 However, as we completed the development of the fee 13 schedule for fiscal year 1997-98, we saw a 64 percent 14 increase in the fee rates per fee category. 15 This was because many facilities have become exempt 16 under the new Legislation leaving a smaller number of 17 facilities to share the cost of the Program and consequently 18 a higher fee per facility category. 19 We found that kind of increase unacceptable, and we 20 began exploring methods to reduce that increase. In 21 addition, some questions were raised as to the legitimacy of 22 the rather large number of exemptions submitted by the 23 districts. 24 We needed time to address those questions by 25 verifying the information the districts had submitted by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 requiring the districts supply us with emissions data, or 2 other information supporting changes to Facility Program 3 categories. 4 In the two extra months resulting from the delay, 5 we were able to verify the status of most facilities and make 6 additional to reduce the increase in fees. 7 I will now present the staff's amended proposal. 8 First, we are proposing to reduce the State budget by 9 $586,000 from fiscal year 1996-97. 10 This is 30 percent less than the State budget last 11 year, and the difference from that published in the staff 12 report and proposed regulation released in August, this is 13 due to an additional $140,000 cut in the OEHHA budget. 14 Second, staff is proposing that the State fee for 15 industry-wide facilities be increased from $15 to $25. This 16 too is a change from what was proposed in the August staff 17 report. 18 We are proposing this because we anticipate an 19 increase in the resources needed to provide the operators of 20 these types of facilities support. 21 The ARB staff is currently finalizing several 22 industry-wide risk assessment guidelines that will be 23 distributed to industry-wide sources, such as gas stations, 24 autobody shops and dry cleaners sometime during the course of 25 fiscal year 1997-98. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 In the distribution of these industry-wide risk 2 assessment guidelines, we are anticipating a need for 3 additional public outreach. 4 This proposed amendment was recommended by a number 5 of industry groups and districts. 6 Third, we propose to clarify the definition of 7 update facility by changing it to district update facility, 8 and we propose to make the definition of tracking facility 9 more concise by making it specific for both acute and chronic 10 hazard indexes. 11 Fourth, we are also proposing to revise the 12 definition of small business in the fee regulation. 13 During the development of the fee regulation for 14 fiscal year 1996-97, we received a comment requesting a 15 review of the Program's definition of small business. 16 In response to that request, we will be 17 incorporating the term annual full-time employee equivalent 18 into the definition. 19 Fifth, Appendix A of the Air Toxic Hot Spots Fee 20 Regulation contains the district's toxic list, reports and 21 surveys. 22 These lists affect the facility applicability to 23 the Hot Spots Program including fees. Several districts have 24 asked the ARB to either remove their list reports or surveys, 25 or revise the fee regulation to reference the most current PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 version of their list reports or surveys. 2 Sixth, we proposed revising the fee rates using the 3 information received from the districts in July of this 4 year. 5 We have revised the tables in the Fee Regulation to 6 reflect the most recent information. The fee rates we are 7 proposing today represent a 19 percent increase over last 8 years, but are substantially lower than a 64 percent increase 9 we propose in the August 1997 staff report. 10 We realize that any increase in fees results in an 11 additional fiscal burden to California business, but it is 12 important to remember that the facilities remaining in the 13 Fee Program and paying the fees are those that pose the 14 greatest health risk to the public. 15 These proposed changes were discussed at public 16 workshops and are supported by a number of industry groups. 17 The fee rates shown here have been calculated using 18 the three components of fee regulation development discussed 19 earlier. 20 With the changes in State and district budgets, and 21 changes in the numbers of facilities remaining in the Fee 22 Program, fees for individual Facility Program categories have 23 been revised. 24 Each Facility Program category is composed of a 25 facilities risk and a workload component based on facility PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 complexity. 2 The ranges you see here are based on the facility 3 complexity as determined by the districts. These next two 4 slides show the districts allocation of State Program cost. 5 The districts allocation of the State's portion of 6 the Program fees is based on the numbers of facilities in the 7 district and the Facility Program categories to which those 8 facilities are assigned. 9 This information can also be found in table one of 10 the Fee Regulation, which is Appendix one of the staff 11 report. 12 The detailed explanation of the allocation method 13 is found in Appendix four of the August 1997 staff report. 14 Health and Safety Code, Section 44380, allows 15 districts to request the ARB to adopt fee schedules for 16 them. 17 Districts must submit District Program costs to the 18 ARB by April first of the year preceding the fiscal year to 19 which the fee regulation applies. 20 Seven districts have requested that the Board adopt 21 fees for them and fulfill the requirements of the Health and 22 Safety Code. 23 On the screen now are the district Board approved 24 Program costs for fiscal year 1997-98 for those districts. 25 This information is also found in table two of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 Fee Regulation. The method used to calculate the district 2 portion of fees for the seven districts is similar to that 3 used for the State portion of fees, except the district fees 4 are based on different resource requirements requested by the 5 seven districts. 6 Those costs are determined by each districts local 7 board. The ARB has no input as to what local Program cost 8 will be. 9 The individual facility fee from each district is 10 the sum of the appropriate fee to recover district costs and 11 the fee to recover State Program costs. 12 We will now review the range of fees for the seven 13 districts we are adopting fee schedules for. The fees shown 14 on the slide currently on the screen are total Program cost, 15 both State and district cost for the seven districts the ARB 16 is adopting fee schedules for. 17 The calculated fee schedules for each district are 18 included in Table three of the Fee Regulation. 19 The lower end represents the fee for those 20 facilities with intermediate risk. The upper end represents 21 the fee the highest risk facilities will be paying. 22 The variation in ranges is due to the different 23 program cost for each district and the individual facilities 24 in each district that fall into different facility program 25 categories. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 The ARB staff has accomplished a number of things 2 with the amendments, the Air Toxic Hot Spots Program Fee 3 Regulation proposed today. 4 We continue to reduce the number of facilities 5 paying a State portion of Program fees. We have also reduced 6 State cost below the $2 million statutory cap while 7 maintaining an effective Program, one that continues to 8 protect the health of the citizens of our State. 9 This concludes the summary of the staff's proposed 10 amendments. 11 CHAIRMAN DUNLAP: Thank you. 12 Mr. Schoning, as our Ombudsman, would you please 13 address the process prior to today by which this item made 14 its way to the Board and share any concerns or comments you 15 have at this time with the Board. 16 OMBUDSMAN SCHONING: Thank you, Mr. Chairman. Good 17 morning Members of the Board. 18 As you have heard the Item that is before you has 19 developed since September of last year and the present and it 20 has included considerable stakeholder outreach and 21 involvement. 22 The staff developed the proposed amendment with the 23 assistance of the Air Toxics Hot Spots Regulations Committee 24 and that includes representatives from each of our 35 local 25 air districts, the Air Resources Board and OEHHA. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 This Committee met either in person, or by 2 conference call a total of 13 times between February of this 3 year and October to develop and discuss the Regulation that 4 is before you. 5 At the same time an industry and environmental 6 stakeholders group, which has worked together with staff on 7 previous fee regulations, continue to work closely with ARB 8 in the development of the current Regulation. 9 Staff invited approximately 90 representatives of 10 this group to review and comment on the development of the 11 Regulation through a total of four teleconferences between 12 March and October. 13 Five to ten individuals participated in each of 14 these meetings. Staff also conducted numerous smaller 15 teleconferences and meetings with interested members of the 16 group. 17 A total of eight notices were mailed to a total of 18 more than 8,000 individuals for each of four public 19 workshops, two in northern California and two in the southern 20 California area during the development of this Regulation. 21 Opportunity for public input into the Regulation 22 was provided during each of these four hearings. 23 Finally, staff mailed copies of the staff report to 24 over 1,400 individuals representing the public, the many 25 Government agencies and industries, including fuels, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 automotive painting and repair, paint and coatings, chemical 2 and waste management, agricultural, electronics and 3 aerospace. 4 In our opinion the staff did a solid job of 5 reaching out to all appropriate stakeholders and affected 6 parties in a workshop, the proposal before you, in a 7 workmanlike and proper manner. 8 CHAIRMAN DUNLAP: Thank you, Mr. Schoning. We have 9 two witnesses that have signed up. 10 If my Board Member colleagues would indulge me, I 11 would like to go to the witnesses now and then we will come 12 back and we will get to the questions. 13 Bill McConachie from the National Paint and Coating 14 Association and Randy Solganik from the Metal Finishing 15 Association of southern California. 16 If you gentlemen would come forward. Mr. Solganik, 17 if you would sit in the front row we will have you hop up 18 there when your colleague is done. 19 Good morning. 20 MR. McCONACHIE: Good morning, John. How are you? 21 CHAIRMAN DUNLAP: Fine, thank you. 22 MR. McCONACHIE: Good morning. Let me start off by 23 saying that I'm not here to debate the fee structure. 24 That, I think, is well developed and reasoned and 25 is no doubt fair. My concern is that we provide in an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 efficient manner. 2 You may recall approximately a year ago I stood 3 here addressing the situation as it applied to autobody shops 4 in the south coast. 5 When I read through all the many publications that 6 I received, which is not an easy task, I was happy, I thought 7 everything was taken care of, but in the middle of the year 8 some things happened which indicated that it was not finished 9 yet. 10 Let me start off by saying some things were 11 pleasant and some things were unpleasant. Let me take the 12 pleasant things first of all. 13 The first pleasant one was that I encountered some 14 people in south coast AQMD who were very pleasant, very well 15 informed and more than willing to help me. 16 I think I should thank them in front of you in the 17 Toxic Hot Spots Program, Sam Sermath and Ramon Patel really 18 walked me through this. 19 While I didn't speak to Dan Vasquez, he was in 20 discussions with them, and then, of course, the Board here 21 who put up with my numerous phone calls and educated me and 22 finally gave me the answer to how the problem developed, and 23 that was really the pleasant thing. 24 I think I finally know that why the body shops who 25 should not be in this Program are caught up in it. I guess PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 the unpleasant thing that happened, you will recall the last 2 time I was here, I was here because body shops had called me 3 and had been assessed fees of $834 I believe, and I showed 4 how that was one-half of two percent of their net income. 5 Unfortunately, these same shops this year received 6 invoices for $4,564 and that caused hours of anguish and many 7 more phone calls to me. 8 What it boiled down to was that I found out, and 9 again, this is information that finally came from the Air 10 Resources Board, that people had been assigned completely 11 wrong prioritization scores, and they didn't know about it. 12 When I told them that they said we don't even know 13 what prioritization score is. We have never heard about it, 14 we have had no correspondence at all. 15 Giving an example, I have three body shops here, 16 and their scores are 26, 52.8 and 64.9. I figure they should 17 be down around one. 18 I spent a lot of time trying to find out why they 19 had such high scores. I found out that it was because of 20 hexavale and chromium. 21 Hopefully, this is the last time you will ever see 22 me here, one of the bad things with this is that body shop 23 owners don't pay me for doing this, and I am imposing on old 24 friendships, the good thing is, as Bob said, my Social 25 Security benefits. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 It is interesting how it came about and how people 2 get caught up in the net of the programs like this. It goes 3 back to the early days of rule 1151, south coast, when 1151 4 put OVOC limits on primary surfaces among other things and 5 the only products to deal with at that time were water bound 6 primary surfaces. 7 In order to protect the metal people went to the 8 pretreatment clause in rule 1151, which in some cases were 9 metal etched primers, and they had some strontium chromate in 10 them. 11 This is where, and remember I talked about how 12 these people are not very sophisticated, they don't have 13 engineers, they just fill in forms and get rid of them. 14 Those who did ask when they get caught up in the 15 Toxic Hot Spots, they did ask the paint suppliers, how much 16 of the hexavale chromium is in my undercoat? 17 They completely misrepresented, misreported how 18 much, they thought it was the same as VOC's, everything that 19 is in the paint goes out. 20 Instead of that, of course, the strontium chromate, 21 the pigment, in the paint they could have reduced the amount 22 that they were starting off with by, I believe, we figured 23 the HVOP something close to 65 or 67 percent efficient, so 24 they reduced it by almost 60 percent and then the filtration 25 systems, which as I recall from my Title 5 work, was 98 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 percent efficiency for systems, which is again, they reported 2 everything is going out and this is what the district got. 3 The district slipped up here, because, if I can 4 find my papers. The same rule, 1151, in July 1, 1995, 5 prohibits the use of hexavale and chromium, at least 6 according to the report back in 1990. 7 They were still using that old data and these 8 people still have these high prioritization scores, which 9 they knew nothing about. 10 When I checked into how they could get out of it, I 11 found out that there was only once a year that you could 12 change your emission reports to the district, and it was by 13 means of these two forms, which I will pass around, but if 14 you look at them, really, they are asking you, are you 15 emitting any new pollutants, you are not taking anything 16 out. 17 What I am saying, ladies and gentlemen, is that 18 people are caught up in this Program who should not be caught 19 up in it. 20 That is why earlier this year I wrote the letter 21 which you may have a copy of, saying that if there is 22 anomaly, the districts, especially with industry-wide 23 sources, the district should have some obligation to notify 24 these people and say, you don't fit the pattern for an 25 industry-wide source, there is something wrong here and give PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 them a chance to change, explain to them why they are in it 2 and a chance to get out. 3 CHAIRMAN DUNLAP: Well, Mr. McConachie, let me ask 4 you, I appreciate that view. 5 What would you have us do specifically? 6 MR. McCONACHIE: I would, well, it was interesting 7 in the presentation this morning that I think it showed that 8 the district had the responsibility towards facilities in the 9 Program to keep them informed as to their status and that has 10 not been done. 11 I would suggest that perhaps a letter of reminder 12 or something from this Board to them. 13 CHAIRMAN DUNLAP: Okay. The interaction between 14 the local districts, as they deal with the sources needs to 15 be enhanced, upgraded, needs to be closer communication, 16 right? 17 MR. McCONACHIE: Yes. 18 By the time they get these invoices and inform me 19 and say we know are an old poke who is retired, but please 20 help us. 21 I call the district and they say it is too late to 22 change things because they have got the reports and I just 23 bounce around from one to another. 24 Really. 25 CHAIRMAN DUNLAP: Okay. Well, what I ask for you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 in that regard would be, if you don't mind, since you are 2 doing this advocacy out of the goodness of your heart, if you 3 could stay a few minutes and draft what you think would be 4 the type of reminder communication that we ought to consider 5 sending and give that to Mr. Kenny and then we will have a 6 conversation with Mike about getting a message out to the 7 locals to have them do some -- and I think that would -- 8 MR. McCONACHIE: Thank you. While I have the 9 microphone for what is hopefully the last time that I impose 10 on you by coming here. 11 I am giving up, which is unusual for me especially 12 the south coast. I must mention that in Title 5 Terry McCall 13 has been helpful there. 14 Finally, I would like to make a suggestion to you 15 folks, because in spite of what I said, and it may sound like 16 a contradiction, in the automotive paint industry there is 17 still a fair amount of cheap paint containing hexavale and 18 chromium being used and the shops are not enforcing it 19 because they don't know that they are using it. 20 It is about 15 years since OSHA passed it, but it 21 never has been enforced. Some paint companies, these 22 pigments are white chromates, the yellows, oranges and reds. 23 For 15 years I have had a personal vendetta against 24 companies who still still kept using them because they are 25 cheap. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 I would suggest that this Program is not just about 2 identifying emissions and raising fees, it's about cutting 3 them, and perhaps some process should be put in place to find 4 out where hexavale and chromium and lead are being emitted 5 from body shops. 6 CHAIRMAN DUNLAP: Thank you. I appreciate that. 7 That is something that I know that my Board Member 8 colleagues here that sit on local district boards can ask 9 about and Mike, I'll ask you and the team here to maybe 10 follow-up with OSHA or the proper coordinating entity to see 11 if something can be done. 12 MR. KENNY: We will follow up and basically do some 13 research to find out what is happening out there in terms of 14 these hexaconal in paints. 15 CHAIRMAN DUNLAP: Give us some tips on colors, I 16 think it was orange, or red and yellow was it? 17 MR.KENNY: It was red and yellow. 18 CHAIRMAN DUNLAP: Okay. Very good. 19 Thank you. We appreciate that. 20 It is nice to know that there are still some 21 advocates that will do the right thing without charging. 22 Yes, sir. 23 MR. SOLGANIK: I don't charge either. I am Randy 24 Solganik of Air Quality Committee Chairman for the Metal 25 Finishing Association of Southern California. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 We use hexavale and chromium, and we will continue 2 to use hexavale and chromium. 3 That is what we do, we are chrome platers. We are 4 also very small businesses. 5 I represent 160 metal finishing shops in southern 6 California. About 20 to 30 of which received very high bills 7 this year, up from the hundreds of dollars range to upwards 8 $4,000, $5,000, $6,000, $7,000, $8,000, $9,000, $10,000, 9 $11,000, $12,000, $13,000, $14,000. 10 Hexavale and chromium have an tremendously high 11 unit risk factor. In fact, here in California it is 12 and a 12 half times higher than the federal cancer potency factor for 13 hexavale and chromium. 14 As a result, you have an air toxic control measure 15 that was promulgated here in the State of California for 1988 16 for chromium, which all our members have been under since 17 then, plus we have a Federal max standard that was 18 promulgated last year that all of our members are under, so 19 they are in full compliance with both of these rules for a 20 significant length of time and yet they saw their fees go up, 21 not 100 percent, but 1000 percent. 22 Now I wish to say that I worked with the staff and 23 the staff did a great job keeping us informed every step in 24 the way. 25 We participated in a lot of conference calls. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 Linda and Richard did a fantastic job of keeping us 2 informed. 3 On the whole way we had one song and one song only 4 that more and more people are going to continue to drop out 5 of this Program. 6 More and more companies will lower their risks and 7 drop away, but due to the high potency value of hexavale and 8 chromium we have reduced our emissions by over 99.9 percent 9 and many of our companies in the last two or three years have 10 spent hundreds of thousands of dollars on control equipment. 11 We will continue to pay for this entire Program, in 12 essence, us and whoever else is unhappily trapped in it with 13 a high potency factor for whatever they are emitting. 14 We think it, and I have a specific request, we told 15 the staff that they were doing the right thing by increasing 16 the industry-wide fee. 17 My company, in particular, we are in the 18 industry-wide category. We somehow are not a prioritized 19 facility. 20 My fee, I'm a hexavale and chromium plater, I pay 21 $100, or whatever. I am here also representing our entire 22 Association which supports raising the fee for the 23 industry-wide categories, for the entire industry-wide 24 category, significantly, and I am saying significantly enough 25 to pay for this entire Program. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 We support raising it upwards between $75 and $100, 2 which would pay for the entire Program, in my understanding. 3 The problem is that the industry-wide category, 4 while it is small business, which we are also, our membership 5 has average size of 10 to 20 employees. 6 Chrome plating shops are very small businesses. 7 Maybe not small, but if under 10 employees requirement that's 8 in the statute here, but very small, nonetheless. 9 These fees could represent one percent of their 10 sales very easily. They do. 11 So, the industrywide category with 15,000 companies 12 in it, dry cleaners, gas stations that are in communities, in 13 mini-malls, right around the corner from where you live, they 14 represent a considerable risk and I would say that the 15,000 15 companies that are in the industrywide category represent the 16 majority of the risk in the AB 2588 Program, because you only 17 have a very small amount of companies that are actually 18 broken out. 19 Next year, you will have more people drop off. The 20 staff has already cut their budget, I am sure that they have 21 cut as much as they can, they have trimmed a lot off. 22 Instead of giving the 60 percent increase in fees 23 we are going to get a 20 percent, or 19 percent increase in 24 fees. 25 That is unacceptable as far as I am concerned. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 They don't understand why they are in full compliance with 2 State law and Federal law and emitting, in many cases, a 3 quarter ounce to half a pound of chromium yet they are still 4 in the 50 to 100 million risk category and will continue to 5 pay elevated fees under this Program. 6 So, it is something that has to be taken care of. 7 CHAIRMAN DUNLAP: Can I ask a question about that, 8 relative to the category, do you think that it's been 9 improperly applied to your member companies, I mean is your 10 beef with the category you are being placed into primarily? 11 MR. SOLGANIK: No. 12 We are the highest risk facilities by the way that 13 the Program is defined. You could define the Program in 14 another way. 15 You could say, let's do a population weighted 16 risk. Let's say a big, large oil company, and I don't want 17 to offend anybody in the room, that might put up hundreds and 18 hundreds of tons of sort of low risk carcinogens that are 19 from stacks that are very high, that are spread out over 20 millions of acres and millions of people. 21 So, the risk that people might see is maybe two in 22 a million, but everyone in southern California might be 23 seeing that risk. 24 You are talking about a plating shop in an 25 industrial area with a risk at their fenceline might be 100 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 billion. 2 So, in a population weighted risk we would be 3 small. The way that the Program is set up now, and the way 4 that it was done we are public enemy number one, and we will 5 pay the highest fees and some of the smallest businesses in 6 California, metal platers, will bear the burden of this 7 Program. 8 A significant burden, I am not going to say the 9 entire burden. 10 BOARD MEMBER FRIEDMAN: Can you tell me, what is 11 the total amount in fees that your 160 member group pays into 12 this Program? 13 MR. SOLGANIK: I don't know. 14 Staff ran me a list of just the people that had the 15 name plating. I have a list of 20 companies here that are in 16 southern California. 17 BOARD MEMBER FRIEDMAN: The reason that I asked you 18 mentioned several times that you are paying the vast majority 19 of the cost of the Program and I think you need some data to 20 illustrate that. 21 MR. SOLGANIK: Okay. Let me back off on that 22 comment because I don't have the data to demonstrate that. 23 What I can tell you is that we are paying among the 24 highest fees that can be paid under this Bill and there is a 25 probably an average of, staff could provide us with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 number. 2 My guess in southern California our industry pays 3 upwards of $200,000 and $300,000. 4 CHAIRMAN DUNLAP: Take your -- you are in 20 that 5 says plating in it. Pull one or two off of there and give 6 Dr. Friedman a feel. 7 BOARD MEMBER FRIEDMAN: Give us a feeling of what 8 the range of the fees might be individually for these 9 companies. 10 MR. SOLGANIK: Okay. Again, I'm not a paid 11 advocate either. 12 I am taking time off work to come up here and talk 13 about this. I have a bill here from Caltron Plating, a small 14 plating shop, this was faxed to me by one of our members. 15 They have maybe 50 or 60 people there they got a 16 bill for $4,564. They are a decorative chrome plating shop. 17 A hard chrome plating shop would have a 18 significantly higher bill. 19 CHAIRMAN DUNLAP: Where are they located? 20 What region of the state? 21 MR. SOLGANIK: They are in Santa Fe Springs. 22 CHAIRMAN DUNLAP: Okay. So, south coast, LA 23 County. 24 BOARD MEMBER DeSAULNIER: That is all right as long 25 we get the answer. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 MR. SOLGANIK: This was faxed to me by staff. 2 These are just people in south coast who are members of our 3 Association who received, in this program, Harbor Plating, 4 Al's Plating, Standard Nickel Chrome Painting, Chromal MB, 5 Pico Rivera, Modern Bottle, AH, Ace, Crown City, Crown City 6 is very large, Al's Precision, and Santa Ana, Sigma Hot 7 Springs. 8 I know Standard Nickel Chrome received a bill in 9 excess of $15,000. The problem is south coast has very high 10 fees also. 11 You saw that they are, they basically take the 12 State fee and double it. 13 CHAIRMAN DUNLAP: Okay. Didn't they, or weren't 14 they part of the seven districts? 15 So, is that statement accurate? 16 MS. MURCHISON: My name is Linda Murchison. Just a 17 comment, the bills that he is citing right now are last years 18 bills reflecting the regulation that the bill approved last 19 year. 20 In this year's regulation, depending once again on 21 exactly what district they are in they could be somewhere 22 around $12,000 or $14,000 if they are considered to be a 23 large facility. 24 However, many of these facilities are in the 25 industrywide group, as you indicated earlier, and the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 industrywide group is the one that historically has paid $15 2 a facility, we are proposing to raise that to $25 a facility. 