BOARD MEETING STATE OF CALIFORNIA AIR RESOURCES BOARD SOUTH COAST AIR QUALITY MANAGEMENT District AUDITORIUM 21865 EAST COPLEY DRIVE DIAMOND BAR, CALIFORNIA THURSDAY, SEPTEMBER 15, 2005 9:00 A.M. TIFFANY C. KRAFT, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii APPEARANCES BOARD MEMBERS Mrs. Barbara Riordan, Acting Chairperson Ms. Sandra Berg Ms. Dorene D'Adamo Supervisor Mark DeSaulnier Mr. Henry Gong, Jr., M.D. Ms. Lydia H. Kennard Mr. Ronald O. Loveridge Supervisor Barbara Patrick STAFF Mr. Tom Cackette, Chief Deputy Executive Officer Mr. Tom Jennings, Acting General Counsel Ms. Diane Johnston, Senior Staff Counsel Mr. Michael Scheible, Deputy Executive Officer Ms. Lynn Terry, Deputy Executive Officer Ms. Kathleen Tschogl, Ombudsman Ms. Catherine Witherspoon, Executive Officer Ms. Lori Andreoni, Board Secretary Mr. Dennis Goodenow, Staff Ms. Renee Kemena, Manager, Planning and Regulatory Development Section, MSCD Ms. Kate MacGregor, M.P.H., Populations Studies Section, Research Division PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii APPEARANCES CONTINUED STAFF Mr. David Salardino, Staff Air Pollution Specialist, Alternative Strategies Section, MSCD Mr. Richard Varenchik, Staff Air Pollution Specialist, Retrofit Implementation Section, MSCD ALSO PRESENT Mr. Neal Abramson, SMMUSD Mr. Kelly Astor, Solid Waste Association of Orange County Mr. Angelo Bellomo, LAUDSD/OE HS Mr. Rick Benfield, Tumbleweed Day Camp Mr. Herbert Burnett, Burnett and Burnette Ms. Patricia Byrd, ALA Mr. Todd Campbell, Coalition for Clean Air Ms. Tzeitel Paras Caracci, Mayor Pro Tem, City of Duarte Ms. Jane Carney, South Coast AQMD Governing Board Mr. Patrick Charbonneau, International Trucks and Engine Corporation Ms. Wynesta Dale Mr. Brian Decker, CIOMA Mr. Russell Dix, Consolidation Disposal Services Mr. Bill Duplissea, CA School Transportation Association Mr. Michael Eaves, CA Natural Gas Vehicle Coalition Mr. Sean Edgar, Edgar & Associates Mr. Gordon Exel, Cummins Westport PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv APPEARANCES CONTINUED Mr. Rick Feinstein, Colton USD Mr. John Frala, Rio Hondo College Mr. Joshua Goldman, ISE Corporation Mr. John Hall, Torrance Transit Mr. Bill Haller, Sierra Club Ms. Staci Heaton, CTA Mr. Shabaka Heru, Community Coalition for Change Mr. Henry Hogo, SCAQMD Ms. Bonnie Holmes-Gen, American Lung Association Mr. Kirk Hunter, Southwest Transportation Agency Mr. Robert Ireson, Air Quality Management Consulting Mr. Daniel Ibarra, M.U.S.D. Transportation Department Mr. Jene Jansen, Antelope Valley Schools Transportation Agency Mr. John Jessie, Anaheim Union High School Mr. Charlile Ker, Westport Innovations Mr. Charles Lapin, Lapin & Associates Ms. Sheri Libicki, Environ Corporation Mr. Henry Lo, Senator Gloria Romero Mr. Raul Lopez, Coachella Valley USDX Mr. Bob Lucas, Lucas Advocates Mr. James M. Lyons, Sierra Research Mr. Joe Lyou, California Environmental Rights Alliance PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v APPEARANCES CONTINUED Mr. Bruce Magnani, CA Chamber of Commerce Ms. Stephanie Magnien, representing Assembly Member Judy Chu Mr. Jed Mandel, EMA Ms. Julie Masters, NRDC Ms. Pamela McDonald, Orange USD Ms. Jackie McHenry, City of Claremont Mr. Winston Mitchell, Durham School Services Mr. Phil Monckton, Scepter, Portable Fuel Container Manufacturers Association Mr. Jeffrey Noonan-Day, John Deere Mr. James Parker, City of Norwalk Mr. Mike Patton, Capistrano USD Mr. Allan Pollock, Montebello Bus Line Ms. Francisca Porchas, Bus Riders Union Mr. Mitchell Pratt, Clean Energy Mr. David Raley, Desert Sands USD Ms. Cathy Reheis-Boyd, WSPA/CA for a Sound Fuel Strategy Mr. Stephen Rhoads, STC Ms. Sharon Rubalcava, CA School Bus Contractors Mr. Allen Schaeffer, Diesel Technology Forum Mr. Jim Seal, California School Transportation Association Mr. Joshue Shaw, CA Transit Association PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi APPEARANCES CONTINUED Mr. Rick Sikes, City of Santa Monica Mr. Dave Smith, BP Mr. Doug Snyder, CA Association of School Transportation Officials Mr. Kent Stoddard, Waste Management Mr. Brian Stokes, Clean Vehicle Education Foundation Mr. Richard Teebay, Los Angeles County Department of Public Works Mr. Mike Tunnell, American Trucking Association Mr. Steve Umber, Placentia-Yorba Linda USD Mr. Robert Van Driel, First Student Mr. Bernard Waddell, Banning USD Mr. Lee Wallace, Southern California Gas Company and San Diego Gas and Electric Mr. Richard Wallace, FTE Mr. Barry Wallerstein, SCAQMD Mr. David Walthan, Ontario Montclair USD Ms. Rosa Washington, Western Riverside County Clean Cities Ms. Laurene Weste, Mayor Pro Tem, City of Santa Clarita Mr. Kurt Wiese, SCAQMD Mr. Bob Wigginton, Rowland USD Ms. Margaret Wilkinson Ms. Stephanie Williams, CTA Mr. Dave Winnett, City of Torrence Mr. Rick Zbur, International Truck & Engine Corporation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vii INDEX PAGE Pledge of Allegiance 1 Item 05-8-1 Acting Chairperson Riordan 11 Executive Officer Witherspoon 11 Staff Presentation 12 Q&A 17 Item 05-8-2 Acting Chairperson Riordan 18 Motion 20 Vote 20 Item 05-8-7 Acting Chairperson Riordan 20 Executive Officer Witherspoon 21 Staff Presentation 22 Ombudsman Tschogl 35 Q&A 36 Mr. Monckton 45 Mr. Wallace 45 Mr. Smith 47 Motion 49 Vote 49 Item 05-8-3 Acting Chairperson Riordan 50 Executive Officer Witherspoon 54 Senior Staff Counsel Johnston 55 Q&A 71 Item 5-8-4 Acting Chairperson Riordan 76 Executive Officer Witherspoon 78 Staff Presentation 81 Ombudsman Tschogl 87 Q&A 89 Ms. Weste 94 Mr. Wallerstein 97 Mr. Wiese 104 Mr. Burnett 106 Ms. Magnien 109 Ms. McHenry 111 Mr. Bellomo 113 Mr. Lo 116 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 viii INDEX CONTINUED PAGE Ms. Rubalcava 118 Mr. Feinstein 121 Mr. Umber 124 Mr. Wigginton 126 Mr. Patton 129 Ms. Caracci 132 Mr. Rhoads 134 Mr. Duplissea 137 Mr. Jene Jansen 140 Mr. David Walthan 142 Mr. Doug Snyder 144 Mr. Abramson 147 Mr. Jessie 150 Mr. Ibarra 152 Mr. Seal 154 Mr. Lopez 156 Mr. Frala 159 Mr. Raley 162 Ms. McDonald 165 Mr. Mitchell 167 Mr. Benfield 169 Ms. Libicki 172 Mr. Sikes 175 Mr. Stokes 178 Ms. Washington 181 Mr. Mandel 182 Mr. Magnani 186 Ms. Reheis-Boyd 191 Ms. Stephanie Williams 194 Mr. Zbur 196 Mr. Lyons 200 Mr. Schaeffer 203 Mr. Hunter 207 Mr. Noonan-Day 210 Mr. Eaves 213 Mr. Lucas 215 Mr. Lapin 218 Mr. Charbonneau 222 Mr. Edgar 225 Mr. Ireson 228 Mr. Tunnell 231 Mr. Pratt 233 Mr. Decker 236 Mr. Wallace 237 Ms. Masters 240 Mr. Lyou 243 Mr. Heru 247 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ix INDEX CONTINUED PAGE Ms. Holmes-Gen 247 Ms. Byrd 250 Ms. Wilkinson 252 Mr. Campbell 255 Mr. Van Driel 258 Ms. Porchas 259 Ms. Dale 260 Mr. Waddell 262 Mr. Hogo 263 Mr. Smith 268 Mr. Haller 270 Ex Parte 273 Q&A 281 Motion 288 Motion 303 Vote 305 Motion 319 Vote 320 Motion 321 Vote 330 Item 05-8-5 Acting Chairperson Riordan 331 Executive Officer Witherspoon 331 Staff Presentation 332 Senior Staff Counsel Johnston 338 Mr. Wallerstein 341 Mr. Edgar 344 Mr. Stoddard 348 Mr. Winnett 352 Mr. Dix 355 Mr. Astor 357 Mr. Smith 360 Ms. Masters 362 Mr. Campbell 364 Mr. Magnani 367 Mr. Mandel 368 Mr. Exel 371 Mr. Ker 372 Ms. Heaton 374 Ms. Knudsen 374 Ms. Reheis-Boyd 375 Mr. Eaves 378 Mr. Pratt 379 Mr. Hogo 381 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 x INDEX CONTINUED PAGE Ex parte 383 Q&A 385 Motion 386 Vote 392 Motion 392 Vote 394 Item 5-8-6 Executive Officer Witherspoon 395 Staff Presentation 395 Mr. Shaw 400 Mr. Parker 400 Mr. Hall 301 Mr. Pollock 402 Ms. Masters 403 Mr. Campbell 403 Mr. Eaves 407 Mr. Mandel 413 Mr. Pratt 416 Mr. Goldman 418 Mr. Magnani 421 Mr. Teebay 421 Ex Parte 424 Q&A 425 Motion 426 Vote 429 Public Comment 431 Adjournment 432 Reporter's Certificate 433 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 ACTING CHAIRPERSON RIORDAN: Ladies and 3 gentlemen, if I may have your attention, we would like to 4 begin the meeting. Those of you who are going to be 5 testifying today on the first two items or first item, 6 anyway, first two items, please come in and take your 7 seat. If you need to continue a conversation, you can 8 exit the room. 9 Good morning. This is the September 15th public 10 meeting of the Air Resources Board. And I will call it to 11 order. As is our custom, we have the Pledge of 12 Allegiance. And I've asked Dr. Gong to lead us, so if 13 you'd all stand. 14 (Thereupon the Pledge of Allegiance was 15 recited in unison.) 16 ACTING CHAIRPERSON RIORDAN: Thank you, Dr. Gong. 17 Madam Clerk, would you please call the roll? 18 SECRETARY ANDREONI: Ms. Berg? 19 BOARD MEMBER BERG: Here. 20 SECRETARY ANDREONI: Ms. D'Adamo? 21 BOARD MEMBER D'ADAMO: Here. 22 SECRETARY ANDREONI: Supervisor DeSaulnier? 23 SUPERVISOR DeSAULNIER: Here. 24 SECRETARY ANDREONI: Dr. Gong? 25 BOARD MEMBER GONG: Here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 SECRETARY ANDREONI: Ms. Kennard? 2 BOARD MEMBER KENNARD: Here. 3 SECRETARY ANDREONI: Mayor Loveridge? 4 BOARD MEMBER LOVERIDGE: Here. 5 SECRETARY ANDREONI: Supervisor Patrick? 6 SUPERVISOR PATRICK: Here. 7 SECRETARY ANDREONI: Ms. Pineda? 8 Supervisor Roberts? 9 Madam Chairman Riordan? 10 ACTING CHAIRPERSON RIORDAN: Here. 11 Thank you very much. 12 By way of notation and with great sadness, I want 13 to remind and share with you the passing of one of the 14 really finest individuals who's probably ever served on 15 this Board, Dr. William Friedman. For those of us who had 16 the pleasure of working with Bill and even the greater 17 privilege of being a friend, let me tell you we have lost 18 a giant among this Board. 19 He was the former Chairman of the Pediatrics 20 Department of the Geffen School of Medicine at UCLA and a 21 Senior Associate Dean of the Academic Affairs there. He 22 was appointed to the ARB by Governor Wilson and served 23 until 2004. 24 I would like to ask the Board to adjourn in his 25 memory this afternoon or this evenning when we conclude, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 and I've also asked, with your concurrence, I hope, for 2 the staff to begin to look at a way in which we might 3 memorialize him in our Research Department. In other 4 words, particularly with the study of children's health. 5 I think he lent so much to our knowledge, to the staff's 6 knowledge, and to those even that we were contracting 7 with. I would love to see something in his memory, some 8 sort of grant that we would grant to people who are 9 interested in children's health. I know some of you might 10 have a comment or two, and I know Supervisor Patrick has a 11 very wonderful story about Dr. Friedman. 12 SUPERVISOR PATRICK: Thank you, Chairman Riordan. 13 We were talking last night at dinner, and I 14 shared a story with Chairman Riordan and Sandra Berg about 15 what a small world it is here in this great state, great 16 nation, and the world, indeed. One of the meetings that 17 we had was in Monterey. And as you all know, that's not a 18 real easy place to get to by airplane. So Dr. Friedman 19 called my office and asked if he could drive as far as 20 Bakersfield, and I would drive the rest of the way up to 21 Monterey and then back to Bakersfield and so on. 22 During that time, I have a wonderful memory of 23 all the conversations we had. He was quite an 24 extraordinary man. I was sharing with him my only 25 association with UCLA had been when my daughter, who's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 almost 28, was born. And within 24 hours of her birth in 2 Bakersfield, she had to be taken by ambulance down to 3 UCLA, because she has congenital heart disease, and her 4 heart rate was declining and declining and declining. 5 And so when she was down at UCLA, all the doctors 6 there were trying to figure out what they were going to do 7 for this beautiful little baby. And, of course, they 8 contemplated surgery, but did not want to do surgery if 9 there was an alternative procedure they could use. So 10 they used an alternative procedure. She was the 13th 11 child to ever have that procedure. Fortunately, it was 12 non-invasive and fortunately within 24 hours her heart 13 perked right up, and she's been very perky ever since. 14 I was sharing this with Dr. Friedman, and he told 15 me that he was the one who had developed this procedure. 16 He was not at UCLA at the time. He was at one of the 17 other schools. But I have to tell you Dr. Friedman has a 18 very special place in my heart for that, for his good work 19 with children, and just for the wonderful human being that 20 he was. 21 And both of us were just blown away that we had 22 this in common and did not know it for 25 years. But he 23 was an extraordinary individual. And I know that all of 24 us are saddened by his loss. But what wonderful memories 25 we have of this great, great man. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 ACTING CHAIRPERSON RIORDAN: Thank you, 2 Supervisor Patrick. 3 Any other comments from the Board? Then we 4 will -- oh, Ms. D'Adamo. 5 BOARD MEMBER D'ADAMO: Well, just to say that he 6 was my seat mate. And I really enjoyed, as you indicated, 7 Madam Chair, not just his expertise, but also his 8 friendship. And I just really appreciated his ability to 9 be so academic and so skilled in the technical issues. 10 But then every now and then he would say, "That just 11 doesn't make any sense." And he never lost his ability to 12 just stay focused on the big picture and what is right. 13 And I just learned a lot from him. We'll really miss him. 14 ACTING CHAIRPERSON RIORDAN: Thank you. 15 Moving on, we also want to note something that 16 occurred not long ago, and that was, of course, the tragic 17 event of Hurricane Katrina. And it has affected 18 California, and the ramifications are significant. 19 And so with respect to California's fuel 20 supplies, just as one example, the Gulf Coast supplied 21 about 15 percent of the nation's fuel and a large portion 22 of blending products to California's refiners. It's not 23 surprising, therefore, that the disruption of the refinery 24 operations had a ripple effect on California and put us, 25 too, in an imminent state of emergency. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 Last week, our Executive Officer approved an 2 emergency regulation to expand California fuel supplies 3 through the end of October. And I'd like to ask her to 4 summarize that action that she took. Ms. Witherspoon. 5 EXECUTIVE OFFICER WITHERSPOON: Thank you. And 6 good morning, Madam Chairman, and members of the Board. 7 A few days after Hurricane Katrina hit, we were 8 contacted by the California Energy Commission and by 9 individual refiners who were concerned that, while not out 10 of fuel stocks, at the moment they had two to three weeks' 11 supply, that they were going to run out with certainty a 12 few weeks hence and would be unable, a few of them, to 13 manufacture California phase three gasoline. 14 So last Thursday, staff conducted an emergency 15 hearing to take testimony on the need for a temporary 16 change to our gasoline regulations to avoid a significant 17 shortfall in fuel supply. On Friday, I went over that 18 record and approved an Executive Order suspending our 19 re-vapor pressure standards which would have been 20 suspended in any event as we transition to wintertime 21 gasoline at the end of October. 22 On Monday of this week, the Office of 23 Administrative Law approved that regulation and it went 24 into effect. And on Tuesday, the U.S. EPA also approved 25 that emergency action for a period of 20 days and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 invited -- which is the maximum time they're allowed under 2 federal law to approve a suspension. But they invited us 3 to submit a request for an extension as soon as the first 4 20 days expires. Mike Scheible, our Deputy Executive 5 Officer, presided over the hearing, and I'd like him to 6 explain to you the facts of this issue and the action that 7 we took. 8 DEPUTY EXECUTIVE OFFICER SCHEIBLE: Thank you, 9 Catherine. 10 We worked over the Labor Day Weekend to look at 11 the situation. In working with the Energy Commission and 12 the fuel suppliers and others determined that the 13 shortfall was real. It was very unlikely that alternative 14 supplies to replace those that would be lost to the Gulf 15 Coast would become available in California over the next 16 few weeks and that there were really no other alternatives 17 that were available that we do identify to replace the 18 supplies, other than the one of letting the price go up 19 and demand go down with price. 20 The Energy Commission, and I think generally 21 virtually everybody who testified at our emergency 22 hearing, supported the action. We all recognize that 23 there were environmental consequences, that lifting the 24 vapor pressure requirement early would mean that 25 higher-emitting gasoline would be out in the marketplace PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 in the latter part of September into October. And if we 2 have hot weather and ozone-forming days during that 3 period, we would see a small increase in ozone that we 4 clearly want to avoid. 5 The conclusion was that we -- in order to ensure 6 adequate supplies, we needed to take an extraordinary 7 action, and I recommended that action to the Executive 8 Officer. The increase in ozone we think on a high ozone 9 day, if it occurs between now and October, will be on the 10 order of 1 or 2 percent. It is not going to dramatically 11 change the air quality, but it is obviously going to have 12 additional adverse impacts. 13 The regulation is temporary. The supply crisis 14 should be well over by the time next spring arrives and we 15 need to return to the lower vapor pressure gasoline. 16 I'd be happy to answer any questions the Board 17 may have. 18 ACTING CHAIRPERSON RIORDAN: Board members, are 19 there any questions for either Ms. Witherspoon or 20 Mr. Scheible? 21 Thank you very much. We appreciate that 22 information. 23 There are needs to go over today's agenda before 24 we begin. First, let me remind the Board and the audience 25 what is not on today's schedule. Agenda item 05-6-3 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 regarding the emission standards for forklifts and other 2 large off-road engines has been postponed to our next 3 meeting, the 20th and 21st of October in Sacramento. 4 Also postponed to the October meeting are the 5 statewide elements of ARB's transit rule, which is a 6 portion of the Agenda Item 05-8-6. However, we will be 7 hearing the South Coast only portions of that rule later 8 today as a part of our consideration of the South Coast 9 District's clean fuel Fleet Rules. 10 With regard to what's on today's schedule, staff 11 has rearranged the order of the remaining agenda items as 12 follows. We will begin with our regular monthly health 13 update. We will then take up the five research proposals. 14 And then we will shift to the portable gas container 15 regulation. Hopefully, that won't be a long regulation. 16 And I would like to get it out of the way before we begin 17 to hear then the remainder of our hearing, which will be 18 devoted to the South Coast Fleet Rules for school buses, 19 solid waste collection vehicles, and transit buses. 20 I'd like to emphasize to everyone in the audience 21 that we are expecting a lengthy hearing on the South Coast 22 Fleet Rules going perhaps into the evenning hours. And 23 for that reason, I'm going to have to impose a 24 three-minute time on all witnesses for your presentations 25 starting with our first item so we can get through the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 agenda today. We are preparing to go into the night, but 2 we're not prepared to stay all night and come in tomorrow 3 morning. So it behooves us all to move the meeting along 4 in a rather organized way. 5 I would like to request that witnesses avoid 6 duplication if at all possible. And if someone before you 7 has made the same points you have wanted to make, the 8 Board would appreciate you simply telling us that you 9 agree with the prior witness. 10 If you wish to speak as a group, you may do so 11 and introduce one another, but each person gets three 12 minutes. You cannot delegate your three minutes to 13 somebody else. And then after the group has spoken, we 14 will then entertain questions for the entire group. This 15 is another way to perhaps take up the agenda in an 16 ordinarily way. We'll just work on that. 17 Fortunately, this South Coast District and let me 18 just pause a moment to say thank very much for hosting us 19 today, Mayor Loveridge, we appreciate it, Mr. Wallerstein, 20 thank you very much. And perhaps the most important 21 person is your technical assistant for us today. You 22 know, I think that all of us are going to appreciate the 23 fact that we have Paul with us. And Paul has been a 24 person that I've known over a period of time. And he's 25 the timer, as well as keeping us on track. And so I'm so PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 appreciative of Paul Wright. 2 And to let the audience know, after you say your 3 name and the association that you may represent, or just 4 your name if you don't have an association, we will begin 5 the timing process. And you'll hear this faint little 6 buzzer when your time has concluded. And Paul is going to 7 be in charge of that. And we appreciate his efforts. And 8 when you hear that faint little buzzer, if you could 9 conclude with a final sentence. 10 Now, moving right along, let me identify anyone 11 who is wishing to speak, outside of the hearing room, and 12 you probably passed it on the way in, you need to get a 13 speakers slip and you need to sign up. Our Ombudsman and 14 her staff will be available. I don't know if they're in 15 the room right now, but there's our Ombudsman. And she 16 obviously -- you can tell. She's the only one with a 17 broken arm in the room right now. She will be very happy 18 to help anybody sign up and be sure they are at the 19 appropriate place at the right time. 20 Moving right along, let me ask you, staff, to 21 begin with Agenda Item 5-8-1. And I will simply ask 22 Ms. Witherspoon to introduce that item. 23 EXECUTIVE OFFICER WITHERSPOON: Thank you, Madam 24 Chair. 25 Past studies have shown significant associations PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 between particulate matter exposure and death and disease, 2 especially due to cardiovascular causes. The University 3 of Southern California study that staff is about to 4 present examined one of the possible underlying mechanisms 5 in human subjects. Ms. Kate MacGregor from the Research 6 Division will present the results of this ground breaking 7 study. Ms. MacGregor. 8 (Thereupon an overhead presentation was 9 presented as follows.) 10 MS. MAC GREGOR: Thank you, Ms. Witherspoon, and 11 good morning, members of the Board. 12 In today's health update, I will discuss the 13 results of an epidemiologic study that evaluates the link 14 between air pollution and heart disease, specifically 15 atherosclerosis and long-term exposure to ambient PM2.5 in 16 older subjects living in Los Angeles basin. 17 Cardiovascular disease, heart disease and stroke is the 18 leading cause of death in the U.S. 19 --o0o-- 20 MS. MAC GREGOR: In California, heart disease 21 alone is responsible for nearly 30 percent of all deaths. 22 Atherosclerosis is the primary cause of cardiovascular 23 disease. Rupture of the arterial lesions created by this 24 disease can lead to acute cardiovascular effects such as 25 heart attacks and strokes. Atherosclerosis is now PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 considered an inflammatory disease with low density 2 lipid-protein, LDL cholesterol accumulation in the 3 arteries as the primary risk factor. 4 However, 50 percent of the patients who develop 5 atherosclerosis do not have high cholesterol. Therefore, 6 it is the relationship between the accumulated lipids and 7 other harmful components of inflammation in the arteries 8 that is a concern. It is this relationship between the 9 lipids and these other harmful components, in this case 10 particulate air pollution, that forms the hypothesis for 11 this study. 12 --o0o-- 13 MS. MAC GREGOR: The epidemiologic study is the 14 first to show a relationship between atherosclerosis and 15 air pollution. It was performed by taking advantage of 16 two ongoing clinical trials at the Atherosclerosis 17 Research Unit at the University of Southern California. 18 Nearly 800 healthy middle-aged adults with a mean age of 19 59 years volunteered for these double-blind placebo 20 controlled studies to examine the effect of vitamin E and 21 vitamin B on the progression of atherosclerosis as 22 determined by corroded artery intima-media thickness, or 23 CIMT. 24 Baseline CIMT, along with other clinical data, 25 was collected at the start of the study. CIMT is measured PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 through ultrasound and is a well-known and well-accepted 2 measure of atherosclerosis. It has been used in 3 epidemiologic studies to assess the relationship between 4 environmental tobacco smoke and atherosclerosis. 5 Questionnaires were used to gather information from 6 participants on a variety of lifestyle and demographic 7 risk factors, including smoking habits, tobacco smoke 8 exposure at home, prescription medication, and education. 9 In order to determine the level of exposure to ambient 10 PM2.5, mean ambient concentration of PM2.5 was assigned to 11 the ZIP code area of each subject's residential address. 12 --o0o-- 13 MS. MAC GREGOR: A geo-statistical model was used 14 to create a PM2.5 surface area map derived from data 15 collected from 23 ambient monitoring stations and averaged 16 for the year 2000. Individually assigned PM2.5 data had a 17 range of 5.2 to 26.9 micrograms per cubic meter. The mean 18 was 20.3 micrograms per cubic meter. The small dots show 19 the geo-located ZIP codes for the residents of the study 20 participants. As you can see, these locations are 21 scattered throughout the Los Angeles basin. 22 The investigators used the participant's 23 residence to capture exposure information since time 24 activity studies show people spend most of their time in 25 and around home. In addition, studies have shown there's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 a strong correlation between outdoor PM concentrations and 2 indoor levels of PM from outdoor origins. 3 One potential problem with this exposure protocol 4 would be the failure to capture ambient concentrations 5 while working and during commute times, with this latter 6 contribution having been shown to be highly relevant in 7 recent studies by the ARB and others. 8 --o0o-- 9 MS. MAC GREGOR: Statistical analyses tested the 10 associations between CIMT and ambient PM2.5. The analysis 11 was adjusted for factors that were found to be 12 statistically associated with CIMT and ambient PM2.5. 13 These factors were age, gender, education, and income. 14 The statistical model indicated a 4.4 percent increase in 15 CIMT per 10 microgram per cubic meter increase in PM2.5. 16 The numbers in the parentheses represent the 95 percent 17 confidence intervals around the estimated increase. 18 In a subset of patients taking lipid lowering 19 medications, the investigators found the response would 20 more than double to 3.3 percent per 10 microgram per cubic 21 meter increase in CIMT. This is particularly significant 22 since animal experiments indicated an increased response 23 for PM exposure based on the tendency to accumulate 24 lipids. 25 Significant age and gender affects were apparent PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 in the analysis with much larger affects identified for 2 woman in the over-60 age category. For this group, there 3 was a 15.7 percent increase in CIMT per 10 microgram per 4 cubic meter increase in PM2.5. From lowest to highest 5 exposure, a total increase of 20 micrograms per cubic 6 meter of PM2.5 concentration, the increase was over just 7 12 percent. The investigators also found a dose response 8 associated with increased exposure, corresponding 9 increases in CIMT were observed for graduated increases in 10 PM2.5 concentration. 11 --o0o-- 12 MS. MAC GREGOR: In a recent review of the 13 evidence associating air pollution with cardiovascular 14 disease, the American Heart Association stated that air 15 pollution may accelerate the development of coronary 16 arthrosclerosis and worsen it's sequelae or aftereffects. 17 The observed changes in CIMT thickness in this study 18 correspond to a 3 to 6 percent increase in long-term risk 19 for heart attack. 20 In order to incorporate both the short-term and 21 long-term effects of PM, respective cohort studies will 22 need to be conducted. These cohort studies should take 23 advantage of long-term outdoor spatially modeled 24 concentrations such as those used in the study. 25 It should be remembered that atherosclerosis is a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 complex disease process with a number of host factors 2 including age, health status, and gender that may be 3 interacting with the urban air pollutants. This study 4 will need to be duplicated with a larger and more 5 representative population in order to truly understand its 6 implications. 7 Thank you for your attention. And I'd be happy 8 to answer questions. 9 ACTING CHAIRPERSON RIORDAN: Thank you very much. 10 Board members, any questions or comments? 11 Dr. Gong. 12 BOARD MEMBER GONG: Well done presentation. And 13 I just have a couple comments. As far as I know, the 14 American Heart Association has actually classified air 15 pollution and, in particular, particulate air pollution as 16 a risk factor for developing atherosclerosis. 17 MS. MAC GREGOR: That's correct. 18 BOARD MEMBER GONG: So I think we all see this in 19 this particular presentation as well that there are some 20 indicators, even though they're early on. And these are 21 healthy subjects, I believe, when they were recruited. 22 And I think that everyone in this audience could probably 23 feel their corroded artery, right or left side. It's that 24 pulsating vessel. Hopefully, you have one or two. That's 25 what they measure with the ultrasound. And it's amazing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 how they can get to the very small thicknesses and 2 identify the actual increase over time. 3 But, again, this is an indirect evidence. It's a 4 cross-sectional study. More studies will have to be done 5 I think. But I think it all leads to the same pathway 6 that particulate matter, especially, can cause local and 7 systemic inflammation which accelerates the endothelial 8 disfunction, or atherosclerosis, or hardening of arteries 9 as we call it. So I think this points out additionally 10 that there are mechanisms, there are pathways involved as 11 simple as your pulsating vessel. 12 MS. MAC GREGOR: That's correct. As you pointed 13 out, these were healthy volunteers. And in people who 14 have the potential for accumulation of lipids or those 15 with diabetes, they may be at actually increased risk. 16 BOARD MEMBER GONG: Tip of the iceberg. 17 ACTING CHAIRPERSON RIORDAN: Any other comments 18 or questions for staff? 19 If not, we thank you very much. 20 MS. MAC GREGOR: Thank you. 21 ACTING CHAIRPERSON RIORDAN: We're going to move 22 on to the next item. Board members, these are the five 23 research proposals that are before us. And in the 24 interest of time, I asked staff, because we've had them 25 before us for some time -- and we realize that the first PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 two projects address indoor air pollution, looking at 2 individual exposures and surveying indoor air pollution 3 sources, such as air purifiers. 4 The third project is aimed at advancing our 5 research and control programs in the environmental justice 6 communities. The fourth project furthers the work we've 7 been doing for asthmatic children in Fresno. And the 8 fifth is to develop a more accurate economic model to 9 estimate the impact of ARB regulations on the vehicle 10 market. 11 Because of the short time, I have asked that 12 staff just be present for questions. And I have also put 13 a caveat and I am hoping you as Board members will support 14 me. The fourth project is asthmatic children in Fresno, 15 this is a continuation of what we've been doing. However, 16 a work product is due us from the first project. And it 17 was due in the spring of this year. It is forthcoming, we 18 are told, by the end of this month. 