3 CHAIRMAN DUNLAP: All right. Unless there are 4 other questions for the witness, I would like to have the 5 back and forth with staff, which I think that we need. 6 MR. SOLGANIK: And my proposal is in writing and it 7 should be in your packet. 8 CHAIRMAN DUNLAP: Right. 9 MR. SOLGANIK: Our industry supports the 10 industrywide. 11 CHAIRMAN DUNLAP: All right. Very good. 12 Thank you. I appreciate that. 13 You did fine for someone just taking off time at 14 work to come here and plead your case. 15 All right. Mike, maybe kick this off. 16 Mr. Kenny. We looked -- one of the things that our 17 Board sent very clear signals to staff on is we are 18 increasingly sensitive to the fiscal burden we place on those 19 that are regulated, that it is justifiable, that people 20 understand what they are getting for those dollars and also 21 that we are being responsive to the law. 22 There is a lot of legislative activity and a lot of 23 requirements that we are expected to implement and enforce. 24 I don't think there is a Board Member up here that 25 was troubled to hear that the Programs has been success in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 that people have cleaned up their acts, so to speak, have 2 reduced using these compounds. 3 We have seen, I think it was one third, the staff 4 presentation said the State Program budget has been dropped 5 from $2 million down to $1.3, okay, so, it has been dropped 6 by about a third. 7 That is a good thing. I mean you are doing the 8 right thing there. 9 At the same time we have an issue where fees have 10 gone up, particularly as it relates to some of the nuances 11 between like south coast perhaps, not to pick on Jim per say, 12 it is a very large district, a lot of action down there. 13 Mike, could you tell us what the logic would be, 14 why this proposal is worthy of Board support and talk a bit 15 about the trends as you tried to do in the staff presentation 16 and perhaps focus it and talk to us about why we should be 17 comforted in what happens at the individual company level 18 with this proposal. 19 MR. KENNY: All right. What we tried to do with 20 the proposal was to really reflect what the Board had 21 provided in terms of direction to us in the last couple of 22 years and at the same time take into account what the 23 Legislature has provided to us in terms of direction from 24 that angle. 25 The proposal that's before you today tries to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 address those directions. 2 CHAIRMAN DUNLAP: On that point, Mike, take us 3 back, if you would, say to the 1987 time period, maybe 4 Kathleen, or Mike Scheible could help as well, I mean, what 5 was going through the minds of the Legislature about having a 6 toxic hot spots effort overall? 7 Registration, notification, I mean, tell us a 8 little bit about that. 9 MR. KENNY: When the Legislation was originally 10 adopted what was going through the Legislature's minds at the 11 time was to put a program in place in the State that would 12 provide information to the public about what is happening in 13 their communities. 14 So, the Legislature authorized a program that would 15 really provide a level of knowledge for the immediate 16 communities. 17 It did that by providing for the type of structure 18 that we have today in terms of setting up a mechanism that 19 would allow the Air Resources Board to establish a means of 20 determining what the risks were in each of those 21 communities. 22 As time has gone on from 1988, when the original 23 Legislative adoption occurred, we got to a point in the early 24 nineties in which we had a program that from a State 25 perspective had fees that were close to $6 million, that is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 OEHHA and the ARB. 2 At the same time we had recognized over the 3 previous several years from 1988 to the early 90's is that we 4 had identified a lot of the risks that were associated with 5 the significant facilities in the local communities. 6 We thought that at that point in time that the 7 particular program costs could be reduced. 8 CHAIRMAN DUNLAP: Now the level of -- because the 9 information we provided to residents and others in the 10 community about what compounds were being used and given some 11 feeling about the risk, people have reduced their -- 12 MR. KENNY: I think that has been really kind of 13 the significant silver lining to the Program. 14 In order to avoid notifications which are required 15 under the law the vast majority of facilities have reduced 16 their usage of the toxic compounds to a level in which they 17 could then not be subject to the notification requirements. 18 CHAIRMAN DUNLAP: So, they dropped out? 19 MR. KENNY: Yes. 20 So, as time has gone on we have gotten to a point 21 where there have been continued dropouts from the facilities 22 because of reduction in the use of the compounds that are 23 highly toxic and we are now at a point where the Legislature 24 recognized that and this Board recognized that over the last 25 couple of years and this Board provided us with direction to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 continue to try to decrease the fees that were associated 2 with the Program to the extent that we could still provide 3 for the health risk maintenance. 4 We got to a point this year in which we were 5 dropping a significant number of facilities. That is why you 6 saw the overall per facility fee go up by 19 percent. 7 You saw the overall fees total fees for the State 8 go down by about 35 percent. 9 CHAIRMAN DUNLAP: Okay. I didn't mean to 10 monopolize that, but I wanted to get that on the table. 11 So, we are reducing, the people are reducing the 12 usage of toxic compounds. They have dropped off the list 13 because they don't need to report and as a result we have 14 reduced our Program commiserate with it, but we still have a 15 core Program we need to fund, is that correct kind of to it's 16 barest element, is that what I am hearing? 17 MR. KENNY: If I could add something, essentially, 18 look at the core Program, the significant facilities that 19 were in the Program last year and you compare that to the 20 facilities that we are proposing for inclusion this year, it 21 dropped significantly. 22 It went from 1,800 facilities that were in the core 23 Program last year down to 800 facilities in the core Program 24 this year. 25 We were also dropping from the industrywide PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 category an additional 3,000 facilities. So, what we are 2 left with really are a core Program of 800 facilities and an 3 industrywide Program of 15,000 facilities. 4 We tried to balance the need to maintain the 5 Program with the desire to reduce fees by working with the 6 OEHHA, get them to reduce their fees down by $150,000 and 7 also by looking at the industrywide fees and increasing those 8 from $15, which is where they were historically, to $25. 9 The combination of those two things allowed for 10 really an additional $300,000 that could then be spread out 11 among the core facilities and that's how we got to the point 12 where we were able to drop the fee increase for the 13 individual facilities from the 63 percent type numbers you 14 heard down to the 19 percent numbers. 15 CHAIRMAN DUNLAP: In looking on page 69 of the 16 staff report, the four local boards represented on our State 17 Air Board here have all dropped their costs. 18 Costs, I guess requirements from fiscal year 96-97, 19 to next year, to this year, 97-98. It looks like they have 20 tightening their belts as well. 21 Okay. So, State fees are going down. 22 Companies have dropped off the list. Individual 23 companies would be paying 19 percent more. 24 Is that short and sweet? 25 Supervisor Roberts. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 BOARD MEMBER ROBERTS: I have some questions and 2 some concerns that I want to get into. Let me start by 3 saying that not only I, but our Air District supports this 4 Program solidly and that we applaud the reductions that have 5 been made. 6 The reductions largely are the result of companies 7 that have made changes and are no longer being regulated in 8 the way that they were and are no longer paying fees. 9 It has been a win, win. They have dropped out and 10 we don't have to watch over them and the fees have gone 11 down. 12 You have heard some industry concerns in terms of 13 the fees. I want to raise a concern that has surfaced in San 14 Diego and was more of a geographic concern. 15 I think, at least for me, it eliminates something 16 perhaps that goes beyond just the fees itself, and that is 17 the science of what it is that we are doing. 18 As I understand it what the staff has done is try 19 to spread these costs based largely on prioritization scores 20 and risk assessment. 21 I don't want to get into questioning that, but it 22 would appear from looking at San Diego's numbers and 23 comparing that to some others, that either we have a 24 disproportionate number of the major polluters, or perhaps 25 the science isn't as exact as I thought it might be. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 I want to give you an example and the numbers have 2 changed somewhat recently and I believe that is probably in 3 response to the concerns that we were raising, but originally 4 we were at some $226,000, which represented a major increase 5 for us in this year of decreases, we were getting a statewide 6 increase not a decrease in spite of the fact that a number of 7 companies everything was going down and we dropped our own 8 costs. 9 The most recent figures represent a slight increase 10 from what we are at last year. 11 But if I were to compare San Diego, for instance, 12 to the Bay Area, the Bay Area has approximately 2.3 times the 13 number of facilities that fall within these regulated 14 categories, and yet San Diego's fees, as near as I can tell 15 from the chart as I look at them, are almost four times what 16 the Bay Area is paying. 17 Now, that would tell you that we probably 18 proportionately have to have seven times the number of major 19 pollutants, or something, something is very off. 20 I, being somewhat familiar with the economies and 21 the industrial infrastructure of both of those areas, would 22 tell it better that just isn't defendable. 23 What I am told, at least through our staff, is 24 that, in effect, perhaps we have been -- our staff in the 25 way they assess these risks have been more conservative. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 Quite frankly we want them to be more conservative, 2 but in order to do that we are being penalized by the way 3 these fees are distributed and perhaps the uniformity 4 statewide with respect to these risk assessments isn't 5 there. 6 I understand that you are leaving things to the 7 local districts, but to find discrepancies of a factor of 8 about seven would lead me to believe that the basic something 9 is wrong here. 10 John, I'm concerned about the distribution of fees 11 representing my district, but as a Air Resources Board 12 Member, I am even more concerned about the basic science that 13 is being used to determine the risks in the variation over 14 these areas. 15 CHAIRMAN DUNLAP: Can I ask you a question, and 16 Mike, you are welcome to try to respond. 17 Ron, does your Board, your staff and Board take 18 action to adopt your own fee schedule, because I don't think 19 that I saw San Diego as one of the seven that were up there, 20 were they, Terry or Mike? 21 BOARD MEMBER ROBERTS: We are not one of the seven. 22 CHAIRMAN DUNLAP: So, you did our your fees 23 locally? 24 BOARD MEMBER ROBERTS: That's correct. 25 We reduced our own fees. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 CHAIRMAN DUNLAP: Mike, can you try and make sense 2 out of that? 3 MR. KENNY: Well, I want to make a couple of brief 4 preparatory comments and then I would like to turn it over to 5 Terry or Linda, but I think you have raised a very legitimate 6 issue with regard to the uniformity statewide and there is 7 not sort of the solid uniformity that I think maybe a lot of 8 people had anticipated. 9 I think that what I would like to do is to have 10 Linda or Terry sort of go through sort of the mechanism by 11 which the different districts do their processing. 12 We can then use that as a basis for further 13 discussion. 14 BOARD MEMBER ROBERTS: The point that I am also 15 making in an area where there is no uniformity you are using 16 that as way to equivalently spread fees. 17 In other words you have built this whole thing on a 18 very shaky foundation. 19 MR. KENNY: Part of the reason for that though is 20 Legislative. I mean the Legislature didn't provide for --. 21 BOARD MEMBER ROBERTS: Let's acknowledge it if we 22 have a problem then and talk about if we need some corrective 23 surgery here, but it hasn't been presented in that way and 24 that is why I wanted to raise this issue with you because I 25 don't think some of my colleagues necessarily understand that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 we rest on something less stable than it would appear. 2 CHAIRMAN DUNLAP: Good point. Supervisor, I can 3 tell you because I testified for the Legislature a couple 4 times this past year on budgets and other items and there was 5 great concern at the Legislature that this success story 6 which was that people were using less air toxics in their 7 manufacturing processes than before was a concern to the 8 Legislature, not so much that it was successful, but they 9 were wondering about it and wanting to know if we were doing 10 all that we can and we provided some assurances about 11 pollution prevention activities and the like. 12 So, it's as things have changed the fees have 13 changed. Mike, you, frankly, you know, to get the support 14 you need out of this Board on this you got to do some work 15 here to make sure we are comfortable with what is happening 16 and why this makes sense. 17 So, Terry why don't you talk a bit about the San 18 Diego, a couple of examples and then talk about the San Diego 19 situation. 20 MR. McGUIRE: Thank you, Mr. Chairman. I will try 21 and address your comments in about the order that you offered 22 them, Supervisor Roberts. 23 Please interrupt me if I am not covering something 24 that you want me to address. You were concerned about the 25 representativeness of San Diego's fees compared to the rest PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 of the State. 2 For another perspective on it, for this years 3 proposal we would recommend that San Diego pick up 13 percent 4 of the statewide fees under this Program. 5 San Diego has about eight percent of the State's 6 population so, that does bear out I think what you said. 7 BOARD MEMBER ROBERTS: That is one of the 8 indicators and I used specifically the citation of San Diego 9 versus the Bay Area. 10 If you want to keep that one in mind, I think it is 11 even more dramatic. 12 MR. McGUIRE: I would like to address that one 13 because I think there are reasons for that apparent 14 disparity. 15 Starting with the baseline of about 13 percent of 16 the fees with eight percent of the population I can move on 17 and explain why I think the Bay Area's fees appear to be so 18 much less compared to San Diego's. 19 As the staff explained, we have established this 20 way of distributing fees in accordance with the law that says 21 two things, it says we must establish the fees based upon 22 facilities risks and it further says that we must establish 23 each facilities risk on the basis of guidelines that have 24 been developed by the California Air Pollution Control 25 Officers Association and approved by this Board, and your PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 Board did approve the most recent version of those guidelines 2 a year ago. 3 In those guidelines they explained how one takes 4 the emissions from a facility and from those emissions and 5 health risk values and information about the facility in 6 general how you compute the risk for that facility. 7 That's expressed in terms of, for example, cancer 8 risks per million. The CAPCOA guidelines are not entirely 9 prescriptive in that those guidelines do provide some wiggle 10 room, if you will, in how you make computations and, in fact, 11 the districts deliberately had written guidelines to provide 12 for districts to make certain decisions about how rigorously 13 they calculated the risks. 14 It is true that some districts elect to be on the 15 conservative side of that wiggle room where as other 16 districts are closer to the more liberal margin of the 17 wiggle room. 18 In fact, in example, in San Diego county, I can 19 give you just two examples, and I don't mean them to explain 20 away large parts of it, but San Diego county first when they 21 compute the scores, the priority scores, the guidelines say 22 that if you have a receptor, a person, exposed to the 23 emissions from a facility, you may adjust the priority score 24 for the distance that the person is from the facility and the 25 further that the person is from the facility the more you can PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 in effect discount the priority score. 2 San Diego county district elects to not use that 3 correction. In other words, even though a facility may not 4 have any receptors living immediately near it the priority 5 score is computed as though receptors were near it. 6 This causes the priority score for many of the 7 facilities in your district to be a little higher than they 8 would be if they were computed by another district. 9 This is a prerogative that is entirely allowed by 10 the guidelines. I can offer you a second one that I think 11 probably explains also why there was the apparent disparity 12 that you cited between the Bay Area fees and the San Diego 13 fees. 14 The way that the regulations are written is that it 15 says, first one uses this priority score as a quick way of 16 assessing risks. 17 It can be computed fairly easily, you take the 18 emissions, multiply them by a risk value correct for a 19 proximity factor that I just discussed and that gets you the 20 priority score. 21 It tends to be conservative by design. That is if 22 one did an actual detailed health risk assessment our 23 analysis have consistently shown that the risks you get by 24 the more full blown health risk assessment will be less than 25 the priority score. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 Most districts in the State, I believe, must, all 2 except about three, have a rule that says if we have a 3 facility whose priority score is greater than 10 that 4 facility will be asked to do a full blown health risk 5 assessment. 6 The Bay Area among others have followed this rule. 7 They have done for many of the facilities in their district 8 the full blown health risk assessment, which has in most 9 cases produced health risks that are substantially less than 10 the priority score. 11 As a result, those facilities now because of the 12 more sophisticated analysis tend to drop right out of the 13 Program. 14 For example, let's see, Linda, make sure I say this 15 right, in San Diego county, I believe about 30 percent of 16 your facilities are in the category whose priority scores are 17 greater than 10. 18 That is a lot higher number than say the Bay Area 19 would have has in that same category, because the Bay Area 20 would have done the more complete analysis and they would 21 have fallen out of the Program. 22 So, our assessment is first that the way of 23 computing the scores and the risks and therefore the fees is 24 consistent with the dictates of the law, and the districts 25 have a certain amount of ability to operate within a range of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 doing that, and our analysis has shown that the districts 2 that have used and interpreted the guidelines a little 3 differently in many cases pay a lot less fees. 4 So, these are options. 5 CHAIRMAN DUNLAP: Now, that is a discretionary 6 element that the San Diego district management chose? 7 MR. McGUIRE: That's correct, Mr. Chairman. 8 CHAIRMAN DUNLAP: So, Mike, interpret that for me 9 relative to the decisions an Air Pollution Control Officer 10 might, the choices that he has and what that means relative 11 to fees and the universe that's included. 12 MR. KENNY: Well, I think that what you see is 13 essentially a situation in which, because the guidelines 14 provide a fair amount of discretion to the individual APCO's 15 around the State, in this particular situation the APCO has 16 made a determination to interpret the guidelines in the way 17 that he thought was best for San Diego county. 18 CHAIRMAN DUNLAP: That had a negative impact on the 19 number of companies that allowed more to stay in possibly 20 than needed to? 21 MR. KENNY: Arguably, yes. 22 CHAIRMAN DUNLAP: And it allowed the fees 23 accordingly to be higher for that district versus the Bay 24 Area's APCO, for example, that did it a different way, 25 reduced the number and reduced the fees? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 MR. KENNY: Correct. 2 BOARD MEMBER ROBERTS: I granted that in the 3 argument that I made, John. I started off by telling you 4 first of all, I repeat, I said, we support this. 5 CHAIRMAN DUNLAP: I know. 6 BOARD MEMBER ROBERTS: Okay. I said, secondly, we 7 take a more conservative view in the way that we evaluate 8 these things. 9 The science is such that, I mean, I can appreciate 10 what you are saying, but when I take the size and the number 11 of facilities, and I'm not trying to single out the Bay Area, 12 but I think it shows us clearly that something is amiss when 13 we an take many times over the number of facilities and end 14 up with a far smaller fee because of decisions that are being 15 made by the individual air boards. 16 You know, you are not talking about what is going 17 into the air so much ultimately, as you are talking about 18 what is happening in terms of those individual decisions. 19 I think that is the concern that I wanted to 20 express to you that leaves me with some discomfort. I don't 21 want to go back and say, you know guys, we have got to change 22 the way that we are doing this, because we really want to 23 work with those companies, perhaps in a little more stricter 24 fashion than is being done in some other districts, but we 25 don't want them carrying a disproportionate amount of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 State fees because we are doing that. 2 That is the dilemma for us. This penalizes the 3 district that really is really doing a, quote, unquote, 4 perhaps maybe a more thorough job, or is more conservative in 5 the application of these rate standards. 6 MR. KENNY: We actually did discuss that among 7 ourselves as a staff and one of the things that we thought we 8 would try to do over the next year is try to look at ways to 9 provide more equity, more uniformity throughout the State 10 with regard to the Hot Spots Program. 11 CHAIRMAN DUNLAP: Good point, Ron. I appreciate 12 that. 13 I know San Diego, the district management and 14 certainly the Board has a strong environmental ethic. It is 15 just a challenge to find the right balance. 16 I think that is what the discussion is about. 17 Supervisor Riordan and then Supervisor DeSaulnier. 18 BOARD MEMBER RIORDAN: There is a second component 19 that was brought up and I recognized doing a full blown risk 20 assessment sometimes is expensive and I don't really know the 21 numbers, but I can recall one that was done in the area in 22 San Bernardino county. 23 Having said that though, maybe in a presentation to 24 the company, it may be in their interest to do that health 25 risk assessment because indeed they may not then be faced PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 with the fees that are facing some of these particular 2 businesses. 3 I don't know, Supervisor Roberts, you would have to 4 ask the numbers and do a comparison, but at least maybe that 5 information ought to be made available to companies and say, 6 okay, here is what it means, you can either do the full blown 7 risk assessment, it may mean that you do not participate then 8 in a program because you will then be judged to be less than 9 what we need to review on this annual basis, or it may not 10 but these are things that might cause a difference and it may 11 be that you don't want to initially require that risk 12 assessment because it is expensive, but it may in the long 13 run be the least expensive for that particular company. 14 BOARD MEMBER DeSAULNIER: That is sort of 15 fascinating to hear that the Bay Area is more liberal in one 16 more thing than San Diego. 17 I would like to agree with Supervisor Roberts, I 18 mean, when I read these numbers I think well that is either a 19 really good thing or a really bad thing. 20 I guess for better understanding for myself as a 21 generalist it seems that the consistency should be greater. 22 So, I agree and it also seems that if there is a 23 difference it should be more based on some physical 24 attributes to the pollution levels rather than to the 25 attributes of the manager or the administrator. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 MR. SCHEIBLE: I would note that once the risk 2 assessment is done and the factors like meteorology come in 3 and the Bay Area has the advantage of the winds blow 4 stronger, more frequently so the risk assessment for the same 5 amount of emissions for the same situation is going to be 6 lower than it would be in southern California. 7 There is a physical difference that accounts for 8 some of this difference. 9 BOARD MEMBER ROBERTS: We are talking about a 10 difference of, a factor of seven. That is a lot of wind. 11 MR. SCHEIBLE: I said some. It's a cold wind, not 12 a hot wind. 13 CHAIRMAN DUNLAP: Say a word about the CAPCOA 14 guidance document, if you would, either Mike or Terry, it 15 doesn't matter, but the point is that I want, the sense that 16 I would like to get is that the Air Pollution Control 17 Officers represented by the Board Members here were involved 18 or not was Summerville there, was Alan Garvey there, I mean, 19 we need to have a sense of who drove that guidance piece and 20 what that represented and meant. 21 MR. McGUIRE: Okay. The CAPCOA, of course, is the 22 Air Pollution Control Officers, the Air Resources Board is 23 not a member at all. 24 We attend a lot of meetings, we work closely with 25 them, but we are not members. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 Does the staff know whether San Diego was 2 represented in the development of the guidelines? 3 MS. MURCHISON: Yes, they were. 4 Actually, the guidelines were developed by a 5 committee that consisted of about 16 representatives from 6 districts, we also had OEHHA staff and the Air Resources 7 Board staff participated in that. 8 Both the guidelines for the prioritization score 9 procedures and the risk health procedures were developed 10 about 1990 and they went through a series of public workshops 11 and actually took public comments and made provisions based 12 on those public comments. 13 San Diego was one of the participants in that 14 effort. 15 MR. McGUIRE: I would like to say two other things 16 because I think they are important. First, the guidelines 17 only effect priority scores, which you recall are the sort of 18 quick way of estimating risks. 19 San Diego includes many facilities who have these 20 high priority scores. If they did health risk assessments, 21 those are subject to the OEHHA guidelines rather than the 22 CAPCOA guidelines and they would be done by a different set 23 of rules. 24 Finally, in response to Supervisor Riordan's 25 comment about the high cost of HRA's, in recognition of that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 your staff has developed a process that we have discussed 2 with many districts, it is a screening health risk 3 assessment, which is something that is between the full blown 4 risk assessment and the priority score which allows one to 5 make more source specific determinations of health risk 6 assessments than can be done with the priority scores. 7 So, there is a good chance that many of those San 8 Diego facilities whose scores are above 10 are probably in 9 the Program, but would not have to be if there were the more 10 sophisticated analysis made on the merits of each source. 11 CHAIRMAN DUNLAP: Dr. Friedman. 12 BOARD MEMBER FRIEDMAN: Well, I have heard very 13 kosher remarks about their standardization and better 14 communication. 15 I don't know where the monies go. I mean, these 16 monies are collected and they go to take care of the cost of 17 assessments and they take care of the cost of handling money 18 and they take care of the cost of the administration. 19 I am resonating to the notion that there are 20 certain industries, metal finishing being one, for example, 21 if you want chrome you have to use chromium. 22 Do we spend amiably? 23 Is there anything in our research portfolio that 24 might help them contain that risk and thereby lower their 25 high visibility in this area? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 Some of the money ought to be used proactively to 2 help reduce the problem not just, if you will, find people 3 because they have a problem that is not under their -- you 4 want chrome you are going to have chromium. 5 So, I just wonder if we do have anything in our 6 portfolio that might address and help that industry? 7 It's a $200 billion a year industry. 8 CHAIRMAN DUNLAP: Mr. Scheible, you have the 9 research program. 10 MR. SCHEIBLE: We actually have developed over the 11 last two years, and are continuing to develop, a series of 12 risk reduction guides, documents, which is kind of a handbook 13 that goes industry by industry in terms of what steps the 14 industry can take to reduce its risk so that it can use cost 15 effective means to not have to notify to get out of the fee 16 paying program and reduce emissions below the level where it 17 has to report. 18 That is part of the requirement that was added a 19 few years ago and it says if you are above a certain point, 20 if you have a significant risk then you have to do risk 21 reduction plan. 22 We have that kind of guidance. In the case of 23 chrome it happens that the cost effective control technology 24 still leaves a residual amount of chrome emissions that 25 because it is so potent we have a significant risk. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 BOARD MEMBER FRIEDMAN: Well, that's exactly my 2 point, Mike. I mean that's current standards of how chrome 3 is handled. 4 What I want to see is some research that would be 5 innovative with respect to how chrome should be handled, or 6 can be handled in the future. 7 It's one thing to have guidelines and it's another 8 thing to do science. 9 CHAIRMAN DUNLAP: Well, I agree with that. Dr. 10 Friedman, just to take you back, perhaps, to a field trip 11 that I took about four and a half years ago to the Palmdale 12 area to the series of aerospace companies that located new 13 manufacturing companies in that area, we saw some very 14 high-tech solutions employed relative to chrome plating and 15 other industrial and chemical processes. 16 I can tell you just from what I learned that day it 17 is very expensive, can be very expensive, to set those 18 systems up, and it can be significantly cost prohibitive for 19 smaller businesses to be able to do that. 20 A lot of these folks have been around for years, 21 many of them are mom and pop shops that have seen their local 22 fees in particular escalate over the last decade, decade and 23 a half. 24 But I agree, Mike, you know, as it relates to some 25 of our research priorities, I think that makes sense. Also PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 technology sharing, we have a technology office, there are 2 summaries that we might prepare of people that are doing it 3 better, and share some of the case studies with the industry. 4 MR. KENNY: We can do both of those things. I 5 think as we look at the research proposals for the future we 6 can try to factor in Dr. Friedman's suggestion. 7 CHAIRMAN DUNLAP: Mr. Parnell. 8 BOARD MEMBER PARNELL: I want to be brief. I 9 rarely miss an opportunity to not talk about things I know 10 very little about, this will be an exception. 11 It just seems to me, not on the subject of the 12 science, but on the subject of the proper role for the Air 13 Resources Board, when it is a coordinated role of sorts and 14 when our inequities and fee distribution brought about by 15 whatever set of philosophies in the Bay Area or in San Diego 16 county that may impact, I think that it becomes obligatory 17 for our Board to say, because you have taken the position 18 that you have taken, you are going to cause an inordinate 19 amount of fee burden and we want you to know that that this 20 is the position that you have taken. 21 I don't know whether that went on, and I don't 22 whether or not, but it seems to me that it's proper role if 23 in fact a lot of these businesses could be exempted out of 24 the Program who are now going to be paying higher fees than 25 would ordinarily be paid. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 I would hope that that kind of dialogue would have 2 gone on in a very specific way. If it was I will feel better 3 about moving on this issue, but it seems to me that our role 4 is coordinative in a great measure, and I hope we didn't 5 overlook something here. 6 MR. SCHEIBLE: Just in response, this year, fairly 7 late in the process, quite a few districts identified a large 8 number of sources that they said qualified for dropping out 9 of the Program. 10 When we heard that we stopped and went back to the 11 districts and said, this is such a large number it causes a 12 lot of these effects in terms of moving the fee burden 13 around. 14 We need to make sure that it's justified. We asked 15 the districts to give us the specific information that 16 technically justified those sources coming out and we 17 reviewed that and found the vast majority of them the 18 technical information was there to support what the districts 19 had said in terms of that as individual sources. 20 It sounds like what we have to do now is go back 21 and look at the sources that are still in the Program and see 22 are there, why is there so much difference around the State 23 there and do that for the upcoming year and figure that one 24 out. 25 BOARD MEMBER ROBERTS: I think that is the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 appropriate action at this point. You know, let's stop the 2 press here. 3 We don't want to do away with the Program, but 4 Mr. Kenny had indicated earlier that perhaps there are some 5 things that could be looked at here as we head into the next 6 year and some recommended adjustments could be made and I 7 would feel comfortable with that. 8 CHAIRMAN DUNLAP: Also, the guidance, should it be 9 updated? 10 We are talking seven years ago. 11 Is there some, the last time the CAPCOA group did 12 this? 13 Can we have it updated? 14 Does it make sense? 15 Is anything changed to where it could be made 16 better? 17 MS. MURCHISON: In terms of the prioritization 18 score guidance I am not aware of any updates. 19 They were developed under the direction of the 20 Board of Directors from CAPCOA. We could make a 21 recommendation to them that perhaps they should review that. 22 CHAIRMAN DUNLAP: Okay. I would like to see if 23 that would help the situation. 24 Supervisor Silva, then Mr. Kenny. 25 BOARD MEMBER SILVA: Thank you, Mr. Chairman. I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 know that the south coast district also supports the 2 reduction and that is really great, but I have a couple of 3 concerns. 4 Would it be possible, or is it common practice for 5 an air district to fail to inform a facility when they 6 become, have a higher prioritization score? 7 How does that work? 8 CHAIRMAN DUNLAP: Mechanically, when their formula, 9 their prioritization scheme changes based upon what is going 10 on with the air toxics generated from that facility, how are 11 they notified? 12 MS. MURCHISON: Each district is responsible for 13 collecting the emission inventory data and doing the 14 prioritization scores. 15 CHAIRMAN DUNLAP: They send out a survey, 16 mechanically, they send out a survey? 17 MS. MURCHISON: Right, to collect the information. 18 CHAIRMAN DUNLAP: Annually? 19 MS. MURCHISON: That's correct. 20 CHAIRMAN DUNLAP: And they would be asked to 21 provide some numerical information and some records and 22 then? 23 MS. MURCHISON: The actual toxic emission 24 inventories are only required to come in every four years 25 actually and the district does prioritize the facility at PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 that time. 2 Many districts will hold public workshops with 3 their facilities to talk about the procedures in which they 4 do the prioritization scores and, in fact, those procedures 5 have to be approved by the local boards. 6 So, it is through that mechanism that most 7 districts inform their facilities of what their scores would 8 be and what the process would be. 9 Not all districts notify the facilities in writing 10 as to what the actual score is going to be used in the fee 11 regulation. 12 CHAIRMAN DUNLAP: Should we make a recommendation 13 that that happen as part of the letter that we have asked Mr. 14 McConachie to help us with, perhaps, should we add that? 15 MS. MURCHISON: Sure. 16 BOARD MEMBER SILVA: Okay. Another concern, I 17 appreciate that, thank you, Linda. 18 The facilities in a program that are not a higher 19 risk, or even may be a lower risk, they still have to pay a 20 higher fee than they did last year. 21 MS. MURCHISON: If the fee rates for each category, 22 if the facility stays in the same category the fee rates in 23 that category have gone up 19 percent. 24 BOARD MEMBER SILVA: I have a problem with that. I 25 understand that the process in southern California when we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 had the water shortage they asked all the citizens to use 2 less water. 3 When we did our water fees went up because we used 4 less water and this is kind of the same situation here. 5 I just have a problem asking people to really cut 6 back so we can charge you more. 7 MS. MURCHISON: I understand. We are sensitive to 8 that. 9 I think it is also important to note that last year 10 we had 1,800 facilities, core facilities in the Program, and 11 this year we have 800, so there a thousand facilities that 12 will pay zero fees this year, so they had a substantial 13 reduction obviously. 14 The remaining 800, the ones that pose the highest 15 risk are the ones that remain in the Program. 16 BOARD MEMBER SILVA: You did a very good job 17 briefing me, I think it was last week. I had a problem with 18 it then, and I still do, I understand where we are coming 19 from, but I probably will be casting a no vote. 20 BOARD MEMBER RAKOW: Would you like to run for our 21 local board? 22 CHAIRMAN DUNLAP: Okay. 23 BOARD MEMBER RAKOW: Okay. I had a problem, which 24 might be indicative of more of a statewide problem with the 25 letter from Praxair, that indicated that a lack of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 communication between what information they were getting to 2 SCAQMD and what information that district passed on to the 3 air toxic group was, according to this letter, accountable 4 for their lack of information of what their fees would be. 5 They thought that they were directly in compliance, 6 it is next to last paragraph. They are suggesting that there 7 be some kind of notification and then perhaps a correction 8 period to resolve any disagreement between what their data is 9 and what the group is. 10 CHAIRMAN DUNLAP: I think we could add that to the 11 communication. Indicate if there has been some change or 12 that there needs to be some verification, some back and forth 13 to make sure that people are working on the same set of 14 numbers and the same presumptions. 15 BOARD MEMBER RAKOW: Sounds like the left hand and 16 right hand were not there. 17 CHAIRMAN DUNLAP: Right. One thing that has 18 emerged though and was mentioned a moment ago about the 1,800 19 sources being shrunk to 800 sources over the course of a year 20 or so, that is a remarkable achievement. 21 I think any time a company, individual sources 22 saddled with the moniker of toxic in some way, they want to 23 do something about it and I think that seeing those sources 24 reduced is very positive. 25 We are talking about a core Program here and they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 would probably be shrinking over time. 2 BOARD MEMBER RAKOW: One other quick thing. 3 Do any of these districts have an appeal process 4 once the fee is set? 5 CHAIRMAN DUNLAP: I'm not sure. 6 Are you aware of any appeal process? 7 MS. MURCHISON: I am not aware of any formal 8 appeals process. I know the districts staff are very 9 receptive to speaking to the facilities, in fact, we often 10 help facilitate that discussion when a facility receives an 11 invoice that they disagree with. 12 We often have a three-way discussion trying to 13 resolve and ensure that the best information was used at that 14 time. 15 MR. KENNY: Just to follow that one a little bit. 16 There is somewhat of an informal and really different appeal 17 process, which is that to the extent that the facility is 18 closed, or to the extent that we have, as Linda says, a 19 three-way discussion with them, it is possible that the fees 20 are adjusted in terms of what is eventually remitted to the 21 State Air Resources Board. 22 CHAIRMAN DUNLAP: Okay. Joe and then Lynn. 23 BOARD MEMBER CALHOUN: The point that Mrs. Rakow 24 made just a few moments ago about the letter from Praxair, 25 the complaint that they made was, if I could recall, the same PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 complaint the last time this particular Item was before the 2 Board, where it seems as though a different group within the 3 same agency aren't working from the same set of information. 4 We want to make sure that we communicate better. 5 CHAIRMAN DUNLAP: Okay. Lynn. 6 BOARD MEMBER EDGERTON: Mr. Solganik, in his 7 testimony for the Metal Finishing Association, indicated that 8 some of his members in that Association have experienced a 9 thousand percent increase, but the staff information is that 10 the increase is about 19 percent. 11 Can you comment on that? 12 MR. SCHEIBLE: I think that is not this year's 13 fee. That would be a source that was in a low risk category 14 and when the risk assessment came in they jumped to a higher 15 risk category. 16 The other thing that happened was when we 17 implemented the Legislation that said go from criteria 18 pollutants to risk sources that had low emissions of criteria 19 pollutants, but high toxic risk often show this, saw great 20 increases, where sources that had high emissions of SOKS or 21 NOXS, but relatively low levels of toxics saw great 22 reductions. 23 CHAIRMAN DUNLAP: Lynn, he's come up with the 24 answer directly. 25 MR. SOLGANIK: Some of our members had fees that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 were not new risk assessments. Their fees were at $300 or 2 $400 and went to $3,000 or $4,000. 3 MS. MURCHISON: Yeah. I think that the invoices 4 that he has reflect upon when there was a change in the 5 method. 6 A couple years ago this Program, the fees was based 7 on where a facility was in the Program. Whether or not they 8 were in a reporting phase, whether or not they were doing the 9 risk assessment phase, it was a workload kind of a Program. 10 The Legislation required that we go to risk based 11 Program, so there was a change in the method last year for 12 the first time. 13 Sometimes, I think, the changes, the increases are 14 a result of the change in method as we went from one that was 15 more process related to a risk based method. 16 CHAIRMAN DUNLAP: Okay. I would like to wrap this 17 up and try and get a vote. One thing, yes, Supervisor 18 Roberts. 19 SUPERVISOR ROBERTS: Sorry to interrupt, just an 20 observation. The dramatic changes that you saw in the 21 numbers this year, and assuming that perhaps some other 22 districts are going to follow on in subsequent years, it 23 seems to me that what's important also is the relationship 24 between those businesses that are going to be left in that 25 more regulated category as compared to those in the general PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 group in that we really need to look at the actual costs that 2 are attributed to each of those and make sure that general 3 fee reflects that, because as you get down to smaller and 4 smaller numbers you are going to have larger and larger 5 problems with respect to explaining that if those costs are 6 distributed, and it may mean that adjustments have to be made 7 in that other fee. 8 CHAIRMAN DUNLAP: I think as we get down to the 9 decision in a minute I will be happy to try to summarize and 10 distill those things with your concurrence. 11 Just so we are fair here, if I may wrap something 12 up, perhaps, while the Board is concerned about equity, and 13 fairness, and predictability and being able to show value for 14 fees, let's make sure that we remain focused on the fact that 15 California society as reflected through this Legislation in a 16 series of bills and the Governor's action on those bills sees 17 reduction of use of hazardous or toxic substances to be a 18 priority and that there is a reason for this Program to be 19 able to identify these substances, let the community be aware 20 of them and encourage them to reduce them. 21 That is the goal. Fees that support a regulatory 22 effort to ensure that those things occur, while some people 23 might argue an unnecessary byproduct of regulation, are 24 absolutely essential for us to be able to do our job and I 25 just want to assure, the staff has seen it, but my Board PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 Member colleagues that when I go with the Chairman of this 2 Board before the Legislature and talk about budgets, I am 3 getting asked questions about the dollars we have deployed in 4 this area, what we are doing with them, do we need more and 5 what can they do to help us have the most effective program 6 that we can to incur those reductions of generation of toxic 7 air contaminants. 8 So, this is a priority. I am pleased to see the 9 staff reflecting this Board's priorities in reducing the 10 dollars we are spending to implement this Program as the 11 source is reduced. 12 We have done a good job here. I think our has 13 staff reflected that. 14 Mike, you deserve some kudos for that, from 15 dropping it by a third. 16 That is important. That doesn't happen in 17 Government often. 18 I need to acknowledge that. What I would like to 19 do is ask staff to take a minute and summarize those few 20 letters that we had. 21 I didn't see an awful lot, what was the total 22 number, Linda? 23 MS. MURCHISON: There were five letters. 24 CHAIRMAN DUNLAP: Okay. We have heard about, is it 25 Praxair? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 MS. MURCHISON: Two of those people have testified 2 already. 3 MR. ROSENKRANZ: Okay. So we will dispense with 4 those and get to the remaining three. 5 So, one that we probably haven't covered is from 6 the San Diego Industrial Environmental Association and they 7 expressed some of the same things that Mr. Roberts did. 8 They wrote to the staff of the ARB and they are to 9 be applauded for their efforts to control and reduce the cost 10 of the Hot Spots Program. 11 Sandy Newt, i.e., would also like to see the 12 program sufficiently funded to ensure and support the ARB and 13 OEHHA provides the districts and the public and the 14 regulating community. 15 CHAIRMAN DUNLAP: Okay. We're fine. 16 Supervisor Roberts has been through that issue. 17 MR. ROSENKRANZ: Well, there is one more. Mr. Hal 18 Stocker, the Chairman of the Feather River Air Quality 19 Management District, he expressed concern about the increase 20 in the State portion of the Program. 21 He also recommends that other sources of funding be 22 explored to use to supplement the Hot Spots fees and the 23 State cost. 24 Mr. Stocker's letter was written prior to the 25 current district allotment. The state cost was proposed and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 the districts allotment has been reduced somewhat under the 2 current schedule. 3 Beyond that the districts increase is due to the 4 district bringing facilities into the Program that were not 5 in the Program before. 6 Mr. Stocker's suggestion that we find other sources 7 of funding, the Legislature requires that this Program be fee 8 based and unless there is a change in the Legislation, we 9 must continue to develop the regulation as such. 10 CHAIRMAN DUNLAP: Is that it? 11 All right. I will now officially close the record 12 on this Agenda Item. However, the record will be reopened 13 when the 15 day notice of public availability is issued. 14 Written or oral comments received after this 15 hearing date and before the 15 date notice is issued will not 16 be accepted as part of the official record on this Agenda 17 Item. 18 When the record is reopened for a 15 day comment 19 period the public may submit written comments on the proposed 20 changes which will be considered and responded to in the 21 final statement of reasons for the regulation. 22 Ex parte communications, just a reminder to the 23 Board Members of our policy concerning communications. While 24 we may communicate off the record with outside persons 25 regarding board rulemaking, we must disclose the names of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 those contacts and the nature of the contents on the record. 2 Do my Board Member colleagues have anything to 3 report? 4 All right. Very good. 5 We have before us a resolution that I would 6 97-41. I would like to append that resolution to include 7 several items, attempting to summarize my Board Member 8 colleagues concerns. 9 Number one, I think we need to have a communication 10 that goes to the local air districts that encourages them, 11 asks them pointedly to improve their communication with those 12 folks that have to register and that are subject to paying 13 the fees. 14 We want to have a process that is a back and forth 15 process relative to the data that they submit that would 16 change their status. 17 We also want to have communication go to CAPCOA 18 from Mr. Kenny that would ask them to consider looking at 19 that guidance that dates from the 1990 time period, that 20 looks at determining equity and the calculation that goes 21 into giving them -- what did you say, Mike? Priority 22 scores, excuse me. 23 Also, we want to have, I think, some coaching 24 perhaps, discussion, technical assistance provided to the air 25 districts if they desire to familiarize them with what they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 can do to reduce fees and perhaps realize some efficiency 2 within their own organizations relative to what they need to 3 do to meet the spirit and letter of the law here. 4 I am also appreciative of Supervisor Roberts views 5 about in his community they would rather I think err on the 6 side of being protective, perhaps going beyond what would 7 maybe be required in a minimal program and doing a bit more 8 not more. 9 That is not to be discouraged, but certainly they 10 need to know the ramifications of their decisionmaking 11 relative to cost and what it might mean to rest of the 12 Program, the burden that they would shoulder. 13 Did I sum that up? 14 Was it broad enough? 15 Supervisor Silva, I appreciate your comments. I 16 would encourage, perhaps, in passing, I'd put your staff 17 through the paces relative to the updating of the data. 18 I know that they are a big district and they 19 updated the data recently which kind of thrown through the 20 allocation issue into a crisis mode for a few weeks, but I 21 think ultimately it worked out well, they reduced a 22 significant number of sources there. 23 Ron, did I capture it? 24 BOARD MEMBER ROBERTS: Your last comment scared me 25 because I thought Mr. Kenny said that in this intervening PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 year, this next year, he would work with us to see if there 2 was maybe some method that would be more equitable in the 3 ways that these fees are distributed and I didn't hear you 4 say that. 5 I heard you say, let them know if they are going do 6 this they are going the pay the price and that isn't exactly 7 what I was looking for. 8 CHAIRMAN DUNLAP: We will append it. 9 Do you want say it better, Mike or Supervisor 10 Roberts? 11 MR. KENNY: What I suggested doing is that we did 12 look at this issue over the last couple of months. The fact 13 that there was less than sort of consistent equity throughout 14 the State and to the extent that there are benefits coming 15 from operations in which health risk assessments are being, 16 let me restart. 17 We did basically look at this issue over the last 18 several months and we did think that there was a benefit to 19 some of the things that were happening in San Diego to the 20 and extent that we can provide for greater equity throughout 21 the State we think there is some benefit to that. 22 CHAIRMAN DUNLAP: I mean, the one thing that's 23 difficult and I why I am grateful that this Board has local 24 district representation, is, you know, and I have appreciated 25 the balance that we have had here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 I have never heard anyone look out for their own 2 district instead of the State. I mean we come here, we wear 3 State hat, but at the same time Mike, I want to caution you 4 and the staff to make sure that we don't get in a position 5 where we have a budget being balanced in a way that would 6 offend or that would seem to be unfair for other districts. 7 It is a tough thing to do. I need you to do with 8 the utmost care and sensitivity. 9 MR. KENNY: I don't disagree with that. I think 10 what we really want to do is try to provide for greater 11 uniformity throughout the State, and I think as Mr. Parnell 12 said, provide sort of a leadership for all the districts such 13 that instead of having a wide amount of discretion that's 14 available to the districts in terms of how they implement the 15 Program they have more limited discretion with regard to 16 helping them with the burden. 17 CHAIRMAN DUNLAP: That is fine. With that 18 amendment to the resolution that was said in combination 19 between me and Mike with Supervisor Roberts caution and 20 focus, I would entertain a motion to move resolution 97-41. 21 BOARD MEMBER PARNELL: As amended. So moved. 22 BOARD MEMBER RIORDAN: I will second the motion. 23 CHAIRMAN DUNLAP: Mr. Parnell made the motion. 24 Mrs. Riordan seconded. 25 Any other discussion? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 All right. We will proceed with a voice vote. 2 All those in favor, say aye. 3 Any opposed? 4 CHAIRMAN DUNLAP: Okay. Very good. 5 Motion carries. 6 Thank you. Thank you staff for a good job. 7 I appreciate the time you put in on this effort and 8 encourage you to follow-up. 9 All right. Let's move to the next Item, 97-9-2, 10 Hairspray Credit Program. 11 It's a public hearing to consider adoption of a 12 hairspray credit effort. The next Item for our consideration 13 is a proposed regulation establishing a hairspray credit 14 program and related amendments to the California consumer 15 products regulations. 16 Staff was directed by the Board at our March 27, 17 1997 hearing to develop such a program to encourage and 18 reward the development of hair spray products that comply 19 early with the second tier 55 percent VOC standard. 20 You may recall at that meeting the Board delayed 21 the effectiveness date of the standard by 17 months from 22 January 1, 1998 to June 1, 1999. 23 We did this in response to staff's determination 24 and industry testimony that many hairspray manufacturers need 25 additional time to complete development of consumer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 acceptable hairspray products. 2 However, the Board also wanted to acknowledge 3 efforts by companies to meet the original effective date and 4 to encourage the introduction of compliant products by the 5 new effective date. 6 To this end staff has worked with all interested 7 parties and prepared a proposed hairspray credit reg and 8 related amendments to the consumer products regulations. 9 If these regs are approved by the Board credits 10 could be used by the generator of the credits or sold to 11 other consumer product manufactures to meet certain 12 requirements of existing California consumer product 13 regulations. 14 Mr. Kenny, this was one case where you were looking 15 to do the impossible. Satisfy folks that have been 16 aggressive and readied themselves to meet the target date and 17 others that felt they needed more time. 18 The Board asked you to find a way to reward, or 19 give them credit for the early folks and the folks that 20 needed more time to not be overly harsh. 21 So, let us hear from you and see how you have 22 done. 23 MR. KENNY: Well, I will leave it to the Board to 24 determine whether we actually maybe did the impossible. 25 We did take a stab at it. First, I would like to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 say that we were pleased to receive the Board's direction to 2 develop an early emission credit trading program for 3 hairspray, because we view this as an opportunity to 4 incorporate additional market based incentives into the 5 ARB's, Consumer Products Program, which as you know has 6 several incentive aspects to it already. 7 We think this will have a beneficial impact similar 8 to those of the Alternative Control Plan Program which 9 adopted by the Board in 1994. 10 The proposed credit program provides additional 11 flexibility to consumer product manufacturers and to 12 marketers to meet regulatory requirements at a lower cost. 13 This can occur at the same time that we preserve 14 the ARB's commitment and the State Implementation Plan for 15 Emission Reductions from Consumer Products. 