19 But I think if we are to be good managers of our 20 money, I have asked, and I hope you will agree, that 21 before we release any of the money in this second round, 22 that the first work product be in our hands. And it is 23 but a draft that we're asking for. It's not an actual 24 finished product, because it has to be peer reviewed. So 25 they are a bit tardy. And I think it would help us to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 have the leverage of the increase of money for their 2 project to be understood that it's because we need the 3 first work product before we release any further money. 4 Other than that, are there any questions or 5 comments either on that, which would be my request, or any 6 questions you have on any of the research projects? 7 We do have an ex parte statement. Are there any 8 ex partes on this particular item? There are none. 9 Board members, I'll entertain a motion to adopt 10 and to amend the one for the Fresno asthmatic study. 11 BOARD MEMBER D'ADAMO: So moved Madam Chair with 12 the amendment. 13 ACTING CHAIRPERSON RIORDAN: Thank you. Is there 14 a second to that motion? 15 BOARD MEMBER GONG: Second. 16 ACTING CHAIRPERSON RIORDAN: Seconded by Dr. 17 Gong. 18 Any discussion on the motion? Seeing none, all 19 those in favor signify by saying aye. 20 (Ayes) 21 ACTING CHAIRPERSON RIORDN: Opposed, no. 22 The motion carries. Thank you very much. 23 The next agenda item is 05-8-7. These are the 24 proposed amendments to the ARB's existing regulation for 25 portable fuel containers, more commonly known as gas cans. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 The Board first adopted regulations to control 2 emissions from gas cans in September of 1999. And, today, 3 we are considering amendments to make the spill proof 4 spouts work a little better, which from my own experience 5 is absolutely necessary, which I won't go into. But let 6 me tell you, I have a lot of experience. 7 The staff has also discovered some people are 8 storing gasoline in containers that are not subject to our 9 rule, such as kerosene containers and utility jugs, which 10 do not help with the emissions control. So they are 11 proposing that we close that loophole. 12 Ms. Witherspoon, would you like to make the staff 13 presentation. 14 EXECUTIVE OFFICER WITHERSPOON: Thank you, Madam 15 Chairman. 16 Today, staff is proposing modifications to our 17 existing regulation for portable fuel containers. A 18 number of issues have arisen during the implementation of 19 the current regulations that need the Board's attention. 20 Briefly, there's a significant loophole we need to close 21 with respect to unregulated containers. Also, we are 22 proposing a new certification program to improve product 23 quality, modifying our standards to reduce spillage 24 emissions, and creating an optional consumer acceptance 25 program to encourage more user-friendly designs. Finally, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 we are establishing new standard and test procedures to 2 simplify and streamline testing. 3 I'll turn it over to Dennis Goodenow to make the 4 staff presentation. 5 (Thereupon an overhead presentation was 6 presented as follows.) 7 MR. GOODENOW: Thank you, Ms. Witherspoon, Madam 8 Chairman, and members of the Board. 9 --o0o-- 10 MR. GOODENOW: My presentation includes a brief 11 description of the current PFC regulation, the benefits of 12 the existing regulation, a description of the problems 13 resulting from the existing regulation, the ARB staff 14 proposed regulatory solutions, the impacts of the 15 proposal, some additional issues the Board needs to be 16 aware of, and the ARB staff recommendation. 17 During this presentation, I will include some 18 pictures and a couple of short video clips to highlight 19 and clarify the point in question. 20 --o0o-- 21 MR. GOODENOW: I'd like to start with a brief 22 discussion of the existing PFC regulation. 23 --o0o-- 24 MR. GOODENOW: As was mentioned, the Board 25 adopted the current PFC regulation in September 1999. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 regulation includes a requirement for automatic closure. 2 This feature simply requires that when the PFC is not in 3 use, it remain closed, thus reducing emissions from 4 evaporation and spillage. Likewise, the regulation 5 includes an automatic shutoff requirement. This feature 6 is intended to stop the flow of fuel in the receiving tank 7 when the tank is fuel. 8 Flow rate and fill height specifications are also 9 required to help meet consumer expectations. A single 10 opening requirement is included to ensure both the 11 automatic closure and automatic shut-off features work 12 properly. 13 A pressure requirement is included to ensure the 14 containers and spouts will not leak under normal operating 15 conditions. A permeation standard is included to reduce 16 hydrocarbon from passing through container walls. Also, 17 the regulation applies to gasoline and diesel containers. 18 Kerosene containers are not included. 19 --o0o-- 20 MR. GOODENOW: The current regulation provides 21 substantial air quality benefits. 22 --o0o-- 23 MR. GOODENOW: The current regulation reduces 24 reactive organic compounds, or ROG emissions, by about 70 25 tons per day. These reductions are mainly from the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 anti-evaporation requirements, such as automatic closure. 2 The existing regulation also reduces emissions from 3 spillage, but not to the extent expected. Although not 4 specifically intended, the existing regulation makes the 5 PFC safest for consumers by reducing hazardous emissions. 6 --o0o-- 7 MR. GOODENOW: As part of our routine review of 8 past regulations, ARB staff has detected some problems 9 with the existing PFC regulations. 10 --o0o-- 11 MR. GOODENOW: The ARB staff intended to include 12 all containers used to store gasoline and diesel in the 13 regulation. But the definition of a PFC is unclear 14 concerning utility jugs. A utility jug is a container 15 that is sold for use with non-fuel products. However, 16 many consumers purchase these utility jugs because they 17 are sturdily made and offered in many fashionable colors 18 and shapes. I have a picture of these utility jugs later 19 in this presentation. 20 The existing regulation does not include kerosene 21 containers. ARB staff did not expect consumers to 22 purchase kerosene containers for use with gasoline. We 23 now know differently. 24 Another problem is spillage. Although the 25 existing regulation does reduce some emissions from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 spillage, the regulation does not achieve the expected 2 reductions and in some case may even result in increased 3 spillage. Additionally, consumers find the products 4 designed in response to the regulation difficult to 5 understand and use. Many of the products in the 6 marketplace today are of poor quality. The ARB staff 7 routinely tests these products. And to date, about half 8 of all products tested have failed one or more of the 9 requirements. 10 --o0o-- 11 MR. GOODENOW: Now I'd like to discuss the 12 problems in detail. The current regulation intended to 13 restrict the sale of utility jugs as PFCs, but due to the 14 language in the definition of a PFC, the regulation allows 15 the sale of utility jugs as PFCs to continue. As 16 mentioned, consumers purchase utility jugs because they 17 are durable and fashionable. They are particularly 18 attractive to the water sport and off-highway vehicle use 19 groups. Utility jugs used with gasoline contribute about 20 13.3 tons per day of ROG emissions statewide. 21 --o0o-- 22 MR. GOODENOW: This slide shows some of the types 23 of utility jugs that are currently sold in California. 24 --o0o-- 25 MR. GOODENOW: The current regulation does not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 include kerosene containers, because ARB staff did not 2 believe consumers would use them to store and transfer 3 gasoline. A survey contracted by ARB showed consumers 4 are, in fact, using kerosene containers with gasoline. 5 This is partially due to their low cost compared to a 6 controlled PFC. ARB staff believes kerosene containers 7 can yield about 3.2 tons per day of ROG when controlled. 8 --o0o-- 9 MR. GOODENOW: This slide shows a picture of a 10 typical uncontrolled blue kerosene container. As one can 11 see, kerosene containers are often sold alongside red 12 gasoline containters that meet the requirements of the 13 regulation. 14 --o0o-- 15 MR. GOODENOW: Another problem is spillage. 16 Spillage from fueling portable equipment occurs when the 17 consumers tries to get the spout into the target tank 18 before the fuel starts to flow and then get the spout out 19 of the target tank before it overfills. 20 The existing regulation attempts to meet these 21 challenges with the automatic closure and automatic 22 shut-off requirements. The automatic closure requirement 23 works well. The automatic shut-off requirement works well 24 in many applications, but fails in others. This is 25 partially because of the many inconsistent sizes, shapes, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 and configurations of equipment tanks. When the PFC 2 automatic feature fails in an application, it most likely 3 would fail each time it is used. ARB staff now believes 4 the existing regulation achieved about half of the 5 expected emission reductions from spillage. 6 --o0o-- 7 MR. GOODENOW: I'd like to show you a short video 8 clip of the automatic shut-off feature working well. 9 (Thereupon a video was presented.) 10 MR. GOODENOW: In this case, the automatic 11 shut-off feature was able to stop the flow of fuel before 12 the tank overfilled. 13 Now I'd like to show you a short video clip of 14 spillage. 15 (Thereupon a video was presented.) 16 MR. GOODENOW: The tank in this video overfilled 17 due to the shape and size of the tank being filled. 18 --o0o-- 19 MR. GOODENOW: Partly because of the problems 20 associated with spillage, consumers are frustrated with 21 the products designed pursuant to the existing regulation. 22 Based on our experiences with a consumer focus group, 23 consumer surveys, and testing, consumers have difficulties 24 understanding how to use PFCs and specifically the 25 automatic shut-off feature. Most consumers do not know PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 that PFCs include an automatic shut-off feature. And when 2 told about the feature, many are skeptical. 3 Also because of the physical dimensions of the 4 spouts needed to accommodate the automatic shut-off 5 feature, many spouts simply will not fit in many equipment 6 tanks. 7 The video clip I'm about to show you was taken 8 from a consumer focus group that shows some of the 9 frustrations and wants of consumers. 10 (Thereupon a video was presented.) 11 MR. GOODENOW: What we've learned from the focus 12 group and surveys was the existing PFCs are just too 13 complicated and difficult to use. 14 --o0o-- 15 MR. GOODENOW: I will now discuss the proposed 16 solutions. 17 --o0o-- 18 MR. GOODENOW: The ARB staff proposed regulation 19 solutions to expand the definition of a PFC to prohibit 20 the sale of utility jugs as PFCs and include kerosene 21 containers, reduce spillage, improve consumer acceptance, 22 include a certification program, to approve PFC quality, 23 and include a diurnal standard to replace the existing 24 permeation standard, I think. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 MR. GOODENOW: Now I'll discuss the solution in 2 more detail. The single most effective way to reduce 3 emisions from PFCs is to amend the definition of a PFC. 4 Staff is proposing to expand the definition to prohibit 5 the sale of utility jugs as PFCs and to include kerosene 6 containers in the definition. Staff estimates these 7 actions will reduce ROG emissions by 16 1/2 tons per day 8 combined. This will improve emission reductions and 9 provide additional consumer safety. 10 Staff is proposing to implement this portion of 11 these proposed amendments as soon as possible. A separate 12 Resolution and Final Statement of Reason is part of our 13 recommendation. It is ARB staff's intention to implement 14 the definition of a PFC amendment by January 2006 to 15 ensure adequate lead time to meet the next peak gasoline 16 fueling season in the summer 2006. 17 --o0o-- 18 MR. GOODENOW: As we've discussed, one of the 19 main objectives of these regulation amendments to reduce 20 spillage. Even though the emissions associated with 21 spillage today are smaller than restricting the sale of 22 utility jugs, for example, the effect of spillage on 23 consumers is much more of a concern than other issues in 24 these proposed amendments. ARB staff intends to reduce 25 spillage by removing the existing flow rate, fill height, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 and automatic shut-off requirements. 2 The fill height and flow rate requirements are in 3 the existing regulation simply as acceptance features. 4 There are no emission reductions associated with these 5 features. And we know they complicate PFCs manufacturers' 6 ability to a produce quality product that will not spill. 7 Also, ARB staff believes strongly that by removing the 8 automatic shut-off requirement, consumers will be able to 9 fuel a larger number of equipment fuel tanks with little 10 or no spillage. By removing the automatic shut-off 11 requirement, consumers' visibility and control will be 12 increased when fueling. 13 --o0o-- 14 MR. GOODENOW: As stated, these proposed 15 regulation amendments are designed to improve consumer 16 acceptance. The proposed amendments will improve consumer 17 visibility and control, reduce the force necessary to 18 activate the flow of fuel and include incentives for PFC 19 manufacturers to consider the needs and wants of consumers 20 in the product design phase. I'd like to discuss the 21 voluntary consumer acceptance program in more detail. 22 --o0o-- 23 MR. GOODENOW: The consumer acceptance program is 24 designed to encourage PFC manufacturers to solicit 25 consumers' input prior to marketing products in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 California. The PFC manufacturers would submit a plan to 2 the ARB staff for review and approval. After the plans 3 are approved, PFC manufacturers would convene consumer 4 focus groups to evaluate and score proposed products to be 5 sold in California. 6 Those products awarded a score of 70 to 79 would 7 be authorized one consumer acceptance star. Those 8 products receiving a score of 80 to 89 would be authorized 9 two consumer acceptance stars. Likewise, those products 10 receiving a score of 90 or more would be authorized three 11 consumer acceptance stars. Also, manufacturers that 12 include the words, "Think safety" in Spanish would receive 13 five additional bonus points. 14 The voluntary consumer acceptance program will 15 create competition among PFC manufacturers at the 16 distributor and retail level. Most point of sale outlets 17 for PFCs only carry one type of PFC. Therefore, most 18 consumers are unable to sway market shares by purchasing 19 the superior product. This approach will give 20 distributors and retail buyers objective information about 21 the consumers' acceptance of each product sold in 22 California. 23 --o0o-- 24 MR. GOODENOW: The proposed certification program 25 will require PFC manufacturers to certify their products PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 prior to sale in California. This action will ensure high 2 quality products and reduce ARB staff enforcement action. 3 Also, this will eliminate the inferior products currently 4 sold in the state. The certification program will also 5 aid manufacturers who produce quality products by 6 requiring them to test the products prior to sale in 7 California. 8 ARB staff currently conducts certification 9 programs for many source categories. Examples include 10 motor vehicles, off-road vehicles, vapor recovery 11 components, small off-road equipment, and other types of 12 off-road equipment. 13 The resources needed to implement this portion of 14 the proposed amendments is not expected to be significant. 15 Staff estimates that only between 10 and 15 products or 16 product families will be certified. The certifications 17 will be good until the manufacturers make significant 18 product changes. The certification program does not 19 include annual certification provisions. 20 --o0o-- 21 MR. GOODENOW: The staff proposal includes a 22 diurnal standard equal to the permeation standard of .4 23 grams per gallon day starting no later than 2007. By 24 moving from a permeation standard to a diurnal standard, 25 the PFCs will be tested for both permeation and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 evaporation which includes testing the spout as well as 2 the container. Staff is also proposing to reduce the 3 standard to .3 gram per gallon days starting in 2009. The 4 test procedure has been modified to better represent 5 in-use conditions and results in less costly testing. 6 --o0o-- 7 MR. GOODENOW: The ARB staff has identified some 8 environmental and cost impacts that will result from the 9 staff recommendation. 10 --o0o-- 11 MR. GOODENOW: By adopting the amendments to the 12 PFC regulation, certification procedure 501, test 13 procedure 501 and 502, ARB staff estimates that 13.3 tons 14 per day of ROG will be reduced from prohibiting the sale 15 of utility jugs for use in place of PFCs. 3.2 tons per 16 day will be reduced from use of kerosene containers. 1.4 17 tons per day will be reduced from spillage and the diurnal 18 standard will reduce emissions by half a ton per day. 19 This proposal is cost effective at between 40 cents and 70 20 cents per ton of ROG reduced. 21 --o0o-- 22 MR. GOODENOW: The staff's initial Statement of 23 Reasons included several issues for your consideration. 24 --o0o-- 25 MR. GOODENOW: We included three additional PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 issues. It was suggested that ARB staff notify retailers 2 and distributors of the change to the PFC definition. If 3 your Board agrees with the staff position to implement 4 this action quickly, the ARB staff will issue such a 5 notice no later than October 1 of this year. This will 6 give retailers and distributors at least three months to 7 prepare for the change to the definition of a PFC. 8 Although most manufacturers support removing the 9 automatic shut-off requirement, one manufacturer opposes 10 this action. Staff has reviewed all the data and test 11 results and believes that by removing the automatic 12 shut-off feature will improve consumer acceptance and 13 reduce spillage. 14 A last issue concerns the U.S. EPA. EPA is 15 considering a national PFC regulation. ARB staff is 16 committed to working closely with the U.S. EPA to ensure 17 any regulation they adopt is consistent with the 18 California regulation. 19 --o0o-- 20 MR. GOODENOW: Concerning the comments received 21 to date and the test results, surveys, and focus group 22 results, ARB staff is proposing the following. 23 --o0o-- 24 MR. GOODENOW: ARB staff recommends the Board 25 adopt two Resolutions for portable fuel containers. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 first Resolution would expedite the proposed changes to 2 the PFC definition and would not have any 15-day 3 modifications. The new definition is expected to go into 4 effect by January 1, 2006. After that date, only 5 containers, including those labeled kerosene, complying 6 with the new PFC definition will be allowed to be sold in 7 California. The second resolution will cover the 8 remaining items of the proposed rule, including 15-day 9 modifications. 10 --o0o-- 11 MR. GOODENOW: This concludes my presentation. 12 Thank you for your attention. Be happy to answer any 13 questions you may have. 14 ACTING CHAIRPERSON RIORDAN: Before we have any 15 questions, let me go to the Ombudsman's Office for 16 comment, and then we'll open it to questions for you. 17 Just a moment. 18 OMBUDSMAN TSCHOGL: Thank you, Madam Chairman and 19 members of the Board. 20 The rule before you was developed with input from 21 the portable fuel container manufacturers and the Portable 22 Fuel Containers Manufacturers Association. 23 Staff began their effort to develop this rule in 24 early 2004. To ensure public participation, they held six 25 workshops and mailed the workshop notices to over 600 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 stakeholders. There were 68 formal meetings and had 2 numerous teleconferences and phone calls with 3 stakeholders. 4 On average, about 40 people attended the 5 workshops representing the portable fuel container 6 manufacturers, equipment manufacturers, and testing 7 facilities. 8 The staff report and notice of the Board hearing 9 were released to stakeholders on July 29th, 2005, via the 10 ARB regulation action web page. There are more than 600 11 individuals on the list serve and the mailing list. 12 This concludes my comments. 13 ACTING CHAIRPERSON RIORDAN: Thank you. 14 Now we'll open it to questions for staff. Board 15 members, are there any questions? 16 EXECUTIVE OFFICER WITHERSPOON: Madam Chairman, I 17 just wanted to clarify one point that wasn't totally clear 18 from staff presentation. And that is in respect to the 19 tonnage reductions from this measure. Almost all of the 20 tons that you saw on the slide are recouping a portion of 21 the 70 tons from the original regulation that would 22 otherwise be lost. There is only about one additional ton 23 here above and beyond the existing regulation, and that 24 comes from changing from permeation to a diurnal standard 25 and making the diurnal standard more stringent in 2009. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 But, otherwise, what we are doing is preserving the 2 emission reductions of the original regulation. 3 ACTING CHAIRPERSON RIORDAN: Okay. Thank you. 4 Dr. Gong. 5 BOARD MEMBER GONG: I guess my question is, do 6 you expect to change the behavior of the consumers who are 7 buying the cheaper utility jugs versus the revised jugs? 8 MR. GOODENOW: No, sir. What we're trying to do 9 is ensure that distributors, manufacturers, and retailers 10 are not able to exploit a loophole that's in the 11 definition now to allow them to sell those containers as 12 PFCs. We're trying to ensure that all containers sold as 13 PFCs meet our requirements. Utility jugs will continue to 14 be sold as utility jugs, but not for PFCs. 15 BOARD MEMBER GONG: But as a consumer, they can 16 still buy the utility jug and then use it for gasoline 17 later? 18 MR. GOODENOW: That's correct. And unfortunately 19 there is some of that happening. Some consumers use other 20 types of containers for fuel products as well, such as 21 milk jugs. 22 BOARD MEMBER GONG: Right. So I guess you're 23 hoping to reduce that particular segment's behavior 24 basically. 25 MR. GOODENOW: What we're hoping to do is, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 currently, there's two categories if you will of utility 2 jugs. One is for the legitimate reason of selling them 3 for water and other types of non-fuel products. This 4 regulation allows for retailers to continue to sell that 5 way, but they must label it as such. 6 The other category are those that are unlabeled, 7 that are utility jugs without a label can easily be sold. 8 And many consumers just aren't aware they aren't intended 9 for gasoline. That's the category of sale we're after, is 10 to make sure if it's not labeled, that it is sold 11 specifically as a utility jug, not as a fuel container. 12 ACTING CHAIRPERSON RIORDAN: Ms. Kennard. 13 BOARD MEMBER KENNARD: I have a related question. 14 What is the enforcement mechanism and penalties for 15 retailers selling utility jugs as PFCs? 16 MR. GOODENOW: The enforcement action is that our 17 compliance folks routinely visit these stores and look for 18 PFCs on the shelf. If they find PFCs or utility jugs 19 being sold suspectedly as utility jugs, they would bring 20 forth a compliance case against that retailer or the 21 manufacturer and distributor. And the fees or penalties 22 associated with that are prescribed in state law. 23 ACTING CHAIRPERSON RIORDAN: Mayor Loveridge. 24 BOARD MEMBER LOVERIDGE: Sort of asked the 25 question up here, but this is sort of economic behavior. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 What is the difference in cost between a jug and the 2 proposed? 3 MR. GOODENOW: Many of the complying jugs or PFCs 4 that are out there that are of the same size as utility 5 jugs are actually less costly. People are attracted to 6 utility jugs because they are fashionable. They come in 7 many colors. They often match the color of the equipment 8 they've purchased. And they're very sturdily made. They 9 look like they're really a robust product. But in the way 10 they're designed, they don't control emissions as well as 11 the compliant jugs. We want to make sure that when you go 12 buy a jet ski, for example, or an off-road vehicle that 13 the retailer is not selling you a product for gasoline 14 that it's not intended for at this time. 15 BOARD MEMBER LOVERIDGE: So the difference in 16 cost is compliant and non-compliant is about the same? 17 MR. GOODENOW: The cost for -- currently, 18 compliant jugs are substantially less than for 19 non-compliant jugs. It's the market is able to get more 20 for the non-compliant jugs. 21 ACTING CHAIRPERSON RIORDAN: Ms. Berg. 22 BOARD MEMBER BERG: Would it be possible to 23 require labeling on the utility jugs that they were not 24 certified or legal to use for flammable liquid? 25 MR. GOODENOW: The definition says if you market PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 a utility jug for a product other than fuel or kerosene, 2 then you are a utility jug and not subject to these 3 requirements. If you put a jug with the word water on it, 4 it is clearly not a PFC. Our compliance people would not 5 buy it. We would not test it. It would be considered a 6 utility jug only. 7 BOARD MEMBER BERG: But from the consumers' point 8 of view, and they're looking for appearance and there's 9 nothing marked on the utility jug, what's going to change 10 their buying behavior? 11 MR. GOODENOW: If it was unmarked, it would be 12 illegal to sell for gasoline. And the burden is on the 13 distributors, the manufacturers, and the retailers to 14 ensure they are not sold or marketed for those purposes. 15 BOARD MEMBER BERG: But I don't think they're 16 required to ask everybody who comes in and purchases a 17 utility jug what their intended use is. 18 MR. GOODENOW: That's correct. 19 BOARD MEMBER BERG: It's going to be difficult. 20 MR. GOODENOW: Yes, ma'am. 21 BOARD MEMBER BERG: Did we certify the containers 22 before? 23 MR. GOODENOW: No. 24 BOARD MEMBER BERG: So if we're going to be 25 certifying the containers now, and we're going to be able PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 to see the ease of use, are we duplicating our efforts in 2 having a voluntary consumer acceptance program when we're 3 certifying that the container is not only falls within the 4 legal parameters but should be easy to use? 5 MR. GOODENOW: I could imagine down the road in 6 maybe 10 to 15 years after all the consumers' needs and 7 wants are fully understood that the consumers' acceptance 8 programs importance would be less than it is now. But for 9 the next three or four iterations or generations of these 10 products, the consumer's input I think is very helpful to 11 both us and the manufacturers to ensure that there are 12 quality products sold in California that will control 13 emissions. 14 BOARD MEMBER BERG: Are there other regulatory 15 items under ARB that have voluntary or mandated consumer 16 acceptance programs? 17 EXECUTIVE OFFICER WITHERSPOON: I don't believe 18 so, no. The vapor recovery program focuses on ease of use 19 as well in kinking of hoses and how well the nozzle 20 operates. We don't call it a consumer acceptance program, 21 per se. This is a little bit different. 22 If I might, staff was trying to avoid issuing 23 notices against individual purchases of fuel cans by 24 focusing on the marketing side of this equation and hoping 25 that that will work. But what many of your questions are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 getting to is consumers, and their baffling behavior or 2 self-interested behavior. 3 It would be legal, should the Board choose to, to 4 construct a regulation that said it's illegal to carry 5 fuel on your boat or have in your garage that's not in a 6 red can. Red is the color for fuel. And we could, with 7 sufficient enforcement personnel, go cut citations and try 8 to change consumer behavior that way. 9 There's a lot of consumers in California. And 10 whether that would be affective is something yet to be 11 seen. So we're trying a different approach, hitting the 12 marketing side, the labeling, the product attractiveness 13 and hoping that will overcome what's happening right now. 14 BOARD MEMBER BERG: I would agree with you that I 15 don't think we should get into the enforcement area of 16 consumers. But I do think we should be speaking with the 17 fire department, because I think they're very interested 18 in this area, and certainly teaming up and making sure 19 that we're utilizing another agency to help us. 20 But I'm also concerned with the resources that we 21 have, and we have limitations. And whether we should be 22 getting into the consumer acceptance business. We've had 23 other consumer products that we have regulated and 24 consumers had to change their mechanism of the products 25 that they used. And I just think that it's a little bit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 of a slippery slope, if you will, if we start getting into 2 consumer acceptance. 3 EXECUTIVE OFFICER WITHERSPOON: It is a new area 4 for the Air Resources Board. But with respect to actual 5 resources, we see shifting people from the enforcement 6 side to the certification side. Because what we do right 7 now is we set the standards. The manufacturers make the 8 product. And then we go pull them off the shelves and 9 test to see if they work. And we would do it the other 10 way around. The manufacturers would bring us the product 11 before sale. We would know if they work. And then they 12 would go into the market. And it's actually more 13 efficient to see the product design at the outset than to 14 test them in the field and chase after the manufacturers 15 with an enforcement action. 16 BOARD MEMBER BERG: And I agree with the 17 certification area. But, again, to get focus groups and 18 to read that documentation, we're going to have to take a 19 look and see what it means. It's just another step that I 20 think we should be very careful on what details are we 21 asking manufacturers to participate in something that just 22 might be overkill if we're going to be doing 23 certifications. 24 EXECUTIVE OFFICER WITHERSPOON: Maybe this would 25 address your concerns, Ms. Berg. Perhaps we should think PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 of -- it is voluntary, and the manufacturers will pay for 2 the focus groups, not the staff. We'll just read the 3 reports. 4 But maybe we should be thinking of this as a 5 pilot and not necessarily a precedent, but a pilot. And 6 we'll all see how it works, whether it has applications to 7 other regulations or not. And we'd be happy to report 8 back to you on whether anyone's taking us up on it, 9 whether we think it's working in the field, whether a 10 three-star product is purchased, if it's more expensive 11 than a no-star product or one-star product. We could give 12 you feedback on all of that and let you know whether it 13 was a worthy enterprise or not. 14 BOARD MEMBER BERG: Thank you. I think that 15 would be a great idea. 16 EXECUTIVE OFFICER WITHERSPOON: That's what we'll 17 do. 18 ACTING CHAIRPERSON RIORDAN: Are there any other 19 questions, Board members? 20 Seeing none, let me go to public testimony. We 21 have three people wishing to speak on this item. I'm 22 going to invite you all down, Phil Monckton, Richard 23 Wallace, and Dave Smith. There are two microphones, and 24 so Phil, if you'd start at this microphone, Richard over 25 there, and then Dave if you'd follow Phil. And if you'd PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 give us your name and the organization you represent, and 2 we welcome you. 3 MR. MONCKTON: My name is Phil Monckton. I work 4 for a portable fuel container manufacturer, Septor 5 Corporation, but I'm standing here as the representative 6 for the Portable Fuel Container Manufacturers Association, 7 which is just comprised of four primary portable fuel 8 container manufacturers in North America and a group of 9 smelt manufacturers as well. 10 I would like to say that over the last two years 11 we've worked very closely with the ARB staff to develop 12 this for the amendments to the regulation. It's been a 13 very cooperative effort. And I think we put together the 14 amendments which we're in favor of. We think it will 15 allow us to develop products which we think will help 16 solve a lot of the problems that are currently in the 17 field and products which are more intuitive for the 18 consumers and ultimately lead to emission reductions that 19 we're hoping to see. So I just want to endorse the 20 amendments as they are. 21 ACTING CHAIRPERSON RIORDAN: Thank you very much. 22 Mr. Wallace. 23 MR. WALLACE: Yes. I'm with Fair Enterprises, 24 and we are also a manufacturer of portable fuel 25 containers. And I would like to just say a few comments PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 on the implementation of utility jugs and kerosene 2 containers. Partly, the problem with this -- I'm for it. 3 Partly the problem with what's happening in the 4 marketplace right now is as people advance into kerosene 5 containers and utility jugs, they're just mislabeled. 6 Most kerosene containers are used for home heating. And 7 if Tom goes out and buys a container for gasoline and 8 Marie fills up the home heaters with gasoline and the 9 kerosene -- any time you mislabel anything, it's a 10 dangerous situation. A prescription that had the wrong 11 pills is a deadly combination for anyone. So with that 12 just the danger factor. 13 The utility jugs have no labeling at all. So 14 what happens is if there's an accident with one? What's 15 in the container? Water? Pesticides? Who knows. Almost 16 all fuel containers are gasoline. And they're red, and 17 everyone recognizes that. If you get in an accident and 18 it dumps over in the back of your truck, what's the 19 substance within? No one knows. 20 Secondly, Dennis was saying that the utility jugs 21 are -- the PFCs that are currently in production are more 22 inexpensive to produce. It's true if it's in the lawn and 23 garden market. But if you're producing containers that 24 are for the off-road industry, the motorcycle industry and 25 you have to compete with utility jugs in the existing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 market, it costs more for a utility jug that is legal than 2 for one that is not legal. And I find it's about 46 3 percent more. So if you're going to build the same sturdy 4 jug for the consumer market, it's going to cost you way 5 more money to comply with that regulation. Thank you. 6 ACTING CHAIRPERSON RIORDAN: Thank you very much. 7 Mr. Smith. 8 MR. SMITH: Hi. I've Dave Smith. I didn't 9 intend to testify on this, but I'm a boat owner and a lawn 10 mower. And I appreciate the questions that you've asked. 11 I support the basis of this rule. But I just 12 wanted to share with you a recent event that I had that 13 just emphasizes the importance of what you're doing here. 14 I had bought two of these jugs, and I've thrown 15 both of them away. The reason being, most recently over 16 the July 4th weekend, I was attempting to refuel my boat 17 with my four-year-old grandson in tow. As we were doing 18 this, and gasoline was going all over onto the water, one 19 of our neighbors in our dock walked up towards me with a 20 lighted cigarette. And I looked up and I said, "Put that 21 away." And he started to throw that cigarette into the 22 water. I said, "Stop." And he put it out on his hands. 23 I don't know if that cigarette would have lit the 24 gasoline on the water or not, but I was just shaking after 25 that. And I just took my grandson, I took that jug, and I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 got rid of the gasoline and I threw that jug away. 2 So I just hope and ask you to go ahead with this 3 and make sure that these things work. Because I don't 4 want to have to deal with this issue with a grandson and 5 myself getting burned up. Thank you. 6 ACTING CHAIRPERSON RIORDAN: Thank you, 7 Mr. Smith. 8 That concludes, Board members, the speakers who 9 have signed up. I'm going to close the public hearing. 10 And, staff, do you have any further comments? 11 SENIOR STAFF COUNSEL JENNINGS: Not at this time. 12 ACTING CHAIRPERSON RIORDAN: I do want to close 13 the record, to be technical. And the record is going to 14 be reopened when the 15-day Notice of Public Availability 15 is issued. Written or oral comments received after this 16 hearing date but before the 15-day notice will be issued 17 will not be accepted as part of the official record on 18 this agenda item. When the record is reopened for the 19 15-day comment period, the public may submit written 20 comments on the proposed changes which will be considered 21 and responded to in the final Statement of Reasons for 22 regulations. 23 We do have ex parte requirements for this item, 24 and I would note mine. I did receive a call from Manuel 25 Cunha from Nisei Farmers indicating support for this item. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 And a complement to the staff. He said they worked very 2 closely with the agricultural industry to make this usable 3 and safe at the same time. 4 Any other ex parte communications? 5 Seeing none, there is a Resolution, Board 6 members, before us. Take a moment and look at it. It's 7 Resolution 05-50 and 05-54. I'll entertain a motion. 8 SUPERVISOR PATRICK: So moved. 9 BOARD MEMBER D'ADAMO: Second. 10 ACTING CHAIRPERSON RIORDAN: It's been moved and 11 seconded to accept the Resolution before us. 12 Yes, Mr. Counsel. 13 ACTING GENERAL JENNINGS: At this time, I think 14 it would be appropriate to indicate that the 54 Resolution 15 would be amended to add the two points that 16 Ms. Witherspoon discussed with Ms. Berg. 17 ACTING CHAIRPERSON RIORDAN: Thank you. I'm sure 18 the maker of the motion and the seconder will include that 19 in their motion. 20 Board members, all those in favor signify by 21 saying aye. 22 (Ayes) 23 ACTING CHAIRPERSON RIORDAN: Opposed, no. 24 Hearing none, the motion carries. 25 And we'll have, hopefully, some new workable PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 containers in our future. 2 Let me indicate to you that the next item, which 3 is Agenda Item 05-8-3, this is an overview and background 4 for the South Coast Fleet Rules. We felt it was important 5 that we explain the legal circumstances which led to this 6 Board hearing and to clarify exactly where things stand 7 today. Although many people in the audience know this 8 already, I believe it's very important to lay the 9 foundation since the regulatory and litigative history is 10 quite complicated and not everyone understands it 11 completely. 12 Staff's overview is also intended to give the 13 Board and the audience some common understanding of the 14 options we face going forward, along with some of the pros 15 and cons that need to be considered. 16 But before I ask staff for this presentation, I 17 would like to call on my distinguished colleague from this 18 particular South Coast Air Quality District, Mayor Ron 19 Loveridge, to make a few opening comments of his own and 20 introduce one of his colleagues from the South Coast Board 21 who's come for opening remarks as well. Mayor Loveridge. 22 BOARD MEMBER LOVERIDGE: Let me extend my welcome 23 to the other Board members to South Coast District, both 24 its place and its headquarters. I'm very proud of the 25 work of the South Coast. Regard it the best in the world PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 at what it does. South Coast represents one of the 2 regulatory success stories when you sort of essay what has 3 taken place in the history of this basin. 4 These are important rules that are before us 5 today. They're another step in this quest which now 6 becomes increasingly complicated to looking where you can 7 make a difference in terms of emissions both for 8 particulate matter and for ozone. 9 I would like to ask Jane Carney, who's a member 10 of the South Coast Board, also Chair of the Mobile Source, 11 if she would offer a kind of framework and explanation of 12 the South Coast position. Jane Carney. 13 ACTING CHAIRPERSON RIORDAN: Jane, we welcome you 14 and it's nice to see you. 15 MS. CARNEY: Thank you. It's nice to see you 16 Madam Chair and Mayor Loveridge, members of the Board. My 17 name is Jane Carney. I'm a member of the South Coast Air 18 Quality Management Governing Board, and I was appointed to 19 that position by the Senate Rules Committee for the first 20 time in the year 2000, which is when these fleet rules 21 came before us. 22 I'd just like to say a few things about the 23 initial adoption of these rules. As I mentioned, they 24 were adopted in the year 2000 over a series of months. So 25 we took them up generally one rule or two rules at a time PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 over a period of months. It will not surprise you to hear 2 me say that these rules were highly controversial. They 3 were highly controversial then. You will see they are 4 highly controversial now. The good thing about highly 5 controversial rules is there's a lot of input. And there 6 was a lot of input in the year 2000. 7 In addition to the typical rule development 8 process in which there are working groups, in which 9 industry and environmental groups and the public 10 participate, we also at South Coast have a Board Committee 11 structure, and I Chair the Mobile Source Committee. And 12 so these rules came before the Committees before they ever 13 came to the Board. We had -- and members of the public 14 and industry groups, environmental groups can testify at 15 the Committee meetings also. So these rules were 16 thoroughly discussed. They were thoroughly analyzed. We 17 spent a lot of time on them. 18 And also in the year since I've been on the South 19 Coast Board, I had more visits from industry and 20 environmental groups on the Fleet Rules than on any other 21 subject by far. It was a surprise to me to see my 22 calendar cleared when we were finished adopting these 23 rules. So there was a great deal of discussion and public 24 input before we voted on these rules. 25 The second thing I'd like to say, and I think we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 have a slide on this, is that these rules were adopted 2 unanimously. We have a slide that shows who the Board 3 members were at that -- we don't. Maybe you're supposed 4 to put this up. I'm sorry. I'm never on this side of the 5 podium. I'm not sure how this works. 6 Those were the members of the Board at the time 7 that these rules -- actually all of the Fleet Rules were 8 adopted. And while local elected officials run on a 9 nonpartisan basis, you will see there's a broad spectrum 10 of political views represented on this Board. It was true 11 then. It's true now. And month after month as these 12 rules came up, we voted for them unanimously. We came 13 together after all of this discussion and thought that 14 what we were doing was the right step forward on these 15 particular mobile sources for the South Coast basin. 16 Lastly, I'd just like to mention the reason for 17 the strong Board support for these rules. They were and 18 are urgently needed. Air quality in this basin must 19 continue to improve. And in the year 2000 and in the 20 years since, we have found it increasingly difficult to 21 find sources of cost effective emission reductions from 22 stationary sources. Stationary sources are very highly 23 regulated already. If we're going to continue to see 24 improvement in air quality, we need emissions reductions 25 from mobile sources. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 So, in fact, I think -- we have reviewed from 2 time to time these rules. We've continued to look at the 3 practical application of them over this period of time. 4 And I think as a Board our sense of the necessity of these 5 rules has increased over that period of time, because we 6 have seen the struggle in which we are engaged just to 7 maintain the air cleanup that has been achieved over the 8 past 20 years. Since year 2000, it's just become 9 increasingly difficult. I think that these rules, these 10 Fleet Rules, advance the goals of both your Board and our 11 Board, and I would encourage you to adopt them. 12 Thank you very much. And thank you very much for 13 putting these on your agenda and holding your hearing here 14 in the South Coast basin. 15 ACTING CHAIRPERSON RIORDAN: Thank you. And 16 thank you, Mayor Loveridge. 17 Let's move forward now to Ms. Witherspoon and 18 would you introduce this item and begin the staff's 19 presentation, please. 20 EXECUTIVE OFFICER WITHERSPOON: Yes, Madam Chair. 21 As you indicated, the series of events leading up 22 to this hearing on the South Coast Fleet Rules have been a 23 roller coaster with several twists and turns along the 24 way, and there are still different interpretations of 25 exactly what happened and where we are now. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 To prepare you for the testimony that's coming, 2 our Senior Staff Counsel Diane Johnston is going to go 3 over the legal chronology in some detail. Once she's 4 finished, I'll make some concluding remarks about where 5 that leaves the Board in general as you weigh the options 6 for going forward on the proposed rules for school buses, 7 refuse trucks, and transit buses, which staff will present 8 individually following this overview. 9 I'll now turn the presentation over the Senior 10 Staff Counsel Diane Johnston. 11 SENIOR STAFF COUNSEL JOHNSTON: Thank you 12 Ms. Witherspoon. Good morning, Chairman Riordan, members 13 of the Board, and ladies and gentlemen. 14 Ms. Witherspoon has asked me to give you the 15 background and the overview for the fleet rule items, 16 because they are very much tied up with State and Federal 17 law and lengthy court proceeding and court decisions. 18 These are the backdrop for the three specific Fleet Rules 19 that the Mobile Source Control Division staff will discuss 20 with you following my presentation. 21 (Thereupon an overhead presentation was 22 presented as follows.) 23 SENIOR STAFF COUNSEL JOHNSTON: The background 24 for the Fleet Rules starts in 1987 with the Legislature 25 granting authority to the South Coast to adopt Fleet PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 Rules. Their chronology then jumps forward from the 2 period between 2000 and today, 2005, with ARB involvement 3 occurring mostly in the last 16 months. 4 Beginning in 2000 and continuing in 2001, the 5 South Coast adopted seven Fleet Rules. 6 In May, the Engine Manufacturers, or EMA, and the 7 Western States Petroleum Association, or WSPA, brought 8 suit against the South Coast's seven Fleet Rules. 9 The EMA and WSPA lawsuit proceeded in the Federal 10 District Court, the 9th Circuit Court of Appeals, and the 11 U.S. Supreme Court. The U.S. Supreme Court handed down 12 its decision in the lawsuit on April 28th, 2004, and 13 returned the case to the Federal District Court for 14 proceedings consistent with its decision. 15 The South Coast District responded to the U.S. 16 Supreme Court decision with a request to ARB's Executive 17 Officer, Ms. Witherspoon, on July 14th, 2004. 18 In October 2004, Ms. Witherspoon issued a public 19 notice soliciting public comment on the South Coast 20 request. ARB staff later determined that a State 21 rulemaking was needed to proceed with the waiver request. 22 In May of this year, Federal District Judge 23 Florence-Marie Cooper ruled on a motion by EMA and WSPA. 24 The rule preserved the authority of the District to adopt 25 and enforce rules as applied to some fleets in the South PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 Coast. 2 While Judge Cooper's decision was being 3 considered and analyzed, and having already committed to 4 the South Coast to present three fleet proposals to the 5 Board, in July, a Notice of Public Hearing was prepared 6 for publication on August 5th, 2005. 7 Also in August, the South Coast announced it was 8 resuming more enforcement of the District Fleet Rules 9 based on Judge Cooper's decision. 10 So here we are today with the South Coast having 11 resumed more enforcement of its Fleet Rules. The Board is 12 asked to consider ARB Fleet Rules that would overlay the 13 South Coast Fleet Rules which are still in place and are 14 largely being enforced by the District. 15 --o0o-- 16 SENIOR STAFF COUNSEL JOHNSTON: Returning to the 17 beginning of the chronology, in 1987, persistent air 18 pollution problems prompted California's Legislature to 19 give the South Coast District authority to regulate 20 emission from fleets of 15 or more vehicles. 21 In 2000 and 2001, the District exercised that 22 authority, adopting seven Fleet Rules to shift fleets to 23 alternative fuels as they acquired new vehicles. The 24 shift to alternative fuels was mandated by the statute 25 which reads in part, "require operators to purchase fleets PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 which are capable of operating on methanol or other 2 equivalently clean burning alternative fuel and to require 3 these vehicles be operated to the maximum extent feasible 4 on the alternative fuel when operating in the South Coast 5 District." 6 Note that the statute authorizes the South Coast 7 District to impose the fleet requirements on fleet 8 operators. As I will explain later, this wording is 9 important to the way in which the District adopted its 10 seven rules and to the subsequent history of the rules. 11 --o0o-- 12 SENIOR STAFF COUNSEL JOHNSTON: The seven rules 13 the District adopted are for light- and medium-duty public 14 fleet vehicles, transit buses, refuse trucks, airport 15 ground access vehicles, school buses, heavy duty public 16 fleet vehicles, and street sweepers. The District's clean 17 Fleet Rules generally require fleet operators to obtain 18 alternative fuel or low emission vehicles rather than 19 diesel vehicles. However, the rules provide for 20 exceptions when such vehicles are not available, will not 21 meet the intended purpose, or for public School Districts 22 only when the School District lacks such funding to 23 purchase alternative fuel school buses. 24 From the seven District Fleet Rules, three were 25 selected for consideration by the Board as will be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 discussed later. 2 --o0o-- 3 SENIOR STAFF COUNSEL JOHNSTON: The District's 4 authority to enact Fleet Rules was quickly challenged in a 5 lawsuit brought bt the Engine Manufacturers Association 6 and the Western States Petroleum Association. EMA and 7 WSPA asserted that Section 209(a) of the Federal Clean Air 8 Act barred the District's adoption of Fleet Rules through 9 preemption, making the District Fleet Rules 10 unconstitutional. What is preemption? Simply stated, it 11 means federal law trumps State or local law. When State 12 and local laws are subject to preemption, they may be 13 found unconstitutional. 14 --o0o-- 15 SENIOR STAFF COUNSEL JOHNSTON: But, again, 16 wording is important. Section 209 says no State or any 17 political subdivision thereof shall adopt or attempt to 18 enforce any standard relating to the control of emissions 19 from new motor vehicles or new motor vehicle engines 20 subject to this part. This part refers to the portion of 21 the Federal Clean Air Act that authorizes the federal 22 government to set new motor vehicle emission standards. 23 In defending against the legal challenge, the 24 South Coast District and its attorneys pointed out that 25 the District had not adopted new motor vehicle standards PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 or new engine standards which it adopted its Fleet Rules. 2 Its Fleet Rules were purchase requirements imposed on 3 fleet owners and operators as California's Legislature had 4 authorized the District to do in the Health and Safety 5 Code. 6 --o0o-- 7 SENIOR STAFF COUNSEL JOHNSTON: Against this 8 argument, EMA and WSPA argued federal preemption. They 9 urged that it did not matter that the District Fleet Rules 10 affected purchases. What mattered was that the vehicles 11 and engines that met ARB statewide emissions standards 12 could not be purchased by fleet operators in the South 13 Coast District, and this amounted to new standards. And 14 since the District was foreclosed by the Clean Air Act 15 Section 209(a) from adopting new standards, EMA and WSPA 16 should prevail, and the District rules should be held on 17 unconstitutional. 18 Both the Federal District Court where the lawsuit 19 was brought and 9th District Court of Appeal, the first 20 level of appeal, said the form the South Coast Fleet Rules 21 took was determinative. Purchase requirements did not 22 equate standards and, therefore, were not preempted under 23 the Federal Clean Air Act. EMA and WSPA appealed to the 24 U.S. Supreme Court, which ruled in their favor last year. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 SENIOR STAFF COUNSEL JOHNSTON: On April 28th, 2 2004, U.S. Supreme Court struck down six of the seven 3 South Coast Fleet Rules, holding that the Fleet Rules 4 purchase requirements were preempted attempts to enforce 5 standards under Section 209(a). The Supreme Court said 6 that a standard is a standard, even when not enforced 7 through manufacturer directed regulation. The Court said 8 that a standard under 209(a) relates to the emission 9 characteristics of a vehicle or engine. 10 However, despite the Court's seemingly broad 11 definition of standard, the Court stated the South Coast 12 Fleet Rules were not necessarily preempted in toto, that 13 is, completely barred, the Court suggested as perhaps not 14 preempted rules related to internal state purchase 15 decisions, lease arrangements, or the purchase of used 16 vehicles. 17 The Court left the task of sorting through its 18 decision to the lower courts. While they awaited that 19 process, the South Coast District suspended enforcement of 20 its rule against private entities and private contractors 21 to government agencies. However, the District continued 22 enforcement against purely public entities such as the 23 City and the County of Los Angeles. 24 --o0o-- 25 SENIOR STAFF COUNSEL JOHNSTON: Faced with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 uncertainty after the Supreme Court decision, the South 2 Coast turned to ARB for help, and in June of last year 3 asked the Executive Officer to seek a federal waiver on 4 the District's behalf. 5 To state the obvious, California is the only 6 state that is permitted to adopt motor vehicle standards, 7 and ARB is the only agency within this state that may do 8 so and seek a federal waiver. Moreover, U.S. EPA must 9 grant California a waiver if California meets the criteria 10 established under Section 209(b) of the Clean Air Act as 11 those criteria have been interpreted by U.S. EPA and the 12 courts. 13 As for why South Coast asked the Executive 14 Officer to act, the District felt that course of action 15 would be most expeditious. Also, the Executive Officer is 16 presumed to have authority to act for the Board unless the 17 Board has reserved the right to itself. So it was an 18 option. However, the very fact that South Coast had 19 requested a waiver set off a fire storm of protests from 20 EMA, WSPA, and other stakeholders who objected to that 21 course of action. 22 --o0o-- 23 SENIOR STAFF COUNSEL JOHNSTON: In response to 24 the overwhelming public interest and ARB's action, staff 25 issued a public notice seeking comment on the questions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 outlined on the slide. More than 3,000 comments were 2 received in response, including lengthy legal briefs on 3 both sides of the issues. 4 --o0o-- 5 SENIOR STAFF COUNSEL JOHNSTON: As you know, the 6 South Coast Fleet Rules have been controversial since the 7 beginning. And this stage of the debate has been no 8 exception. Briefly, the opponents argued that the ARB 9 should make no attempt to overturn the U.S. Supreme Court 10 decision, because the South Coast Fleet Rules were not 11 only preempted, but bad public policy as well. The 12 opponents further argued that ARB was right to establish a 13 fuel neutrality policy for its own rules and should not 14 reverse that course on this matter. 15 Finally, the opponents pointed out that the 16 District rules were fatally flawed, because they did not 17 allow diesel vehicles to be purchased even when they were 18 identical in emissions performance to their alternative 19 fuel counterparts. 20 The supporters for the Fleet Rules were equally 21 passionate in their arguments on the other side siting the 22 historical and still present superiority of alternative 23 fuel vehicles to today's diesel products and the need for 24 greater fuel diversity in California. The supporters also 25 argued that the Fleet Rules were a legitimate exercise of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 District authority and should be supported and defended by 2 ARB consistent with legislative direction. 3 --o0o-- 4 SENIOR STAFF COUNSEL JOHNSTON: The U.S. EPA also 5 weighed in with ARB staff and shared their perspective of 6 the law, the waiver process, and what they felt was the 7 appropriate course of action. The most significant 8 conclusion on the U.S. EPA's part was the South Coast 9 Fleet Rules needed to be converted into State rules to 10 even be eligible for waiver consideration. That's the 11 primary reason staff is here today. 12 U.S. EPA also expressed a strong preference for 13 performance based, or numerical, standards rather than the 14 existing form of the District rules, which uses written 15 definitions to establish what constitutes an alternative 16 fuel. 17 EPA staff also shared their preliminary 18 conclusions about what kind of waiver would apply and 19 their view that South Coast Fleet Rules would not qualify 20 for a within-the-scope waiver determination. While those 21 opinions are not binding, it gives us some indication of 22 where U.S. EPA is coming from and what hurdles we have to 23 overcome to obtain a timely waiver. Finally, and although 24 not a legal comment, U.S. EPA also expressed significant 25 concern from a policy perspective that pursuing the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 District Clean Fuel Fleet Rules any further was contrary 2 to the national objective of cleaning up diesel fleets 3 with all the technology investment that entailed. 4 --o0o-- 5 SENIOR STAFF COUNSEL JOHNSTON: Against this 6 backdrop, ARB staff developed the proposed ARB Fleet Rules 7 for the South Coast District. ARB and the South Coast 8 agree to proceed with three of the rules: Transit buses, 9 school buses, and trash trucks. ARB staff updated all the 10 technical information about the affected South Coast 11 fleets: The technology availability, the in-the-field 12 experience, the cost, and the emissions benefits. In 13 short, the usual ARB rulemaking process, but compressed 14 with an attempt to ensure continued enforcement of the 15 Fleet Rules by securing a waiver on behalf of the South 16 Coast, while the ultimate fate of the District's own rules 17 still pended before the Federal District Court. 18 Later you will hear from staff the specifics of 19 each of the three currently proposed ARB Fleet Rules. You 20 will also hear from Ms. Tschogl, ARB's Ombudsman, details 21 of the process for the regulations development. 22 --o0o-- 23 SENIOR STAFF COUNSEL JOHNSTON: With ARB 24 rule-making underway, on May 9, 2005, Federal District 25 Court Judge Florence-Marie Cooper ruled on a motion that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 EMA -- Judge Cooper ruled on a motion from EMA and WSPA to 2 implement the Supreme Court decision. In her decision, 3 ruling against EMA and WSPA, Judge Cooper noted that the 4 Supreme Court decision had directed her, among other 5 issues, to consider whether some of the South Coast Fleet 6 Rules or some applications of them could be characterized 7 as internal State purchasing decisions. And if so, 8 whether a different standard for preemption applies. 9 Without explaining the full logic of her 10 reasoning, her decision denied the EMA motion to strike 11 down the District rules. Because she concluded that since 12 the District rules apply to State and local governments, 13 they fall within the market participant doctrine and are, 14 therefore, outside the scope of Section 209. Or stated 15 more simply, South Coast may regulate public agencies. 16 Judge Cooper noted her ruling did not address two 17 other applications of the South Coast Fleet Rules 18 discussed by the attorneys for EMA and the South Coast, 19 namely, their application to federal fleets or to private 20 contractors under public contract. EMA has since filed a 21 motion seeking Judge Cooper's invalidation of the District 22 rules as they relate to private contractors. A decision 23 on that motion is expected sometime next year. 24 --o0o-- 25 SENIOR STAFF COUNSEL JOHNSTON: In August 2005, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 the District resumed enforcement against private 2 contractors to public agencies. Earlier, in May 2004, 3 following the Supreme Court decision, the District had 4 resumed enforcement against public agencies. By resuming 5 enforcement, as you will hear from staff, the District now 6 gets nearly all the emission benefits that would otherwise 7 be achieved by the proposed ARB rules. However, the South 8 Coast is not enforcing its rules against federal agencies 9 or purely private fleet operators. 10 --o0o-- 11 SENIOR STAFF COUNSEL JOHNSTON: The purpose of 12 today's hearing is to consider how to proceed. You may 13 hear ARB Fleet Rules characterized as a backdrop for the 14 District Fleet Rules. A backdrop is needed where there is 15 otherwise little support. However, in light of Judge 16 Cooper's decision, legal support for the District's 17 authority and its rules is substantially strengthened. On 18 that strength, the District has resumed enforcement for 19 the vast majority of the vehicles covered by its Fleet 20 Rules. 21 The better characterization for the actions the 22 Board is asked to consider today is as an overlay to the 23 District rules. The District rules and the ARB rules 24 would overlay, because they would apply to the same 25 vehicles and could be concurrently enforceable. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 Regulatory overlays have their own issues. For ARB Fleet 2 Rules, not the least of the issues relates to obtaining a 3 timely waiver on the District's behalf. 4 Questions include whether U.S. EPA will treat the 5 waiver requests as within the scope of previous waivers or 6 as new waivers, whether standards that do not apply 7 statewide may be granted waivers, whether U.S. EPA will 8 apply Federal Clean Air Act heavy-duty lead time and 9 stability criteria to California, and whether the waiver 10 request will receive timely consideration by U.S. EPA. 11 These questions bear consideration as the District reviews 12 each of the proposed ARB Fleet Rules. 13 That concludes my presentation of the background 14 and overview of the ARB Fleet Rules for the South Coast 15 District. 16 ACTING CHAIRPERSON RIORDAN: Thank you, 17 Ms. Johnson. 18 Yes, Ms. Witherspoon. 19 EXECUTIVE OFFICER WITHERSPOON: Madam Chairman, 20 Diane Johnston's presentation will be made part of the 21 record for each of the three Fleet Rules you're about to 22 consider, though the Board will be acting on each rule 23 individually. We did this to avoid duplication later on 24 and to give the Board and the audience a common foundation 25 regarding how these Fleet Rules came before the Board. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 At this point, I'd like to summarize the options 2 as staff sees them for moving forward. These options are 3 the same for all three rules, though the Board is free to 4 make different decisions on each one. 5 Option 1 is to adopt the proposed ARB rules. We 6 have prepared draft regulations, staff reports, and 7 adopting Resolutions to overlay the South Coast Fleet 8 Rules for school buses, refuse trucks, and transit buses. 