16 Emission reduction credit programs are based on a 17 simple concept. A regulated source of emissions and reduces 18 its emissions below the level required by law and certifies 19 the emission reductions as credits. 20 The company may then use the credits to meet its 21 obligation for emission reductions from other regulatory 22 requirements or may sell its emission reduction credits to 23 other companies. 24 The system increases flexibility by providing 25 additional methods for compliance. The staff work with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 interested parties to develop a credit program for 2 hairsprays. 3 It became apparent there could be two distinct 4 methods for companies to create credits. First, as the Board 5 originally directed, credits could be generated by companies 6 that complied early with 55 percent VOC standard. 7 Second, a greater incentive to participate in such 8 programs could be created if products with VOC below 55 9 percent, that is products that over-comply with the standard, 10 could qualify for additional credits. 11 Therefore, today's staff is presenting a Hairspray 12 Credit Program that rewards and provides incentives for early 13 compliance and over-compliance with the 55 percent VOC 14 standard. 15 The Program was developed with interested parties, 16 hairspray and other consumer product manufacturers, their 17 suppliers, trade organizations and the U.S. EPA, who 18 expressed various goals for the program. 19 Staff found the different perspectives very 20 valuable and was able to incorporate many specific 21 suggestions into the proposed program. 22 As a result, staff has crafted a program that will 23 be effective in promoting the following goals: Reward early 24 compliance with a 55 percent standard, provide an incentive 25 to over-comply with the standard and ensure that all credits PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 are for verified surplus emission reductions, provide 2 flexibility to participants, assure early availability 3 credits, maximize the uses the for the credits and last, 4 preserve the emission reductions from consumer products 5 committed to in the SIP, and obviously not least. 6 I would now like to call upon Ms. Judy Yee, of the 7 Stationary Source Division to present to you the proposed, 8 impossible, Hairspray Credit Trading Program. 9 Judy Yee. 10 MS. YEE: Thank you, Mr. Kenny, Chairman Dunlap and 11 Members of the Board. 12 Today we will introduce to you the proposed 13 Hairspray Credit Program by answering some commonly asked 14 questions. 15 Let's begin by answering the question, what is the 16 Hairspray Credit Program? 17 As Mr. Kenny mentioned, this is an emission 18 reduction credit program that provides additional flexibility 19 to consumer products businesses to meet California 20 regulations. 21 The Program is limited to consumer products arena. 22 There will not be interchangeability with existing credit 23 programs. 24 It is important to note that this is not a 25 mandatory program. ARB is not required by any State or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 Federal law to develop such a program and businesses 2 participation in the program is entirely voluntary. 3 It will be market driven. That is, if the creation 4 and/or use of credits will lower a businesses compliance 5 cost, that business is likely to choose to participate in the 6 Program, otherwise the business will not participate. 7 The Hairspray Credit Program contains requirements 8 for both the creation and use of the credits. Earlier credit 9 programs established under stationary source permitting 10 programs, such as New Source Review, established core 11 criteria for credits including the requirement that credits 12 must be for surplus emission reductions. 13 What are surplus emission reductions? 14 Surplus emission reductions are emission reductions 15 not required by existing State or Federal regulations. That 16 is a business has chosen to lower its pollutant emissions to 17 a level below what is required by law. 18 Nor must our plans for attaining the air quality 19 standards, such as our State Implementation Plan, which is 20 our blue print for achieving healthy air in the next century, 21 rely on these emission reductions. 22 The next slide addresses the opportunities 23 hairspray businesses have to create surplus emission 24 reduction for credits. 25 What type of hairspray will be able to generate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 surplus emission reductions and qualify for credits? 2 As Mr. Kenny mentioned, the proposed program that 3 we are presenting to you today acknowledges and encourages 4 the extra efforts made by manufacturers who have available to 5 the California market hairsprays with VOC content of 55 6 percent, or lower. 7 Therefore, a business will have the opportunity to 8 create surplus emission reductions for credits if it has a 9 hairspray product with 55 percent VOC content, or lower for 10 sale in California, or if a business introduces a 11 reformulated, or new product with 55 percent VOC content or 12 lower for sale in California before June 1, 1999. 13 After June 1, 1999, only hairspray products with 14 less than 55 percent VOC levels may generate surplus emission 15 reductions for credits. 16 At this point, I would like for us to take a 17 broader look at the Hairspray Credit Program. Let's begin by 18 reviewing how was the program developed. 19 As mentioned earlier, the direction given to us by 20 the Board at its March 19, 1997 hearing was our starting 21 point. 22 Since that date we have held five formal meetings 23 and consulted extensively with interested parties, which 24 include hairspray and consumer products manufactures, their 25 suppliers and their associations and the U.S. EPA. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 In response to their comments and suggestions, we 2 have provided a program that is flexible, and simple to 3 implement as possible. 4 We also made every effort to be consistent with 5 Federal guidance for voluntary emission reduction credit 6 programs. 7 How will the Hairspray Credit Program be 8 administered? 9 Air Resources Board staff will administer all 10 aspects of the Program. We will provide guidance to 11 potential Program participants to review the submitted 12 applications. 13 The Executive Officer will approve applications for 14 credits and applications to use credits. ARB staff will 15 monitor the Program's effectiveness by reviewing information 16 that applicants will be required to submit before and after 17 application approval and through periodic evaluation of the 18 implementation of the Program as a whole and including annual 19 credit creation and use activity. 20 The ARB will not be charging application fees or 21 any other Program fees. Businesses that are considering 22 participating in the Hairspray Credit Program should consider 23 when can credits be created and used. 24 If the Board approves the proposed regulation today 25 surplus emission reductions occurring between January 1, 1998 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 and January 1, 2,005, may qualify as credits. 2 Credits will have a mixed life, generally a five 3 year period from the date of issuance. However, credits 4 issued early in the Program before January 1, 2,000, will be 5 given an expiration date of January 1, 2,005. 6 This was done to maximize credit availability for 7 upcoming consumer products VOC standards. However, all 8 outstanding credits will expire after January 1, 2,010. 9 Creditholders will not be able to use credits after 10 that date. This is to preserve ARB State Implementation Plan 11 commitment. 12 Let's move to an overview of the procedural 13 requirements of the proposed program. 14 What is the process established by the Hairspray 15 Credit Program for awarding credits and using credits? 16 For credits, of course, a business must first 17 manufacture for sale, or have plans to manufacture for sale 18 in California a 55 percent VOC, or less, hairspray that will 19 provide the surplus emission reductions. 20 To receive the credits that business must submit an 21 application to ARB staff. For credit creation staff's review 22 of the application will focus on verifying the low VOC level 23 of the hairspray and whether the applicant has adequately 24 demonstrated that the proposed method for determining product 25 sales is valid. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 For credit use, our focus will be on whether 2 emissions estimates are calculated correctly and if 3 sufficient credits have been provided. 4 Upon approval of the application for credits by the 5 Executive Officer the credits will be issued to the 6 applicant. 7 The proposed Hairspray Credit Program also contains 8 enforcement provisions along with reporting requirements. 9 These provisions are intended to ensure that credit 10 issuance and use will be consistent with the Program's 11 requirements and goals. 12 What are the allowable uses of the Hairspray Credit 13 Program credits? 14 The Program's intent is to allow as much 15 flexibility as possible. However, as mentioned earlier, use 16 will be limited to the consumer products arena. 17 The amendments to the California Consumer Products 18 Regulations that we are proposing today will allow the use of 19 the credits as an alternative method to comply with certain 20 consumer product requirements. 21 Staff believes that the primary use of the credits 22 will be to provide a manufacturer with additional time to 23 meet upcoming VOC standards for one of its products. 24 The manufacturer will provide credits generated 25 from this Program in sufficient quantity to mitigate any PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 excess emissions which occur from a product not meeting the 2 standard. 3 Additionally, credit owners may hold on to the 4 credits for possible future use, or trade, or sell the 5 credits. 6 Credits may even be retired before their expiration 7 date for an environmental benefit. In fact, ARB staff 8 assessment is that the proposed Hairspray Credit Program as a 9 whole should have an overall benefit on the environment. 10 ARB staff has determined that the Hairspray Credit 11 Program will primarily benefit the environment, because the 12 Program will encourage the early introduction of low VOC 13 hairsprays reducing VOC emissions from the single largest 14 category of consumer products in advance of the effective 15 date of the Hairspray Standard. 16 This extra effort by the hairspray manufacturers 17 will additionally benefit, accelerate the development of low 18 VOC technology and promote on time compliance with the 55 19 percent standard by the remainder of the industry. 20 Also, it is staff's understanding from discussions 21 with interested parties that consist with current business 22 strategies they are likely to use their credits 23 conservatively, potentially resulting in more credits being 24 created than are used. 25 This will result in an additional environmental PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 benefit. 2 In summary, staff believes that the proposed 3 Hairspray Credit Program will benefit both ARB and interested 4 parties. 5 The Program is voluntary and flexible. It provides 6 consumer product manufactures with more options for complying 7 with California consumer products regulations. 8 It encourage and rewards hairspray manufacturers 9 that to make the extra effort to introduce low VOC early and 10 hairsprays with lower VOC levels than required by the 11 California standard. 12 Furthermore, the proposed Program will accomplish 13 these goals while preserving ARB's commitment in the State 14 Implementation Plan. 15 Finally, in response to comments received from the 16 U.S. EPA, staff is suggesting several changes to the proposed 17 regulation. 18 The suggested changes are provided to you as an 19 Attachment B to the proposed resolution. Copies have been 20 provided at the back of the room and you should have a copy 21 before you. 22 Staff considers the majority of these changes to be 23 technical and clarifying in nature. Staff is proposing to 24 add clarifying language to the Purpose Section of the 25 Regulation to indicate that the purpose of the Program is to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 benefit both the environment and regulated entities. 2 Staff is proposing a Program baseline date of 3 October 11, 1990, the date the Board originally adopted the 4 consumer products regulation pertaining to hairsprays. 5 This would allow only hairspray products 6 reformulated or introduced after the adoption date of that 7 regulation to participate in the Hairspray Credit Program. 8 Staff is proposing to add a new section to the 9 proposed regulation that specifies that the Executive Officer 10 will perform periodic Program evaluations and report the 11 results to the U.S. EPA. 12 Staff is proposing technical changes to the 13 definitions of the State Implementation Plan and Surplus. 14 Staff is also proposing language to clarify that 15 State law for disclosure of public records is applicable only 16 to the ARB and is not applicable to the U.S. EPA. 17 Staff will be drafting specific language to 18 implement these suggested changes and will make the language 19 available for a 15 day public notice period. 20 Therefore, staff is also proposing to make 21 additional modifications to the regulatory language as needed 22 to implement the suggested changes. 23 The staff recommends that the Board approve the 24 proposed Hairspray Credit Program regulation and the related 25 amendments to the California Consumer Products Regulations PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 contained in Attachment A as modified by the suggested 2 changes in Attachment B. 3 This concludes our presentation. At this time we 4 will be happy to answer any questions that you may have. 5 CHAIRMAN DUNLAP: Okay. Thank you. 6 We appreciate that. Why don't we go to you, 7 Mr. Schoning, Mr. Ombudsman, and talk to us a bit about the 8 process prior to today by which this Item came to the Board. 9 MR. SCHONING: Thank you, Mr. Chairman and 10 Members. In March when you adopted the regulation for 11 reducing VOC emissions from consumer products you likewise 12 directed staff to develop this credit program, which is 13 before you this morning. 14 Since March that has conducted two formal 15 discussion meetings, three conference calls and more than 15 16 individual telephone calls and meetings with a wide range of 17 interested parties. 18 These include representatives from CTFA, the 19 Consumer Cosmetic Toiletry and Fragrance Association, the 20 Gillette Company, Proctor and Gamble, Helene Curtis, the 21 National Aerosol Association, DuPont Products, the United 22 States Environmental Protection Agency, Sacramento 23 Metropolitan Air Quality and many others representing 24 consumer products and raw material manufacturers. 25 This regulation together with the workshop and the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 Board hearing notices were made available over the Internet 2 and sent to more than 2,800 interested and affected parties, 3 including environmental groups, emission credit brokers, 4 small businesses and government agencies. 5 As you can see staff has provided stakeholders 6 considerable opportunity to participate in the Item before 7 you today. 8 CHAIRMAN DUNLAP: Okay. Mr. Schoning, thank you. 9 I appreciate that summary. One of the things, just 10 a reminder to some of the newer Board Members, Jim has been a 11 relatively recent addition to the team here at the Board and 12 we have asked him to not so much look over the shoulder of 13 our staff, but to talk to us very candidly and provide a 14 summary about how the staff did relative to outreach, what 15 groups have been contacted, what is the process that they 16 went through. 17 That has done an awful lot to help me have more 18 comfort in that we have done the outreach so necessary to 19 have successful regulatory programs. 20 Thank you, Jim. I appreciate that. 21 All right. Why don't we hear, if the Board is 22 okay, I will give you a minute, Lynn on that item that you 23 want to cover, but I would like to hear in Mr. Mattesich. 24 Jim, would you come forward. You are our sole 25 witness today. Mr. Mattesich is an attorney who represents PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 the Cosmetics, Toiletries and Fragrance Association. 2 He has become a familiar face to us here on 3 consumer product issues. 4 MR. MATTESICH: Thank you, Mr. Chairman. As you 5 stated, Jim Mattesich, for CTFA. 6 Some of you are new to the Board and most of you 7 know CTFA is made up of about 500 companies, national and 8 international companies that manufacture personal care 9 products, hairsprays being one of them, but all other 10 personal care products that are sold across this country and 11 around the world. 12 Mr. Chairman, you will find it no small irony that 13 I am not only speaking on behalf of CTFA, but I was asked 14 yesterday to speak on behalf of another company with whom you 15 are familiar and that is DuPont. 16 CHAIRMAN DUNLAP: That is tremendous progress, 17 Jim. I would have never guessed that. 18 MR. MATTESICH: I can't resist the temptation to 19 tell you that DuPont has become a member of the CTFA 20 recently, given the circumstances that we last faced, I 21 wanted to mention that to you. 22 I just have a few short points. First of all, CTFA 23 appreciates the extra effort that staff has gone through to 24 bring this before you. 25 As an example of that I just wanted to tell you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 that I was feeling sort of like a martyr this morning because 2 I needed come in and do some other work before this hearing 3 and so I got to the office at 7:15. 4 Feeling as a martyr and a little righteous, but 5 your staff according to the fax time code, at 7:13 faxed me a 6 document, so they had been here earlier than I expected, but 7 the document becomes relevant later in my comments, but it is 8 an example of the perseverance and the hard work that they 9 have gone to in this particular instance. 10 CTFA supports the concept that's before you in 11 terms of this Hairspray Credit Program. We want a program 12 that works, we want a program that plays by 1-1-98, which is 13 the proposal. 14 If it's done right it will provide industry with 15 the flexibility that staff talked about in the presentation, 16 necessary flexibility. 17 It can be a win, win for industry and this Board 18 and for clean air in California and we recognize that and we 19 appreciate it. 20 We would like very much to be able to stand here 21 this morning and tell you that we support the particular 22 proposal in front of you, but the problem is that there isn't 23 an exact particular proposal in front of you, mostly because 24 the faxes, a copy of a letter from U.S. EPA, raising a number 25 of concerns, which staff had been diligently working and we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 intended to work out as well, but when they faxed you 2 something last night -- 3 CHAIRMAN DUNLAP: What is the date and code on the 4 that fax, just for the public record, Mr. Mattesich? 5 MR. MATTESICH: It was covered by your 7:13 a.m., 6 but I think it was something like 20:18 last night. 7 CHAIRMAN DUNLAP: So, that is eight o'clock last 8 night? EPA saw fit to send us their comments on this. 9 MR. MATTESICH: Right. The comments raised some 10 problem areas which staff is familiar with, but is leaving us 11 in a dilemma of not being able to tell you that we support 12 the proposal because they are demanding changes some of which 13 if you deem to make would be a problem for us. 14 CHAIRMAN DUNLAP: Jim, could I ask, this staff 15 proposal, are you supportive of the original staff proposal? 16 MR. MATTESICH: The proposal that we have seen thus 17 far, and I will tell you in a minute why I have to walk a 18 fine line, the proposal that we have seen thus far from staff 19 is probably going to be an acceptable proposal to us and 20 staff has had recognize and pointed out to that they need a 21 15 day notice period and they need to draft some additional 22 language, the devil always being in the details. 23 I am a paid advocate, but if I stood up here today 24 and told you that we support something that I haven't read, 25 my client hasn't read, I would quickly be an unpaid advocate. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 CHAIRMAN DUNLAP: Right, and we wouldn't want that, 2 Jim. 3 MR. MATTESICH: No, certainly not. So, we 4 understand the process and we understand where you are 5 going. 6 We think that we are going to be able to ultimately 7 support the document that gets produced, but I can't stand 8 here today and tell you that we will support something that 9 we have not yet seen. 10 CHAIRMAN DUNLAP: Okay. Fair enough. 11 If you would, and I don't want to take away your 12 train of thought, but I think we might be able to get to this 13 pretty quickly and I know you would like to make sure it is 14 done quickly and accurately. 15 If you could give us the key points that you want 16 to caution us on as we consider whether or not we are going 17 to accommodate at this juncture U.S. EPA's concerns. 18 I would be grateful. 19 MR. MATTESICH: The two that we knew about before 20 the letter came in that we are quite familiar with, I want to 21 talk about, they have indicated in their letter that there 22 are now five provability issues, we only knew about two 23 provability issues before 7:13 this morning, but those two 24 are important ones. 25 One, they have asked for a 10 percent emission, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 basically roll off the top, for any of the credits that are 2 created. 3 They want a 10 percent take away of those credits 4 so the manufacturers can go to the time, trouble and expense 5 complying early, or getting super compliant product and 6 creating the credits. 7 They were saving just a number, a hundred tons per 8 day, they would only get credit for 90. That is a problem 9 area for us because these companies will be going to great 10 trouble and expense to try to create the credits. 11 We don't think it's necessary and staff has 12 indicated to us they don't think it is necessary either just 13 given the way these systems work, that a mandatory 10 percent 14 roll off isn't the right way to go. 15 CHAIRMAN DUNLAP: So your counsel to us would be to 16 oppose that? 17 MR. MATTESICH: Absolutely. 18 BOARD MEMBER CALHOUN: That is not inconsistent 19 with other credit programs that the staff has proposed to 20 this Board. 21 In the past they proposed various credit programs 22 with discounting attached to them. So, that 10 percent, that 23 is not inconsistent with what has been proposed before. 24 CHAIRMAN DUNLAP: I certainly don't want to quibble 25 with Mr. Calhoun, but in this case it is an early, which PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 makes it a little bit of a less pure of an argument. 2 That is my view. 3 MR. MATTESICH: That our view as well. The second 4 important one for us is that U.S. EPA seems to want to 5 restrict your Executive Officers discretion in how he or she 6 would determine what the sales of these early compliance 7 products were. 8 It appears that U.S. EPA wants to require that 9 there be no discretion in terms of your looking at standard 10 industry reporting systems, like Nielsen data or IRI data or 11 other well accepted and it has to be accepted by your 12 Executive Officer, but the proposal gives the Executive 13 Officer some discretion in the types of data that he or she 14 would accept. 15 U.S. EPA seems to want there to be no discretion 16 and requires that the only data that would acceptable would 17 be actual retail receipt kind of data, which is impossible 18 for manufacturers to present to your Executive Officer as the 19 sum and total of the sales, because all of the sales in the 20 State are not captured by computer, so that you could simply 21 push a button and provide that actual hard data number. 22 However, the IRI and Nielsen type data is the data 23 that manufacturers use and make multi-billion dollar 24 decisions upon, because they accept its reliability when they 25 are deciding whether to market a new product and which way to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 go with the current product. 2 They accept it to make mega decisions. We think 3 that your staff could accept it as well for these limited 4 purposes, at least. 5 So, in some, those are the two problem areas that I 6 know about, that we have concern about, that we want with 7 work with staff and want to work with the U.S. EPA on as 8 well, because we think that this can be, as I said before, a 9 win, win program and we want to see it succeed, so long as we 10 receive the right, I's dotted and T's crossed. 11 CHAIRMAN DUNLAP: Very good. 12 Any questions of Mr. Mattesich at this point? 13 Stay in the front row, would you Jim, we might need 14 you. 15 Is there anyone here from U.S. EPA? Mr. Kenny, or 16 was the fax the method that they used to convey this last 17 minute message to us? 18 MR. KENNY: I think the fax was the sole 19 appearance. 20 CHAIRMAN DUNLAP: Before we even begin this 21 discussion, because it seems the core discussion is not what 22 you think Mike, but what the EPA thinks. 23 So, I am more than a little irritated and so I am 24 going to ask at the outset for staff and Kathleen to prepare 25 some strongly worded letter expressing my personal dismay, to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 my colleagues agree with me, to get this last minute notice. 2 I am very irritated about that. 3 So, Mike, would you, or Kathleen take a minute and 4 talk about where this last minute communication leaves us, 5 and I'm going to ask you to think as an attorney, if you 6 would, relative to what recourse we have to respond. 7 Okay. Ms. Edgerton, I know you some concerns. 8 Feel free as a legal Member to inquiry Mr. Kenny and make 9 sure that we get on the table what we need to on this issue. 10 BOARD MEMBER EDGERTON: May I say one thing before 11 he speaks? 12 If I, before you start, I wanted to make sure that 13 I understand the basis of, and the other Board Members also, 14 understand what is the fundamental basis I believe of the 15 U.S. EPA's view that we have to have the 10 percent discount, 16 etcetera. 17 It has to do with their view that their regulations 18 governing economic incentive programs must be followed in 19 ours, in this Hairspray Credit Regulation, and in that EPA 20 credit regulation, it's very clear that if you want, well 21 there is a distinction between the discretionary and the 22 mandatory programs, but we are calling this discretionary and 23 therefore we are saying that the EPA regulations do not apply 24 point by point. 25 On the other hand, they are considering it in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 nature of a mandatory program, because the old hairspray 2 regulations are included in the SIP and approved in the SIP. 3 We changed our regulation and moved out the date, 4 and that is my understanding that it has not yet been 5 approved. 6 That is all I can figure from reading their 7 letter. 8 Is that correct? 9 MR. JENNE: That's right. It has not been approved 10 yet, actually it hasn't been approved by OAL yet, so we will 11 be submitting that to the U.S. EPA SIP provision as soon as 12 they approve it. 13 BOARD MEMBER EDGERTON: So, actually, even if you 14 refer to just even the slides that we had here, most 15 fundamental, what are surplus emission reductions, and it 16 says, and I quote, "emission reductions not required by 17 existing State or Federal law." 18 CHAIRMAN DUNLAP: Lynn, if I could interrupt you, 19 what I wanted to try and do was get Mike to kind of -- 20 BOARD MEMBER EDGERTON: I just wanted to be sure 21 that he covered that while he covered this. 22 CHAIRMAN DUNLAP: I want to have him explain what 23 we have done in the process and what this letter means 24 relative to where we can go as a Board and then we will cover 25 any of the specifics. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 I don't want to get ahead and get too far into the 2 specific legal elements until I hear what they did and why 3 they did it and what the reference means to us relative to 4 SIP and what we can do. 5 What action we could take today and what it might 6 mean. So, if you would allow that to happen. 7 MR. KENNY: I think it presents a problem, it 8 doesn't present a problem for this Board in acting, but it 9 does present a problem in terms of the exposure that the 10 industry is going to have if they choose to use this kind of 11 a credit program as a way of meeting their obligations under 12 the consumer product rules that are part of the SIP. 13 The reason for that is that if the industry 14 determines to use the credit rules that we have here, the 15 ones adopted by the Board as a way of meeting their SIP 16 obligation through the consumer product rules, they then are 17 in compliance with State law, but to the extent that the 18 consumer product rules and emission reductions associated 19 with them are part of the SIP they are going to be 20 potentially in noncompliance with the Federal obligation. 