9 If the Board chooses to adopt one or more of those rules, 10 staff will proceed with the final rulemaking process and 11 file the State rules with the Office of Administrative 12 Law. 13 Concurrently, staff will begin the process for 14 obtaining a federal waiver. The waiver process can be 15 quite arduous, and there's no guarantee we'll obtain a 16 timely approval. At the moment, there's a backlog of ARB 17 waiver requests, and some of those have languished for 18 more than five years. Of course, staff will make every 19 effort to get a favorable decision, but the ball will be 20 in U.S. EPA's court, and they have considerable discretion 21 as to which criteria apply, how much time is needed for 22 full federal review, and what other actions take 23 precedence over this request. 24 Option 2 is to take no action. As Mr. Johnston 25 described, the South Coast's authority to implement the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 Fleet Rules was largely restored by Judge Cooper's 2 decision on May 5th. If you take no action, the District 3 can continue to enforce its Fleet Rules locally, unless 4 and until future legal action sets some or all of the 5 District's authority aside. 6 The District would strongly prefer that you 7 provide additional insurance by adopting State measures. 8 But given the hurdles facing us visive a timely federal 9 waiver, the District may be just as well off going it 10 alone. 11 So those are the two options before you. Some of 12 the witnesses may testify that there are other options. 13 For example, you may hear testimony that the Board should 14 adopt rules that overturn rather than backdrop the 15 District rules. Staff examined those ideas and found them 16 to be contrary to State law. The Legislature clearly 17 intended that the South Coast District have authority to 18 impose clean fuel Fleet Rules within its jurisdiction. It 19 would be inconsistent with legislative direction for ARB 20 to reverse that through State rulemaking. Therefore, if 21 you do act, it must be with the intent of preserving the 22 District's authority, not limiting it or overturning it. 23 At this point, Diane and I would be happy to 24 address any general questions that you have before we get 25 into the specifics of any particular fleet rule on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 next three items. 2 ACTING CHAIRPERSON RIORDAN: Thank you, 3 Ms. Witherspoon. 4 Board Members? Dr. Gong. 5 BOARD MEMBER GONG: Two quick questions. 6 One is, Diane, you mentioned about the ARB asking 7 for a federal waiver that I guess legally should be for 8 the entire state and not just for one Air District. Am I 9 correct in understanding? 10 SENIOR STAFF COUNSEL JOHNSTON: Well, actually, 11 this is one of the issues that's before us and that we 12 would have to argue in the waiver request, is whether -- 13 our view is that it is possible to ask for a waiver for a 14 rule that would have a limited area of application. But 15 U.S. EPA has not ever ruled on that kind of waiver request 16 in the past. So it would be a new issue before them, and 17 we are not certain as to what the outcome would be, how 18 they would rule on that, whether it would be okay with 19 them or not. It's a new question. 20 BOARD MEMBER GONG: Thank you. 21 My second question is probably more directed to 22 staff when they make their presentation. What happens if 23 there is a lengthy federal waiver process five years or 24 longer? What happens to emissions and everything else I 25 guess? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 SENIOR STAFF COUNSEL JOHNSTON: Actually, I think 2 Tom Jennings might want to comment on that, or I can 3 comment on it, if he prefers. 4 ACTING GENERAL JENNINGS: Yes, I can comment on 5 it. 6 I think that we have not fully decided whether we 7 would request a new waiver or a within-the-scope of 8 previous waiver determination by EPA. It is clearly our 9 view that once we receive a new waiver of preemption, that 10 any subsequent rulemakings that we do that are within the 11 scope of that preemption are immediately enforceable 12 because they were always within the scope of the 13 preemption. 14 There is a more difficult issue with regulations 15 that are subject to a new waiver. It has been the ARB's 16 position that the extent federal law would prohibit us 17 from enforcing the regulation pending the waiver action 18 that there's actually a provision in the California 19 constitution that requires State agencies to enforce 20 statutes and not to refuse to enforce them on the grounds 21 of constitutionality until a California Appellate Court 22 has made a decision on constitutionality. 23 But it's a tough issue on regulations that 24 require new waivers, and there's some give and take there. 25 But we certainly try to enforce them as much as we can. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 EXECUTIVE OFFICER WITHERSPOON: Dr. Gong, that 2 was the legal answer to your question, and there's a 3 practical answer as well. 4 If we don't have a waiver, and if we conclude we 5 can't enforce absent a waiver, there are still 6 requirements in place requiring clean fuel vehicles to be 7 purchased in the South Coast because the District rules 8 have been restored to some extent. So, for example -- and 9 we will talk about this later with each rule. 10 The school bus rule is in place and is 11 principally applicable to public entities. So we expect 12 it to remain in place. It's also heavily subsidized, and 13 those subsidies are continuing and will purchase 14 alternative fuel vehicles. 15 The transit bus rule already intersects with our 16 own transit rule, and transit providers in the South Coast 17 are locked onto the alternative fuel path by our own rule 18 adopted by the Board in 2001. There wouldn't be any 19 difference in what happened with transit agencies through 20 2015. 21 The place where there's the most potential 22 slippage is in the trash truck rule where a third of the 23 providers of trash collecting services are private 24 contractors to public entities. And if EMA and WSPA are 25 successful with their current motion, the District could PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 be stripped of their authority to regulate them. They 2 would still regulate the two-thirds of public agencies 3 that provide trash collection, but not the last third. 4 Now, we, again, have a rule already on the books 5 that's about accelerated retirement and retrofit of trash 6 trucks. So emissions control will continue, but what 7 could get lost is for one-third of the vehicles if they 8 are in the market for a new trash truck, they might not 9 have to buy a natural gas trash truck. So that's the 10 practical answer to your question. 11 ACTING CHAIRPERSON RIORDAN: Mayor Loveridge. 12 BOARD MEMBER LOVERIDGE: Let me just ask, the 13 five years seems to me simply an outrageous time for some 14 sort of return of an opinion. That just seems to be 15 unacceptable, whether it's a major opinion or minor 16 opinion. Why that kind of time? And could not there be a 17 specific request saying we want a more timely response? 18 ACTING GENERAL JENNINGS: This is something we've 19 been struggling with the EPA for some time. They have 20 been able to expedite action on some waiver requests. For 21 instance, the LEV II waiver request they did grant I 22 believe in less than two years. But there are 23 authorization requests we did for the off-road vehicles 24 for things like LSI where we submitted a regulation in 25 2000, and they still have not granted an authorization. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 And it's very troubling, and we have had high level 2 discussions with EPA management on how to address this. 3 But it's an ongoing issue. Obviously, on this one, we 4 would ask it be dealt with expeditiously. But that's 5 happened before. 6 EXECUTIVE OFFICER WITHERSPOON: And with respect 7 to that, because we have a significant backlog, we have 8 negotiated over which rules need to go first in terms of 9 their enforcement deadlines and their significance in 10 tonnage control within California. There's places where 11 we're harmonized with EPA, and it's not that important, 12 because under federal authority enforcement actions could 13 be brought. But where our rules are unique and different, 14 we've asked for them to be accelerated. 15 But there's also a clause in federal law that 16 says any party may request a hearing on a waiver decision, 17 and EPA must grant that request. And so when things spill 18 into a more public arena and are more contentious, then 19 the process can really bog down. Because it's not just 20 between us and EPA lawyers anymore and their cumbersome 21 process, but between, you know, sort of stakeholders 22 pitted against one another and EPA trying to sort all that 23 out and make new rulings they haven't made before, which 24 is very time consuming. 25 What Diane Johnson was alluding to visive the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 local jurisdiction locality within California is that 2 shielded from the general statement in the Clean Air Act 3 that no locality should attempt to do a mobile source 4 rule. However, the State of California may. And you 5 might hear testimony later that our right to have motor 6 vehicle standards does not extend to localities within 7 California, but only to the state of California as a 8 whole. 9 BOARD MEMBER LOVERIDGE: Two very quick comments. 10 I spent ten days in D.C. in the early '70s looking at what 11 was George Murphy's amendment to the Clean Air Act and 12 John Dingle's effort to take it out and the good work of 13 the California Delegation to keep George Murphy's 14 exemption in. Just an editorial comment, I just find -- I 15 mean, no agency the local, State, or Federal should be a 16 black hole. I think the time line you identified I just 17 view as just not acceptable. 18 ACTING GENERAL JENNINGS: We agree. And we have 19 tried to make that point with EPA several times. 20 ACTING CHAIRPERSON RIORDAN: Other questions, 21 Board members, at this time? 22 Then we'll ask staff moving on to the first item 23 before us. This is Agenda Item 5-8-4, the Proposed School 24 Bus Regulation for School Buses Operating in South Coast 25 Air Quality Management District. This is the first of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 three South Coast Fleet Rules to be presented today. Our 2 plan is to take up each rule in order and take testimony 3 on each one from the affected stakeholders and interested 4 parties, and close the record on each individual rule and 5 vote. 6 If you are here for the solid waste vehicle rule, 7 we will be taking that subject up next after all the 8 witnesses on the school bus rule have had an opportunity 9 to testify. The transit rule will be last, and most 10 likely very late into the afternoon or evening after our 11 dinner break this evening. 12 If staff will help me, I'll do my best to keep 13 everyone posted on where we are in the agenda so you can 14 estimate when the items you're interested in are about to 15 be heard. We have already heard from Ms. Johnston 16 regarding the legal proceedings that brought us to this 17 point. At this time, I'd like to ask Ms. Witherspoon to 18 introduce the item and the staff presentation. 19 EXECUTIVE OFFICER WITHERSPOON: Thank you, Madam 20 Chair. 21 Just one general comment before I start. There 22 are a number of witnesses that wish to speak to all three 23 items. And so we have instructed them, and by this 24 comment I'll instruct them again, that when they come up 25 on school buses, they may say, "We would like these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 comments to be entered into the record for trash trucks 2 and transit buses as well." It is not necessary to stand 3 up and read the same comments again. Now, if they do have 4 additional specific comments they would like to make about 5 the trash truck subject or the transit bus subject, of 6 course, they will come up again. But we would like not to 7 have repetitive testimony on all three items. And the 8 record is open on all three until you close them later. 9 ACTING CHAIRPERSON RIORDAN: And I appreciate 10 that. 11 And also, Ms. Witherspoon, I neglected to say 12 there are some elect officials here who perhaps, when the 13 staff presentation is over, I'll take first because they 14 have another commitment. But beyond that, I am going to 15 stick to the witness list as it is. If for any reason you 16 need to leave, if you were to submit written testimony, 17 that's part of the record, feel very free to do that. But 18 I do want to stay on a witness list and not jump back and 19 forth. Everybody's time is important. And so I'm going 20 to take you in that order. And so we will begin with the 21 staff presentation now. Thank you. 22 EXECUTIVE OFFICER WITHERSPOON: Thank you. 23 Protecting children's health is one of ARB's 24 highest priority which is evident throughout our research 25 program, the air quality standards we propose for the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 Board's consideration, and in the regulations we bring to 2 you for adoption. I think everyone here would also agree 3 that providing clean, safe transportation for California's 4 school children is common goal. 5 We were extremely fortunate to receive another 25 6 million in this year's budget for cleaning up older 7 high-emitting school buses. Those dollars will pay for 8 100 new school buses statewide and will allow us to put 9 particulate traps on about 1,000 more. That's on top of 10 the $75.5 million the State has expended since 2000 for 11 cleaning up California's older high-emitting school buses. 12 In the South Coast, the District has chosen to 13 implement a blend of subsidies and mandates combining its 14 alternative fuel objectives with the available stream of 15 State and local funding. Specifically, the South Coast 16 District has adopted a rule which requires schools and 17 transportation providers to purchase or lease alternative 18 fuel buses when acquiring new vehicles and is subsidizing 19 that requirement with the expenditure of about $11 million 20 per year. 21 The proposed regulation that staff will present 22 in a moment matches up with the basic outlines of the 23 South Coast rule. The two main differences are that we 24 added a mandatory retrofit provision to clean up existing 25 school buses. Also, we clarified ARB rule only applies if PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 full subsidies are available in accordance with the 2 California constitution, which prohibits any State agency 3 from imposing unfunded mandates on School Districts. 4 With or without regulations, school buses are 5 turning over and School Districts are putting on 6 retrofits. The primary driver is money. But it's fair to 7 say that fewer alternative fuel school buses would be 8 purchased if the South Coast District had no rule at all 9 since many School Districts prefer to buy diesel buses 10 given a choice. That's what the District's rule 11 accomplishes and ARB backstop rule would accomplish as 12 well. If the Board adopts this rule and we obtain a 13 timely waiver to enforce it, you would be requiring School 14 Districts in the South Coast air basin to continue with 15 the purchase or lease of alternative fuel buses through 16 2010. 17 If, on the other hand, the Board decides to take 18 no action, the District's school bus rule will remain in 19 effect and will apply to all but one purely private School 20 District. That is, of course, assuming there are no 21 further court rulings to limit the District's authority. 22 With that introduction, I'll now turn the 23 presentation over to Ms. Krista Fregoso to discuss the 24 specifics of the ARB rule. Oh, it's Renee Kemena. That's 25 not what my script said. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 (Thereupon an overhead presentation was 2 presented as follows.) 3 PLANNING AND REGULATORY DEVELOPMENT SECTION 4 MANAGER KEMENA: Thank you, Ms. Witherspoon, Madam 5 Chairman Riordan, and members of the Board. 6 Ms. Johnston has already provided you with the 7 legal backdrop for the fleet rule proposals before you 8 today. This first one is the regulation for school buses 9 in the South Coast Air Quality Management District. I 10 will summarize both the existing South Coast Rule 1195 and 11 ARB's proposed school bus rule, highlighting the 12 differences between the two. I will then discuss emission 13 benefits and cost effectiveness of the proposal, issues 14 that you will hear during today's testimony, and finally 15 options for the Board's consideration. 16 --o0o-- 17 PLANNING AND REGULATORY DEVELOPMENT SECTION 18 MANAGER KEMENA: Let's start with a description of what 19 South Coast's existing Rule 1195 does. Adopted in April 20 2001, it requires fleet operators with 15 or more school 21 buses to purchase new alternative fueled heavy-duty school 22 buses and to purchase new non-diesel medium-duty school 23 buses that are ULEV, low-emission vehicle, or cleaner. It 24 also contains requirements to retrofit in-use diesel buses 25 as a condition for fleet operators to get an exemption PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 from the purchase requirements. 2 Rule 1195 relies on external funding for fleet 3 operators to meet the rule requirement. Over the past 4 five years, about $55 million in State and local incentive 5 funding has been available for new school bus purchases 6 and retrofits in the South Coast region. 7 Rule 1195 is in place now, and South Coast is 8 implementing it on public school fleets and on private 9 fleets that contract to public schools. As a result of 10 the court rulings, they are not implementing on the one 11 private school with over 15 buses. 12 --o0o-- 13 PLANNING AND REGULATORY DEVELOPMENT SECTION 14 MANAGER KEMENA: So I just described the main components 15 of Rule 1195. This slide shows that Rule 1195 together 16 with incentive funding has successfully increased the 17 number of compressed natural gas or CNG buses on the road 18 and the number of PM retrofits of diesel buses. 19 --o0o-- 20 PLANNING AND REGULATORY DEVELOPMENT SECTION 21 MANAGER KEMENA: That was a quick overview of South 22 Coast's rule currently in effect. Now I'll cover ARB's 23 proposed school rule. 24 Like Rule 1195, it is applicable to fleet 25 operators with 15 or more school buses. Like Rule 1195, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 the main effect would be to require the purchase of 2 alternative fuel school buses when funding is available. 3 But we use an emissions performance standard called BEST 4 to get there, which I'll go into in a minute. Like Rule 5 1195, it requires PM retrofits on in-use diesel buses. 6 And like Rule 1195, it would be implemented by the South 7 Coast staff. 8 --o0o-- 9 PLANNING AND REGULATORY DEVELOPMENT SECTION 10 MANAGER KEMENA: The proposed ARB rule differs from Rule 11 1195 in a couple of respects. ARB's rule directly 12 requires PM retrofits. The South Coast rule also requires 13 PM retrofits, but in a more round-about fashion as a 14 condition of the exemption process. 15 ARB's rule reinstates sunsetted exemptions 16 primarily the ones related to infrastructure funding, but 17 infrastructure funding is available anyway through both 18 the State's lower emissions school bus program and from 19 the District's AB 923 moneys. 20 --o0o-- 21 PLANNING AND REGULATORY DEVELOPMENT SECTION 22 MANAGER KEMENA: Here are the proposed BEST emission 23 criteria for new school bus purchases. While not an 24 alternative fuel mandate, the effect would be similar on 25 the heavy-duty side. We expect that only CNG engines PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 would achieve the NOx levels shown through 2009. Both CNG 2 and diesel engines with a particulate filter already 3 achieve the PM levels shown. And by 2010, CNG and PM 4 engines will be comparable for both NOx and PM emissions. 5 In 2010, both CNG and PM engines have to meet the 6 standards shown nationwide. On the medium-duty side, new 7 purchases must be certified as non-diesel ULEV, consistent 8 with the South Coast Rule. 9 --o0o-- 10 PLANNING AND REGULATORY DEVELOPMENT SECTION 11 MANAGER KEMENA: Compliance with the proposed ARB rule is 12 entirely contingent upon funding. If funding is not 13 available for the extra capital cost of the school bus for 14 alternative fuel infrastructure or for PM retrofits, 15 schools can apply for exemptions. 16 How much funding is available? Our best estimate 17 is about 11 million per year for school bus fleets. 18 That's based on funds the District has committed, plus 19 estimates of funding from other sources based on what's 20 been funded in recent years. On top of that $11 million 21 in annual funding, the South Coast Air District will 22 receive a share of the $25 million in new State funding 23 this year. 24 The funding is there. And what we've seen 25 through our State lower emissions school bus program is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 that the funding gets spent, whether or not a rule is in 2 place. Therefore, emission reductions will accrue whether 3 this rule is in force or not. School bus incentive 4 funding over the past five years has been oversubscribed. 5 There are always more takers than there is money. 6 --o0o-- 7 PLANNING AND REGULATORY DEVELOPMENT SECTION 8 MANAGER KEMENA: I'm now going to talk about emission 9 benefits and cost effectiveness. Since the District is 10 currently enforcing Rule 1195 on both public schools and 11 private contractors to public schools, we believe the 12 ARB's proposed rule and the District rule will get the 13 same benefits. The additional benefits of the ARB's rule 14 beyond the District rule is zero. The benefits of the 15 ARB's rule if it were a stand-alone rule, meaning it 16 replaced Rule 1195, are small. It would reduce NOx 17 emissions by about .04 tons per day and would reduce PM 18 emissions by .04 tons per day. That includes the 19 additional 25 million in funding statewide. The cost 20 effectiveness of this proposed rule is poor compared to 21 other rules the ARB has recently adopted. 22 --o0o-- 23 PLANNING AND REGULATORY DEVELOPMENT SECTION 24 MANAGER KEMENA: Here's some of the issues you may hear 25 about during today's testimony. You may hear that the ARB PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 rule is not fuel neutral and is an alternative fuel 2 mandate. That deters fleet turnover, because fleets will 3 delay bus purchases until 2010 when diesel and CNG will be 4 at comparable emission levels. That the cost of 5 technology and infrastructure are too high. School 6 transportation funding in general is inadequate. And that 7 with a set amount of incentive funding, you could buy more 8 new diesel buses than CNG buses, since diesel costs less. 9 You may hear ARB's rule is needed as a legal backstop and 10 that ARB provides direct retrofit authority. And finally, 11 you may hear that exhaust intrusion from diesel buses is a 12 children's health concern and, therefore, we should 13 require CNG buses. 14 --o0o-- 15 PLANNING AND REGULATORY DEVELOPMENT SECTION 16 MANAGER KEMENA: With that, I now reiterate the Board's 17 options for consideration. The first option is to adopt 18 the ARB rule and begin the process to obtain a federal 19 waiver. The second option is to take no action on the 20 proposed rule, and the South Coast Air District will 21 continue to enforce Rule 1195. 22 Thank you. And that concludes my presentation. 23 ACTING CHAIRPERSON RIORDAN: Thank you very much. 24 Ms. Witherspoon, do you have any other comments 25 before I go to Madam Ombudsman? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 EXECUTIVE OFFICER WITHERSPOON: Not at this time. 2 ACTING CHAIRPERSON RIORDAN: Madam Ombudsman, 3 would you like to describe the public process that 4 occurred while this item was being developed and share any 5 concerns or comments with us? 6 OMBUDSMAN TSCHOGL: Madam Chairman and members of 7 the Board, the clean on-road school bus regulation for 8 school buses operating in the South Coast Air Quality 9 Management District rule was developed with input from 10 private school transportation providers under contract to 11 public School Districts, engine manufacturers, retrofit 12 device manufacturers, school bus distributors, and fuel 13 providers. 14 In February of this year, staff initiated their 15 effort to develop this rule. During February and March, 16 staff, for all the fleet rule proposals effecting vehicles 17 in the South Coast Air Quality Management District, 18 participated in approximately 13 conference calls with 19 engine vehicle manufacturers and retrofit manufacturers to 20 discuss the status of current and future technologies. 21 On March 10th, 2005, a school bus working group 22 meeting was conducted by individual co-conferencing 23 between staff located at the Sacramento office and the 24 attendees located at the El Monte office. 25 In March, they made site visits to seven School PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 Districts and one private school bus service contractor in 2 the South Coast Air Quality Management District. 3 One public workshop was held on April 7th, 2005, 4 in El Monte. About 60 people attended the March 10th, 5 2005, work group meeting representing School Districts, 6 private transportation companies that contract with School 7 Districts, and school bus distributors. 8 About 85 people attended the April 7th, 2005, 9 public workshop representing the same school bus 10 stakeholders as those at the March 10th, 2005, work group 11 meeting, as well as environmental organizations, 12 heavy-duty engine vehicle manufacturers, retrofit device 13 manufacturers, and the South Coast Air District. 14 The staff report and the hearing notice were 15 released for public comment on July 29th, 2005. Hard 16 copies of the hearing notice were mailed to 17 representatives on six mailing lists, plus the mailing 18 list administered by the Legal Office. 19 On July 29th, 2005, hearing notice and staff 20 report were posted on the ARB regulatory activities 21 website and ARB's South Coast Fleet Rule website. 22 On July 29th, 2005, e-mail notification 23 announcing the release of the staff report and the hearing 24 notice along with instructions for obtaining the documents 25 was sent to subscribers of five listserves. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 The South Coast Fleet Rule listserve has more 2 than 4500 names. The diesel retrofit listserve has over 3 1700 names. The lower-emission school bus program 4 listserve has a little over 600 names. The MS mailings 5 listserve has nearly 1100 names. Lastly, the Board 6 notices listserve has more than 1500 names. Also, there 7 are approximately 1200 people on the six mailing lists 8 used by the MSCD staff to send out the hearing notices. 9 Thank you. This concludes my comments. 10 ACTING CHAIRPERSON RIORDAN: Thank you very much. 11 Board members, are there any questions for staff? 12 Ms. Kennard. 13 BOARD MEMBER KENNARD: I have two cost questions 14 and then a legal question. 15 The first is a cost question relative to at the 16 $11 million per year and the South Coast contribution of 17 $25 million, is the $25 million a one-time share? 18 EXECUTIVE OFFICER WITHERSPOON: Yes, it is. 19 BOARD MEMBER KENNARD: So how long would it take 20 for full implementation? 21 EXECUTIVE OFFICER WITHERSPOON: Of which? The 25 22 million? 23 BOARD MEMBER KENNARD: No. Of the entire 24 retrofit conversion. 25 EXECUTIVE OFFICER WITHERSPOON: Actually, there's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 two separate things going on. The South Coast is 2 requiring when new vehicles are purchased that they be 3 natural gas. The State is attempting to get pre-87s and 4 pre-77s off the road and be replaced with anything new, 5 natural gas or diesel. And so for the pre-77s, there's 6 about 1,000 of them left statewide. And we're going to 7 get 100 of those with the 25 million. And pre-87s, how 8 many of those are left? A few thousand I think it is. 9 Six-thousand, statewide roughly. 10 BOARD MEMBER KENNARD: So what are your 11 projections for how much and how long this $11 million 12 will go? 13 EXECUTIVE OFFICER WITHERSPOON: Well, the $11 14 million is being spent to purchase new natural gas buses 15 predominantly, with some of it going to retrofit. So you 16 divide 11 million by the 145,000 per natural gas school 17 bus and whatever the associated infrastructure costs are. 18 It's going to take a while to get the fleet turned over. 19 They get 92 per year. 20 BOARD MEMBER KENNARD: The 11 million -- 21 EXECUTIVE OFFICER WITHERSPOON: Buys 92 buses a 22 year. 23 BOARD MEMBER KENNARD: There's a total -- 24 EXECUTIVE OFFICER WITHERSPOON: There's 6,000 25 pre-87s statewide, and the District's share of that would PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 be about a third, probably. Though they've gotten rid of 2 their pre-77's. 3 PLANNING AND REGULATORY DEVELOPMENT SECTION 4 MANAGER KEMENA: There's 138 pre-77s still in South Coast. 5 EXECUTIVE OFFICER WITHERSPOON: There's a lot of 6 work to do and a lot of money needed statewide. 7 BOARD MEMBER KENNARD: Thank you. 8 The second question is, what are the legal 9 ramifications for South Coast under the no action 10 scenario? 11 ACTING GENERAL JENNINGS: I don't think there are 12 any legal ramifications. They would still be able to 13 enforce their regulations to the extent permitted by the 14 court decisions. If they were to lose in the 9th Circuit, 15 then there wouldn't be any backstop. But our action 16 wouldn't have any adverse affect on their being able to 17 implement their regulation. 18 BOARD MEMBER KENNARD: Thank you. 19 ACTING CHAIRPERSON RIORDAN: Dr. Gong. 20 BOARD MEMBER GONG: Thank you. 21 This question applies to the cost effectiveness 22 ratio. Here in this particular fleet rule for PM 23 reduction, it's $390 million per ton. And this is a 24 general question that applies to the other Fleet Rules. 25 I'd like to have an idea of the confidence intervals, if PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 you will, about this calculation. And I'm not asking for 2 a detailed analysis. But is there a range for this? 3 EXECUTIVE OFFICER WITHERSPOON: Dr. Gong, we've 4 looked at a lot of different vehicle replacement projects 5 under Carl Moyer, which is where a lot of these numbers 6 come from, though this was calculated specifically for 7 this rule. And the reason that school bus projects and 8 school bus rules are not very cost effective in reducing 9 tons is because they don't accumulate very many miles. 10 They're low use vehicles. 11 And that is why they haven't qualified for Carl 12 Moyer funding in the past and why the Legislature and the 13 voters and the Governor have set aside special pots of 14 funding to turn over school bus. Without respect to how 15 good it is for cleaning the air, we need kids on safer 16 cleaner buses and to reduce proximate exposures. So the 17 State is going to make that investment. We're not 18 subjecting it to the same measuring stick that we apply to 19 other regulations. 20 BOARD MEMBER GONG: That also applies to the 21 other two Fleet Rules, too? 22 EXECUTIVE OFFICER WITHERSPOON: With the other 23 two Fleet Rules, the reason the cost effectiveness is 24 small or not favorable is because there are existing State 25 regulations operating in concert. So there's very little PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 emissions difference between them and the high cost for 2 making a CNG choice, or forcing the CNG choice. 3 BOARD MEMBER GONG: So you're also saying these 4 numbers are pretty tight? 5 EXECUTIVE OFFICER WITHERSPOON: We believe so, 6 yes. We have a lot of experience with the cost of diesel 7 versus natural gas technologies. 8 ACTING CHAIRPERSON RIORDAN: Ms. Berg. 9 BOARD MEMBER BERG: Is there any language in the 10 State bill regarding the $25 million funding that would 11 have an adverse effect to areas outside of South Coast 12 being able to purchase other than CNG buses if we were to 13 adopt this rule? 14 EXECUTIVE OFFICER WITHERSPOON: No, there is not. 15 BOARD MEMBER BERG: Thank you. 16 EXECUTIVE OFFICER WITHERSPOON: And we may be 17 bringing before you school bus guidelines, because there 18 is a dispute over how the $25 million should be allocated. 19 The Legislature expressed a preference for -- or directed 20 us to spend the money on pre-77s. And we've since been 21 asked to make the funding proportional to where the most 22 pre-77 vehicles are. And since South Coast has done so 23 good cleaning up the pre-77s, if we were to do that, they 24 would receive a less per capita share of the funds. And 25 this is something we'll be taking to workshop and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 discussing with all the stakeholders and may well end up 2 in front of the Board for your decision on how to handle 3 the school bus rule. 4 ACTING CHAIRPERSON RIORDAN: Any other questions? 5 All right. Now comes the part of the speaking 6 order. We have 58 speakers, so you can kind of judge. So 7 that's why again I repeat I'm asking you to stay to the 8 three-minute limit. I'm going to enforce it. 9 There is one individual who had indicated to 10 me -- and I see the name on the speaking list -- the need 11 to leave, an elected official. I'm going to ask Mayor 12 Laurene Weste to come forward, and then I will move back 13 to the regular list. And let me indicate, Laurene, before 14 you start, you will be followed by Dr. Barry Wallerstein, 15 Kurt Wiese, and Herbert Burnett. So if those people would 16 be ready to go at the appropriate time. 17 MS. WESTE: Good morning, Chairman Riordan and 18 Air Resources Board members. My name is Laurene Weste, 19 and I am the Mayor Pro Tem for the City of Santa Clarita. 20 In order to save time, I will speak to all three of your 21 agenda items on solid waste vehicles, transit fleet 22 vehicles, and school buses. 23 ACTING CHAIRPERSON RIORDAN: Thank you. 24 MS. WESTE: Thank you. 25 I would like to thank you very much for holding PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 the California Air Resources Board meeting in Southern 2 California, which gives us an opportunity to speak to you. 3 San Clarita is in the northern part of Los Angeles County 4 where the 5 and 14 freeways meet. Recently, the AQMD 5 staff developed a subregional plan for Santa Clarita 6 Valley. Staff members worked diligently with our 7 community to help illuminate the air quality situation in 8 the Santa Clarita Valley, where we have some of the worst 9 air quality in California and the nation due to ozone and 10 particulate matter. 11 Santa Clarita has taken a proactive approach to 12 air quality. In 2001, the City achieved the AQMD's model 13 community award. The City has received three ride share 14 diamond awards. The City has an air quality chapter in 15 its General Plan. The City's contracted street sweeping 16 and solid waste hauling companies are required to use 17 alternative fuel vehicles. Our transit division currently 18 has 14 CNG buses in its fleet, and all new buses will be 19 CNG fueled. Santa Clarita views AQMD as its partner. 20 Particulate matter is a growing concern in our 21 valley, which may worsen significantly. The emissions 22 from the proposed CEMEX gravel mega-mine in our community 23 will result in enormous dust emissions if the project is 24 allowed to move forward. This project would operate 25 24 hours a day for 20 years and add 1,160 diesel truck PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 trips daily to our already crowded roadways. 2 As a result of this proposed project, it is 3 critical that all sources of diesel that can be controlled 4 are controlled to protect our community from elevated 5 cancer risks and other health issues associated with 6 diesel emissions. 7 For those who are thinking that our growth is 8 causing the problem, it may be surprising to hear that the 9 Santa Clarita Valley has only control over little more 10 than 2 percent of the contributors to our ozone pollution. 11 The City of Santa Clarita needs the Air Resources 12 Board to take decisive action today. The City would like 13 the Air Resources Board to take the most stringent actions 14 it can on all three counts before you: Clean on-road 15 school buses, on-road heavy-duty solid waste collection 16 vehicles, and heavy-duty urban bus engines and vehicles 17 and Fleet Rules for transit agencies. Strong actions on 18 these items will help our community and begin to address a 19 portion of the 98 percent of the pollution we cannot 20 control. CARB and the AQMD control it, and we need you to 21 take strong action now. 22 ACTING CHAIRPERSON RIORDAN: Thank you. 23 MS. WESTE: Can I make -- 24 ACTING CHAIRPERSON RIORDAN: You can make one 25 final comments because you are over your time. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 MS. WESTE: We would like you to take strong 2 action today and fight for our lungs. We cannot be a 3 great state if we are in declining health. Please make 4 the decision. Adopt the rules. 5 ACTING CHAIRPERSON RIORDAN: Thank you very much. 6 (Thereupon an overhead presentation was 7 presented as follows.) 8 MR. WALLERSTEIN: Good morning, Madam Chair, 9 members of the Board. Barry Wallerstein, Executive 10 Officer of South Coast AQMD. 11 --o0o-- 12 MR. WALLERSTEIN: So why are we here before you? 13 We're not here to ask for an overlay. Your adoption will 14 actually replace our rules. I will go to my Governing 15 Board and put our rules on an inactive status with your 16 approval. We're here to achieve the additional emission 17 reductions, improve air quality, reduce toxics, and 18 continue your past tradition of promoting the cleanest 19 technology. 20 --o0o-- 21 MR. WALLERSTEIN: We think it's important to note 22 that in the Supreme Court case -- and this is from the 23 transcript that the plaintiffs, EMA, their attorney 24 stated, "There is no question that these Fleet Rules could 25 have been adopted by the State of California and be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 approved by the EPA and be operating completely tomorrow 2 if they wanted to go through that process." That's what 3 we're here doing. 4 --o0o-- 5 MR. WALLERSTEIN: Why do we have special needs? 6 Supervisor Patrick and other members of the Board, 7 unfortunately, we're way ahead in this year's smog 8 contest. We have eight-hour ozone levels almost twice the 9 federal standard and many more days of violations. If we 10 look at PM2.5 as an example -- 11 --o0o-- 12 MR. WALLERSTEIN: -- we see, unfortunately, we 13 are by far the worst in the state and the nation. And 14 it's important to note our PM2.5 problem is principally a 15 particulate nitrate problem. What about diesel 16 particulates. 17 --o0o-- 18 MR. WALLERSTEIN: If we look at the top ten 19 counties' highest emission, Los Angeles County, almost 20 more than twice the emissions of the second highest county 21 which happens to be Orange County. And San Bernardino and 22 Riverside County are also on that list. All four of our 23 counties are among the highest in the state and nation. 24 What about the technology? 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 MR. WALLERSTEIN: If we look at school buses 2 today, the best of the diesel buses is that 2.3 grams per 3 brake horsepower hour. Your staff is proposing 1.8, which 4 would be achieved with an add-on control device on diesel, 5 we believe. But yet the natural gas buses are down as low 6 as 1.2. Clearly, a better technology for reducing 7 pollution. And in fact when we -- 8 --o0o-- 9 MR. WALLERSTEIN: -- compare this, if we look at 10 your previous actions before your Board, because your 11 action would set an emission standard, it is fuel neutral. 12 And, in fact, you've tackled this kind of problem before 13 on light-duty vehicles as indicated by this quote from 14 Second Lloyd where he said, "I'd love to see diesel cars 15 in California's light-duty fleet, but only when they 16 attain our emission standards." We're asking you to do 17 the same thing here for school buses. 18 --o0o-- 19 MR. WALLERSTEIN: Relative to the funding, as 20 mentioned by your staff, no one has to get a natural gas 21 bus unless we pay for the bus for everything except for 22 $25,000. If they wanted to go out and buy a diesel bus, 23 it would cost them 110,000. For 25,000, they get a 24 brand-new bus. Not only that, according to the way the 25 rule is written -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 --o0o-- 2 MR. WALLERSTEIN: -- we provide 13,000 per 3 vehicle for fueling infrastructure and 4,000 to upgrade 4 their maintenance facilities. 5 --o0o-- 6 MR. WALLERSTEIN: Regarding the question that was 7 asked about funding, we're fortunate the Legislature and 8 Governor signed into law AB 923. Our Board has already 9 taken action to allocate $14 million of the revenues we're 10 receiving over the next year for school buses and has 11 committed for the long term to fund at least 6 to $12 12 million per year that could help implement this rule. 13 --o0o-- 14 MR. WALLERSTEIN: We're not just doing those 15 things. We have a loan program where a School District 16 can borrow a natural gas bus. In addition to that, we 17 have funded mechanic training courses that are a week long 18 through Rio Hondo College and will continue that activity 19 as well. 20 --o0o-- 21 MR. WALLERSTEIN: We do have one requested 22 amendment, and that be the initial standard be set at 1.5 23 grams per brake horsepower hour, because that can be 24 clearly achieved by alternative fueled engines as well as 25 gasoline powered engines. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 --o0o-- 2 MR. WALLERSTEIN: Lastly, in the end, it's about 3 the kids, the environment that we provide them, and we 4 would ask for your support. 5 ACTING CHAIRPERSON RIORDAN: Thank you very much. 6 And thank you for staying on time. 7 Questions, Board members, of the speaker? 8 Ms. Berg. 9 BOARD MEMBER BERG: Good morning, Dr. 10 Wallerstein. Am I to understand that the fleet rule we're 11 looking at today then would allow other than natural gas 12 as far as you're concerned? 13 MR. WALLERSTEIN: Absolutely. The key difference 14 between the rule before you and our rule is we had to 15 operate under that old statute that was fuel based, based 16 on the methanol standard at the time that mandated that it 17 had to be an alternative fueled vehicle requirement. Your 18 rule is one that is setting, as your staff mentioned, an 19 emission standard. Come one, come all. All you have to 20 do is meet that standard. 21 BOARD MEMBER BERG: Can I just ask staff a 22 question? And that is if South Coast was going to set 23 aside their rules, but we were looking to do a waiver, 24 then how would that work? 25 EXECUTIVE OFFICER WITHERSPOON: That's a problem. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 It's a problem either way. If we have concurrent rules 2 and the State law requires affected parties to comply with 3 both, they have regulatory confusion. If the South Coast 4 suspends its rule on the other hand and we don't have a 5 federal waiver, ours is not federally enforceable 6 arguably. And Mr. Jennings spoke to that earlier. 7 So Mr. Wallerstein and I talked about this a week 8 or so ago when I first heard he was proposing to suspend 9 his rules, I urged him, don't do that. You might have the 10 only rules that are enforceable. And if you really want 11 to keep the clean fuel mandate going, you should keep your 12 rules in place. I think Mr. Wallerstein's testimony is 13 intended to take away a concern you might have about 14 duplicative rules. So he said, if you have to pick one, 15 pick yours instead of mine. And I urged him to do the 16 opposite. 17 MR. WALLERSTEIN: Ms. Berg, might I comment? 18 ACTING CHAIRPERSON RIORDAN: Mayor Loveridge, 19 he's champing at the bit. But I'll come back to you, Ms. 20 Berg. 21 BOARD MEMBER LOVERIDGE: I just wanted to ask if 22 Barry Wallerstein would respond to that. 23 MR. WALLERSTEIN: It seems to me that in the 24 ruling you would hopefully adopt today, you could place a 25 provision that says it is only active if our rule is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 inactive, or we could go and amend our rule to do that. 2 Regarding the waiver, we believe there's an open 3 question. We believe that since the vehicles that would 4 come through these sets of regulations are beneath the 5 standards or I should say comply with the standards for 6 which you've already sought waivers, that your staff could 7 argue appropriately that it is within the scope of 8 existing waivers. In addition, it is our understanding 9 that when your staff has sought waivers because of this 10 lead time issue in the past, they have gone ahead and 11 implemented the regulations pending approval of the 12 waiver. 13 ACTING CHAIRPERSON RIORDAN: Let me go back tO 14 Ms. Berg. 15 BOARD MEMBER BERG: I'm finished. 16 ACTING CHAIRPERSON RIORDAN: Mayor Loveridge. 17 BOARD MEMBER LOVERIDGE: Help me out. I'm school 18 X. I want to buy a bus. Would the exemptions that are 19 being proposed by the CARB rule, would they also be the 20 exemptions of the South Coast District? 21 MR. WALLERSTEIN: Yes, they would. The rule 22 mirrors ours quite well. 23 ACTING CHAIRPERSON RIORDAN: Staff, do you have a 24 comment? 25 EXECUTIVE OFFICER WITHERSPOON: That's correct. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 There are some provisions in the South Coast rule that 2 sunset. And we remove the sunset, but they match 3 substantively the requirement for external funding in 4 order to be applicable. That's the primary exemption 5 clause. That if there is not funding, you need not 6 comply. 7 BOARD MEMBER LOVERIDGE: There's also things like 8 the five mile -- 9 EXECUTIVE OFFICER WITHERSPOON: There's also the 10 availability of natural gas in a reasonable distance and 11 that sort of thing. We have that, too. 12 ACTING CHAIRPERSON RIORDAN: Board members to my 13 right, do you have any questions? 14 Thank you. Thank you, Mr. Wallerstein. 15 MR. WALLERSTEIN: Thank you. 16 ACTING CHAIRPERSON RIORDAN: Mr. Wiese and then 17 Mr. Burnett. 18 MR. WIESE: It's Kurt Wiese, and I'm District 19 Counsel for the South Coast Air Quality Management 20 District. 21 It is important that you adopt the Fleet Rules in 22 front of you to provide certainty. The AQMD Fleet Rules 23 are now in a very uncertain state. As you heard from your 24 counsel's presentation, we're currently involved in 25 litigation over the Fleet Rules. We've been involved in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 litigation for the past five years, as you can see from 2 your presentation. And it's only because of the recent 3 ruling by District Court judge in Los Angeles that the 4 Fleet Rules are alive today. 5 Now the plaintiffs in that litigation, the Engine 6 Manufacturers Association, the Western State Petroleum 7 Association have indicated that they intend to appeal that 8 rule. They're going to go to the 9th Circuit. I believe 9 we have good arguments to make in front of the 9th 10 Circuit, but there are no guarantees. If we lose in front 11 of the 9th Circuit, the Fleet Rules are gone. We can 12 always try to get the Supreme Court to become interested 13 in the Fleet Rules again, but the likelihood of that 14 occurring I think is -- well, anyone can look at the 15 statistics and see the very small percentage of cases that 16 go to the Supreme Court. 17 There's another area where the Fleet Rules are 18 uncertain, and you've heard a bit about that. And that 19 has to do with the scope of enforceability of the Fleet 20 Rules. The upshot of the Judge's recent ruling is that we 21 can apply the Fleet Rules to public entities. We've taken 22 the position that we can apply them to private entities as 23 well that contract to public entities, but there's no 24 decisions that are on point. You can't go to the law. 25 You can't go to a published decision and find a case that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 says that. So there's uncertainty there as well, although 2 we do believe we have good arguments to make. 3 We don't believe that the waiver process 4 undermines the goal of keeping the Fleet Rules in place. 5 Dr. Wallerstein has addressed within-the-scope of the 6 waiver issue. We think that your staff could -- I'm 7 sorry -- that EPA could make that finding. 8 I'd like to point out, too, that the requirements 9 in the Clean Air Act for finding that a waiver exists are 10 relatively straightforward. They're in Section 209(b) of 11 the Federal Clean Air Act. There has to be a finding that 12 the standards are at least as protective of public health 13 as an applicable Federal standard. That's a no-brainer. 14 The standards have to be necessary to meet compelling and 15 extraordinary conditions, which again is fairly 16 straightforward in the South Coast. And, finally, there's 17 a consistency requirement that we don't think really is 18 applicable here at all. 19 In sum, it's important all around that there be 20 certainty with respect to the Fleet Rules. Uncertainty is 21 bad for everyone. It's bad for the regulated public that 22 has to go out and purchase vehicles. It's bad for 23 regulators that have to design and implement the staff 24 programs, and it's bad for the breathing public. Thank 25 you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 ACTING CHAIRPERSON RIORDAN: Thank you very much, 2 and thank you for staying to the time limit. 3 Mr. Burnett, followed by Stephanie Magnien and 4 Mr. Caracci. I'm not pronouncing that right. I hope he 5 will correct me, or she. You are going to be next. Yes. 6 MR. BURNETT: Thank you. My name is Herbert 7 Burnett. I reside in Los Angeles County. I'm a 8 professional engineer in the state of California. And I 9 have been providing technical advice and counsel to the 10 District regarding CNG buses and vehicles over the last 11 five years. 12 My comments today will refer primarily to the 13 cost and infrastructure issue which was presented earlier. 14 The District produced a white paper that addressed these 15 costs and infrastructure, and I was involved with the 16 District in preparing that. And my comments will refer to 17 the details of that study. 18 Having said that, the first CNG program started 19 in 1991 with the California Energy Commission approving 20 400 alternative fuel vehicles of which 100 were CNG. I 21 would call that first generation. The second generation 22 of CNG vehicles and fueling stations was in '96 to '97, 23 and that was a report that was done by a School District 24 in Northern Los Angeles County which addressed the results 25 of that generation. So this is a third generation that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 this survey and the white paper is addressing. So this is 2 by no means a pilot demonstration program. This is 15 3 years. 4 So on to the details of the white paper. The 5 District developed working groups that were attended by as 6 many as 20 or 30 School Districts. And as a result of 7 that, we sent survey forms to these Districts to obtain 8 information on diesel and CNG vehicle costs, maintenance 9 service, bus operations, warranty, training, fueling 10 stations, fuel supplies, and fueling station 11 infrastructure. And we had 13 Districts respond to and 12 participated in the survey. 13 What were the objectives and strategies? Well, 14 number one, we wanted to get direct cost from the 15 Districts so we could understand and compare the cost of 16 diesel versus CNG. And the Districts furnished us 17 Excel-based spreadsheets with their data that we used to 18 make this comparative analysis. Now, the goal of this 19 data was for the District to work with vendors and 20 suppliers to improve services and cost and for planning 21 future CNG station funding programs. 22 Now, the big issue here was how do we normalize 23 all this data. And we did that by looking at the 24 differential costs. You perhaps may hear testimony today 25 regarding the accuracy of the cost data. But when you use PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 differential cost of CNG versus diesel, that takes out of 2 the equation the different accounting procedures that the 3 Districts use. 4 So what did we find? When we looked at diesel 5 and CNG buses less than five years old, the cost of diesel 6 versus CNG, diesel was one cent a mile cheaper. And that 7 was for roughly 100 buses in each category less than five 8 years old. We found this to be consistent with the second 9 generation CEC study which showed that two cents a mile in 10 favor of CNG. And also since that time with the fuel 11 savings, there's about a $5,000 fuel savings per bus per 12 year. We would propose that the Board adopt the rules. 13 ACTING CHAIRPERSON RIORDAN: Thank you, 14 Mr. Burnett. 15 Any questions for this speaker? Thank you. 16 MS. MAGNIEN: Good morning, members of the Board. 17 My name is Stephanie Magnien. I'm here on behalf of 18 Assembly Member Judy Chu, representing the 49th Assembly 19 District in the West San Gabriel Valley. 20 The Assembly Member would like to express her 21 support for the three proposed California Air Resources 22 Board regulations for clean urban transit buses, clean 23 on-road solid waste collection vehicles, and clean on-road 24 buses for both public and private operations in the 25 region. Transit buses, school buses, and refuse PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 collection vehicles are major culprits of air polluting 2 emissions. It is imperative to adopt these regulations so 3 these vehicles can be replaced or modified with cleaner 4 alternatives and use other proven advanced emission 5 control technologies in order to reduce harmful and toxic 6 pollutant emissions. 7 The use of clean air technologies could 8 positively affect our health. Nitrogen oxide emissions 9 from these affected vehicles can be cut in half if these 10 regulations are adopted. This clearly reduces the risk of 11 cancer to children who ride these buses and decreases 12 emission of particulates near schools and local 13 communities. In addition to the environmental and health 14 benefits gained from the alternative clean air 15 technologies, these regulations will help Southern 16 California meet the stringent 2010 Federal emission 17 standards. The regulations will also help to make new 18 technologies and alternatives more available and reduce 19 our reliance on petroleum products. 20 I'd like to thank you for taking the time to 21 consider Assembly Member Chu's strong support for CARB's 22 three proposed fleet regulations. 23 ACTING CHAIRPERSON RIORDAN: Thank you. And 24 thank you for staying to the time limit. 25 We have I guess the next person is in transit as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 we speak. So my understanding is I have Jackie McHenry, 2 if you are here, would you like to come forward, please, 3 and then let me follow with Angelo Bellomo. 4 MS. MC HENRY: Good morning. Thank you for 5 coming down and listening to us all. My name is 6 Jacqueline McHenry. I'm a City Council Member from the 7 City of Claremont. 8 Our City is committed to providing our citizens 9 with the best that we can provide for them with the 10 revenue that we have from the State and locally. One of 11 the things that we are not able to provide them that you 12 can help us provide is clean air. We live in an area, as 13 I'm sure you know, that has the worst air quality in the 14 nation. Claremont is right next to Upland. And in your 15 own, thank you very much, financially sponsored USC study 16 on children's lungs, Upland had the worst air quality or 17 the worst particulate matter for the development of 18 children's lungs. 19 I'd love to believe that we have a wall between 20 Claremont and Upland and we're not breathing the same air, 21 but the fact is we are. And our children are breathing 22 that air. And that does not help with their health or the 23 quality of our citizens. 24 We are trying to do our best. According to our 25 Community Services Director, we have purchased four CNG PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 trash trucks. We're in the process of buying two more 2 this year, this fiscal year. And hopefully in ten years, 3 although I hear now they're actually going to be some 4 diesel qualifications that will be the same in 2010, we 5 will hope to replace all of our heavy-duty diesel refuse 6 trucks with alternative fuel, specifically CNG, or 7 anything else that comes up in the mean time. 8 We also are trying -- I'm trying personally to 9 not only get our other vehicles that we use, we have 91 in 10 our total motor fleet, to have alternative fuels. Hybrid 11 cars for our staff members who aren't driving these trash 12 trucks, just getting around, trying to encourage that. I 13 tried to encourage our City Manager to do that, and he was 14 very resistant to it. But our City Manager is no longer 15 there, and hopefully our new City Manager will be more 16 responsive to that. One of the questions I will be asking 17 of the candidates. So we're doing our part. 18 I also support, even though I wasn't here to 19 speak on that, the alternative buses and transit buses and 20 school buses. That's all very important. 21 We have an obligation as elected officials and 22 you, as appointed officials, basically to provide health 23 and safety for our residents for our constituents. Please 24 help us do that by allowing the AQMD, the South Coast 25 AQMD, to have its rules enforced any way by any means PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 possible, legally, of course. And I know you can help us 2 do that. And I know you're committed to doing that. And 3 I appreciate you coming down here and letting us speak to 4 those matters and taking me out of turn because I do have 5 another meeting I have to go to. Thank you. 6 ACTING CHAIRPERSON RIORDAN: Thank you very much. 7 And thank you for staying to the time. 8 Angelo Bellomo followed by Henry Lo. 9 MR. BELLOMO: Thank you, Madam Chair and members 10 of the Board. My name is Angelo Bellomo. I'm Director of 11 Environmental Health and Safety for Los Angeles Unified 12 School District. 13 As many of you probably know, LAUSD has 900 14 existing school sites and nearly a million students. My 15 job and my office is responsible for ensuring the health 16 and safety of those students and 80,000 employees which 17 work for the District as well. We do this through a 18 series of initiatives that include doing what we can to 19 minimize exposure to toxic air emissions while our 20 students and staff are at school, if they're traveling on 21 school buses. And we'd also like to do as much as we can 22 with regard to education when they're in their 23 communities. Because exposure takes place in all of those 24 areas. 25 We're doing three specific things right now to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 address toxic air emissions. Better siting of the new 2 schools that we're putting on. We've developed and 3 implemented distance criteria where we don't site schools 4 close to emission sources. With regard to our 900 5 existing schools, though, we're really reliant upon the 6 regulatory agencies, so we've identified toxic air 7 emitters near our schools. And we're working with the 8 regulatory agencies to step up enforcement at those 9 facilities. And, thirdly, we do it by cleaning up our bus 10 fleet. And we've been doing this pursuant to AQMD's 11 direction and leadership in this area. And it's something 12 that we are very excited about and very proud of in terms 13 of turning over our fleet. 14 But aside from saying that we're doing our part, 15 because every one of us can get up here and say that, what 16 I really want to leave the Board with this morning is how 17 the LAUSD views these proposed Fleet Rules. And to put it 18 as succinctly as I can, we believe these measures are 19 vital. Everyone here is certainly aware of the impact 20 that diesel emissions have on the public health. And 21 specifically for us, the impact that diesel emissions have 22 for our students that are travelling to and from school as 23 well as their time at school and in their communities. 24 These measures will result in improved air 25 quality. But most importantly for us, they will result in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 reduced risk to the health and safety of our students and 2 of our local communities. 3 Secondly, and really lastly, these measures are 4 practical. I'm still sort of confused about whether 5 they're an overlay or not an overlay. But, in essence, 6 they really duplicate what the South Coast AQMD has 7 already initiated and what our School District has 8 willingly accepted. We believe these are practical 9 measures but also vital measures. So we urge you to adopt 10 these measures here today. Thank you very much. 11 ACTING CHAIRPERSON RIORDAN: Thank you very much, 12 and thank you for sticking to the time. 13 Mr. Bellomo, I want to ask a quick question or 14 two. In your District, do you own most of your buses or 15 do you contract out? 16 MR. BELLOMO: We do both. About half of our 17 fleet is owned, and the rest is supplemented through 18 contractors. 19 ACTING CHAIRPERSON RIORDAN: In that time, have 20 you had to come to the South Coast to ask for some waivers 21 in terms of purchasing new vehicles? 22 MR. BELLOMO: I don't believe so. The staff here 23 at AQMD would probably be more familiar with that. Our 24 transportation director can't be here with me today, but I 25 don't believe so. I think the funding has been available PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 when we've needed it. 2 ACTING CHAIRPERSON RIORDAN: What about the 3 contractors that fill the other half of your -- maybe I 4 should leave that question for them if they've had to. 5 MR. BELLOMO: That would be good. 6 ACTING CHAIRPERSON RIORDAN: Because you've 7 obviously had to buy and retrofit a number of vehicles. 8 MR. BELLOMO: Yes. Either a question for them or 9 your own staff would be familiar with the answer. 10 ACTING CHAIRPERSON RIORDAN: Thank you very much. 11 Are there any other questions for this speaker? 12 Thank you. 13 Henry Lo, followed by Sharon Rubalcava. 14 MR. LO: Good afternoon, Madam Chair. My name is 15 Henry Lo, and I am here today on behalf of the Senate 16 Majority Leader Gloria Romero of the 24th Senate District. 17 Our District includes East Los Angeles and the Western and 18 Central San Gabriel Valley. 19 "On behalf of the residents of the 24th 20 Senate District, I'm pleased to inform you of our 21 support for the three proposed CARB regulations 22 for clean urban transit buses, clean on-road 23 solid waste collection vehicles, and clean 24 on-road school buses for both public and private 25 fleet operating in the region. Many of my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 constituents are dependent on public transit, and 2 it is vital for the health and security of this 3 community to have these clean air standards 4 adopted for fleets. 5 "It is vital these regulations are adopted so 6 higher-polluting diesel-powered buses, waste 7 hauling vehicles, and transit buses can be 8 replaced or modified with cleaner alternatives 9 and use other proven advanced emission control 10 technologies in order to reduce harmful criteria 11 and toxic pollutant emissions. 12 "The use of alternative clean air 13 technologies can reduce NOx emissions by 50 14 percent or more compared with the cleanest diesel 15 engine. These regulations directly reduce the 16 cancer risk to children who ride school buses and 17 also decrease emissions of particulates near 18 schools and local communities. Along with 19 helping to meet the stringent 2010 Federal 20 emission standards, the regulations will help to 21 make new technologies and alternatives more 22 available and reduce our reliance on petroleum 23 products. 24 "Sincerely, Senate Majority Leader Gloria 25 Romero." PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 And for the record, I would like this statement 2 to apply to all three items. Thank you. 3 ACTING CHAIRPERSON RIORDAN: Thank you very much. 4 And we will apply it to all three items. Thank you. 5 Sharon, followed by Rick Feinstein. 6 MS. RUBALCAVA: Thank you. My name is Sharon 7 Rubalcava, and I'm speaking today on behalf of the 8 California School Bus Contractors, which is a coalition of 9 school bus fleet operators that provide service to both 10 public and private schools within the South Coast Air 11 Quality Management District. 12 The Coalition believes that this proposed 13 regulation, like Rule 1195, is ill-advised, and we're 14 urging the Board not to adopt the rule. We fully support 15 efforts to reduce emissions from diesel exhaust, but we 16 believe this rule, which will mandate the purchase of 17 alternative fuel buses from 2005 to 2009, is really not a 18 wise use of public funds. 19 We think the Board and air quality in general 20 would be better served and greater emissions reductions 21 would be more available if we simply dropped the 22 requirement to purchase alternative fuel buses and adopted 23 a rule that requires the installation of retrofit 24 technology on all eligible buses as soon as possible using 25 the funds for that purpose. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 The staff report shows very clearly that the 2 emissions reductions from the purchase of new alternative 3 fuel buses will result in only small emission reductions. 