21 So, that then presents a situation for the industry 22 in which they are vulnerable to Federal enforcement despite 23 the fact that they are in compliance with State requirements 24 that have been adopted by this Board. 25 So, I think that is where the fundamental rub PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 really comes is that industry is then placed in a situation 2 in which they comply with the State law, but that doesn't 3 give them any kind of immunity from prosecution under Federal 4 law when they use this Program. 5 CHAIRMAN DUNLAP: Okay. Should we even move on 6 this Item today or should we hold it another month? 7 What do you think? 8 MR. KENNY: I think the Board should still move on 9 the Item today and I think what needs to occur is that we are 10 going to have to discuss this with U.S. EPA and with the 11 industry to see whether or not some resolution can be 12 achieved, because ultimately what could occur if we can't 13 achieve that resolution is that kind of vulnerability for the 14 industry will really drive everyone away from ever using the 15 Program. 16 CHAIRMAN DUNLAP: So, it would have a chilling 17 effect on, it would be a mixed message relative to what would 18 be sent to the consumer product industry overall and their 19 willingness in the future to try to do anything early for 20 business reasons, such as credits or some flexibility in the 21 marketplace. 22 Jim, am I getting that right? 23 MR. MATTESICH: Yes, Mr. Chairman. 24 I would discourage industry use, if not absolutely, 25 principal from using this Program because they can't make PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 decisions that are multi-million dollar decisions that they 2 think that they are ultimately not going to get both State 3 and Federal compliance out of it. 4 People are not going to roll the dice on large 5 numbers with this hanging over their heads. 6 CHAIRMAN DUNLAP: All right. So, the bottom line, 7 so we can proceed, Kathleen, do you share Mr. Kenny's view 8 that we should move this Item today? 9 MS. WALSH: I do. 10 CHAIRMAN DUNLAP: And then trust the staff to have 11 discussions with EPA about finding accommodations and you 12 would be given adequate flexibility to negotiate some fine 13 details that would not be impactful on the intent of where 14 the Board might go or go down a path that would be 15 unacceptable to us. 16 I mean, you would be prohibited from negotiating 17 something we wouldn't agree with, right, Mike? 18 MR. KENNY: Yes. I think the key thing here is 19 that, as Mr. Mattesich said, there are five elements that EPA 20 has identified, two of which are actually significant and 21 those are the ones that we have with regard to the 10 percent 22 discount and the Executive Officer discretion. 23 To the extent that there is any change, that change 24 will go through a 15 day public comment process. The 25 opportunity will be there to ensure that we have a program PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 that actually meets this Board's direction and is also one 2 that the industry feels that they can use to get benefits 3 that we are trying to provide. 4 CHAIRMAN DUNLAP: Ms. Edgerton. 5 MS. WALSH: Excuse me, Chairman Dunlap. Our 6 standard practice with 15 day changes and the language in the 7 resolution reflects that if there are significant changes 8 that staff feels are necessary to resolve concerns with EPA 9 and develop a program that's going to be usable for the 10 industry we would bring it back to the Board. 11 CHAIRMAN DUNLAP: Okay. We have never been 12 disappointed, or burned, but at the same time, you know, this 13 is a fluid situation and there is a political element to this 14 and that's what this Board is about is ensuring that that's 15 considered and that's not a role for staff. 16 I am irritated about the late notice and about the 17 chilling effect this can have. Okay. 18 Ms. Edgerton. Proceed please with what you feel 19 you need to know and if you have a different feeling than I 20 have at this point relative to what we do, please make that 21 known. 22 BOARD MEMBER EDGERTON: Thank you, Mr. Chairman. 23 With all due respect I do have a different opinion. 24 I do think that it gives me considerable concern 25 for this Board with all of its reputation and commitment to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 adopt a measure, which we have been notified would not be 2 approved for five reasons. 3 Perhaps the only way I could consider it if there 4 were a direct, would be if there were a directive to, in the 5 15 days come up with something that was approvable. 6 It doesn't sound to me from what has been said, and 7 from a quick reading of this, that that is possible. 8 CHAIRMAN DUNLAP: On that point, if I could just 9 respond, EPA, as I understand it and followed it relative to 10 market trading programs, is guilty of sending mixed signals 11 in that they have provided, they have been active and 12 participated in work groups over the last several years about 13 market trading programs, have said publicly, I have been 14 present when the assistant administrator has indicated that 15 they have been supportive of these programs and we are 16 getting some interesting feedback from them of late that is 17 confusing us, confusing me, confusing the business 18 community. 19 I am getting countless phone calls from trade 20 groups, business associations, some environmentalists saying 21 that they are confused by latest EPA action. 22 I am not willing to give them the ultimate say over 23 what program works for California just because we get a 24 letter at the eleventh hour that says we have five areas of 25 concern. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 I am not going to give the whole negotiation over 2 to them. California has, you don't need a lecture on this, I 3 will not do that, but we have been a leader in every area of 4 air pollution control in this country and we have also been a 5 leader in this State in market trading programs. 6 So, I am reluctant to say stop everything, because 7 we have got some letter at the last minute and don't 8 proceed. 9 While I appreciate your view about being cautious 10 and not, you know, trying to participate in some sort of 11 train wreck, I don't want to do that, but at the same time, I 12 don't want to necessarily stop. 13 Lynn. 14 BOARD MEMBER EDGERTON: I appreciate and agree with 15 you that we need to develop and to accept responsibility for 16 our own program. 17 I also agree, and have seen the same mixed 18 directives with respect to the trading programs, and that is 19 a concern to me as well. 20 I did not mean that we wouldn't bring this up again 21 at another time as soon as we got some things straightened 22 out. 23 I wasn't intending to suggest that we would have 24 that be the end of it should we postpone it, because that 25 just isn't what I intended. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 I do think that we must be mindful that we are 2 trying to put in place a program. We are very proud of our 3 program being approved, and we are trying to have a program 4 that meets the law, and that is the guidance that we have to 5 consider. 6 Now, if we want to put ourselves in the position 7 ultimately where we are going to be litigating with U.S. EPA 8 over whether a particular set of emissions reductions from 9 credits are countable or not down the road, then, let's 10 realize that is one of the things that we could be doing and 11 that we want to do it right now. 12 I'm not sure that it is necessary to do it right 13 now, it seems that taking it, you know, maybe postponing this 14 to see if we can't get it a little more clear would be 15 useful. 16 I frankly don't see as a practical matter what 17 would be lost in doing that in that Mr. Mattesich has just 18 indicated that no industry people are to be going using this 19 regulation anyway until we get it solved. 20 So, that was my understanding and Mr. Mattesich is 21 getting up, so, maybe I got that wrong. 22 MR. KENNY: If I might. Ms. Edgerton, I think you 23 are right. 24 I don't think anyone will use this regulation until 25 such time as this is sort of nailed down, but I do think that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 there is a benefit in having the Board proceed today to the 2 extent that it will result in a dialogue with U.S. EPA. 3 I think the dialogue will be a better dialogue with 4 the Board having acted then with the Board not having acted 5 and postpone this. 6 MR. MATTESICH: Mr. Chairman and Members. Ms. 7 Edgerton, you did get it right, that is what I said, but I 8 also agree with Mr. Kenny, and I did try to say earlier in my 9 comments, that it is important to us that this go forward and 10 that we have a program in place by 1-1-98 what the current 11 draft would call for, so that industry hopefully can start 12 creating credits that will be useful to them at the earliest 13 possible time. 14 We hope that during this very short time period 15 that is available to us that we will be able to resolve this. 16 BOARD MEMBER EDGERTON: Mr. Mattesich, may I ask 17 you this question, my understanding is that your industry 18 will not actually be using the program until your industry is 19 assured that it also satisfied U.S. EPA. 20 Is that correct? 21 MR. MATTESICH: I believe that the members would 22 not do that. 23 BOARD MEMBER EDGERTON: In order for you to feel 24 that you can -- your people to feel they can confidently 25 rely on it, it needs to have satisfied Federal and State law, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 Federal law being the State approved SIP issues and the 2 issues that the EPA has. 3 MR. MATTESICH: And we hope to obtain U.S. EPA's 4 approval for this draft as amended as indicated by staff by 5 1-1-98. 6 BOARD MEMBER EDGERTON: Thank you. 7 CHAIRMAN DUNLAP: Mr. Calhoun. 8 BOARD MEMBER CALHOUN: I share Ms. Edgerton's 9 concerns, but I think the staff has attempted to address the 10 concerns expressed by EPA in this last minute document that 11 they prepared for us. 12 So, I don't see any reason why there should be any 13 hesitancy on moving ahead with it based on the fact that -- 14 I agree with John, that to get this at the last minute, you 15 know, that is kind of irritating, but nevertheless, the staff 16 did put forth some effort to address the concern that EPA 17 has. 18 Even if we do move ahead on it they will have an 19 opportunity during the 15 day period to provide some 20 additional comment. 21 CHAIRMAN DUNLAP: Mr. Venturini and then 22 Mrs. Rakow. 23 MR. VENTURINI: Just very briefly, it may help with 24 your discussion, of those five items that the EPA has 25 identified as approvability issues our staff proposed changes PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 that deal, we believe, deal with three of those. 2 So, the two that haven't been dealt with we don't 3 recommend dealing with at this point is the benefit and the 4 discretion. 5 I would like to just point out, we have spent a lot 6 of time. 7 CHAIRMAN DUNLAP: The benefit, you mean the 10 8 percent? 9 MR. VENTURINI: The 10 percent discount. We spent 10 a lot of time dealing with this through the meetings and with 11 EPA. 12 I just want to clear with the 10 percent is not in 13 EPA's regulation. The 10 percent is mentioned in the 14 preamble as a presumptive determination that the program 15 provides, and I will just read in the Reg it says, the 16 program is to benefit both the environment and the regulated 17 entities, and EPA's position is based on, well, if you do the 18 10 percent up front they made that presumptive 19 determination. 20 We as staff believe we presented that this program 21 will result in an overall benefit. And one of the challenges 22 we will have, I guess, following this is to try to convince 23 EPA, and we believe that we have done so in the staff report 24 itself, but have some more dialogue with EPA that the 25 regulation will result in a benefit. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 I don't want to leave the impression that 10 2 percent is a mandate in the EPA regulation, because it is 3 not. 4 MR. KENNY: If I add to that very quickly. I think 5 what will happen here is that EPA will take a position that 6 the 10 percent although not regulatory in nature has 7 essentially a force and effect, I mean, that has been one of 8 the difficulties that we have had with the U.S. EPA on a 9 number of issues in which they interpreted their guidance or 10 preambles or policy determinations as having regulatory 11 effect. 12 That will be the debate that you will see us 13 engaged in. 14 CHAIRMAN DUNLAP: All right. Ms. Rakow. 15 BOARD MEMBER RAKOW: Related to this last minute 16 fax, and perhaps you have clarified it, but did the staff 17 have any conversation with EPA on this 10 percent discount or 18 an Executive Officer discussion based on their June and July 19 letters? 20 MR. VENTURINI: We have had extensive discussion 21 with EPA. 22 BOARD MEMBER RAKOW: And it was just something that 23 wasn't able to be agreed upon? 24 MR. VENTURINI: That's correct. 25 MS. RAKOW: Yeah. Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 Thank you. That put a clarification. 2 CHAIRMAN DUNLAP: Okay. Ms. Edgerton. 3 BOARD MEMBER EDGERTON: Mr. Chairman. First, I 4 would like to mention for the record that most of you all who 5 were here before during the hairspray discussion before the 6 regulations before know that I was a supporter of the credit 7 program as a way to reward DuPont for having developed early 8 technology. 9 So, I very much want do want to see the credit 10 program work and I would very much like to have those members 11 of your association who have worked the hardest and achieved 12 the most, in terms of getting the VOC down, rewarded. 13 But, by the same token, I am concerned about one 14 issue that I am not sure I understand correctly, and that is 15 whether part of the issue, partly that there is a lag in 16 having our new regulation approved. 17 What is the baseline U.S. EPA is using? 18 Are they using the old Hairspray Reg, not the new 19 Hairspray Reg, and what is the baseline that we are using 20 when we are talking about a benefit, the new Hairspray Reg, 21 right? 22 MR. KENNY: When we are talking about this Credit 23 Reg, what we are talking about is essentially providing an 24 alternative mechanism for compliance, and so whether you were 25 to look at that in the context of the old hairspray, or the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 new hairspray really doesn't make much of a difference, but 2 at the same time, what we are going to do is once OAL 3 approves the modified Hairspray Reg that will then be 4 submitted to U.S. EPA as a separate provision. 5 BOARD MEMBER EDGERTON: The Modified Reg, as I 6 recall, achieved less VOC reduction. 7 MR. KENNY: Yes, because we have a delay in the 8 time frame. 9 BOARD MEMBER EDGERTON: Right. So, there was a 10 loss in emissions, reductions, when we modified the Hairspray 11 Reg, for good reasons, I voted for it. 12 MR. KENNY: Yes, but from a SIP perspective we 13 didn't change the SIP obligation, because that was one of the 14 things that we did with regard to the regulations. 15 We were making sure that, in fact, even with the 16 modifications to the Hairspray Reg, we were still preserving 17 the SIP benefits. 18 CHAIRMAN DUNLAP: Because of the date, in other 19 words, we didn't start taking credit Lynn, for hairspray 20 benefits until year what, Mike? 21 MR. KENNY: 1999. We changed it from 98 to 99. We 22 changed the original Hairspray Reg, I think it was by 17 23 months. 24 BOARD MEMBER EDGERTON: So, then if I understand 25 you, we didn't have any net emissions reductions loss? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 MR. KENNY: Not from a SIP standpoint. 2 BOARD MEMBER EDGERTON: But the U.S. EPA is 3 approaching it as if we did. 4 MR. KENNY: No. The U.S. EPA is approaching this 5 solely from the perspective of with regard to economic 6 incentives they believe that there should be a 10 percent for 7 any economic incentive program. 8 They also do not believe in director discretion at 9 the State level in almost any situation to the extent that 10 this program does not reflect the 10 percent discount, which 11 they believe you have to have, and to the extent that is has 12 some directors discretion, that is where their opposition 13 lies. 14 BOARD MEMBER EDGERTON: Thank you. My difficulty 15 here is that I have been in general support of the 10 percent 16 reduction discount for credit trading programs as a matter of 17 principle. 18 I did that with the trading programs in the 19 guidelines that we sent to the districts earlier. I know I 20 spoke to that and you all heard me speak to that as what my 21 best judgement is that it a reasonable discount for 22 uncertainty in credit trading programs. 23 CHAIRMAN DUNLAP: It may very well be. I don't 24 think anyone, Lynn, would fault you for wanting to preserve 25 as much as you can for the breathers, I think that is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 terrific, the only issue and what makes the market trading 2 option so attractive to many people particularly in industry 3 forestry, but amongst several regulatory communities, is that 4 it provides some flexibility and people are able to put into 5 play early introduction of products, or elements of products, 6 and get some credit for that and we want to encourage that. 7 BOARD MEMBER EDGERTON: They get 90 percent. 8 CHAIRMAN DUNLAP: Well, but they have to make a 9 business decision. I don't think any of us can think like an 10 individual consumer product manufacturer and decide what's 11 going on with them nationally, internationally, where their 12 production facilities, we just want to provide an incentive 13 for them to do the right thing early and recognizing when we 14 perhaps push too far. 15 Lynn, I for one laud your gut instinct about 16 wanting to secure that 10 percent, I don't think that is a 17 bad thing, but in this individual case, I think perhaps, 18 perhaps, it is wrong and since it not a required element, or 19 there is some judgment being applied here that perhaps is not 20 consistent Lynn, and that is what our Executive Officer is 21 telling us backed up by our Legal Counsel, that it's 22 misplaced and it probably will have a chilling effect, as the 23 industry rep said, on what action they take. 24 So, in this case, I think I am willing to go along 25 without that 10 percent framework and I am comforted with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 that, in this case. 2 There will be others when I may not feel that way. 3 So, I don't want to, you know, make this overly complicated, 4 but it is my sense that we move this item, Mike, as part of 5 that I would ask you to your negotiating team to get tough. 6 I'm irritated about the late notice and the fact 7 that it has confounded this discussion today. I think that 8 it was poorly done. 9 I am willing to give you the discretion within 10 those bounds to find a proper remedy, and Mr. Mattesich and 11 the interests that he represents, I think, have been a 12 partner with us, I have seen them come a long ways and that 13 is to be lauded, not to be penalized. 14 So, with my Board's approval, I would like to close 15 the record on this Item. 16 BOARD MEMBER EDGERTON: May I make one more comment 17 before we close? 18 CHAIRMAN DUNLAP: Yes, you may. I will give you a 19 chance in just a minute. 20 I'd like staff, I will close the record, I would 21 like staff to summarize those written comments and then I'll 22 entertain a motion to move the resolution and Lynn, I will 23 give you opportunity to speak first when we come back from 24 that. 25 BOARD MEMBER EDGERTON: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 CHAIRMAN DUNLAP: Yes. Mr. Venturini. 2 MR. VENTURINI: Mr. Chairman, I think we have 3 already discussed the EPA letter, so we won't go into that 4 any further, we have one other letter from Dave Boothe, 5 Global Business Manager of DuPont, a letter basically 6 supporting the staff proposal. 7 I just want to make one point, in discussing this 8 the other day with DuPont, they sent this letter before we 9 received the EPA letter and they wanted just wanted to 10 express the same sentiments as Mr. Mattesich regarding not 11 seeing the additional changes, but generally they are in 12 support. 13 CHAIRMAN DUNLAP: Thank you. Ms. Hutchens reminds 14 me that I must do it properly as I close the record. 15 The record will be reopened when the 15 day notice 16 of public availability is issued. Written or oral comments 17 after this hearing date, but before the 15 day notice is 18 issued will not be accepted as part of the official record on 19 this Agenda Item. 20 When the record is reopened for a 15 day comment 21 period the public may submit written comments on proposed 22 changes which will be considered and responded to in the 23 final statement of reasons for the regulation. 24 Ex parte communication. 25 Is there anything that needs to be reported on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 this? 2 All right. If I might, Supervisor Roberts and I 3 failed to mention that he had contact with IEA on that last 4 Item, so Mike, if we could get that included into the record, 5 and that was November 6. 6 So, we have one ex parte communication, not on this 7 Item however, but from the previous one. 8 Thank you, Ron. Okay. 9 With that, we have before us resolution 97-42. I 10 certainly would entertain a motion, but I am going to call on 11 Ms. Edgerton, at this point, and if you want to move on it I 12 would be grateful, but if you want to say something that is 13 fine, too. 14 BOARD MEMBER EDGERTON: Thank you. I haven't heard 15 any of my colleagues speak on the issue, so, I am taking the 16 silence as an indication that the 10 percent probably would 17 not get a second if I were to move that the 10 percent be 18 included. 19 If there is anybody who feels otherwise please feel 20 free to move and I will second you. I do intend to vote 21 against this for that reason, because I do think 90 percent 22 is more reasonable than not. 23 I think a 10 percent discount is a reasonable 24 discount in the trading programs as a matter of principle. 25 I support the credit program though. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 BOARD MEMBER CALHOUN: May I ask would it console 2 you to know that in five years everything is going to 3 disappear anyway? 4 BOARD MEMBER EDGERTON: Yes, it does. 5 BOARD MEMBER CALHOUN: So, maybe the effect that 6 you are trying to achieve will be achieved anyway. 7 BOARD MEMBER EDGERTON: Mr. Calhoun, I appreciate 8 your consolation. Actually, I am pretty optimistic and 9 upbeat about this whole Program, the Hairspray Credit 10 Program, and I am actually not really a candidate for 11 consolation, I am pretty fine with it anyway. 12 It is a matter of the principle. I think at the 13 heart of this probably in the disagreement that the EPA is 14 having with us, it is over the 10 percent discount, which is 15 a huge issue nationally with credit trading programs. 16 Thank you. 17 CHAIRMAN DUNLAP: Well, there's a motion by 18 Mr. Parnell and a second by Dr. Friedman to move on the 19 resolution that we have before us, which is 97-42. 20 Any discussion by the Board, any further 21 discussion? 22 I would append as part of that resolution, and you 23 are welcome to tell me I am all wet if you want, I do want to 24 send a strong letter about the timing in which we got this 25 and I want to certainly empower the staff to go negotiate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 with them and send a very clear signal that they are 2 confusing not just this Board, but others in the community 3 about their stand on some of these trading programs. 4 On the one hand they are telling us that they are 5 supportive and on the other hand they are trying to break 6 some deals and some arrangements that seemed to be good for 7 the environment and good to get industry motivated. 8 So, Mike, if you could convey that, sensing that my 9 colleagues are okay with that. 10 All right. I will proceed on a voice vote. 11 All those in favor of moving resolution 97-42, 12 please say aye. 13 Any opposed? 14 BOARD MEMBER EDGERTON: Opposed. 15 CHAIRMAN DUNLAP: Very good. One opposed. 16 Motion carries. 17 Thank you. What I think that I would like to do at 18 this juncture is break for lunch. 19 Could we do that for about an hour? 20 It is 12:30. We will come back at 1:30. 21 Staff, there's two Item's remaining. Mr. Kenny, I 22 will look to you to manage those Item's as efficiently as 23 possible and we will see if we can conclude at a reasonable 24 hour. 25 (Thereupon the lunch recess was taken.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 A F T E R N O O N S E S S I O N 2 --o0o-- 3 CHAIRMAN DUNLAP: The next Item on the Agenda is 4 97-9-3. It's a public hearing to consider amendments to the 5 area designations for the State Ambient Air Quality 6 Standards. 7 This Item is for the Board to consider the staff's 8 recommendation designating areas of the State with respect 9 the attainment status of the State Ambient Air Quality 10 Standards. 11 I want to assure Supervisor Riordan that it isn't 12 that same issue that you had last year where you had to 13 decide whether specific business was in one air district or 14 not. 15 BOARD MEMBER RIORDAN: My big bear issue. 16 CHAIRMAN DUNLAP: I remember Supervisor Silva 17 helped you out with that one. 18 BOARD MEMBER RIORDAN: Yes. He's a good friend. 19 CHAIRMAN DUNLAP: So, with that, Mr. Kenny, I'd 20 like for you to introduce this Item, and Mike, just to remind 21 you, the Board is always willing to take the time necessary 22 to contemplate and deliver on proper clean air policy, but we 23 do have a bit of a time constraint, so I would ask you to be 24 judicious in your use of the remaining time today. 25 Mike has picked up on that. Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 Mr. Kenny, go ahead. 2 MR. KENNY: Thank you, Mr. Chairman and Members of 3 the Board. We so have an expedited regulatory Item for you. 4 As you mentioned, the staff is proposing amendments 5 to the area designations for the State Ambient Air Quality 6 Standard. 7 The California Clean Air Act requires that the 8 Board establish and periodically review the criteria used for 9 designating areas with respect to the State standards. 10 This is to be done pursuant to criteria the Board 11 approved previously. The Board must review the area 12 designations each year and update them when new information 13 indicates a different designation is justified by the most 14 recent air quality data. 15 The Board initially designated areas of the State 16 in 1989 and has amended these designations every year since 17 then. 18 The staff proposes today that the Board update two 19 of the more than 350 total designations based on our review 20 of the air quality data for 1994 through 1996. 21 Now, I would like to introduce Ms. Cynthia Garcia, 22 who works in the Air Quality Analysis Section in a Technical 23 Support Division. 24 Cynthia will discuss the staff's proposal. 25 MR. McGUIRE: Mr. Chairman, in the interest of time PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 we will not include the Federal designation Item that we 2 talked about, but we would be prepared to discuss that if you 3 like. 4 CHAIRMAN DUNLAP: Okay. You know, what we could 5 do, if you are okay, Mr. Kenny, we could have you just give a 6 brief oral synopsis then we could ask a few questions, Terry, 7 because I think it will go pretty smoothly. 8 It appears that the staff's effort here is right on 9 target and it's relatively noncontroversial. 10 Mr. Kenny, I will begin maybe Terry, and ask a 11 couple of questions, if I may? 12 MR. McGUIRE: That would be fine. 13 CHAIRMAN DUNLAP: Okay. As it relates to the 14 Health and Safety Code, the Board has the responsibility of 15 designating areas their attainment status, nonattainment or 16 unclassified. 17 We have done this regularly since, for many years. 18 We are looking now to redesignate two particular counties, 19 Butte, the Sacramento valley air basin, and Glen county, also 20 in the Sacramento valley air basin. 21 So, we are doing this because air quality has 22 improved. 23 MR. McGUIRE: In this particular case, I will jump 24 ahead in the presentation, in this particular case there was 25 a change in statute last year that made some slight changes PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 in the way that we determined the attainment transitional 2 designation. 3 So, really this particular change to move those two 4 counties to attain nonattainment transitional is simply to 5 conform with the new change in the law. 6 CHAIRMAN DUNLAP: Okay, but in those two counties 7 can you give us a sense, are things better, are they worse? 8 What has happened relative to ambient air quality 9 monitoring there, anything? 