4 Reductions will be less than one pound a day of NOx in 5 2010 and less than a tenth of a pound of PM 10. This 6 reduction would appear to require the purchase of 92 7 alternative fuel buses per year at a differential cost of 8 $65,000 per bus, when you consider both the fueling 9 infrastructure and the maintenance involved. 10 In contrast, your staff report projects 11 retrofitting the entire remaining 1300 eligible buses, 12 diesel fueled buses, with particulate filters would reduce 13 PM by 18 pounds per day at a cost of 15.6 million. 14 Clearly, this is the most cost effective strategy and the 15 wisest use of public funds to protect air quality and 16 reduce emissions. And so we support the accelerated 17 retrofits. 18 Both the State and Federal governments have 19 adopted regulations that will reduce NOx and PM 10 20 emissions from school buses going into effect in 2010. 21 The ARB, in your rulemaking, the equipment manufacturers 22 in their work have all invested significant time and 23 effort into developing and implementing these rules. 24 This proposed rule proposes just to squeeze out a 25 little bit of additional reduction before those rules go PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 into effect. Given the anecdotal evidence of the 2 additional cost, maintenance, and reliability issues 3 associated with alternative buses, we think the fleet 4 owners may very well choose to defer new bus purchases 5 until 2010. The result will be that older buses will be 6 on the road for a longer period of time, and this is a 7 potential impact that should be analyzed before the rule 8 is adopted. 9 Also, once clean diesel buses can be purchased 10 again, fleet owners may not continue to invest in 11 alternative fuel technology, leaving the very expensive 12 alternative fuel infrastructure and maintenance facilities 13 that you've funded underutilized. We seriously question 14 whether the limited benefits in terms of reduced emissions 15 are worth the enormous expenditure for new buses. 16 Lastly, I'd like to note that your proposed 17 regulations has a circumvention provision which prohibits 18 fleets of smaller than 15 to avoid the rule. I submit to 19 you that this proposed rule is in itself a circumvention 20 of Section 209 of the Clean Air Act. You're attempting to 21 get around the prohibition of Congress against 22 jurisdictions -- small jurisdiction such this, adopting 23 rules -- 24 ACTING CHAIRPERSON RIORDAN: Thank you very much. 25 Appreciate your comments. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 Mr. Feinstein, followed by Steve Umber. 2 MR. FEINSTEIN: Good morning, Chairwoman Riordan 3 and members of the Board. My name is Rick Feinstein. I'm 4 the Director of Transportation of the Colton Joint Unified 5 School District. 6 The Colton District educates over 25,000 students 7 in both Riverside and San Bernardino Counties. Colton 8 operates a fleet of school buses that provides over three 9 million annual passenger trips, and we travel 10 approximately one million miles each year. 11 Almost ten years ago, Colton was one of the first 12 Districts to purchase CNG school buses within the South 13 Coast basin. In fact, it is School Districts like Colton 14 that tested the technology and helped prove the viability 15 of CNG for school bus operations. The Colton District has 16 the largest CNG school bus fleet in the Inland Empire. We 17 have 43 buses, or 84 percent of our daily bus routes, 18 using CNG. We have become the de facto experts on CNG 19 school buses. 20 I think it's important to note that our District 21 has spent over $2 million of our District funds towards 22 this endeavor. Those were funds that could have been used 23 in the classroom, but our School Board also understands 24 the need to provide cleaner school buses for the health of 25 our students, employees, and the public we serve. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 We've also benefited in ways we did not 2 anticipate. For example, if the current cost of diesel 3 fuel versus the cost of CNG continues as is, we will save 4 approximately 6,000 per bus in annual fuel expenses for a 5 fleet of 43 CNG buses. That is over $250,000 per year in 6 savings. 7 I'm here today for four main reasons. First, to 8 express our support of the fleet regulations that you are 9 considering today. In my opinion, they provide enough 10 flexibility for School Districts to operate and include 11 funding provisions so as not to be a burden. 12 Second, to let the Board know that there are 13 Districts who support your efforts to improve air quality. 14 Unfortunately, we do have many in our industry are who 15 afraid of change. At times, it's hard to hear us above 16 the roar, but we are out there. 17 Third, to encourage you to continue with your 18 efforts to reduce diesel pollution exposure, especially 19 for children. There are so many benefits when you send 20 your resources in our direction, and those benefits can't 21 always be measured by a cost per ton ratio. 22 And, finally, I wanted to make a few brief 23 comments about leadership. I'm sure we can all relate to 24 this in some way. Leaders are never finished in their 25 learning. Leaders must be ready to implement change, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 which is sometimes painful. But without change, progress 2 is often impossible. The affective leader must suppress 3 their innate reluctance to suppress change and instead 4 initiate and embrace change. 5 I know some people believe they have the best 6 interest of school transportation in mind when they resist 7 this change. But leaders must continually look to the 8 future, plan, and make things happen. That's what we do 9 in school transportation and at the ARB. We make things 10 happen. I encourage you to make things happen today and 11 approve these regulations. 12 ACTING CHAIRPERSON RIORDAN: Thank you, 13 Mr. Feinstein. 14 Member Berg would like a question. 15 And, Steve Umber, I hope you're right there. 16 BOARD MEMBER BERG: Since you have so much 17 experience with the CNG buses, maybe you could address the 18 question before, which is have you had very many variances 19 that you have needed in your District? 20 MR. FEINSTEIN: We've had no variances that we 21 needed. 22 BOARD MEMBER BERG: And then do you own your 23 buses, or do you contract from the outside? 24 MR. FEINSTEIN: We own our buses, and we contract 25 for an occasional field trip. But, otherwise, we own and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 operate all of our own buses. We're able to provide 2 transportation for both special needs and for transit 3 buses without any worries. We send our buses to San Diego 4 and back without worry of needing to fill up. Our drivers 5 love them. Our mechanics love them. I wouldn't have it 6 any other way. 7 BOARD MEMBER BERG: Thank you. 8 ACTING CHAIRPERSON RIORDAN: Mr. Umber, and 9 you're going to be followed by Bob Wigginton, followed by 10 Mike Patton. If you'd all come forward, please. 11 MR. UMBER: Madam Chairperson and Board, my name 12 is Steve Umber. I'm the Director of Transportation for 13 the Placentia-Yorba Linda Unified School District. 14 And I basically came today to report a success 15 story with our District and the experiences we've had over 16 the last five years. We have purchased six compressed 17 natural gas buses, two of the medium-duty buses, as well 18 as retrofitted 37 of our not-too-old diesel buses. And I 19 feel confident that we have one of the nicer fleets 20 around. Our School Board has emphasized to me that they 21 want to encourage clean air and health for our students. 22 But, and it's the big but, money is still a problem. 23 I'm here today to also encourage you to look at 24 the long-term cost effect in this area and help us, if 25 possible. I think you are all aware that all School PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 Districts are facing extremely tough budget decisions on 2 an ongoing basis. And as we've experienced infrastructure 3 costs that exceeded what we originally anticipated, it's 4 put us in a bind in a real way. Our School District 5 increased fees to parents. We doubled them this last year 6 to $360 per year. And I really do feel that resulted in 7 more automobiles being driven to school and longer lines, 8 more traffic, and more kids walking sometimes, too. Not 9 many, though. 10 The bottom line is we know that we have to watch 11 out for our kids, that health is important. But safety 12 is, too. And I don't think every single District is in 13 the same boat. Fewer buses will not mean safer kids. And 14 in some cases, catastrophe will happen. And health won't 15 matter any more to that child. So there's a balance 16 that's needed here. You must, must look at the funding 17 for this mandate. That's my message. Thank you. 18 ACTING CHAIRPERSON RIORDAN: Thank you. 19 There is a question for you, Mayor Loveridge. 20 BOARD MEMBER LOVERIDGE: As I understand the 21 choice that's been presented, you can buy a new diesel bus 22 for 110,000 or you can buy a CNG bus for 25,000, plus 23 13,000 for maintenance and so forth. Why is that a 24 difficult choice? 25 MR. UMBER: As I mentioned, every District's a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 little different. We have a relatively new fleet. So I 2 don't have any buses to purchase. The buses that are in 3 my fleet are not old enough to qualify for the CNG 4 purchases. And so that means I'm going to run the buses 5 that I have now for the next at least 15 years. And the 6 maintenance and upkeep of the CNG infrastructure is where 7 the costs have come in. Not necessarily the cost of the 8 gas. But I've been a little taken back by the maintenance 9 and upkeep of fuel and equipment specifically. When that 10 can average up to $2,000 per vehicle, per year, that is a 11 huge factor. 12 Did I answer your question? It's not the 13 purchasing issue. That I've never had a problem with. 14 It's the ongoing costs. 15 ACTING CHAIRPERSON RIORDAN: Thank you. 16 Are there any other questions for this speaker? 17 Thank you very much. 18 MR. WIGGINTON: Good morning. My name is Bob 19 Wigginton. I'm the Director of Transportation for Rowland 20 Unified School District. That's about four miles west of 21 here. We have a fleet of 36 school buses, 33 of them are 22 diesel powered and three are gasoline powered. I'd like 23 to say first of all this is my 35th year in the school 24 transportation. My task throughout those 35 years and 25 today is to ensure the safest form of transportation that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 I can for the school children we transport. We've got to 2 provide for the safety. We provide the safest vehicle 3 that's on the road for school kids to ride in. We also 4 provide a safe professionally trained bus driver to ensure 5 their safety. Our concern has long been safety, long 6 before these issues and talks of safety come up. 7 We don't have CNG school buses. We can't afford 8 the unfunded cost of them. We're a public School 9 District. Our core business is education. We strive to 10 produce a sound educated graduate to go and compete in the 11 world economy. That's our task. This is our primary 12 task. The school bus stuff is just the necessary evil 13 that comes along with it to try to get some of them to 14 school. 15 The public schools in California are unfunded to 16 a drastic extent. We're funded on a per capita basis 17 towards the bottom of all the states in the country. The 18 funding is just not there for School Districts in toto, 19 much less the bottom hanging fruit, the school bus. Any 20 time there's any discretionary money that comes to School 21 Districts, it funds computer labs or text books or other 22 things that directly affect the child. We're lucky if any 23 crumbs get down to us. 24 To addresses Mr. Loveridge's comment, most School 25 Districts don't have a real school replacement bus policy PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 that they follow. Many of them have one on paper in a 2 file, and they never get it out because the money never 3 gets down that far. It's not really a question do you 4 spend 110 or 25. Do you spend 25 or zero. Most School 5 Districts have old fleets, because they don't replace the 6 school buses. A lot of them have been replaced in South 7 Coast lately on a lot of the grant funding. We've gotten 8 six since I've been with Rowland, the twelve years I've 9 been there, and they've all been on grants. We haven't 10 done a straight-up bus replacement in our District in 20 11 years, because the money stops at the classroom. 12 When the 1195 rules were adopted in the South 13 Coast, we told them time and time again they repeatedly 14 refused to recognize the unfunded costs of that program, 15 the fueling infrastructure. The money they're allotting 16 is inadequate to provide a real fuel station. The 17 five-mile range for driving off site, you know, we have a 18 site three-and-a-half miles from us. But I would tell you 19 five miles in some parts of this basin is probably a 20 five-minute drive. Where I drive around, it's about a 21 30-minute drive. And so I'm going to have 6- or $7,000 in 22 driver wages getting that bus fueled. And so that's an 23 unfunded cost. 24 The $4,000 that's allowed for upgrading our 25 infrastructure where you work on the buses is totally PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 inadequate. There are some Districts that had an estimate 2 of $250,000 to make that upgrade to make it safe for 3 mechanics to drive in. We have to make sure it's safe for 4 them, too. 5 The exemption process might as well be 6 non-existent. I guess that's my time. 7 ACTING CHAIRPERSON RIORDAN: That's your time. 8 MR. WIGGINTON: I would urge you to vote no on 9 this rule. 10 ACTING CHAIRPERSON RIORDAN: Let me ask if there 11 are any questions for this speaker. 12 Okay. Mr. Patton. 13 Mr. Patton, before you begin, I'm going to take 14 the last person after you, and then I'm going to break for 15 lunch. And Paras Caracci, I understand you are here now, 16 so if you'd come forward to the other microphone. And 17 then for the audience, so that you know, I think I'll take 18 about a half-hour break for lunch, and then we'll be back. 19 And we will continue on the long list of speakers. 20 MR. PATTON: Thank you. I'm Mike Patton. I'm 21 Director of Transportation at Capistrano Unified School 22 District in South Orange County. We transport 11,000 23 students approximately every day. We have 200 buses in 24 our fleet, nine are in the 1970 era, '65 are 1980s era, 25 and then it goes up from there. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 One point I would just like to make. Everybody 2 here from school transportation, children's safety is our 3 career. We care about children and obviously children's 4 health and our own health. The goal of the Fleet Rules is 5 a worthy one. Clean air affects all of us. And, of 6 course, we all support that. 7 But funding is an issue, and I just wanted to 8 give you Capistrano's perspective. There is no fueling 9 infrastructure any place within 15 miles of one of our two 10 bases. The estimate for building fueling infrastructure 11 for one of our yards is approximately $350,000. If we're 12 going to get buses with the $13,000 piece to help pay for 13 the fueling infrastructure, we're going to have to buy 25 14 buses before we can pay for that. 15 What basically is happening, because of the rule 16 and because the rule is mandating everybody get this 17 technology, all these Districts are getting one or two 18 buses with 13,000 attached. If I have to go to my School 19 Board and say I need $300,000 up front and hopefully I'll 20 get approved for 25 buses down the road with this $13,000 21 and that will backfill the General Fund for the fueling 22 infrastructure, that's problematic for me. 23 We are not opposed to CNG. And there are plenty 24 of Districts that are not opposed to CNG. I heard the 25 statement from a staff member saying that the money is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 there and the money will be subscribed whether it's 2 required of Districts or not. My question to you is why 3 is there a punitive aspect in this? Why don't you just 4 attach funding to this technology, allow the Districts 5 that want it to convert. 6 Another concern that I have is I don't 7 particularly want to have a fleet that has a third of it 8 one type of technology and two-thirds of it another type 9 of technology. It strikes me that it would make more 10 sense and it would be better business to have an entire 11 fleet of one technology, one sort of fuel, the mechanics 12 know how to deal with that. It strikes me there's a 13 different way for you to achieve your goal, and that would 14 be target the Districts that are interested, fund it, and 15 fund it in such a way it's not going to be an incursion on 16 the General Fund. That's a big issue for most of us here. 17 And, otherwise, without the punitive aspect, you will 18 still have plenty of people adopting CNG. 19 ACTING CHAIRPERSON RIORDAN: I think Mayor 20 Loveridge would like to ask a question. 21 BOARD MEMBER LOVERIDGE: As I understand it, one 22 of the exemptions that's called out in the CARB rules is 23 the five-mile exemption. So if those rules are adopted, 24 you would be exempted from the requirement, is that -- 25 MR. PATTON: Currently, under 1195 I don't have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 that exemption. That exemption went away with sunsetting. 2 BOARD MEMBER LOVERIDGE: I understand. But if 3 the current CARB recommendation is adopted, there is a 4 five-mile rule which means you would have an exemption. 5 MR. PATTON: Right. But, again, I don't think 6 that negates my point that there will be plenty of people 7 if you just put the funding -- 8 BOARD MEMBER LOVERIDGE: I'm not arguing that. 9 Just the observation about the fueling stations is that 10 one of the governors of the rules is the proximity of the 11 fuel stations. 12 ACTING CHAIRPERSON RIORDAN: Thank you, 13 Mr. Patton. 14 MS. CARACCI: Hi. Good afternoon. My name is 15 Tzeitel Paras Caracci. And I'm the Mayor Pro Tem with the 16 City of Duarte. I want to thank you, Madam Chair, Mayor 17 Loveridge, and Board members for having this meeting. I 18 was asked by the AQMD on behalf of our City to come here 19 this afternoon. And I'm sure you've heard many other 20 speakers read off of a letter, but I won't pretend to know 21 everything about alternative clean air technologies, nor 22 expect that you ask me any detailed questions, as we do 23 have competent staff that would be much more prepared than 24 I. 25 But one thing that is true, coming driving out PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 here this afternoon, again, in seeing the air, this is 2 definitely something that our city as well as the San 3 Gabriel Valley is very interested in supporting with 4 regard to the three proposed regulations that are 5 presented to you today. 6 The fact of the matter is that the air quality is 7 only going to get worse. And every little bit that we can 8 do to support and help this air that we're going to be 9 breathing for the rest of our lives become a little bit 10 better. 11 And each day that we can -- I see the other 12 School Districts that are coming in and understanding what 13 budget crutches they're going to have to be looking at. 14 And sometimes we have to just kind of tighten up the belt 15 and figure out what's more important in the long run and 16 then address some of the things that you as the body 17 that's going to make the decision have to deal with. 18 So just on behalf of the City of Duarte, and of 19 course we do have the City of Hope in our midst in our 20 community, this is something that's definitely very 21 pertinent to our community. And I just wanted to say that 22 it's vital that I hope that you make your decisions and 23 you may need to make amendments to these particular 24 regulations. But I think that the bottom line is we 25 definitely need to have cleaner air. And however we're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 going to go ahead and address that each and every day, as 2 little as possible each day, I think would be very much 3 appreciated by our community as well as I think as the 4 rest of the world. So thank you very much, Madam Chair. 5 ACTING CHAIRPERSON RIORDAN: Thank you. And 6 thank you for being here this morning. 7 I'm going to adjourn for a half-hour, but I want 8 to let Steven Rhoads, Bill Duplissea, and Jene Jansen, I 9 want to let you know you're going to be the first three on 10 the list to speak after we come back. So let's say five 11 minutes of 1:00. We'd like to start at five minutes of 12 1:00. Thank you very much. 13 (Thereupon a lunch recess was taken.) 14 ACTING CHAIRPERSON RIORDAN: Ladies and 15 gentlemen, we're going to start in just a minute. Let me 16 remind Steven Rhoads, Bill Duplissea, and Jene Jansen to 17 come forward. Ladies and gentlemen, we're going to begin 18 again. Just by way of acknowledgement, Mr. Joe Calhoun, a 19 former Board member, is in the back of the room. 20 Joe, we welcome you today. Nice to see you. 21 Mr. Rhoads, I think most of us are seated. Those 22 of you who need to have conversation, if you could do it 23 outside of the hearing room, I would be grateful. 24 MR. RHOADS: My name is Steven Rhoads. I'm here 25 representing the School Transportation Coalition. I've PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 given you a little package that includes our first 2 opposition letter to Rule 1195. It also contains some 3 data on the Unified School District in the South Coast 4 County area. 5 The issue I had I'm here to talk about today is 6 environmental justice. If you look at the School District 7 data and try to think about what kind of -- like an 8 average unified School District might be. It turns out 9 that of those that have school bus fleets, it turns out 10 about 60 percent of the kids are eligible for the federal 11 free lunch program; 70 percent of them are Latino or 12 African American; and the average age of the school bus 13 fleet is 16.5 years. 14 The average age of the school bus fleet of 16.5 15 years is particularly disturbing, depressing. You talked 16 earlier about what the impact of 11 million would be, the 17 impact of 20 million would be. Even with those types of 18 funds, even if it was every year, the age of the school 19 bus fleet would get older and older. You need a much 20 larger amount of money on an annual basis to turn it 21 around. 22 This rule will disproportionately impact poor 23 minority students. They're the ones that use the school 24 buses. These students already have old, outdated 25 polluting school buses. Many of the school buses don't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 meet the '87 particulate standards. This rule will limit 2 the options available to School Districts to replace those 3 school buses. Consequently, fewer school buses will be 4 replaced. 5 We'll have the unintended consequence of forcing 6 poor minority students to ride in even older polluting 7 school buses. School Districts, especially those with 8 small size school bus fleets, will postpone getting any 9 new school buses until 2010 at the earliest. It's for 10 this reason that we would urge you to consider rejecting 11 this rule. 12 But we also want to take this time to compliment 13 South Coast for some of the things they have done. And 14 one of those is with Jurupa Unified School District where 15 they went in, worked with the community, worked with the 16 School District and replaced 34 diesel buses with CNG 17 school buses, provided staff training for the mechanics, 18 and provided the necessary fueling infrastructure. We 19 think that is the way to go. 20 We would urge South Coast to continue to work 21 with communities, especially those containing a large 22 number of socially disadvantaged children, replace a 23 significant number of school buses each year, and provide 24 the necessary staff training and fueling structure. You 25 can do the Colton exercise with 11 million a year that was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 talked about earlier. You can do Jurupa two times over 2 every year. We think that's the most cost effective way 3 of reaching the District's goals. This proposed rule will 4 only hurt the very children it was designed the help. 5 ACTING CHAIRPERSON RIORDAN: Thank you, 6 Mr. Rhoades. 7 Bill Duplissea, followed by Jene Jansen. 8 MR. DUPLISSEA: Madam Chair and members, thank 9 you very much for allowing me to speak today. I represent 10 the California School Transportation Association, and I 11 want to just take a couple of minutes here and show my 12 empathy, certainly for the Board here. And I understand 13 that you've heard a great deal about cost and maintenance 14 and reliability. And, undoubtedly, you're going to hear a 15 great deal more as the afternoon wears on. 16 And I'm going to change the direction a little 17 bit and just stand back. And my background as a Board 18 member on similar boards, heading up two State 19 Departments, and also as a former member of the California 20 State Legislature, I'm very empathetic to what lies before 21 you today and the decision you're going to have to make. 22 And, actually, the enabling legislation that was 23 mentioned earlier I believe by staff that 1987 when the 24 enabling legislation occurred for the rulemaking authority 25 for South Coast occurred, I happen to have been in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 Legislature at the time. And I can tell you this is 2 really the theme of very short comments I have, because 3 I'm going to be mercifully brief. Then, as now in the 4 Legislature, the overwhelming single issue that dominated 5 the unanimous thought and will of the California State 6 Legislature is to put more money in classrooms. 7 And that one point -- and I think clearly all the 8 testimony you've heard so far and again the testimony you 9 will I'm sure hear the rest of the afternoon, the 10 economics of this cannot be ignored. And if one dollar is 11 taken from a classroom and put into some compliance cost 12 that need not be put there, I think that's a grave 13 injustice to the school children of the state of 14 California. 15 So on behalf of the California School 16 Transportation Association, I'd like to ask you to 17 consider strongly that the action you take today could 18 well result in that. So we would certainly oppose any 19 change that could be made. Thank you very much for your 20 time. 21 ACTING CHAIRPERSON RIORDAN: Mr. Duplissea, stay 22 there, because I think Mayor Loveridge has a question. 23 BOARD MEMBER LOVERIDGE: Let me just ask the same 24 question I asked before. I agree with the need for new 25 buses. If you have a choice, you need to buy a new bus PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 with the support of 110,000 for a diesel versus 25,000 for 2 a CNG bus, why isn't that a good deal? Assuming you have 3 to buy a bus, why isn't that a good deal for a District? 4 MR. DUPLISSEA: Well, Mayor, let me respond in 5 this way. All the costs certainly aren't covered. 6 There's been previous testimony here, not to be belabor 7 those points, which really begs the option that the 8 gentleman from Orange County made earlier before we took 9 the break for lunch. Why not redirect our efforts to 10 those Districts that do want to voluntarily convert, who 11 will take those ancillary costs that are not recoverable 12 and improve the conversion to CNG on a voluntary basis 13 rather than the mandated aspects of what's before us? 14 There are ancillary costs. If there were a 15 guarantee that any indirect or direct costs of a 16 conversion to CNG were available to all School Districts 17 across the board, I think you probably wouldn't have a 18 roomful of people here opposing it. 19 BOARD MEMBER LOVERIDGE: Did you have an estimate 20 of what that might be? 21 MR. DUPLISSEA: I don't, no. 22 ACTING CHAIRPERSON RIORDAN: Thank you very much. 23 MR. DUPLISSEA: Thank you. 24 ACTING CHAIRPERSON RIORDAN: Jene Jansen. 25 Mr. Jansen, before I let you begin, I just have to say -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 and I've never done this before. But I thought the letter 2 that you sent to me stating your position was perhaps one 3 of the best written letters I've ever received and perhaps 4 the easiest to understand. And I want to say thank you. 5 MR. JANSEN: Thank you very much, Madam Chairman. 6 I do appreciate you listening today, and I relish 7 the opportunity to talk to the entire Board. My name is 8 Jene Jansen. I'm the Antelope Valley School 9 Transportation Agency CEO, and I am here as an interested 10 party, I believe, and also represent a lot of parents who 11 are very concerned about the services that are provided by 12 school buses today and especially in the growing area of 13 Lancaster. 14 We have 56 transit buses and 76 special needs. 15 Our operations change to more special needs as a lot of 16 them are. We have 192 total buses. We're not short of 17 buses. One of the reasons I made the trip down today is 18 we have a substantial CNG operation at Lancaster, and it's 19 been know for some time as having that facility there. 20 I want to offer a different perspective. And I 21 have very great concerns of the CNG issue, and I dislike 22 having to be listed as in opposition, because really it's 23 just in the program, not the use of the CNG. We're facing 24 some things. I want the reality to be known we have 1992 25 CNG buses that are coming up now that the tank life being PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 15 years, we have to park. We're talking about 1977 buses 2 and 1985 buses and what they do. We're parking the 1992 3 because of the program that did not carry over with some 4 of the funding to replace these tanks. So when we talk 5 about CNG, we also need to know that these tanks have a 6 tank life. 7 And when we set in there and hammer out bus life 8 cycles with boards, and they want to talk 25 and 30 years 9 and we have 30-year buses out on the roads, we have to 10 also know the CNG buses have a tank life that has a drop 11 dead date, that if they're not replaced at that point in 12 time, they'll be parked. 13 Right now we're looking at probably a $30,000 -- 14 I apologize if that's not right, but that's the general 15 figure I've heard. These are an issue that you have to 16 have in the program that this isn't something -- we can't 17 build something that does not have some sort of flat line 18 cost to it, so much a year. Not just peak and buy a bunch 19 and come back -- and the Board would fire me for coming 20 back in 15 years and say we need them all replaced. That 21 has to be considered. 22 The other thing is the range is an issue. The 23 range of them is shorter, and we have the special ed 24 portion of ours is growing. And as it grows, then we need 25 more buses. Well, if you compound that with the budget PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 problem we already have, then you have to take away or add 2 more buses, it doesn't happen. This is a budget issue. 3 What will happen is the service will be reduced. They 4 have to have that in consideration. So let's build a 5 program that I think has to have substantial gain aspects 6 of it, that if we can make some substantial gains with the 7 buses that we are purchasing, let's lead our way into it. 8 Let us work with it. Let us be part of it. But we cannot 9 leap into it without some of these things answered. 10 And three minutes goes very fast. Thank you very 11 much. 12 ACTING CHAIRPERSON RIORDAN: Are there any 13 questions for this speaker? It's my fault. 14 David Walthan, Doug Snyder, and Neal Abramson. 15 David, you're first. 16 MR. WALTHAN: Good afternoon. Thank you for 17 taking the time to be here and allow us to share our 18 testimony with you. And if at the end I have time, I 19 would like to answer Mayor Loveridge's question. 20 My name is David Walthan. I work for the Ontario 21 Montclair School District. I have dedicated the last 28 22 years of my life to the safety and health of kids, and I 23 do believe the safety and health of kids should be inside 24 the bus. 25 Our School District has 48 buses, ten CNG, seven PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 clean diesel, and the rest are dirty diesel. We were able 2 to add those buses only through grant funding. Everyone 3 you will hear from today wants to protect kids, and we 4 also want to clean the air. And we want to provide the 5 safest and best buses we can for the kids in California. 