10 I know it is not driving it, but has anything 11 happened of note there that you would want the Board to 12 know? 13 MR. McGUIRE: What I would say is our work looking 14 at air quality, particularly ozone and carbon monoxide 15 throughout the State and over the last 15 years and the trend 16 is continuing now has been almost consistent improvements in 17 ozone and carbon monoxide concentrations nearly everywhere, 18 there are some exceptions in the northern Sacramento valley 19 where these two counties are, I expect that trend has 20 probably exhibited, but I don't know for sure. 21 This particular year we are not recommending any 22 other major designation improvements, like for nonattainment 23 to attainment. It just happens that even though air quality 24 has been improving it's just nobody was right near the edge 25 to where this year they happen to go from one status to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 another. 2 Air quality continues to improve and these 3 designations are not necessarily reflecting that. 4 CHAIRMAN DUNLAP: It's more of an administrative 5 more to comport with the new Federal designations. 6 MR. McGUIRE: To comport with the new State law. 7 CHAIRMAN DUNLAP: All right. Very good. 8 Do we have any questions of staff on this item? 9 All right. Since it seems to be largely 10 administrative, Mr. Kenny, there is a sense that I have on 11 the Board that we are willing to move on this Item. 12 Anything you want to say in summary? 13 MR. KENNY: I have nothing to say in summary. 14 CHAIRMAN DUNLAP: Okay. Very good. 15 Any questions of staff? 16 We have one witness. Could I ask you to come 17 forward. 18 I recognize this gentlemen. Is it Glen county? 19 APCO. Ed Romano. 20 MR. RAMONO: I'm appearing in support of the 21 staff's recommendation. Thank you. 22 I will keep it short. 23 CHAIRMAN DUNLAP: Very good. 24 BOARD MEMBER ROBERTS: In view of the excellent 25 presentation, I would like to make a motion in support. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 BOARD MEMBER PARNELL: Second. 2 CHAIRMAN DUNLAP: Very good. But before we do that 3 I need to close the record, so hold that thought. 4 Mike, did you have anything else that you wanted to 5 say or do you have any comments that the staff needs to 6 summarize? 7 MR. KENNY: No. 8 MR. McGUIRE: No comments. 9 CHAIRMAN DUNLAP: Since all testimony, written 10 submissions and staff comments for this Item have been 11 entered in the record and the Board has not granted an 12 extension of the comment period I am officially closing the 13 record on this portion of Agenda Item 97-9-3. 14 Written or oral comments received after the comment 15 period has been closed will not be accepted as part of the 16 official record on this Agenda Item. 17 Just a reminder to the Board, we must report 18 ex parte communications. 19 Do we have anything to report? 20 All right. Very good. 21 We have before us Resolution 97-43. We have a 22 motion by Supervisor Roberts and a second by Dr. Friedman. 23 Any discussion that we need to have on the motion 24 to approved Resolution 97-43? 25 All right. We will proceed with a voice vote. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 All those in favor, say aye. 2 Any opposed? 3 Very good. Thank you very much. 4 I want to thank staff. I know the preparation was 5 significant. I apologize for us moving quickly, but we have 6 great confidence in your work, particularly in this 7 particular area you have demonstrated time and time again you 8 know how to do this and you do it well and we are grateful 9 for that. 10 All right. That brings us to the last Item on the 11 Agenda today, the Emission Inventory Item. 12 While staff is changing positions, we will go to 13 the next Item, 97-9-4, a public meeting to consider the 14 approval and verification of California's 1995 emissions 15 inventory update. 16 This Item on today's Agenda for the Board's 17 consideration is the approval of the emissions inventory 18 effort pursuant to SB 2174 of 1996. 19 This law requires that every three years the Board 20 approve the emissions inventory for criteria pollutants and 21 the staff has worked to verify emissions inventory. 22 The Board's first inventory approval must occur not 23 later than January 1,1998. Emissions inventory are basis for 24 much of the Boards work, such as air quality planning and the 25 development of emission control measures. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 The inventory is dynamic and it is revised 2 frequently as new information becomes available. I can 3 attest from firsthand experience years ago I remember working 4 with a staff member there, Gary Agid and others in emissions 5 inventory work when I was a planner early in my career at the 6 South Coast Air District. 7 I know we have a commitment and have maintained 8 that commitment here for many decades to have the best 9 inventory possible, to be inclusive in the process by which 10 we modify and update that inventory. 11 I am pleased to know that we do it well. We do it 12 the best in the country. 13 So, with that, Mike, I'd ask you to introduce this 14 Item and get this Item under day way. 15 MR. KENNY: Thank you, Mr. Chairman and Members of 16 the Board. The staff recommends that the Board approve the 17 1995 emissions inventory as prepared in Table one of the 18 staff report. 19 1995 is the latest year for the complete emissions 20 inventories available. It is statewide average inventory. 21 The 1995 emission inventory also include estimate 22 for each source category for each county and air basin in the 23 State. 24 The staff also recommends the Board accept the 25 staff's verification of inventory and as we will describe in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 our presentation today. 2 The ARB staff and the districts with input from 3 many other agencies have been preparing emission inventories 4 for California for many years. 5 Our goal is to produce and maintain a complete 6 accurate and up-to-date inventory of all emission sources in 7 the State. 8 Furthermore, we strive to present this information 9 in a manner that enables its use in public education, 10 research, air quality planning and control strategy 11 development. 12 Emission inventory reflects the best information 13 available at the time. The inventories are developed in an 14 open public process. 15 In preparation for this meeting the staff held many 16 workshops and met with special interest groups. These 17 activities are summarized in the staff report. 18 Mr. Chairman and Members of the Board, you are all 19 correct in observing that the emissions inventory is 20 constantly being improved. 21 We are constantly updating emissions and estimation 22 methodologies and data on source activity. The staff intends 23 to present significant changes to estimation methodologies 24 for the Board's approval as they emerge rather than waiting 25 three years. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 For example, in 1998 we plan to present a new model 2 for estimating emissions from off road mobile sources. 3 Also, when the Board considers a regulatory item 4 which relies on inventory information we intend to identify 5 any estimates of emissions from affected source categories 6 that differ from those in the inventory you approve today. 7 I will now ask Mr. Gary Agid to present this Item. 8 MR. AGID: Good afternoon, Mr. Chairman and Members 9 of the Board. This public meeting is for you to consider the 10 approval and verification of the California Emission 11 Inventory pursuant to your requirements of SB 2174 of 1996. 12 My name is Gary Agid and I'm the Assistant Chief of 13 the Technical Support Division. 14 I have been a coordinator of this project which has 15 included efforts of staff's from the Technical Support and 16 Mobile Source Control Divisions and the Office of Air Quality 17 and Transportation Planning. 18 Staff members from each of these areas are here 19 today to help answer questions. Developing emission 20 inventories is a major resource effort that involves about 50 21 ARB people and almost 100 people at the air pollution control 22 and air quality management districts plus additional staff 23 from other agencies such as CalTrans. 24 Today I will describe the requirements of SB 2174. 25 I will also explain what an emission inventory is and what is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 included in the 1995 emission inventory you are being asked 2 to approve. 3 I will review the roles and responsibilities of the 4 many agencies involved in producing an inventory and the 5 various types of inventories that are developed. 6 I will describe three methods we use to verify the 7 emission inventory, the issues we faced in this task and our 8 conclusions and i'll tell you about our efforts to improve 9 the emission inventory to its verification and about how we 10 included our stakeholders in the process for preparing for 11 this meeting. 12 SB 2174 was signed by Governor Wilson last fall. 13 It requires the Board to approve at a nonregulatory public 14 meeting and update to the California Emission Inventory for 15 Criteria Pollutants. 16 Criteria pollutants include total organic gases, 17 reactive organic gases, carbon monoxide, oxides of nitrogen, 18 oxides of sulfur, particulate matter, and PM 10, which is a 19 subset of particulate matter. 20 PM 2.5 will soon be included in the inventory 21 because of the new PM 2.5 National Ambient Air Quality 22 Standard. 23 Toxics pollutants are not included. The law also 24 requires a verification of the inventory, that is an 25 assessment or confirmation of the estimated emissions using PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 other available scientific data including measured pollution 2 and an explanation of any discrepancies. 3 The Board's first approval of an emission inventory 4 must occur before the end of this year and at least be 5 revisited every three years thereafter. 6 As Mr. Kenny indicated the staff plans to come to 7 the Board with emission inventory reviews more frequently 8 than three years if significant changes with major policy 9 consequences should emerge. 10 The staff and the districts have been preparing 11 emission inventories for many years. SB 2174 now requires 12 that the Board approve these inventories. 13 Emissions inventories and portions of them have 14 always been presented to the Board during hearings concerning 15 air quality plans, or the adoption of emission reduction 16 regulations. 17 The goal has always been to produce and maintain a 18 complete and accurate inventory of all emission sources in 19 California which reflects the best information available at 20 the time. 21 Before getting specific let's discuss what an 22 emission inventory is. It an estimate of the amounts and 23 types of pollutants from thousands of industrial facilities 24 millions of on-road motor vehicles and many millions of uses 25 of products such as paints and consumer products. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 There are also emissions from thousands of 2 vegetation types and other sources such as planes, trains and 3 off-road vehicles. 4 I emphasize estimate. It is not feasible to 5 measure emissions from all of these sources and activities 6 under all conditions that occur during the day or on a 7 vehicular trip. 8 There are a few exceptions. Continuous emission 9 measuring devices are installed at some large facilities, for 10 example, in stacks at power plants. 11 Simplistically, an emission estimate for any source 12 is made by multiplying an emission factor by an activity or 13 usage factor. 14 Emission factors are estimated to represent the 15 average conditions for all sources in the category for which 16 emissions are being estimated and usage factors are source 17 specific. 18 An emission factor for a specific process at an 19 industrial facility is developed by averaging the results of 20 the emissions test from similar processes at several 21 different facilities. 22 This factor is then used to estimate emissions from 23 all similar types of processes in California. For example, 24 emissions may be measured from a number of boilers averaged 25 and expressed as pounds of emissions per thousand BTU's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 produced. 2 This factor is then used to estimate from all 3 boilers based on the BTU's they produce. Activity levels may 4 be amounts of product produced, solvent used or fuel used. 5 Our emission inventory comprises four components. 6 Stationary sources, area-wide sources, mobile sources, which 7 have two major subcomponents, on-road vehicles and other 8 mobile sources, and fourth, non-anthropogenic sources. 9 I will now spend a few minutes discussing each of 10 these components. 11 Stationary sources are made up of individual 12 facilities called points sources, which are either 13 inventoried separately or aggregated. 14 The largest facilities are inventoried separately. 15 The facility might be a refinery, cement plant or an 16 automobile assembly plant. 17 There are more than 11,000 of these sources 18 included in the ARB's emission inventory. Large facilities 19 could have many individuals points from which one or more 20 pollutants are emitted. 21 For example, emissions at a refinery might include 22 such things as boilers, tanks or oil production fugitive 23 emission losses from each valve, fitting, and many other 24 devices, as this photo demonstrates. 25 Emissions from each emission point are estimated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 separately using methodologies unique to that device and 2 process. 3 The emissions for each pollutant from all emission 4 points point are then added to determine the facilities 5 emissions and the emissions from groups of similar types of 6 facilities are then added for presentation in the published 7 emission inventory. 8 There are about 79 thousand emission points that 9 are included in California's inventory. There are more than 10 60 data fields in the emission inventory to describe each 11 facility, much more than just emission data. 12 For example, several fields describe the facility 13 location and others describe the each device process and 14 stack. 15 There is also a field to flag data that are deemed 16 to be confidential. The ARB is prohibited by law from 17 releasing such data to the public. 18 Smaller stationary sources are inventoried among 19 136 categories of aggregated point sources which are small 20 point sources that are grouped together as a single source 21 category. 22 Examples are gas stations, dry cleaners and print 23 shops. The ARB is required by law to comply with stationary 24 source emission inventory using information about individual 25 facilities that is provided by air pollution control and air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 management districts and other State and Federal agencies. 2 The Technical Support Division works closely with 3 all agencies on this effort. We provide guidance to 4 districts on collecting and estimating stationary source 5 emissions, but we defer to the districts on the details of 6 how this is done because of their more immediate relations 7 with the facilities. 8 Area-wide source emissions, which are spread out 9 over large areas, include emissions from 72 categories 10 architect such as architectural coatings including house 11 paints, agricultural operations including pesticide and 12 fertilizer applications, paved and unpaved roads and consumer 13 products, including hairsprays. 14 These are truly area-wide sources rather than small 15 point sources that are aggregated in the stationary source 16 component. 17 The ARB and district staffs share the 18 responsibility for developing methodologies and for 19 estimating emissions from the area-wide sources and the 20 Department of Pesticide Regulation participates in estimating 21 emissions from pesticide applications. 22 One-third of all area-wide source emissions are 23 updated each year. The ARB methodologies are being put on 24 the ARB's Internet site for public review. 25 The mobile source inventory component is divided PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 into two major subcomponents. On-road motor vehicles and 2 other mobile sources. 3 I will discuss these categories separately starting 4 with the on-road motor vehicles. The emissions are estimated 5 for 12 classes of on-road vehicles such as light-duty 6 automobiles, various sizes of gasoline and diesel powered 7 trucks, motorcycles and urban buses. 8 For these vehicles emissions are estimated for 9 three general vehicle technologies, two exhaust processes, 10 four evaporative processes and two summers, winter and 11 summer. 12 These inventories are estimated for previous and 13 future calendar years with each year having a different fleet 14 mix of vehicles and technology. 15 Estimating emissions for on-road vehicles is 16 difficult because emission rates and usages of vehicles can 17 vary widely. 18 Emissions may vary depending on factors such as the 19 level of vehicle maintenance and a drivers aggressiveness and 20 driving pattern. 21 For example, driving on a city street versus 22 driving on a free-flow freeway. There are many players in 23 estimating on-road vehicle inventories. 24 At the Air Resources Board, the staff of the Mobile 25 Source Control Division develops and refines estimation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 models and develops emission factors, which are per vehicle 2 emission rates, based on vehicular testing in a laboratory 3 setting. 4 U.S. EPA also tests vehicles and provides data to 5 the ARB and additional data is obtained through contracts 6 with independent laboratories. 7 Most of the vehicular activity is estimated by the 8 ARB's Office of Air Quality and Transportation Planning, 9 relying on data provided by numerous sources including 10 CalTrans, the Department of Motor Vehicles and regional 11 metropolitan planning organizations. 12 This type of data includes for each area of the 13 State the number of vehicles, the number of vehicles miles 14 traveled, the number vehicle starts, ambient temperatures, 15 vehicle miles traveled by speed distribution and vehicle 16 miles traveled by time period for each day. 17 Other mobile sources include off-road recreational 18 vehicles, farm and construction equipment, aircraft, trains, 19 ships, commercial boats and recreational boats. 20 There are more than 80 subcategories inventoried 21 that distinguish between different types of ships and 22 aircraft. 23 Estimating other mobile source emissions is 24 primarily the responsibility of the ARB, but some categories 25 are estimated by districts. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 Non-anthropogenic emissions are mostly naturally 2 occurring emissions from biogenic sources, which are 3 vegetation types, and geogenic sources, which are petroleum 4 seeps, wildfires and windblown dust from undisturbed land, a 5 relatively small contribution of biogenic emissions are from 6 crops and therefore are not naturally occurring. 7 Estimating biogenic emissions is particularly 8 difficult because of the vast number of plant types with each 9 having emission rates that vary with local factors, such as 10 climate and terrain. 11 Also, geogenic seeps and wildfires start and stop 12 with no way to predict when these events will occur. 13 The ARB and district staffs share the 14 responsibility for estimating the emissions from 15 non-anthropogenic sources. 16 Biogenic emissions are generally not reasonably 17 controllable because a great deal of the use of an emission 18 inventory is to assess opportunities to reduce emissions. 19 I will focus the rest of my presentation on 20 anthropogenic sources of emissions. 21 Now I have that described what an emission 22 inventory is, let's discuss the inventory the staff 23 recommends that you approve, the 1995 emission inventory. 24 This is a statewide annual average inventory of 25 criteria pollutants. It is a four page Table in the staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 report which begins on page 438 of the Board book. 2 The more detailed draft 1995 emission inventory 3 document includes similar Tables for each county and air 4 basin in the State. 5 A copy of this document has been provided to you 6 and it looks like that, if you have not noticed it, and there 7 are additional copies on the table outside, the back door. 8 I will describe the 1995 inventory by component. 9 Stationary, area-wide and non-antropogenic emissions are 10 updated at any time, as the ARB staff or districts acquire 11 new information, therefore the inventory is dynamic. 12 The 1995 emission inventory for these components is 13 a snapshot of the inventory that represents the latest 14 information available at the time. 15 On-road vehicle emissions are estimated using four 16 models that are collectively known as MVEI, for motor vehicle 17 emission inventory. 18 The 1995 emissions are based on MVEI 7G1.0 19 corrected. The latest version of the model. 20 I will refer to this version in the remainder of my 21 presentation as the current version of the MVEI. MVEI and 22 its emission outputs are updated approximately annually. 23 For each area of the State, the models merged the 24 emission factors and activity information previously 25 described. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 The current version of MVEI produces a vehicular 2 inventory that is substantially improved from previous 3 versions for reasons described in the staff report. 4 1995 other mobile source and emissions are 5 estimated using estimation techniques in use for many years. 6 A new model called, off-road, will soon be 7 available that will significantly improve the emission 8 estimates for this category. 9 Off-road and the emission estimates it produces are 10 currently undergoing public review. The staff expects to 11 present the model and its emission estimates to the Board for 12 approval during 1998. 13 An extensive public process will be provided for 14 individual off-road emission categories, particularly for 15 categories that will be subject to emission reduction 16 regulatory proposals during 1998. 17 The average annual emission inventory is used to 18 demonstrate the relative contribution of emissions from each 19 component of and the many categories included in the 20 inventory and as an aid in setting priorities for controls 21 strategy development. 22 This inventory along with other information is used 23 to create other types of inventories. Before I tell you 24 about them, I will show you two slides, a table that shows a 25 summary of the 1995 emission inventory and a bar chart that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 shows relative emission contributions of the inventory 2 components. 3 This slide is also in the executive summary of the 4 staff report. It's a summary by major component of the 5 emissions in the 1995 emission inventory. 6 As I previously explained, biogenic emissions are 7 not included. TOG, or total organic gases, is made up of 8 many compounds, some of which are ROG, reactive organic 9 gases. 10 Reactive organic gases are the organic compounds 11 that participate in photochemical atmospheric reactions that 12 result in the formation of ozone. 13 As you can see, total ROG is about one-half of the 14 total TOG, but the fraction varies considerably by inventory 15 component. 16 Similarly, PM 10, which is a subset of particulate 17 matter, is approximately one-half of all PM emissions. 18 This slide shows the percentage of reactive organic 19 gases, oxides of nitrogen, carbon monoxide and PM 10, that 20 each component contributes to the total 1995 statewide annual 21 average emissions for each pollutant. 22 These are the pollutants of no significant 23 concern. The total ROG emissions used in this chart do not 24 include emissions from biogenic emissions. 25 This is because these emissions are not reasonably PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 controllable and to include these emissions would mask the 2 percentages shown for the components that are controllable. 3 As you can see, almost one-half of the emissions of 4 ROG are from on-road motor vehicles. The remainder are 5 mostly split between stationary and area-wide sources. 6 On-road motor vehicles contribute about 60 percent 7 of oxides of nitrogen emissions and other mobile sources 8 contribute 20 percent, for a total mobile source contribution 9 of 80 percent. 10 The remaining emissions are mostly from stationary 11 sources. 12 Let me digress here and point out that there has 13 been confusion about vehicular emissions represented in our 14 inventory. 15 Some people had mistakenly thought that on-road 16 vehicle emissions are what we call mobile source emissions. 17 They are, in fact, only one part of the mobile 18 source inventory. Looking at the last two bars, on-road 19 motor vehicles overwhelm the carbon monoxide inventory and 20 area-wide sources overwhelm the PM 10 inventory. 21 All of these percentages can vary significantly 22 from region to region, especially between urban and rural 23 areas of the State. 24 This inventory along with other information is used 25 to create other types of inventories which have specific PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 uses. 2 I will describe some of them. Inventories from 3 previous years which are estimated using current computation 4 methods and data establish trends and show emission reduction 5 progress. 6 Emissions for future years are estimated based on 7 estimated growth factors and emission reduction benefits of 8 control measures. 9 These forecasted inventories are also used for 10 trend analysis and to estimate future emissions for air 11 quality plans. 12 These forecasted inventories are generally seasonal 13 inventories, which are also known as planning inventories. 14 For an ozone plan a sum and component of the annual 15 average emission inventory is created, because ozone 16 exceedences occur in the summer. 17 For the carbon monoxide plan a weather component is 18 used because exceedences are in the winter. Date specific 19 inventories are created for use in regional air quality 20 models to help determine the amounts and types of emission 21 reductions needed to attain air quality standards. 22 The inventory must be temporarily and specially 23 resolved and date specific information replaces average 24 information. 25 Even though they are consistent with the data in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 the approved inventory these other types of inventories may 2 have a somewhat different data than the Board approved 3 inventory and will contain more recent information. 4 We will advise the Board of relevant changes and 5 importance in air quality plans and control measure proposals 6 that the staff presents for Board approval in the future. 7 We are constantly striving to improve the emission 8 inventory. A large portion of the Board's research and 9 contract funds are devoted each year to efforts to improve 10 all components of the emission inventory. 11 The ARB and representatives of the regulated 12 community are participates in the National Emission Inventory 13 Improvement Program whose sole purpose is to improve the 14 national emission inventory. 15 California also has its own emission inventory 16 program. The Emission Inventory Technical Advisory 17 Committee, known as ITAC, is a longstanding ARB and district 18 technical group devoted to improving California's emission 19 inventory. 20 Current improvement areas have focused on emissions 21 from point sources, pesticide applications, biogenics sources 22 and many of the particulate categories. 23 A new on-road vehicle emission model is being 24 developed to replace the currently used MVEI series of models 25 used to estimate on-road vehicle emissions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 This model, which is expected to improve the 2 accuracy of the motor vehicle emissions will undergo motor 3 vehicle emission inventory stakeholder review before the 4 staff brings it to the Board for approval. 5 As I mentioned earlier, a new model to estimate 6 other mobile source emissions, off-road, will be brought to 7 the Board for approval during 1998. 8 Let's now focus on the verification requirements of 9 SB 2174. Recall that the law requires the inventory be 10 verified with available scientific data including measured 11 pollution and any discrepancies be explained. 12 Verification is an assessment, or confirmation of 13 the estimated emissions. It's a second opinion, an attempt 14 to independently evaluate the accuracy of the emission 15 inventory. 16 It's recommended that the Board accept that the 17 staff's emission inventory verification efforts were carried 18 out to the extent technologically feasible and adequately 19 meet the requirements of SB 2174. 20 There are many complications in using air quality 21 data to determine the accuracy of the emission inventory, 22 nonetheless collectively, we believe our three verification 23 evaluations helped confirm that the accuracy of the emission 24 inventory, particularly the motor vehicle inventory, has 25 improved during recent years. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 Now, for the three evaluations. We studied 2 pollutants in tunnels. We compared ambient air quality and 3 emission data and we completed a fuel consumption analysis. 4 The first two methods are updates, expansions and 5 improvements to similar previous efforts to verify the 6 emission inventory. 7 In the tunnel studies, vehicle emission rates were 8 calculated from ambient pollutant concentrations in the 9 tunnel and then compared to the model of emission rates 10 estimated by ARB's emission models. 11 The model used speeds and temperatures in the 12 tunnel rather than average conditions. The original tunnel 13 study was performed in the late 1980's in the Van Nuys 14 Tunnel. 15 The MVEI emissions model available at the time was 16 used. A model that has been approved four time in 1990's. 17 The results implied that organic gas and carbon 18 monoxide emissions in the tunnel were significantly 19 underestimated by the ARB's emission inventory. 20 That effort has been updated using our current MVEI 21 model and the results indicate our motor vehicles estimates 22 are now much closer to the observed emission rates and within 23 the accuracy, limitations, of tunnel studies. 24 Recent studies of other tunnels throughout the 25 United States show considerably varying results. For PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 example, in tunnels with free-flow traffic results have 2 indicated models under-predict emissions, the opposite of the 3 Van Nuys Tunnel results. 4 We have concerns about using tunnel studies to 5 verify emissions. Models are designed to estimate regional 6 emissions for a typical fleet traveling at different speeds 7 and operating modes at average temperatures. 8 Conditions in tunnels are very specific. For 9 example, the Van Nuys Tunnel has a grade with traffic lights 10 at the top causing stop and go conditions with hard 11 accelerations. 12 In the summer air-conditioning is used by most 13 vehicles. This is an impact currently not accounted for in 14 the MVEI model. 15 All of these factors contribute to higher than 16 average emissions than predicted by models. Also, tunnel 17 studies are imperfect technical tools for verifying emission 18 estimates. 19 For example, it is difficult to determine the 20 emissions in air quality samples that need to be compared to 21 estimated emissions. 22 Nonetheless, the studies in the Van Nuys Tunnel 23 provide a trend that demonstrates our emission models have 24 improved over time. 25 In our second method, we compared emission PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 estimates to ambient pollutant concentrations. The concept 2 is that emissions should be reflected in the ambient 3 pollutant concentrations into which they are emitted. 4 This approach was originally completed in 1992 5 using 1987 ambient data from six monitoring sites in the 6 South Coast Air Basin and the motor vehicle emission model 7 version available at the time. 8 Again, the staff used the same method as this 9 earlier study, but used the latest emissions based on our 10 current MVEI model and 1995 air quality data. 11 The results demonstrate that our current model more 12 closely reflects the ambient pollutants than the previous 13 emission model did. 14 In addition, the staff refined the methodology. 15 For example, improved organic speciation profiles were used. 16 The staff used only ambient data on days when there 17 was no pollutants carried over from the previous day and 18 emissions from heavy duty diesel trucks were removed from the 19 inventory because few of these trucks traveled in the 20 vicinity of the monitoring sites. 21 The results show even closer and reasonable 22 agreement between estimated emissions and ambient emissions. 23 In our third method, we estimated gasoline consumed 24 by vehicles by analyzing the exhaust emissions from vehicles 25 and compare this to estimates of fuel consumption provided by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 the Board of Equalization. 2 Carbon dioxide is the largest direct product of 3 combustion of gasoline and vehicular emissions of carbon 4 dioxide are estimated by our current MVEI model. 5 The carbon dioxide emissions along with other 6 emission estimates are used in a carbon dioxide method to 7 estimate fuel economy. 8 These estimates combined with vehicle mile travel 9 estimates are then used to determine gasoline fuel 10 consumption estimates. 11 The comparison of the MVEI estimated and Board of 12 Equalization estimated fuel consumption was made for each 13 year, 1990 through 1995, and the results were within five 14 percent of agreement. 15 The staff will continue to improve and update with 16 new data the current three verification methods and to 17 develop new methods. 18 The three methods all address the motor vehicle 19 component of the emission inventory. This is because we 20 currently don't know of techniques to verify other portions 21 of the inventory. 22 Efforts are in progress to develop techniques to 23 verify the aggregate of all emissions and emissions from 24 stationary sources and from area-wide sources. 25 Specific improvements to the three methodologies PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 that are being pursued, or considered, or summarized in 2 attachment three to the staff report. 3 The regulated community and interested stakeholders 4 have always played critical role in the review of the 5 emission inventory during the planning and regulatory 6 processes. 7 They also participate actively in inventory 8 workshops and in the development of methods and data that 9 improved the inventory. 10 The ARB and district staff often meet with industry 11 associations to better understand stand the emission 12 processes and to use their technical expertise to improve the 13 inventory. 14 In preparation for today's meeting, the staff 15 health two public workshops in early April to discuss all 16 aspects of the SB 2174 process and the 1995 emission 17 inventory. 18 Additional outreach efforts were in response to 19 participant requests. Two workshops were held in July, one 20 concerning verification and the other concerning activity 21 data used to calculate motor vehicle emissions. 22 During the verification workshop in July we 23 presented the three methodologies and the results of our 24 efforts to the participants and we asked if there were 25 additional methods that anybody could recommend to us and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 none were received and we are still looking for additional 2 methods. 3 An industry working group was formed to address the 4 concerns of those representing stationary sources and has met 5 three times since April. 6 An emission forecasting working group was formed to 7 focus on the way forecaster developed. A forecasting 8 conference cosponsored by the group is tentatively planned 9 for the spring of 1998. 10 Through all of these outreach efforts suggestions 11 have been made that resulted in changes to what we were 12 presenting today. 13 These efforts will ensure that the overall emission 14 inventory development and update process is well understood 15 by the public and that all have an opportunity to express 16 their concerns. 17 Copies of the emission inventory and supporting 18 documents that describe the emission inventory estimation 19 methodologies are always publicly available. 20 The staff also provides standard and customized 21 inventory reports to the public upon request. The MVEI 7G 22 model and documentation are available to the public on the 23 Internet and on diskettes. 24 This allows the users to generate their own 25 reports. The emission inventory, many of the support PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 documents and information about upcoming inventory workshops 2 and conferences are also now available on the ARB's Internet 3 site, which is also known as a web page. 4 We have always tried to provide easy access to 5 emission inventory data and the Internet is one of the most 6 valuable tools for improving this access. 7 I was going to present a brief demonstration of our 8 web page for emission inventory, but in the interest of time 9 I will skip over that. 10 CHAIRMAN DUNLAP: You are a wise man, Gary. 11 MR. AGID: Thank you. In conclusion, the staff 12 recommends that the Board approve the 1995 emission inventory 13 and accept the staff's verification of the emission 14 inventory. 15 CHAIRMAN DUNLAP: Thank you for that presentation. 16 I appreciate the thoroughness of that report. 17 I know how important this work is and I know you 18 have many people that want to quibble with some of the 19 specifics, but I know hat this team that you have assembled 20 here have done a good job at hearing all parties and doing 21 your best to make sure that the numbers reflect reality. 22 With that, what I would like to do is ask 23 Mr. Schoning, although this isn't a regulatory item, it has 24 regulatory implications, and I would like Mr. Schoning to 25 give us an overview about how things went at the stakeholder PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 meetings throughout 1996, and after we hear from Jim I would 2 go to the three witnesses and ask the board to hold their 3 questions until we get the witnesses up here. 4 Jim. 5 MR. SCHONING: Thank you, Mr. Chairman. You are 6 correct, throughout our 1996 stakeholder workshops conducted 7 throughout the State of California a frequently heard over 8 and over again message was, work from sound science and 9 frequently the avenue of our work folks had in mind was that 10 we could improve our inventory mindful that it is a constant 11 process of improving the inventory and we are pleased to see 12 that it was conducted. 13 As staff indicated, they invited more than 400 14 stakeholders from industry, government to the general public 15 to participate in the development of the product that is 16 before you. 17 They held workshops, I believe three between the 18 first of April and July of this year, including approximately 19 150 stakeholders from a wide range of fields. 20 Additionally two advisory bodies were created, an 21 industry working group and an emissions forecasting working 22 group. 23 The Industry Working Group includes approximately 24 15 representatives, many of the South Coast Air Quality 25 Management District, and is focused on how the data reporting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 process can be improved. 2 The group has met three times between June and 3 November of this year and continues to provide input to ARB 4 and to the South Coast on managing the emissions inventory 5 process. 6 That Emissions Forecasting Working Group includes 7 members from air quality management districts, regional Cal 8 Trans offices and counsels of government around the State. 9 This group, which is planning a emissions 10 forecasting symposium in the spring of 1998, met on several 11 occasion during September and October of this year. 12 Thus we see staff has done and is continuing to do 13 an excellent job of reaching out to stakeholders and affected 14 parties on this important issue. 15 CHAIRMAN DUNLAP: Very good. Thank you, Mr. 16 Schoning. 17 Any questions of staff at this juncture? 18 Would you like me to just go ahead with the 19 witnesses? 20 We have three witnesses that have signed up to 21 testify. We will start with Michael Block who is with the 22 Engine Manufacturers Association and we ask Bob Lucas from 23 CCEEB to come to the front row and ready himself as we would 24 Michael Wang from WSPA. 25 MR. BLOCK: Good afternoon. I am Michael Block and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 I am here to speak today on behalf of the Engine 2 Manufacturers Association. 3 EMA's members include the major manufacturers of 4 non-highway and non-road engines used to power trucks, buses, 5 farm, construction, industrial, lawn and garden and utility 6 marine and locomotive equipment. 7 All of these mobile sources are included in the 8 emissions inventory being considered for approval today. 9 EMA members support the development and updating of 10 the most accurate emission inventory as possible. Emission 11 inventories form the basis for assessing the need for and 12 effectiveness of regulatory activity. 13 EMA believes that inventory models must be modified 14 to account for new regulations that are promulgated after the 15 approval of an inventory model. 16 Further, EMA strongly supports the process outlined 17 in SB 2174 requiring Board approval and verification of the 18 emission inventory as part of the public process. 19 EMA has worked closely with ARB staff to provide 20 suggestions and technical input on the inventory modeling 21 process for both the on-highway and non-road segments of the 22 emissions inventory. 23 As such EMA has participated in workshops, 24 submitted comments and was part of the peer review of the 25 models themselves. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 With respect to the on-highway model known as 2 MVI7G, we believe that with one exception the model is 3 accurate and should be adopted. 4 The one exception is to account for the emissions 5 benefits associated with the use of on-board diagnostic 6 systems, or OBD, that are required for medium-duty vehicles. 7 The voluntary response portion expected from an OBD 8 indication should be included in the model. With respect to 9 the off-road model, EMA provided extensive comments on both 10 the input information to the model as well as the model 11 itself. 12 In doing so it was our understanding and desire 13 that the entire new off-road model encompassing all non-road 14 categories, including engines used in lawn and garden, 15 industrial, farm, construction, marine and locomotive 16 applications would have been completed and presented for 17 Board approval. 18 Unfortunately, that has not occurred. As a result 19 the Board is being asked to approve an inventory with an 20 outdated model for non-road mobile source emissions. 21 While the Board may feel obligated to accept that 22 model for the moment it is critical that the Board commit 23 itself to a timely review and approval of the revised model 24 otherwise future ARB regulatory activity could be 25 compromised. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 We believe that ARB staff supports our concern that 2 the new off-road model be revised in a timely fashion. 3 One way to do that is to review the model in pieces 4 linked to pending regulatory activity. In this way 5 California's regulatory schedule would not be compromised by 6 outdated or inaccurate inventory assessments. 7 In order for this approach to be effective for the 8 California public as well as for industry and other 9 stakeholders, a defined schedule for each portion of the 10 off-road model must be established and implemented within the 11 next year. 12 Failure to adopt all elements with the off-road 13 model by the end of 1998 will result in a reversion to 14 outdated industry data seriously compromising the overall 15 consistency and accuracy of the inventory and fairness the 16 accuracy of ARB's regulatory programs. 17 EMA will continue to commit its resources to this 18 progress and looks forward to completion of the entire 19 off-road inventory assessment in 1998. 20 As I mentioned above, models are utilized to 21 provide an emission inventory basis for knew regulations. 22 However, new regulations are frequently finalized 23 subsequent to the adoption of a particular model. The models 24 and the inputs to these models need to be adjusted to account 25 for these postmodeling regulations. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 One example is evident today. The on-highway 2 model, NVEI7G, will presumably be approved without inclusion 3 of the emissions inventory benefits associated with the 4 recently published Federal regulations for heavy-duty trucks 5 and diesel engines. 6 California has already committed to adopting the 7 same standards, which we understand will be promulgated next 8 year. 9 To address these issues ARB uses control factors, 10 which are sort of mathematical corrections to the existing 11 model to account for new regulations. 12 From a technical perspective EMA supports the 13 control factor approach. However, that process historically 14 has not been open for public review. 15 With the implementation of the public review 16 process under SB 2174, ARB should ensure that all inventory 17 processes, including the calculations and control factors, be 18 subject to public review. 19 EMA urges the Board to include the calculation of 20 control factors as part of the inventory assessment process. 21 EMA appreciates the opportunity to provide these 22 comments. We are committed to the public inventory review 23 process and we encourage the Board and the staff to work 24 toward a prompt and timely review and adoption of the newest 25 modeling information. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 I will be happy to answer any questions either now, 2 or later. 3 CHAIRMAN DUNLAP: Mr. Calhoun. 4 BOARD MEMBER CALHOUN: Maybe I didn't hear you 5 well, but did I hear you say that the Board is being asked to 6 approve a model? 7 MR. BLOCK: Yeah. MVEI7G, the on-highway model. 8 BOARD MEMBER CALHOUN: When has the Board been 9 asked to approve that? 10 Are you suggesting that the action that the Board 11 takes today is in effect sanctioning this particular model, 12 is that the basis for your statement? 13 MR. BLOCK: Right. We support the approval of 14 that. 15 BOARD MEMBER CALHOUN: Let me site my own views 16 about what we are being asked to do today. This is the first 17 time that this Board is being asked to approve the emission 18 inventory. 19 I would not want to create the impression by 20 whatever action this Board takes today that the Board is 21 saying that this inventory is accurate, because at best, this 22 is a guesstimate, using the best available techniques that 23 the staff has for making this particular estimate. 24 I don't want to, at least my vote, if I should vote 25 to approve this, implies that I am saying that the inventory PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 is accurate. 2 MR. BLOCK: I guess my response to that would be 3 that we are aware of that also. In fact, as I indicated, 4 it's a best estimate, and maybe the best way to explain that 5 is it is the most accurate at the time with the information 6 that we have. 7 We don't expect the Board to approve a model that 8 is the absolute definitive, most accurate and kind of walk 9 away from it. 10 BOARD MEMBER CALHOUN: What does approval mean to 11 you? 12 MR. BLOCK: Approval means, basically, approving an 13 inventory assessment that given the information that we have 14 right now, is as you would say, the best estimate of what the 15 inventory is. 16 I'm not sure I am answering your question. 17 BOARD MEMBER CALHOUN: I will accept that. 18 CHAIRMAN DUNLAP: Well, I think the concern 19 Mr. Calhoun has, and I certainly share it, is that people 20 need to understand that there are limits in accuracy, because 21 it's impossible for us to know everything and to have all 22 variables tied down. 23 In spite of that we don't have the luxury of 24 waiting to do anything until we have all the answers relative 25 to our mandate. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 I think your points are well made. I would ask 2 staff, for my part at least, there some were pointed and 3 specific requests relative to process and elements of the 4 inventory that EMA is most concerned about and I would like 5 to get a reaction from you all about how accommodating you 6 feel that you can be within the spirit of 2174 to those 7 specific suggestions. 8 I know there is dialogue, EMA, I am certain that we 9 will be pretty close to living together over the course of 10 the next nine months on issues as they emerge and I know you 11 have a very strong presence with our staff and I know you 12 will be talking with our Board Members in the future on other 13 issues, so I am not worried about access. 14 MR. CROSS: Actually, I am surprised that it's all 15 under testimony a little bit Michael and I have talked 16 already extensively about what next year would hold and we 17 have already agreed that the incremental process of combining 18 regulatory activities with inventory updates for all the 19 off-road categories will in fact be done. 20 We have agreed to the deadline of the end of 98 for 21 completing all of the off-road inventories and we have also 22 agreed to a very open process in ensuring assuring that all 23 of the data and all of the inputs are put before the impacted 24 parties as early as we possibly can for dialogue. 25 So, I think we will be fine on it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 MR. BLOCK: If the tone of my testimony was such as 2 to say that we didn't have that dialogue that was not my 3 intent. 4 The tone of our testimony was just to point out to 5 the Board some of our concerns and to emphasize that we have 6 had a good relationship and working with Bob and his staff to 7 address those issues. 8 CHAIRMAN DUNLAP: Yes. The one issue that peaked 9 my interest was the OBD issue and one of the things that this 10 Board is very concerned about is the electronics and the 11 emissions for the light-duty and heavy-duty trucks and the 12 like and so that will continue to be a priority for us and we 13 have asked our staff to look into that and make sure we are 14 getting the benefits that we had realized. 15 As it relates to that specific issue I know we are 16 already communicating with you concerns and issues. 17 MR. BLOCK: Bob's staff has made a commitment. 18 MR. CROSS: We are already looking at that as well. 19 CHAIRMAN DUNLAP: Less you feel selected out, or 20 picked on, let me assure you we are having the same 21 discussions with the light-duty folks as well. 22 MR. BLOCK: We are well-aware of that. 23 CHAIRMAN DUNLAP: Okay. 24 Any other questions of this witness? 25 We have two others. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 Mr. Lucas. Bob Lucas, from CCEEB. 2 I see Bob, that you have checked off the opposed 3 box on your comment card. 4 MR. LUCAS: Only two choices. 5 CHAIRMAN DUNLAP: Yeah. We didn't give you a 6 middle ground, did we? 7 MR. LUCAS: Well, I did expound a little bit under 8 the theme. Let me step back just a little bit. 9 CCEEB is the sponsor of the bill that you are 10 responding to today. CCEEB approached Senator Polanco and 11 impressed upon him the importance of the emissions inventory 12 document that is produced by the Air Resources Board. 13 In doing that, we impressed upon him the need that 14 that document be subject to Board review and that it be 15 adopted by the Board in some formal hearing process. 16 It does not necessarily have to be a regulatory 17 process, but at some formal hearing process. In the past, 18 these activities have been conducted entirely by the staff. 19 2174 says, let's take it from the staff and give it 20 to the Board, so that when this document goes out public this 21 is your statement of where you believe the current emission 22 inventory is and where it is going and the status of it. 23 So, it is within that context that we are reviewing 24 this and we have been participating and that we have some 25 concerns today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 We have some concerns in that, although there has 2 been a lot of process in terms of preparation of this 3 document, getting to this document, the last workshop was in 4 July, this document, this is the first public discussion of 5 this document that I am aware of. 6 It has been in circulation for one month. Now, to 7 some that may sound like a lot of time. 8 I think if you harken back to the presentation that 9 the staff gave you, you see just how detailed and complicated 10 this document really is and what it represents. 11 We have some of our members that are interested in 12 the stationary source aspect of the emission inventory and 13 that's what they focus on. 14 We have some that are interested more in the mobile 15 source side and on the modeling and that's what they focus 16 on. 17 We have some that are interested in the 18 socioeconomic data and how that might be manipulated by some 19 and in the past there has been some concerns about how SCAG 20 has interacted with the Board and how that affects future 21 results. 22 We also have though some that are interested in the 23 correlation and the verification of the results of the 24 effort. 25 Now, I have gotten E-mails from people that are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 concerned in all aspects of that. The last E-mails to come 2 in unfortunately had to do with the item that I am here for 3 today and that's on the correlation aspect of it and the 4 verification. 5 Yes, it's true, these comments just came to me this 6 week and I am just now bringing them to the attention of the 7 staff. 8 On the basis on these comments I asked the staff, 9 since this is not January, if we could have another month to 10 review some of our concerns with the staff. 11 With regard to verification. I am not here to 12 quibble with you over the inventory. I am not here to 13 quibble with you over the assumptions in the individual 14 models, but I am here to ask you to direct your attention to 15 the verification portion of this document. 16 On page 50, which is chapter 4, in the middle 17 paragraph, the document states, the updated analysis shows 18 that the emission ratios for current models and the ambient 19 ratios measured in 1995 are now in reasonable agreement. 20 Staff has declared victory. Well, we take issue 21 with that statement. 22 We think that this may not be entirely an accurate 23 statement and that there is room to disagree with that 24 statement. 25 If we move to page 58, there is a little bit more PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 information there. On the last paragraph before item 3, it 2 says, in the second point, the current hydrocarbon inventory 3 may be underestimated by 20 to 55 percent. 4 Whereas the 1987 analysis suggested that the 1987 5 hydrocarbon inventory was underestimated by 150 percent. 6 We have gone from 150 percent concern down to a 55 7 percent concern. Again, we are declaring a victory here 8 based on that. 9 The staff said that they have used the same 10 methodology to reach this conclusion as was undertaken in 11 1987. 12 They say they have improved it. Well, we take some 13 exception with those improvements and some of the things that 14 were done to get a different result from the same general 15 type of data by the selection of the data that was used to 16 generate the number that allows this correlation to occur. 17 You will notice that the detail, actually it's on 18 page 50, it says, if you want to see the detail for this you 19 go to attachment 3. 20 Well attachment 3 is a fairly detailed portion of 21 this document in the back. This is where assertions are 22 made. 23 For example, on the distinction as to why to 24 exclude HADDT, in the 1987 analysis it was all vehicles were 25 included and in this analysis they are excluding it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 There is a statement here in the second paragraph 2 that says, the sum of emission estimates for vehicle 3 categories without HADDT might better represent emissions 4 that actually produce the ambient concentrations measured at 5 the monitoring sites. 6 Well, we would like to explore that a little bit 7 more about the, might, for example, because there is a 8 significant difference. 9 You take HHDDT out, the numbers go down by 20 10 percent, or some number like that. If you go to page 17 in 11 this attachment 3, in the last paragraph, it says, in the 12 last sentence in the last paragraph, it says, since ambient 13 NMHC/NOX, ratios are higher than emission ratios in general 14 the SIGBE profiles produced a better match between ambient 15 and emission ratios than do the auto oil profiles. 16 Well, that means that it gives a better answer. 17 Well, we are not interested, this is the grading document, by 18 the way. 19 This document by which you determine how well you 20 are doing. It sounds from this sentence that SIGBE was 21 chosen over auto oil because they gave a better match, 22 therefore less discrepancy, better answer for doing a better 23 job, let's give ourselves a better grade. 24 Now we may not be correct in our concerns about 25 these kinds of statements and in the use of these certain PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 data sets and exclusion of certain data sets in the 2 calculation of the ratios that give rise to an assessment as 3 to how close or not close these emission inventories are. 4 We too take exception though to the conclusions on 5 page 50. I think that this Board should at least be 6 presented with a broader variety of potential conclusions 7 than the one that declares victory on page 50. 