6 I recently surveyed 13 School Districts located 7 in the South Coast Basin. And out of those 13 School 8 Districts, eight reported lower student ridership. The 9 combined total of those students is 7,920 kids are not 10 riding buses today. 11 The proposed rule recommends a system to bring 12 diesel into the best compliance. It uses a system called 13 clear air. To my knowledge, that system has not been 14 certified for school bus use. We also understand that 15 this system may increase fuel consumption by 25 percent. 16 How can CARB recommend a system that will increase our 17 fuel dependency? 18 You've already heard about the study by the South 19 Coast on funding for infrastructure. Your proposal would 20 dedicate $4,000 for infrastructure. School Districts 21 cannot do infrastructure improvement in a piecemeal 22 fashion associated with the amount of buses you buy. It's 23 just not possible. We currently have State and Fire Codes 24 that are in effect right now that prevent us from leaving 25 those buses sitting in the garage for repair. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 It's a shame that kids have to ride buses that 2 are 30 and 40 years old and be deprived of the opportunity 3 to ride a bus with all the newest, latest safety standards 4 on it. The last thing that I would hope that you will not 5 do is to pass these regulations and put more kids at risk 6 of losing their life. Okay. 7 ACTING CHAIRPERSON RIORDAN: If you're finished 8 and you want to answer Mayor Loveridge's question, I'll 9 give you that opportunity. You have A little bit more 10 time there. 11 MR. WALTHAN: Mayor Loveridge, the CARB Board has 12 a policy or a program in effect right now called the 13 "Lower Emissions School Bus Replacement Program." And 14 that program allows School Districts to purchase buses at 15 either 10,000 or $25,000. And we can choose between which 16 fuel source we would like to choose between. South Coast 17 does not allow that opportunity. So we are cheating the 18 kids in the South Coast area when Districts can't take 19 advantage of that. 20 ACTING CHAIRPERSON RIORDAN: Okay. Thank you 21 very much. Appreciate your comments. 22 MR. WALTHAN: Thank you. 23 ACTING CHAIRPERSON RIORDAN: Doug Snyder, Neal 24 Abramson, and John Jessie. 25 MR. SNYDER: Good afternoon, Madam Chair and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 members of the Board. My name is Doug Snyder, and I'm 2 representing the California Association of School 3 Transportation Officials. We are a statewide organization 4 with members from over 300 School Districts in California, 5 including 50 here in the South Coast AQMD. 6 We understand that you are concerned with the 7 health effects that emissions from older high-polluting 8 diesel engines have our children. But our main 9 responsibility is school children's safety. And by far, 10 the safest way for kids to get to and from school every 11 day is on a yellow school bus. Each year in California 32 12 children are killed in passenger vehicles, twelve of which 13 are occur here in the AQMD. And 14 children are killed as 14 pedestrians, six of which occur here in the AQMD during 15 school transportation hours. Virtually no children die in 16 school buses. 17 The unfortunate fact is this school bus rule will 18 make our children less safe because fewer children will be 19 riding the bus to school. As Mr. Walthan said in his 20 sampling, 7,920 students are no longer riding the bus 21 since 2000 when Rule 1195 was adopted. Economic factors 22 may have played a part in the decision making process 23 because of tight budgets. But other factors such as 24 unfunded mandates and unrealistic rules and regulations 25 also play a large role. Already less than 15 percent of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 California students, approximately 960,000 ride the bus to 2 school each day, which is dead last in the nation. 3 AQMD Rule 1195 is not working as well as it could 4 to retire older high-polluting buses. Only 355 school 5 buses have been replaced in the first four years of the 6 rule, or only 26.5 percent of the 1,344 buses that AQMD 7 estimated would be replaced between 2000 and 2004. Why 8 has there been such a low replacement rate? Many School 9 Districts have not wanted to convert to CNG because of 10 higher costs. 11 For example, they have no space for CNG 12 infrastructure, and they have to pay drivers overtime to 13 fuel off site, or the cost of replacing or recertifying 14 tanks that Mr. Jansen mentioned, or the higher cost for 15 CNG parts. Any one of these factors can place a negative 16 economic impact on Districts which in many cases becomes 17 the straw that breaks the camel's back so to speak, and no 18 new buses are purchased. 19 Our proposal on how to accomplish the goals of 20 both the ARB and the AQMD is to allow School Districts and 21 the AQMD to purchase low emission diesel school buses. By 22 doing this, more of the older higher-polluting buses will 23 be removed from our roads, which in turn will improve air 24 quality and reduce exposure to children. We urge the Air 25 Resources Board to look at the big picture and to vote PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 this rule down and to persuade the AQMD to amend the Rule 2 1195. 3 Thank you very much. 4 ACTING CHAIRPERSON RIORDAN: Thank you, 5 Mr. Snyder. 6 Any questions for this speaker? Thank you. 7 MR. ABRAMSON: Good afternoon. My name is Neal 8 Abramson. I'm the Director of Transportation for the 9 Santa Monica Malibu Unified School District. 10 I would like to specifically address our 11 District's problems under Rule 1195 as it is now and to 12 give you some insight into other School Districts across 13 California, that if you implement those rules statewide, 14 School Districts in similar size and scope like ours are 15 going to experience the exact same problems. Nuts and 16 bolts. Money is the main issue, of course. 17 Our School District, being on the west side of 18 L.A. County, is roughly three-and-a-half miles wide and 40 19 miles long. Therefore, the amount of fuel it takes just 20 for us to go back and forth on a daily basis is not easily 21 accomplished with compressed natural gas. We currently 22 operate three of eleven large buses with compressed 23 natural gas. We do not have our own fueling station. We 24 also don't operate our own fueling station for gasoline or 25 diesel either. So that's a separate issue. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 There are hundreds of School Districts in 2 California just like ours that are small. We only have 24 3 buses in our fleet. And the current rule states that if 4 it's greater than 15, they're going to have to follow it. 5 I'm saying that 15 may not even be the right 6 number. Twenty-five may not even be the right number. 7 I'm not sure what that number is. But, for example, if I 8 have three compressed natural gas buses out of 24 right 9 now, and I replace the other 21 with compressed natural 10 gas fuel, the $250,000 roughly that would be given to me 11 for infrastructure is not near the $450,000 that would be 12 required to build a CNG fueling station if I had the room 13 to even build it. Because, again, my district is small. 14 We only have 11,000 students in our district. We 15 transport about 1200 on a daily basis of regular education 16 and children with special needs. 17 So if you look at the simple numbers, a lot of my 18 colleagues and peers have expressed their concerns about 19 the infrastructure, about the cost per unit not covering 20 what is needed. Now, we do have one pump located within 21 five miles of my facility in Santa Monica. There are no 22 CNG facilities in Malibu. That one pump is one pump, not 23 one station, one pump which I'm competing with taxicab 24 services, other bus companies, shuttle buses, even 25 Los Angeles parking enforcement is over there. Every time PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 they see one of our buses, they run the other way, because 2 they know we've taken all their pressure just trying to 3 get some fuel. I've had two of my drivers verbally abused 4 by members of the public concerned about our school buses 5 using their pressure. 6 Now, I've been promised that the new company 7 that's going to be taking over that fueling pump is going 8 to upgrade the facility. However, we don't get the range 9 like Mr. Feinstein from Colton gets because he's got his 10 own facility with slow-fill. This fast fill, we don't get 11 the range. 12 ACTING CHAIRPERSON RIORDAN: As you heard the 13 little buzzer, do you want to make one final statement? A 14 sigh. 15 MR. ABRAMSON: Other than unless Mayor Loveridge 16 would like to ask me that question, I think I answered it 17 in my comments. 18 ACTING CHAIRPERSON RIORDAN: Your sigh said it 19 all. 20 BOARD MEMBER LOVERIDGE: There are different ways 21 to fill a CNG bus; correct? You can buy a smaller on-site 22 slow-fill for much less cost. 23 MR. ABRAMSON: My facility is not large enough to 24 even accommodate one slow-fill station at a cost of 25 $45,000. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 BOARD MEMBER LOVERIDGE: I'm not talking about a 2 station. But as I understand, there's a device you can 3 have at fairly modest cost of slow-fill which you could 4 probably have in your facilities to use. 5 MR. ABRAMSON: The estimate for me in my facility 6 was $45,000, if I physically had the room to install it 7 just for one slow-fill overnight station, 45,000. And 8 we're only given 14,000 per bus. 9 ACTING CHAIRPERSON RIORDAN: Okay. Thank you 10 very much. 11 John Jessie, followed by Daniel Ibarra, followed 12 by Jim Seal and Raul Lopez, if you'd come forward, 13 gentlemen. 14 MR. JESSIE: Good afternoon. My name is John 15 Jessie. I'm with the Anaheim Union High School District, 16 home of the happiest place on earth. 17 I have -- first of all, before I say anything, I 18 would like to thank your staff. The report that your 19 staff put together is excellent. And it is, just on the 20 face of it, so unbiased that I'm stunned. So thank you 21 very much for your staff. 22 ACTING CHAIRPERSON RIORDAN: Thank you. 23 MR. JESSIE: I have 16 pre-1987 school buses that 24 are old, dirty, smelly. They put out a lot of pollution. 25 I'd love to get rid of them. These are special education PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 buses, which means they're of a size that I cannot use in 2 transit. And because of new regulations regarding the use 3 of seat belts and the facing of wheelchairs, I cannot use 4 what has commonly been called a type 2 or small gasoline 5 powered van. I must use a mid-sized conventional. They 6 do not make a CNG mid-sized conventional. They do not 7 make a gasoline mid-sized conventional. They make only 8 clean diesel. 9 This last year my School District scraped up 10 $400,000 so I could start on a replacement program for 11 these old smelly buses. If I were allowed to apply for a 12 grant, I could replace all 16 of these old, smelly, dirty 13 buses in one year. Because I can't, I applied for an 14 exemption, figuring I would replace four buses a year for 15 the next four years. 16 The exemption process that I went through with 17 the South Coast Air Quality Management District took 18 approximately six months. The problem with that is by the 19 time that they gave me the approval on my exemption, the 20 budgetary year was over. The fiscal year was over, and my 21 funding was gone. The only thing that saved my purchasing 22 of the four buses is that I had put in for the next four 23 years. So I lost one year, and now I'm down four buses. 24 Now I have the funding for twelve buses, provided I can 25 get the exemption in a timely manner. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 One would think that South Coast AQMD or the Air 2 Resources Board would be pleased as punch that I'm trying 3 to get rid of 16 old dirty, smelly diesel buses and 4 replace them with anything that's cleaner. That is not 5 what happened. 6 I would ask that you do not support this rule at 7 all, because it does me as a School District no good at 8 all. It does not help me in any way, shape, or form. I 9 do agree that if someone wants CNG -- I'm not against CNG, 10 by the way. If somebody wants CNG, then they should have 11 CNG, and all of their costs should be paid. Thank you. 12 ACTING CHAIRPERSON RIORDAN: Thank you very much. 13 Are there any questions for this speaker? Yeah. 14 There is. 15 BOARD MEMBER LOVERIDGE: No questions. If it 16 took six months to get an exemption response from the 17 District, you certainly have my apologies. That is not an 18 acceptable length of time. 19 MR. JESSIE: I agree. 20 ACTING CHAIRPERSON RIORDAN: Thank you. 21 Daniel Ibarra and Jim Seal and Raul Lopez and 22 John Frala, be on board. 23 MR. IBARRA: Good afternoon, Madam Chair, members 24 of the Board. I'm Dan Ibarra. I'm the Director of 25 Transportation of Montebello Unified School District. We PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 serve 28 school sites, an enrollment of about 35,000. And 2 we at Montebello are proud to do our part to help provide 3 a healthy environment for the 5300 students who ride our 4 buses daily. 5 We've taken advantage of every grant opportunity 6 from AQMD. All the buses that can have been installed 7 with particulate matter traps, diesel oxidation catalysts. 8 We've taken advantage of all training of all 9 infrastructure grants. And I'm pleased to say in the last 10 approximately five years that we've operated CNG we've had 11 a very positive experience with the reliability of these 12 vehicles. 13 Now, in addition to the health benefits and 14 operational reliability -- by the way, I want to say 15 something. There was a gentleman up here earlier from 16 Placentia who said he had one of the best fleets around. 17 Well, Montebello's fleet will beat Placentia's fleet, I'll 18 tell you that. 19 In addition to the health benefits and 20 operational reliability of CNG, and we operate 31 out of 21 the total of 85 buses, we realized this past year a cost 22 savings of approximately 40,000 by using CNG. When we saw 23 the price of diesel fuel climb by a full 33 percent and 24 gasoline jumped by 45 percent, the cost of CNG remained 25 virtually stable at just under 70 cents. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 So I would like to say that in support of 2 adopting these regulations, I would like to just say that 3 without such a rule, or a rule like it, School Districts, 4 given the ongoing budget challenges that face pupil 5 transportation programs throughout the state, in my 6 opinion would opt to purchase diesel and in many cases 7 gross polluting older used diesel buses. The budget 8 crunch is that severe. 9 I believe that every one of us in school 10 transportation should do our part to help clean the air 11 that our children breathe. I believe it's our 12 responsibility. And with that, I would like to say I do 13 support the adoption of the proposed reg. Thank you. 14 ACTING CHAIRPERSON RIORDAN: Thank you very much. 15 Next speaker, Jim Seal. 16 MR. SEAL: Thank you. Jim Seal, consultant to 17 the California School Transportation Association. 18 I hope in your deliberation process that you take 19 into consideration, based on available data -- and I, too, 20 would like to commend staff, because I think there was in 21 the initial Statement of Reasons very good information 22 that mandating a particular engine standard, which in most 23 cases is a surrogate for a fuel, may not deliver the 24 desired results. If we all agree, and I think everyone in 25 this room agrees, the goal here is to not only reduce NOx PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 substantially, but to reduce PM substantially. 2 When you look at the data and what was predicted 3 by the AQMD regarding 1195, the less buses that were 4 purchased had a real consequence. Less percentage of tons 5 of NOx per day and less percentage of tons of PM per day 6 resulted from this rule than what had been predicted. 7 And I would like -- and this is not usual, 8 because I think -- and I just want to jump over to the 9 other rule here as another example. In the urban bus 10 rule, which I read very carefully, and what has become 11 Option 2, staff has made an interesting observation saying 12 emissions are higher than had been expected and will 13 remain so. And the reason that that statement was made, 14 as you well know, is that there was not -- the engine 15 manufacturers could not meet an arbitrary engine standard, 16 which meant, as most people said here today, that meant 17 holding on to transit buses longer than normal. 18 And believe me, since I do work in the transit 19 field, relatively speaking, transit agencies have more 20 capital offsets to purchase new vehicles. This is not, of 21 course, the case unless there are grants that come to 22 School Districts hopefully to offset those fleets. For 23 contractors, again, we only follow what the School 24 District tells us. If a School District puts in a Request 25 for Proposal, you shall replace all your buses with CNG, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 LNG, clean diesel, we respond to that. There is a cost 2 associated with that. That, therefore, means when they 3 get that bid back, they either have to cut the service 4 back or redo the RFP. 5 I'll give you an example, San Francisco Unified 6 School District. One would think -- they have absolutely 7 100 percent replaced their vehicle fleet. All of their 8 Class 1 transit school buses are all being replaced with 9 clean diesel. They looked at the options. Classroom 10 again, the cost associated with that, this is the 11 direction they went. 12 In conclusion, all I can say is incentivizing 13 Districts -- and I think some have said this. 14 Incentivizing Districts to move in a direction that is 15 most comfortable to them based on what they've already 16 invested can be a way to speed up the purchase, not only 17 of clean diesel, but also of additional CNG buses, too. 18 ACTING CHAIRPERSON RIORDAN: Thank you, Mr. Seal. 19 Appreciate your comments. 20 Raul Lopez, John Frala, and Rick Feinstein, 21 you've already spoken. Somehow you came twice on the 22 list. And David Raley will be following. 23 MR. LOPEZ: Hi. My name is Raul Lopez. I'm from 24 Coachella Valley Unified School District. I'm the 25 Transportation Director. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 I believe you have a copy of our Superintendent's 2 letter. I just want to add a couple words. It's not 3 going to be much. Everything is in the letter. 4 Bottom line is all Districts need more funding. 5 Okay. All Districts have different needs. For some, CNG 6 is appropriate. For others, it's not, due to the 7 District's size. And our district is over 1200 square 8 miles. 9 Unfortunately, CNG does not work for us. Right 10 now, I have five CNG buses which we put in service last 11 week, brand-new buses. And we have to drive six miles to 12 the closest infrastructure. We estimated we're going to 13 spend 38,000 a year to fuel these buses, not counting the 14 wear and tear on those buses. 15 In six years, we'll break even with the savings 16 of the $25,000 that we purchased three buses more. And we 17 paid 85,000 for two more buses, and emergency funding 18 covers 60,000 per bus. Out of those five buses, in six 19 years, we'll break even. After that, it will be down hill 20 for us. We try to keep them at least 20 years. 21 Unfortunately, we keep them for a lot longer time. We 22 estimated in 20 years our District's going to be out of 23 $570,000 just driving to fuel. 24 Now, to install a fueling infrastructure for 25 those five buses, we're looking at about $400,000. We PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 submitted a grant for a fueling infrastructure for 2 $385,000, and we were only awarded 240,000. 3 Unfortunately, we had to return the money because we 4 didn't have the money to spare to build an infrastructure. 5 And also we have submitted on four different 6 occasions for exemptions, and we were turned down because 7 the reason was there was money for infrastructure. If 8 there's money for infrastructure, why on these five new 9 buses I bought was I not awarded any money for 10 infrastructure? They told me because I didn't apply for 11 it. I figure that when you apply for your funding, those 12 12,000 per bus come with the grant, plus the 4,000 for 13 your shop. But none of that was awarded. I bought five 14 buses. I was expecting 60,000. They say I did not apply 15 for it. 16 So we're in a position right now, one of our new 17 buses when we were coming back from the fueling station 18 broke down. So now I'm using a pre-1987 bus to replace 19 that bus. As it is, our encroachment of our General Fund 20 is $3 million right now. We have over 16,000 students in 21 our district. We transported 15,000 students of those. 22 We have 88 buses with 82 routes, we transport 15,000 of 23 those students. 24 All I need to say in my closing argument is we're 25 pulling $3 million out of classroom moneys. We're just PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 adding more to the cost. We're pulling money out from the 2 students. That's it. 3 ACTING CHAIRPERSON RIORDAN: Thank you, 4 Mr. Lopez. And thank you for making the case for 5 Districts that have unique characteristics. I think the 6 Board members really appreciate the fact the distances 7 that you travel. And while we think of the South Coast as 8 more urbanized, we have to remember there are places like 9 Coachella and Indio and those areas that have tremendous 10 distances to travel. Appreciate your comments. 11 Next speaker. 12 MR. FRALA: Madam Chairman, members of the Board, 13 my name is John Frala. I represent Rio Honda College, 14 which is the local college that was shown up here earlier 15 as a training facility. We've developed some training 16 with AQMD, which I have a copy of it up here. This is a 17 safety training that AQMD has worked with us on and our 18 sister campuses through an ATTI grant, which is a State 19 grant through advanced transportation initiative. These 20 training sessions came out of the funding that come along 21 with the buses being funded to train the facilities. So 22 on top of not only funding the companies and buses, this 23 money that's being provided also is providing jobs. And I 24 have a few of the details on that that I downloaded off 25 the California website this morning. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 The projection of jobs in this industry between 2 2000 and 2012 was roughly around 29,000 jobs when this 3 initiative was first taken on. As current, right now 4 there's 30,500 jobs that have been created by this 5 funding. And this is to supply technicians to not only 6 transit school bus Districts for the new technology that's 7 out there. 8 I did a search here 25 miles from our ZIP code 9 from where we stand. Right now there's 1,130 jobs 10 available for technicians to work on this product. And 11 that's because of the funding that's come around to bring 12 the School Districts this new transportation for our 13 students. Not only is this funding going to get us clean 14 air, it's going to provide more jobs and provide more jobs 15 for the School Districts and bring their technology up to 16 more common standards. In the last five years, we've gone 17 from mechanics who work with a test light to a computer. 18 So we've increased our technology tremendous amounts. 19 On top of the clean fuel diesel program some of 20 the gentlemen have been talking about, that type of 21 training is also available or has to be developed right 22 now because you have particulate traps and some other 23 systems that are not common on these buses. Some of that 24 funding pays for that training to get these technicians to 25 service them correctly. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 ACTING CHAIRPERSON RIORDAN: Thank you. Have you 2 concluded? 3 MR. FRALA: Yes. 4 ACTING CHAIRPERSON RIORDAN: I have a question. 5 On your outreach, do you try to help existing mechanics 6 retrain? Is that -- do you have -- 7 MR. FRALA: We currently have a program up at the 8 State Chancellor's Office we're trying to offer a two-year 9 degree on technicians for school buses and transit buses. 10 It would be the first of its kind in the state of 11 California. 12 ACTING CHAIRPERSON RIORDAN: I'm thinking, you 13 say there are new jobs that are created as a result of the 14 technology. But I'm wondering if you do some outreach to 15 those who are maybe in an older technology, do you try to 16 reach out to them to get them to enter this? 17 MR. FRALA: Yeah. We service daytime and 18 nighttime groups, so we also service private contracts to 19 facilities also. 20 ACTING CHAIRPERSON RIORDAN: Very good. You're 21 an important component. 22 MR. FRALA: Thank you. 23 ACTING CHAIRPERSON RIORDAN: Let me invite David 24 Raley, Laura Braynard, Cheryl Seifert, and Pamela McDonald 25 to be coming forward. And use both microphones, please. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 MR. RALEY: Good afternoon, Madam Chairman and 2 Board members. My name is David Raley. I represent 3 Desert Sands Unified School District. We operate in an 4 area of approximately 750 square miles of the Coachella 5 Valley. Our school bus fleet is comprised of 63 vehicles. 6 At this time, 25 of those are CNG. We're waiting for two 7 additional 84-passenger buses powered by CNG as well. 8 In addition to our school bus fleet, we have 9 approximately 15 service vehicles using alternative fuels. 10 We have two bio-fueled vehicles. And the remaining 13 are 11 CNG. We have developed our infrastructure to accommodate 12 the CNG fleet in cooperation with the AQMD. We also have 13 an ongoing relationship with the cities of La Quinta and 14 Palm Desert as a fueling station for their service 15 vehicles as well. 16 Other cities and organizations have been 17 requesting to use our facilities. However, our current 18 infrastructure is inadequate to support the demand. With 19 our continued success and utilization of the CNG vehicles, 20 we are approaching full capacity of our slow fuel filling 21 stations. Our facility has 14 slow-fill posts which 22 accommodate two vehicles each at 3200 PSI overnight 23 filling capacity. With the addition of two new CNG 24 vehicles to arrive in early October, we'll have 27 CNG 25 vehicles, leaving us with one slow-fill post for the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 service vehicles. 2 As has been alluded to by others, the funding for 3 these projects is critical to our continued success and 4 utilization of the alternative fuels. And even with our 5 internal growth, we're expecting 35,000 new residents to 6 the desert area. So this is going to bring in more cars 7 and more pollution. So we've really gotten on board with 8 the CNG program as our alternative fuel of choice. 9 To meet this demand, we are also going to be 10 replacing ten of our oldest vehicles that are 1987 11 vintage. So we expect to purchase the new CNG vehicles. 12 One of the items that was brought up previously 13 was about the purchase of those CNG vehicles. And, yes, 14 we do believe that for us it's a good deal. And we did, 15 indeed, get a waiver for two of our vehicles, because we 16 could not get the requirements met for the vehicles that 17 we'd need. So our special needs buses are, indeed, the 18 newer diesel, but we were able to get those with the 19 waiver. 20 And also we spoke about the regular maintenance, 21 and we've been training our mechanics on a regular basis 22 so they could become proficient in maintaining the CNG 23 vehicles which has improved our efficiency and 24 effectiveness in implementing the technology. And we also 25 have seen cost effectiveness with using the CNG with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 current fuel prices that we've been facing. And we, too, 2 are much concerned with saving the money for our students. 3 So we support this ruling by the AQMD. Thank you. 4 ACTING CHAIRPERSON RIORDAN: Thank you very much. 5 Yes, Mayor Loveridge. 6 BOARD MEMBER LOVERIDGE: It sounds like a fueling 7 station of some size you're talking about 250, $300,000. 8 But the on-site slow-fill, what are the costs of those 9 approximately? 10 MR. RALEY: Depending on the type, it could be 11 approximately $10,000 and up. We have -- with the 14 12 stations, we actually have them lined up so you can put 13 two vehicles in a line with that one filling post. So as 14 we have a line of vehicles, we can accommodate that. And 15 then we've exceeded our limitations in the property. The 16 actual fuel station that we have to support those 17 slow-fill stations, it takes up the space of one big bus. 18 And that was approximately $300,000 when we built the 19 structure to begin with. And we bought a used unit. 20 BOARD MEMBER LOVERIDGE: Can you have the 21 slow-fill without the major station? 22 MR. RALEY: You still need a main station for the 23 pressure, the compressors to service those posts. 24 ACTING CHAIRPERSON RIORDAN: Thank you very much. 25 Laura Braynard. I don't see Laura. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 Cheryl Seifert. 2 Pamela McDonald, Winston Mitchell, Rick Benfield. 3 MS. MC DONALD: Hello. My name is Pam McDonald. 4 I'm with Orange Unified School District. I'm the Director 5 of Transportation. 6 According to the National Research Academy and 7 National Academy of Science, more than 800 students are 8 killed each year going to and from schools. These 9 fatalities include teenage drivers and their passengers, 10 adult drivers transporting their own students, 11 pedestrians, and bicycle fatalities. Compare these 12 statistics to school bus riders, fatalities were five 13 children were school bus passengers and 15 children were 14 pedestrians at school bus stops, and you clearly see the 15 profound difference in student safety. 16 As can you see, removing students from school 17 buses is a foolhardy decision. Due to budget cuts 18 two years ago, the Orange Unified School District 19 increased the non-busing zone for all high school students 20 to three miles, resulting in eliminating five 21 home-to-school routes. This put more students on the road 22 instead of buses. 23 Recognizing that clean air is beneficial to all, 24 it is the goal and the philosophy of the Orange Unified 25 School District to cooperate and participate in efforts to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 improve our environment. However, given the current 2 budget restraints, we are limited to school bus 3 replacement only when grants are available to subsidize 4 the expense. Without funding, School Districts do not 5 have the means to meet the restrictive requirements of 6 this proposal. 7 And in 1996, Orange Unified applied for and was 8 awarded a grant, and we replaced all of the 1977 school 9 buses with new diesel buses. Thanks to a recent AQMD 10 grant, OESD took delivery of our first CNG bus 11 approximately about two months ago. I spoke to the driver 12 yesterday, and she said she is fueling her new CNG bus 13 approximately three times a week, to where she was fueling 14 her diesel bus once a week. OESD does not have a CNG 15 fueling station on site. I did some quick figures, and 16 our nearest fueling station for CNG is about 4.2 miles 17 away. For just labor, if I pay the driver to fuel her 18 diesel bus on site, it would be about $200 a year for 180 19 school days. For the CNG bus, it's going to cost us about 20 $2700. 21 I do want to thank again the AQMD for another 22 grant that we applied for for those buses that we bought 23 in '96. We were awarded the grant to put particulate 24 traps on the current school bus fleet. We also use 25 ultra-low sulfur diesel fuel to reduce the emissions even PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 further and even in other vehicles that are diesel. 2 Other Districts followed suit and are continuing 3 efforts to improve the air quality we share, causing 4 School Districts to reduce student ridership or abandon 5 diesel equipment is not the answer to air quality 6 concerns. The result, as the cost and requirements 7 increase, transporting students in school buses will 8 decrease, meaning more personal vehicles on the road. 9 This will cause additional traffic pollution. The Orange 10 Unified School District opposes the CARB adoption and 11 implementation of the rule as the restrictions are too 12 costly. Although the District remains fuel neutral, it 13 will continue to apply for grants and replace the diesel 14 vehicles with CNG buses. 15 ACTING CHAIRPERSON RIORDAN: Thank you very much. 16 We appreciate your comments. 