8 We do think that since no harm would result from 9 the Board putting this matter over for a month that we have 10 an opportunity to work with staff and at least review some of 11 these questions and see if the disparity is as far as it 12 might be, or if we are closer. 13 If it is as far as it might be this inventory is, 14 we believe is more than 100 percent off on the hydrocarbons. 15 Just by the numbers that are in this document that 16 is a potentiality. That, we believe, would affect your 17 conclusions as written on page 50 in chapter 4 of the 18 document. 19 So, I guess the bottom line is, what we are asking 20 for is there is a January date to report to the Legislature 21 to fulfill our obligation to adopt updated inventory 22 verification. 23 We still have a month, we can at least have one 24 more meeting and see if we can come to terms. If not, we are 25 going to be here to strongly argue against some of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 statements that were made, particularly on the verification. 2 CHAIRMAN DUNLAP: I appreciate that and I know, I 3 have worked with you in the past, Bob, and I know how 4 strongly you feel about making sure that the data and the 5 numbers are accurate and we appreciate that and kind of 6 respect that view from your organization. 7 Two issues that come to mind for my part of the 8 discussion, one is, we take very seriously Legislative 9 requirements relative to reporting, to not to quibble with 10 you over adequate timeframes and deadlines and all of that, 11 but to put in the vernacular of the day, I catch hell when we 12 are late submitting information to the Legislature, so we 13 take that seriously, that's why they have those dates. 14 In hearing your testimony, and seeing your 15 comments, I see the verbiage here and how it might irritate, 16 and it appears as if it is absolute perhaps, from your view, 17 but as Mr. Calhoun mentioned a moment ago, inventories, and 18 the accuracy of inventories are not regulations, but they can 19 be a precursor to that, are a precursor to that. 20 We don't gain anything at this Board by artfully 21 manipulating numbers, at all. One of the biggest concerns we 22 have is making sure that the numbers are accurate, we want 23 them to be, because that is the basis for all the regulatory 24 programs and we need to get the desired outcome, which is to 25 protect public health. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 So, my only hesitation to giving you what you want 2 relative to the delay is the lack of specificity you have. 3 Your concerns are about words, which are important, 4 and I will put staff through the paces on those words in a 5 few moments, I folded my corners of the pages, and not 6 specifically about what is wrong, but the potential for it to 7 be wrong. 8 That concerns me, Bob. I know you guys in the past 9 have always come in and, you know, had your ducks lined up 10 and had the numbers and I am not seeing them this time and 11 that's troubling me a little bit. 12 MR. LUCAS: Again, I am not quibbling over the 13 emission inventory. The point that I am raising has to do 14 with the verification that is being employed by the Board 15 staff to given to the Board to adopt. 16 We are saying that this verification system should 17 be at least subject to some public review and comment before 18 you adopt it, certainly before you reach conclusions as a 19 result of it. 20 We dispute some of the numbers that are used in 21 this verification calculation. We dispute the choice of 22 certain sets of numbers versus other sets of numbers and we 23 think if other numbers were used that it would lead to 24 different conclusions. 25 We are not asking to change numbers in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 inventory, but we think it is not in anyone's interest for 2 the Air Board to say that we have won the battle here in our 3 modeling and that is clearly the conclusion you reach by 4 looking at this verification. 5 MR. KENNY: We are not saying that we won the 6 battle. I mean what we are talking about here are 7 inventories and the reality of inventories has been and will 8 continue to be that they are inexact, they are imprecise, 9 they are best estimates for the particular day, they are time 10 limited. 11 I don't know how I can qualify them any more than 12 that. We tried to do the best job that we can at the 13 particular point and time. 14 We recognize that inventories will be continually 15 subject to review and continually subject to updating, that 16 has been the history of inventories and it will continue to 17 be the history of inventories. 18 So, to the extent that Mr. Lucas talks about us 19 declaring victory, I do think that's an inaccurate statement. 20 CHAIRMAN DUNLAP: Mike, on that point, can you 21 respond to Bob relative to the other bites at the apple he 22 and his organization would have as work on refining these 23 inventories over time and that, what the consequences of an 24 approved action today and what it might mean relative to 25 their ability to influence, to provide, not just influence, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 but new, more accurate data and information. 2 Is this the last crack they get at it? 3 MR. KENNY: No. 4 I think what you are going to see is essentially 5 the staff being continually open to the discussion with 6 regard to the inventory. 7 We do have a lot of work that we are doing as the 8 staff has indicated with regard to the off-road inventory and 9 that work will be subject to public scrutiny and will be 10 subject to public scrutiny both in terms of the results and 11 in terms of the process by which we achieve those results. 12 We recognize that, in fact, newer and better 13 information make for better inventories and so that 14 information will be incorporated into the inventory. 15 CHAIRMAN DUNLAP: All right. If Bob's organization 16 has some new data that is better and more accurate than ours, 17 how does that get folded in and updated? 18 Does that come back to the Board every time? 19 MR. KENNY: It doesn't have to come back to the 20 Board every time. This process under 2174 required that we 21 bring this to the Board before January 1998, and then revisit 22 it before the Board on a triennial basis. 23 We will be back to the Board, you know, the 24 triennial basis as required. It is also very realistic to 25 expect that we will be back before the Board, for example, as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 we update the off-road inventory that we are working on right 2 now and we will be doing that next year in 1998. 3 There is really no reason not to have this open to 4 the public. Generally, the approach that we have taken here 5 at the Board is that we have all of our documentation, all of 6 our information open to public review. 7 We do not have anything that is not open to public 8 review other than confidential data. 9 CHAIRMAN DUNLAP: The points that Bob is bringing 10 up, specifically page 50 and the like, how long has that been 11 on the street, he indicated a month, has it been out that 12 long? 13 MR. SCHEIBLE: The write-up document has been 14 available for approximately a month. However, in early July 15 we presented the tables that are in the report and made a 16 staff presentation, a workshop in this room on the 17 methodologies. 18 That information has been refined, the numbers have 19 changed very little. We received comments, we made some 20 changes to that so that the basic methodology that we used 21 for both analyzing tunnel studies and the ambient data the 22 presentation for completeness sake of how it was done in 85, 23 87, and how we think it is better done today reflecting new 24 data and things that we have learned since was made at that 25 time. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 Basically, this information has been out there for 2 quite some time. It can always be improved. 3 CHAIRMAN DUNLAP: Bill, did you want to say 4 something? Fred. 5 BOARD MEMBER FRIEDMAN: Well, I was just going to 6 say that to me it is quite clear in what you wrote, that this 7 is a work in progress. 8 I am not sure that I understand how out of 125 9 pages, we spoke about five words. I mean, it is quite clear 10 in this report that as methods change, as data, new data is 11 forthcoming, as individuals look at critically, at what is 12 said and provide input, that this is going to change. 13 That is the way that it is supposed to be. 14 MR. LUCAS: If I may, my comment again are not 15 directed towards the inventory and changing inventory 16 numbers. 17 My comments are directed to the verification. The 18 compilation of the report card. 19 The calculation methodologies and the choice of the 20 numbers used to verify those numbers. I am not addressing 21 the inventory. 22 I am addressing the verification and there we do 23 have a dispute with staff. The extent of the dispute is 24 unknown at this time, because we have not had a discussion 25 with them over this document which interprets the material PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 that Mr. Scheible said has been out since July in a form that 2 we find very questionable. 3 We are suggesting that since this is now your 4 document and not a staff document that you may want to 5 consider taking one additional month to look into this 6 verification issue. 7 BOARD MEMBER CALHOUN: May I make one comment 8 regarding the verification. A lot of the stuff pertaining to 9 verification, Mark Carlock has discussed a lot of it at a 10 previous meeting, not that I am trying to discredit what you 11 are saying, but some of it has been discussed in the past. 12 This whole thing is kind of evolving and I have to 13 admit that it is rather complex. Whatever the inventory is, 14 the air quality should reflect, the quality of the air should 15 reflect that. 16 There obviously are some questions. I get 17 telephone calls or I will meet people in the street and they 18 ask me why in the heck is the Board looking at, shall we say, 19 some type of consumer product when it is not making much of a 20 contribution, I just used that as an example, all the 21 automobile, all the gross emitters, and so we have to try to 22 relate the quality of the air to the inventory, and I have 23 had some extensive discussions with the staff about this, and 24 so I think it is whatever action this Board takes today, I 25 would like to see some follow-up action after this meeting. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 I understand there is a staff group that looks at 2 correlating, that looks at trying to correlate the air 3 quality with the emission inventory and I would like to learn 4 a little bit more about that. 5 CHAIRMAN DUNLAP: Okay. Well, let's, Sally, I will 6 be happy to hear from you and then I want to hear from the 7 last witness and then we will come back. 8 BOARD MEMBER RAKOW: Related to what Mr. Lucas said 9 about the coming month, could you explain to me the procedure 10 that we do having to meet the date for the Legislature? 11 CHAIRMAN DUNLAP: Well, Chris Reynolds is here, our 12 Legislative Director, and I don't mind calling him out of the 13 audience and having him come up here and join the staff 14 table. 15 Chris, if you would, just pick a moment and talk 16 about the emphasis that the administration has placed on 17 responding to the Legislative deadlines and the like. 18 BOARD MEMBER RAKOW: And when this deadline does 19 occur? 20 CHAIRMAN DUNLAP: Yeah. And Chris, for reference 21 sake, in the back of the package there is a specific bill. 22 MR. REYNOLDS: For the sake of brevity, I'm Chris 23 Reynolds, the Legislative Director. 24 For the sake of brevity the administration 25 considers it very important to meet deadlines. There is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 continual questions that come from Cal EPA, the agency under 2 which the Air Resources Board operates. 3 Continual questions being raised about reports that 4 are due to the Legislature and what the timing of those 5 reports are and when they are due. 6 We are very mindful and watchful of the deadlines 7 that the Legislature has placed. We believe that they put 8 them in place for a reason. 9 So, we are very concerned about meeting those 10 timelines, those deadlines, we take it very seriously. 11 CHAIRMAN DUNLAP: But the specific question Chris, 12 it says in the bill, 2174. 13 MR. REYNOLDS: It says that this must be adopted by 14 January 1, 1998. 15 BOARD MEMBER RAKOW: When do we report to the 16 Legislature that yes, we have adopted it. 17 Is it by the end of January, by the beginning of 18 February, January 10? 19 What is our leeway? 20 MS. WALSH: The time requirement is for adoption of 21 the inventory and that needs to be done by this Board before 22 January 1, 1998. 23 That is what the Legislation calls for. The 24 Legislation does not require specifically a report to the 25 legislature by any specific date, but this action that you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 are contemplating today is required to be completed by 2 January 1, 1998. 3 CHAIRMAN DUNLAP: The December Board meeting date, 4 do you know it, Pat? 5 December 11. Okay. 6 BOARD MEMBER RAKOW: I have seen some reports in 7 another agency that go on and on and never get any action on. 8 CHAIRMAN DUNLAP: That happened here once Sally, 9 and it wasn't pleasant, I can assure you. 10 BOARD MEMBER RAKOW: I know. This other agency 11 would have never noticed. 12 MR. REYNOLDS: Just to interject, I am sorry if I 13 confused the issue by talking about the timeliness of 14 reports. 15 This Legislation talks about adopting the 16 inventory, it doesn't talk about reporting. I was just using 17 that as an illustration of how seriously our agency and this 18 administration considers meeting deadlines. 19 BOARD MEMBER RAKOW: I agree. I support the fact 20 of meeting deadlines. 21 I guess it's all leading to the, my thought is what 22 would we lose by having an opportunity for the staff, and I 23 don't know, I am asking the question, the staff and seeing to 24 sit down and see if they can work out any of their 25 differences in the next few weeks. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 I don't know whether those would set us back. 2 CHAIRMAN DUNLAP: I am personally not opposed to 3 that, but I want to hear from the remaining witness and see 4 what WSPA has to say, too. 5 Bob, I appreciate it. The one thing I would say to 6 you, and if we are going to consider that and discuss it 7 after we hear from Mr. Wang, but if we get a delay, if I 8 might lecture you just for a moment, one month is a long time 9 and may not be all that you needed, but it's a long time 10 generally speaking, and you know, if we do see fit to give 11 you that time, you know, you are going to have a month, you 12 are actually going to have a little less than a month. 13 So, we are going to count on you and hold you 14 responsible, put your credibility on the line to get you 15 people together. 16 MR. LUCAS: I don't mind that and, in fact, look 17 forward to it. What we do need here is an opportunity to sit 18 down with the staff and discuss some of these discrepancies. 19 CHAIRMAN DUNLAP: Yeah. Okay. 20 All right. Michael. 21 Thank you, Bob. Michael Wang, WSPA. 22 MR. WANG: You will note that I checked neither for 23 or against. I find it safer to get up here and say it that 24 way. 25 My name is Mike Wang with the Western States PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 Petroleum Association. We are pleased to be here. 2 We have comments on the follow-up to SB 2174 and to 3 on the importance of a good, quantitative and reliable 4 emission inventory reconciliation. 5 This is especially important in light of 6 developments since the last inventory, 1994-95, and in 7 preparation for the future. 8 First, WSPA is pleased that ARB is taken on this 9 issue with the level of commitment and seniority of staff and 10 the time they have spent on it. 11 It has been an extensive effort and we recognize 12 that. Today I'll note some of the key outcomes we think are 13 expected from this process and then highlight some key 14 aspects that we also hope will emerge. 15 We see regular and rigorous inventory development 16 and reconciliation as critical given our understanding of the 17 current control measure limitation. 18 Indeed the emissions inventory as currently 19 developed is problematic. EPA's recent acknowledgment, for 20 example, that emission reductions anticipated for ships and 21 airplanes will only partially be achieved and the 22 pronouncement that heavy duty diesel and NOX emissions seem 23 to be understated, stress the importance of improving the 24 accuracy of the current years emissions inventory. 25 Now, there are some key concerns that need to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 addressed by the Board and staff now and in the future. 2 We hope that another inventory update is prepared 3 prior to submittal of the next SIP. Given that the next SIP 4 could be submitted three years from now, the year 2000, we 5 suggest that a new inventory be adopted by your Board, say, a 6 year in advance to do an adequate timing and that would be in 7 the year about 1999, and accompanying that year 2000 SIP. 8 It appears that the ARB is in agreement with this 9 approach and we appreciate that. You have made frequent 10 statements that inventory could be developed more frequently 11 than every three years and as new data emerged. 12 For example, this new inventory could MVEI7G, or 13 the newest version of whatever impact it is and incorporate 14 many of the new proposals ARB is planning. 15 With respect to future inventory revisions, we 16 suggest that ARB and local districts reconcile the emissions 17 inventory with ambient air measurements and other tests that 18 are currently available or that you currently anticipate 19 conducting. 20 We are aware that instances in the current 21 inventory update were less rigorous reconciliation due to 22 time has occurred and we understand that. 23 The future reconciliation or verification needs to 24 occur in order to ensure that the best data is used for 25 planning purposes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 In essence we are asking that the inventory and SIP 2 planning process engage in rigorous testing as more data 3 becomes available to us and as we get closer and closer to 4 the SIP submittal and as the stakes get a little bit higher. 5 Given the importance of these efforts ARB may need 6 to provide additional funding to support these activities. 7 I have to make one small pitch for future year, the 8 out-year projections. We are aware that ARB and other 9 agencies have tentatively planned an emissions symposium for 10 1998 in March and we strongly support that. 11 We think that is a good way to start developing a 12 projection and a methodology to project emissions inventory. 13 This symposium would bring together those which 14 develop to run models of the future with those that utilize 15 the models in their work. 16 The focus of the symposium will be on identifying 17 is how the forecasting methods used by agencies and groups 18 can be incorporated in a more robust method for projecting 19 future emissions. 20 We are especially pleased that a growing consensus 21 believes that we focus on the few variables which seem to 22 have the greatest impact on out-year emissions. 23 So, in closing, we appreciate the steps that ARB 24 has made in the process. We know that ARB joined us in 25 noting that more needs to be done. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 The public outreach process used by ARB seems to 2 have been a success and the process moves forward towards the 3 next inventory update and submittal. 4 We look forward to continued improvements. 5 CHAIRMAN DUNLAP: Okay. Thank you, Michael, I 6 appreciate that. 7 Yes. Lynn, just one second. 8 Mike, are you okay with the out-year planning and 9 process? 10 Okay. Relative to the one year ahead for the SIP? 11 MR. KENNY: Yes. 12 CHAIRMAN DUNLAP: All right. Ms. Edgerton. 13 BOARD MEMBER EDGERTON: My understanding of the 14 verification in this report was that you looked at three, is 15 that on, oh, I'm talking to the light. 16 I'm sorry. Hello. 17 My understanding of the verification and 18 reconciliation, which was prepared and presented by the 19 staff, was that three methods were utilized. 20 It doesn't mean that there are other ways of trying 21 to reconcile the emissions data with air quality or other 22 ways to try to check the accuracy of the inventory. 23 It just means that these are the ones that the 24 staff used in this report and these are the results of those 25 analyses. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 It seems to me that that is pretty 2 straightforward. I would want to ask the staff, if my 3 understanding is correct, that these are exactly what they 4 are, three methods you used and whether you think that there 5 are other additional methods that you would like to have an 6 opportunity to include in the report if given more time, or 7 if you would like to suggest that you think maybe there are 8 ways that you would like to change what you have got in here. 9 MR. SCHEIBLE: I will try to take on those 10 questions. We do not have available to us other methods that 11 we could identify, or others could identify that we have the 12 ability to implement at this time. 13 We would love to have more methods to look at or be 14 able to do more extensive data analysis. What we tried to do 15 was, I think what our analysis showed us was when we compared 16 the current inventory to the inventories that we were using 17 back five years ago we see much less discrepancy no matter 18 what method is used relative to tunnel studies, relative to 19 ambient ratios. 20 When we fix some of the things we think we had an 21 error in this previous analysis and one big one was the 22 percent of hydrocarbons coming out of vehicles that were 23 reactive organic gases, we used what was called auto oil and 24 that gave us a number that was too low, we know in retrospect 25 that it was wrong. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 When we replaced it with a number that was more 2 accurate we get better comparisons. Third, when we do things 3 like we look at with or without heavy-duty exhaust included, 4 which raises the NOX, we get an assessment when we think that 5 is more accurate for 6:00 a.m. to 9:00 a.m. in places like 6 downtown LA, again, the ratios get closer. 7 We are probably at the point now where we are never 8 going to get the one to one agreement between ambient ratios 9 and motor vehicle emission ratios. 10 We are starting to get into the ballpark where the 11 method is saying there is reasonable agreement. That doesn't 12 mean the inventory is right, or that we stop improving the 13 inventory, it just means that obvious flaws in the inventory 14 that were suggested by previous studies aren't so obvious any 15 more. 16 There were some suggestions that we picked these 17 techniques because of the results they gave. We picked the 18 techniques because we believe the techniques are the most 19 accurate weighted to prove the methodology and the results we 20 got are the results we got. 21 We laid out very much the path how it was done 22 before and the criticism started about this to the current 23 past so that people could understand. 24 I think we can do a better job explaining it over 25 time. I don't know whether we can reach consensus. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 I don't think that we will do anything 2 fundamentally different over the next 30 days. 3 CHAIRMAN DUNLAP: Okay. Here is what I propose to 4 do. 5 What troubles me about where this is going today, a 6 bit, and I know staff has worked hard and I lauded staff at 7 the outset, the principal sponsor of the bill is here saying 8 they didn't have enough time to review it. 9 They think there were some judgment calls in here 10 that were perhaps shortsighted and they're concerned. 11 There's lack of specificity in their criticisms, 12 but at the same time, I am sensitive to the fact that here is 13 a group that went to a Senator and got him to run a bill that 14 the Governor signed. 15 So, I want it done right. I certainly don't want 16 to miss a deadline to the Legislature, it's important, your 17 credibility is on the line when you hit the deadline. 18 So, if my Board Member colleagues are supportive, I 19 will hold this over for a month and I am going to ask staff 20 to make themselves available to the CCEEB group and other 21 groups that have an issue and I want some very focused 22 discussions. 23 I want a report back next month how much of these 24 concerns were actually realized. You know, I'm interested in 25 the crying wolf syndrome if it applies here, so, I want to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 know that. 2 So, if my Board Member colleagues are sympathetic 3 with that approach. 4 BOARD MEMBER RIORDAN: Mr. Chairman, I am 5 sympathetic, but I would like to see you narrow the focus, 6 because I think I heard in the testimony that there was not a 7 disagreement on the emissions inventory. 8 So, I would hope that we could sort of set that 9 aside and that not become an issue of change, or whatever, 10 that you direct the focus because I think that would make the 11 meetings that much more productive. 12 CHAIRMAN DUNLAP: We will do it on the verification 13 element, I guess appendix, is it C, or 3, the third one, 14 which was the primary concern, 3. 15 I have had presented to me up here some specific 16 language where we have caveated some final points about the 17 fact this is a best guess, Joel Calhoun said it, I certainly 18 agree with it, so let's focus it on that third element. 19 I want staff to know very clearly that this move is 20 not in any way slight on you or your good work. We have 21 supreme confidence in your ability to do this, you have 22 demonstrated that time and time again. 23 I know we have heard from our Ombudsman that the 24 process was open and I am appreciative of that, I know that 25 is the case. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 So, let's carry it over a for a month. Let's focus 2 on that particular element. 3 I need a motion. 4 Okay. There is a motion by Supervisor Roberts 5 seconded by Mrs. Rakow to continue it for a month asking 6 staff to specifically sit down with CCEEB and other interests 7 to look at the verification element as Supervisor Riordan 8 said well not the broader issue of bringing everything into 9 question, but the specific elements that Mr. Lucas focused 10 on. 11 I appreciate those other two witnesses, the EMA 12 witness, as well as the WSPA witness and their forthright 13 nature on talking about the elements that they agreed upon 14 and the counsel they gave us to make sure that we had an as 15 accurate as possible inventory. 16 Mr. Kenny, are you okay with this? 17 MR. KENNY: That is fine. 18 CHAIRMAN DUNLAP: All right. Very good. 19 Any other discussion on the Item? 20 Okay. We'll carry it over for a month. 21 We'll do a voice vote. 22 All those in favor, say aye. 23 Any opposed? 24 Very good. Motion carries. 25 MS. HUTCHENS: There were written comments. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 CHAIRMAN DUNLAP: We are going to carry it over for 2 next month on the written comments. Okay. 3 All right. Thank you. 4 Let's go to the last Item, the public open comment 5 period. The next Item on the Agenda is the open comment 6 period, during this period although no formal Board action 7 will be taken we will provide an opportunity for members of 8 the public to directly address the Board on items of interest 9 that do not appear on today's Agenda. 10 We are asking that each witness limit his or her 11 testimony to topics that are within the subject matter 12 jurisdiction of the Board to ensure that everyone has an 13 opportunity to speak we are also asking that each witness 14 limit his or her testimony to no more than five minutes. 15 Ms. Hutchens, is there anyone that signed up to 16 address the Board? 17 MS. HUTCHENS: No. 18 CHAIRMAN DUNLAP: Very good. 19 Is there any items that the Board wishes to 20 discuss? 21 Mr. Kenny, do you want to add anything? 22 MR. KENNY: I have nothing to add. 23 CHAIRMAN DUNLAP: Okay. 24 Very good. 25 The November meeting of the California Air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 Resources Board is now adjourned. 2 (Thereupon the Air Resources Board meeting 3 was adjourned at 3:05 p.m.) 4 --o0o-- 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 4 I, VICKI L. MEDEIROS, a Certified Shorthand 5 Reporter of the State of California, do hereby certify: 6 That I am a disinterested person herein; that the 7 foregoing hearing was reported in shorthand by me, Vicki L. 8 Medeiros, a Certified Shorthand Reporter of the State of 9 California, and thereafter transcribed into typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said hearing nor in any 12 way interested in the outcome of said hearing. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this twenty-second day of November, 1997. 15 16 17 18 VICKI L. MEDEIROS 19 Certified Shorthand Reporter 20 License No. 7871 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345