17 Rick Benfield, Sheri Libicki, and Rick Sikes. 18 MR. MITCHELL: Distinguished members of the 19 Board, my name is Winston Mitchell. I live in the South 20 Coast Air Quality Management District. I'm the Regional 21 Vice President for Durham School Services, a school bus 22 contractor that operates 1300 diesel buses in Southern 23 California. We have an almost all-diesel fleet. In the 24 early '80s, we chose diesel fuel consciously because of 25 the qualities of safety, reliability, and economy. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 I want to share with you something that happened 2 during the formulation of Rule 1195. I got an emergency 3 phone call from our general manager in Lamorinda a 4 Northern California District. We operate 17 CNG school 5 buses up there. She was panicking and needed me to send 6 her 17 diesel buses. Her fuel vendor had informed her 7 that due to the explosion of a gas line in the 8 southwestern United States and a cold snap in Canada that 9 her use of gas was deemed non-critical, and as of Monday 10 she would not be allowed to fuel. 11 I thought this would be very interesting to the 12 South Coast Air Quality Management District, so I called 13 them and let them know that was happening. They thanked 14 me. Within 24 hours, I got a phone call from that general 15 manager saying, "Hey, the vendor came back to me and said 16 that, indeed, our use was critical and that we could fuel. 17 Thanks for whatever you did." Well, frankly, I did 18 nothing. But we talk about this dependable source of CNG. 19 Four weeks ago I got a panic phone call from a 20 vendor representing an LAX parking shuttle service that 21 works for LAX, the airport authority. They needed an 22 emergency 50 diesel transit school buses for airport 23 operations. It seems that their liquid natural gas 24 supplier in Houston had a problem making delivery to them 25 and there was no local source of LNG to them. I met their PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 needs by leasing them, temporarily, 30 diesel school 2 buses. 3 There's a few other things I would like to say, 4 however, obviously I'm out of time. 5 ACTING CHAIRPERSON RIORDAN: You're out of time, 6 and I apologize. 7 MR. MITCHELL: I would urge this Board to look 8 very, very carefully at the economic consequences of the 9 adopting this rule, and I would urge you not to adopt it. 10 ACTING CHAIRPERSON RIORDAN: Thank you very much. 11 MR. BENFIELD: I'm Rick Benfield, President of 12 Tumbleweed Transportation. Thank you for my three 13 minutes. 14 Diesel is a proven technology that will be as 15 clean as CNG four year from now as you've heard. So this 16 rule will not reduce emissions as staff has predicted. 17 History has proven this, as we came nowhere close to the 18 emission reductions AQMD estimated for Rule 1195. 19 I am a small business owner. Staff is telling 20 you this rule will have "no significant impact on small 21 businesses." However, just last month, half of our buses 22 were red tagged by the California Highway Patrol because 23 of this very AQMD and CARB program and both Board's 24 failure to abide by Title 13 governing school 25 transportation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 Explain to me how not being able to use to our 2 buses for a week due to this very program is not a 3 significant impact. Explain to me how spiraling fuel 4 costs exacerbated by this very program is not a 5 significant impact. This Board has the power to end 6 AQMD's discrimination and force of balanced approach, and 7 that's exactly what we need you to do. 8 This rule is also bad public policy. Our 9 thoughts and prayers go out to those affected by the 10 tragedy along the Gulf Coast. And one of the lessons 11 learned should influence your decision about this rule. 12 Our California school bus fleet is part of this state's 13 public safety network. Each and every bus used for those 14 evacuations that we painfully watched on television was a 15 diesel bus. All CNG buses in similar circumstances if it 16 happened here in California would be worthless. Once 17 again, good old reliable diesel came to the rescue in a 18 way CNG could not. 19 There's a reason you don't have these rules for 20 first responders. CNG cannot fill the bill, and it would 21 limit our ability to deal with crises here at home. 22 School Districts and contractors in California must be 23 able to use clean diesel. 24 And, finally, the staff report states, "In the 25 absence of this regulation, the estimated emissions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 benefits would still occur." Would still occur. It is 2 misguided -- in the misguided pursuant of CNG at all costs 3 AQMD has squandered, as you've heard, valuable dollars 4 that could have achieved real emissions reductions. 5 They're in their third solicitation in as many years for 6 DOCs on 1990 to '93 buses. Had all the money AQMD used to 7 force CNG on School Districts over the past five years 8 been spent instead on PM traps and clean diesel, all of 9 those pre-'77 buses would now be retired and real 10 emissions reductions would have been realized. 11 So please don't further compromise public safety 12 and reduce to aid and abet this insatiable devotion to 13 CNG. We support reasonable balanced efforts to clean our 14 air. But as you've heard, our limited state resources are 15 best spent on PM traps and clean diesel. And I urge you 16 to reject this rule. 17 ACTING CHAIRPERSON RIORDAN: Thank you very much. 18 Thank you for staying within the time limit. 19 There is a question. Mr. Benfield, could you 20 come back, please? 21 BOARD MEMBER D'ADAMO: Just a question. What did 22 you do during that one-week period in order to provide 23 service? Did you have any options available? 24 MR. BENFIELD: Well, fortunately, it was the 25 summertime. We were dangerously close to the start of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 school. We were about a week away. And I do have to say 2 the AQMD staff did finally get involved and rallied the 3 troops, even though all of the Executive Officers and 4 Deputies were gone. We had enough other buses without 5 particulate traps on them to be able to supplement during 6 that week. But if it had happened right now when school 7 was in effect, the nightmare for all of us in terms of the 8 press and the public and implications would have been -- I 9 don't even want to imagine it. Thank you. 10 ACTING CHAIRPERSON RIORDAN: Okay. Let me just 11 share before you begin. Rick Sikes, Brian Strokes, and 12 Rosa Washington, you are the three next speakers, if you'd 13 come forward, please. 14 Sheri. 15 (Thereupon an overhead presentation was 16 presented as follows.) 17 MS. LIBICKI: Madam Chairman and distinguished 18 Board members, my name is Sheri Libicki from Environ 19 Corporation. I was asked by International to evaluate the 20 staff's cost effective analysis. ARB staff made several 21 choices we believe to make these regulations appear more 22 cost effective than they actually are. 23 --o0o-- 24 MS. LIBICKI: First, the cost effectiveness is 25 strongly dependent on the miles a vehicle travels in a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 given year. ARB staff states that school buses in the 2 South Coast travel over 13,000 miles per year. And that's 3 per EMFAC. That value is only consistant with EMFAC if we 4 assume school buses operate consistently seven days a 5 week. The actual annual mileage of school buses in South 6 Coast and EMFAC is 12,300. And the annual mileage of 7 buses in the survey taken by South Coast is even less, 8 11,250. 9 Second, this rule sets a standard of NOx 10 emissions and PM emissions just as there are rules for NOx 11 and PM emissions for heavy-duty diesel engines. When 12 comparing the performance of diesel and CNG in the rule 13 cost effectiveness analysis, ARB staff choose to compare 14 the higher diesel standards to the lower more favorable 15 CNG certification for some, not all, engines. As noted by 16 others, diesel engines are certified at 2.5 grams NOx plus 17 NMHC -- diesel standards are 2.5 grams, but they're 18 actually certified at 2.3 grams NOx plus NMHC and some are 19 lower. 20 Finally, the inadequacy of the fueling station 21 cost has been discussed many times, and I don't need to 22 repeat that. 23 --o0o-- 24 MS. LIBICKI: What's the result of this? The 25 replacement aspect of the rule is even less cost effective PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 than ARB staff claimed. It is more out of the line with 2 previous rules implemented by ARB. You can see here that 3 the lower line, the 60,000, is ARB's cost effectiveness 4 analysis, and the two upper bullets represent the 2006 5 cost, and then the 2007 through '09 costs when the 6 calculations are done correctly. 7 --o0o-- 8 MS. LIBICKI: Let's go to the last one. As ARB 9 staff recognizes that the School Districts have limited 10 funding, as Ms. Witherspoon mentioned, you can buy more 11 new diesel buses. What she didn't say is you can reduce 12 more pollution for the same funding as well. If you use 13 ARB's cost effectiveness values, not even the ones we 14 believe are correct, clean diesel provides more reduction 15 for dollars spent. 16 If we simply look at the current diesel standards 17 with the diesel particulate filter and the rule CNG 18 standards and assume we have $30 million to spend over the 19 next five years, we can reduce both NOx and PM, both 20 according to the 2006 standards and 2007 through 2009 21 standard. For the same dollars spent, we can get cleaner 22 air. 23 Thank you. If you have any questions I'm glad to 24 take them. 25 ACTING CHAIRPERSON RIORDAN: Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 Are there any questions Board members? 2 Ms. D'Adamo. 3 BOARD MEMBER D'ADAMO: I have a question of 4 staff. Have you seen this presentation? And if so, could 5 you respond to the first slide regarding that mileage. 6 ACTING CHAIRPERSON RIORDAN: Let's put that first 7 slide back on again. 8 PLANNING AND REGULATORY DEVELOPMENT SECTION 9 MANAGER KEMENA: We have discussed some of Environ's 10 comments. A few of them are new. 11 As far as the mileage goes, we were using an 12 annual average mileage, so we believe our mileage does 13 represent -- it's five days a week, but they average it 14 over the whole year. So the mileage is accurate. 15 As far as the certification data, the point was 16 that the engines are certified at 2.5 grams diesel, and 17 they have a compliance margin so they actually come in at 18 about 2.3. And what you're saying is we aren't getting 19 credit for that compliance standard. We also did not give 20 credit for compliance margin on CNG. We used actual 21 certification standards for both diesel and CNG, so our 22 methodology was consistent. 23 ACTING CHAIRPERSON RIORDAN: Thank you very much. 24 Mr. Sikes. 25 MR. SIKES: My name is Rick Sikes. I'm the Fleet PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 Superintendent for the City of Santa Monica, and I'd like 2 to read I letter from Craig Perkins, the Environmental 3 Public Works Director. 4 "I'm pleased to inform you of the City of 5 Santa Monica's support for the three proposed 6 CARB regulations for clean urban transit buses, 7 clean on-road solid waste collection vehicles, 8 and clean on-road school buses for both public 9 and private fleets operating in the region. 10 "The City of Santa Monica committed to the 11 purchase of cleaner alternative fuel vehicles 12 beginning in 1993. At present, over 70 percent 13 of the miscellaneous fleet and over 50 percent of 14 our big blue bus fleet operates on alternative 15 fuel such as CNG, LNG, and dedicated electric. 16 We are striving to achieve even greater success 17 over the next few years as we demonstrate the 18 feasibility of hydrogen, high-efficiency hybrid, 19 and fuel cell vehicles. 20 "Santa Monica's aggressive goals are 21 described in the City Council's adopted 22 alternative fuels policy and the sustainable City 23 plan. It is vital these proposed regulations are 24 adopted by CARB so that higher-polluting diesel 25 power vehicles, waste hauling vehicles, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 transit buses can be replaced or modified with 2 cleaner alternatives and use other proven advance 3 technologies in order to significantly reduce 4 harmful emissions compared with other cleaner 5 diesel engines. 6 "The regulations will also help meet 7 stringent 2010 Federal emission standards, make 8 new clean vehicle technologies more available, 9 directly reduce the cancer risk to children who 10 ride school buses, and decrease our nation's 11 energy independence. 12 "Some people feel that now is not the time to 13 stop using the highly-polluting vehicle 14 technologies we've been hanging on to for the 15 past 100 years. They believe it will cost too 16 much or be too difficult. Others think we should 17 wait until we find the perfect fuel before we 18 start cleaning the air. 19 "The fact is Santa Monica and the rest of 20 Southern California cannot afford to wait any 21 longer to implement the fleet regulations that 22 are proposed by CARB. Thank you for your courage 23 in making this important decision." 24 I'd also like to make a personal statement. I 25 feel that it's -- we as operators of public and private PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 fleets have a responsibility to reduce the damage to the 2 people's health done by our own vehicles. 3 ACTING CHAIRPERSON RIORDAN: Thank you very much. 4 Appreciate your comments. 5 Brian Stokes. 6 I'm sorry. Dr. Gong, did you -- 7 BOARD MEMBER GONG: Mr. Sikes, appreciate your 8 testimony. How do you reconcile the City's viewpoints 9 regarding the fleet rules versus Mr. Abramson's from your 10 own Santa Monica and Malibu School District comments? 11 MR. SIKES: I believe Mr. Abramson's comments 12 were his personal opinion. The City Council has adopted 13 these rules and policies, and these are opinions that are 14 in the City Charter. 15 BOARD MEMBER BERG: I have a question, though. 16 Doesn't the Santa Monica School District have a Board? 17 MR. SIKES: I'm sure it does. 18 BOARD MEMBER BERG: So wouldn't Mr. Abramson's 19 comments reflect that Board? 20 MR. SIKES: I don't know. 21 BOARD MEMBER BERG: Okay. 22 ACTING CHAIRPERSON RIORDAN: Mr. Stokes. 23 MR. STOKES: Good afternoon. And thank you for 24 this opportunity. I'm Brian Stokes. I'm Chairman of the 25 Clean Vehicle Education Foundation, sponsored by members PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 of natural gas vehicle product and service providers and 2 natural gas to hydrogen products. 3 I guess it's instructive to listen today to all 4 the various comments and kind of recognize that we're 5 still talking about replacing school buses that are 40 or 6 more years old. One begins to wonder if there ever will 7 be a time when there's enough money. But, certainly, it's 8 beyond the time when we have to deal with the issue. 9 I think a sensible thing of the Board to do is to 10 deal with this issue today and virtually eliminate the 11 toxic emissions exposure that students are faced with. 12 Students are two to three times more susceptible to those 13 emissions, and they don't get a second chance. This 14 exposure is just what it is, toxic. And it's 15 unconscionable. 16 For this rule and the two other rules that we are 17 considering, I think we need to expedite action and to 18 encourage funding. We recognize there is a shortage of 19 funds. This has to be a priority, especially the school 20 bus rule. As was stated earlier this morning, stabilizing 21 the marketplace, sending a consistent signal to people who 22 invest their money in these industries, alternative fuel 23 industry, it's, I think, an obligation to the Board to 24 honor that investment and the signals the Board has 25 previously sent that finding a .2 gram solution was going PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 to be rewarding. If you back away from the .2 gram, 2 you're basically telling the manufacturers their 3 investment may be wasted. 4 And as we consider other applications beyond the 5 South Coast Fleet Rules today, you may be setting 6 precedence for other market applications that discourage 7 market entry. So if we've got a cleaner, better solution 8 we can eliminate exposure of students to toxic emissions 9 we may foreclose that opportunity. 10 The last comments I want to make are about the 11 range of school buses and some of the costs. The truth is 12 that the school bus has the equivalent of 50 to 60 gallons 13 of natural gas, and at seven miles per gallon, which is 14 the average, and normally travel 150 miles a day, that 15 translates into 300 to 420 mile range. There is no 16 District in California that can't live with that range. 17 The other point I want to make is that beyond the 18 rules that I think are important to send that market 19 stability signal, there are also tax credits available and 20 infrastructure cost offsets available on top of what the 21 District or others might provide in subsidy. So the truth 22 of the matter is I don't think any of the speakers are 23 paying for the infrastructure. The infrastructure is 24 affordable, and there are speakers following me that 25 will -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 ACTING CHAIRPERSON RIORDAN: Your time is up, and 2 thank you very much for your presentation. 3 MR. STOKES: Thank you. 4 ACTING CHAIRPERSON RIORDAN: Rosa Washington. 5 MS. WASHINGTON: Good afternoon. My name is Rosa 6 Washington, and I'm here representing the Western 7 Riverside Council of Government and the Western Riverside 8 Clean Cities Coalition. We support all three rules. And 9 our county has experienced unprecedented growth in the 10 last ten years, and we can understand that a lot of times 11 changes, like going from diesel to CNG, can bring about a 12 lot of unforeseen expenses and even place a burden on 13 businesses. And that's why we feel that the State 14 government, local governments, and even if private sector 15 can work together to make these rules work. But we need 16 to do it. 17 And I hate to use this word, but, you know, the 18 revolution has to start somewhere. And you might be the 19 ones to start it. We also support that -- we acknowledge 20 that for people like the refuse industry, the technology 21 may not be available. And we support that they be given 22 exemptions, you know, within a reasonable time. But when 23 the technology becomes available, then they can take 24 advantage of it. 25 But that's all I have. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 ACTING CHAIRPERSON RIORDAN: Thank you very much. 2 Thank you for being here. 3 Let me ask Jed Mandel to come next, Bruce 4 Magnani, Cathy Reheis-Boyd, and Stephanie Williams. And 5 Bruce and Cathy, come on down, people, because we need to 6 continue to move this forward. Rick Zbur, James Lyons, 7 Allen Schaeffer, Kirk Hunter, I want to bring everyone 8 down so you're seated in that first row, please, so the 9 next speaker -- because I'm thinking this will be more 10 efficient. Mr. Mandel. 11 MR. MANDEL: I'm Jed Mandel speaking on behalf of 12 the Engine Manufacturers Association. 13 Because of time constraints, I will briefly list 14 ten reasons -- the top ten, if you will, why ARB should 15 just say no to the fleet rules. 16 10. ARB should not adopt single technology 17 non-fuel neutral standards that stifle competition and 18 development, especially when there are no net benefits and 19 huge costs. 20 9. The proposed Fleet Rules did not provide any 21 PM emission benefits. And PM is why the South Coast 22 adopted their Fleet Rules in the first place. 23 8. The Fleet Rules do not provide any NOx 24 benefits. They actually will make NOx worse. Fleet 25 owners will delay purchases and continue to operate their PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 older equipment until 2010 when they can buy diesel again. 2 7. The rules eliminate fuel and technology 3 choices and place the public's transportation and refuse 4 collection needs at the risk of a single source off-shore 5 fuel supply. 6 6. The rules would pull the rug out from under 7 the manufacturers who in response to EPA's and ARB's 8 challenge and in reliance on their rulemaking commitment 9 to certainty, stability, and lead time have invested 10 billions in successfully achieving clean diesel 11 technology. 12 5. The rules are not necessary. Based on Judge 13 Cooper's decision, the South Coast is enforcing its own 14 Fleet Rules against public and private fleet operators. 15 4. The rules will not act as a backstop for the 16 South Coast. They need an EPA waiver, which could take a 17 year or more and likely would themselves be the subject of 18 litigation. 19 3. ARB should not risk its prestige or its 20 authority by adopting rules which EPA disfavors and which 21 require EPA waivers and do not meet Clean Air Act waiver 22 requirement. 23 2. ARB should not undermine industry's efforts 24 and investment in clean diesel technology, an historic 25 achievement that ARB staff has long recognized requires PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 uniform nationwide standards, not only because of the 2 small size of the market and the need to spread and recoup 3 costs, but also because of the inherent interstate 4 commerce aspects of trucking. 5 1. ARB should not force the public through the 6 use of public resources on public fleets to expend their 7 limited available resources on the highest-cost 8 lowest-benefit programs and ARB's history, programs which 9 are completely unnecessary. 10 In sum, there is no justification whatsoever for 11 rules of such limited, if any, value which come at such 12 enormous costs and adverse consequences. Needless to say, 13 I have submitted more extensive written comments for the 14 record, and I'd be pleased to answer any questions you 15 have. I've saved you from putting up the overheads. I 16 think it takes too long. But I think you have them. 17 ACTING CHAIRPERSON RIORDAN: Thank you. We do 18 have them, Mr. Mandel, and we appreciate that. They will 19 be made part of the record. 20 Mayor Loveridge. 21 BOARD MEMBER LOVERIDGE: Jed, the proposed 22 emission criteria, you accept those for the succeeding 23 years for 2005, 2006, 2007, 2009, 2010, and above? 24 MR. MANDEL: I'm not sure I understand, Your 25 Honor, by the accepting the criteria. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 BOARD MEMBER LOVERIDGE: There's emission 2 criteria which buses or solid waste vehicles need to meet, 3 and I guess you're not disputing those standards for 2007 4 or 2010. 5 MR. MANDEL: I'm not disputing the standards that 6 this Board adopted for 2007 and 2010, which the industry 7 has invested to achieve and will achieve. What disputing 8 is the laying on top of that on a different time schedule 9 new standards for certain fleets in the South Coast. And 10 my concern is that it won't -- as the staff report says, 11 it provides no PM additional benefits. The diesel engines 12 today, the ones that will be sold in the time frame of 13 this rule, meet the same PM emission limits as do CNG 14 engines. There is arguably between now and 2010 a modest 15 NOx benefit to CNG technology. It disappears in 2010. 16 The question which you have to ask yourself, will 17 people invest in CNG technology between now and 2010 and 18 the whole infrastructure that's necessary to support it 19 when they know in 2010 they'll be able to buy that diesel 20 engine again. I think what we tried to show you in charts 21 is it's unlikely that smart people with limited resources 22 are going to do that. So you'll have a NOx dis-benefit. 23 They'll simply keep their older engines longer. 24 ACTING CHAIRPERSON RIORDAN: Any other questions 25 for this speaker? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 Thank you, Mr. Mandel. 2 Bruce Magnani. 3 MR. MAGNANI: Yes. Madam Chair and members, my 4 name is Bruce Magnani. And I'm here representing the 5 California Chamber of Commerce and our Coalition of 6 Californians for a Sound Fuel Strategy. 7 We are a coalition of industries that produce, 8 use, and rely on diesel technology and specifically clean 9 diesel technology. And I'd like to start by emphasizing 10 we support the goals of ever cleaner air for California, 11 and we support well reasoned and science-based standard 12 that meets a cost effectiveness model. We simply cannot 13 support the proposed rule that would eliminate a fuel and 14 technology option that could meet a reasonable 15 science-based standard. 16 The proposal before you is not cost effective, as 17 has been demonstrated by previous testimony and will 18 probably be repeated by other testimony today. It will 19 have a negative impact on business, as I think's already 20 been mentioned. It offers no meaningful health benefit. 21 In fact, as stated earlier, the rule may worsen benefits 22 because fleet operators will run older technology longer 23 until the 2010 diesels are out, rather than change over 24 technology because of the infrastructure costs associated 25 with that. I think schools have demonstrated clearly the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 money granted for infrastructure improvements is not 2 adequate to take on fueling stations. 3 In addition to the health and safety and economic 4 concerns, we are concerned in adoption of the rules it 5 will be a departure from the State's fuel-neutral 6 standard. We don't believe these rules are fuel neutral, 7 but the NOx emission standard is set so low for the sole 8 purpose of eliminating clean diesel technology to make it 9 comport with the original South Coast rule. The concept 10 of fuel neutrality is important. It's a logical policy 11 that promotes competition and innovation among engine and 12 fuel technologies, and in turn increases opportunities for 13 continuing advancements in state-of-the-art emission 14 controls for cleaner air. 15 I think Dr. Wallerstein's statement earlier was 16 telling in that he asked for the rule to be amended to 1.5 17 rather than the 1.2 that's in the staff report, and I 18 think that's because there is a question as to whether or 19 not the CNG manufacturers can actually meet that 1.2 20 standard. So they're looking for a little bit of room in 21 that rule, because there is a question of that. And that 22 even makes the difference between clean diesel and CNG 23 even more nominal as we move forward. 24 I think that's also a question the ARB is taking 25 a risk by taking action on a set of rules that aren't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 needed, is that the recent court decisions that when you 2 apply for a federal EPA waiver, you're running the risk of 3 receiving somewhat of a punitive response from EPA that 4 could require the ARB to apply a lead time and stability 5 standard to all of your mobile source emission regulations 6 in the future. And I think you're risking for these rules 7 the ability to move forward and continue to regulate under 8 the limited fashions under your waivers in the future. I 9 think that's a high risk to take moving forward. 10 With that, I would like to ask you through 11 careful consideration with the scientific testimony here 12 today to reject the Fleet Rules in total. Thank you. 13 ACTING CHAIRPERSON RIORDAN: Thank you. 14 Question? 15 Ms. D'Adamo. 16 BOARD MEMBER D'ADAMO: Thank you, Madam Chair. 17 Could staff respond to the issue raised by the 18 witness regarding the risk we might be taking with regard 19 to lead time? And as I understand it, this risk possibly 20 could apply to other waivers that we've already received. 21 I'm not sure I'm understanding the point, or just as to 22 this one. 23 SENIOR STAFF COUNSEL JOHNSTON: Well, I think 24 he's correct. If you recall in my presentation, I 25 mentioned that one of the issues that is raised by these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 sets of Fleet Rules is the possibility that U.S. EPA would 2 apply the Federal Clean Air Act provisions in 202(a)(3)(c) 3 for lead time and stability. Lead time being four years 4 before the model year in which the rule applies. And 5 stability being three years of stable rules. In other 6 words, three years between the changes in the standard. 7 Whether U.S. EPA and a waiver either within the 8 scope or as a new waiver would apply those criteria to 9 California. And we believe that the language of the Clean 10 Air Act says that those standards definitely apply to U.S. 11 EPA. But we do not agree that they apply to California. 12 Yet, in 1995, there was a decision that supported actually 13 one of our waiver requests in which there was language 14 which we regard as dicta -- in other words, language that 15 need not have been there in this waiver decision that said 16 that lead time did, indeed, apply to California. 17 Now, the U.S. EPA decision did not need to have 18 said that. But they did. And so that raises the 19 question, which has been continuing for a long period of 20 time, about whether U.S. EPA would apply those criteria to 21 California should those issues be raised in any other 22 waiver context. 23 ACTING CHAIRPERSON RIORDAN: Does that answer 24 your question Ms. D'Adamo? Do you want to follow up on 25 that? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 BOARD MEMBER D'ADAMO: I'm just wondering if 2 there's something about this waiver request that would 3 increase that risk more so than any other waiver request. 4 ACTING GENERAL JENNINGS: Well, first, just to 5 add one more thing. The Clean Air Act requirement only 6 applies to EPA standards for heavy-duty engines and 7 heavy-duty vehicles. And I don't think we really feel 8 that this one presents any issue different from other 9 situations except that if the lead time and stability 10 requirements were evoked, it would certainly disqualify 11 these. 12 EXECUTIVE OFFICER WITHERSPOON: Ms. D'Adamo, the 13 way I would characterize it is the risk is always there, 14 and the EPA has already signaled its belief at least in 15 one instance that lead time and stability apply to us. 16 The fact that these are so controversial will make that a 17 prominent issue in the next waiver decision and unlikely 18 to be dicta, but more likely to be the core of the fight. 19 Because if EPA does apply lead time and stability, these 20 rules won't take affect until after 2010 and, therefore, 21 would be meaningless. 22 BOARD MEMBER D'ADAMO: Would that set a precedent 23 for other waiver requests? 24 EXECUTIVE OFFICER WITHERSPOON: Yes, it would. 25 BOARD MEMBER D'ADAMO: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 ACTING CHAIRPERSON RIORDAN: I see nodding in the 2 affirmative. Is that correct? 3 SENIOR STAFF COUNSEL JOHNSTON: Yes, it would. 4 ACTING CHAIRPERSON RIORDAN: Are there any other 5 questions that any Board member has of staff or this 6 speaker? 7 Okay. Thank you so much for your presentation 8 and moving right along. 9 MS. REHEIS-BOYD: Chairman Riordan and members of 10 the Board, thank you for allowing us to testify. My name 11 is Cathy Reheis-Boyd, and I'm the Chief Operating Officer 12 of the Western States Petroleum Association. I'm also 13 here as a member of the Californians for Sound Fuel 14 Strategy Coalition. 15 WSPA opposes the adoption of the CARB proposed 16 rules for all three actions, therefore I'd like these 17 comments to be in the record for all three. 18 ACTING CHAIRPERSON RIORDAN: We will note that. 19 MS. REHEIS-BOYD: We do support the no-action 20 proposal, therefore. 21 We believe that the proposed rules are not 22 fuel-neutral and they have been crafted in a manner to 23 effectively ban the use of ultra low sulfur diesel, 24 advanced engines, and highly efficient after-treatment 25 devices with little are no air quality benefit in a cost PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 ineffective manner between now and 2010. 2 Clean diesel technology is a success story 3 largely because of the fuel neutral and fuel technology 4 policy that has been encouraged in the past and should be 5 encouraged here, not discouraged. It will provide 6 significant air quality benefit while complimenting the 7 existing fueling infrastructure and resources. 8 Adopting an alternative fuel mandate can create 9 unwarranted dependencies on one type of fuel and one type 10 of technology, which in turn can lead to shortness in 11 supply and instabilities in pricing. Fuel neutral 12 standards allow for a diverse range of fuels and products 13 to compete in the marketplace, resulting in an optimized 14 mix of standard compliance options at a market driven 15 price. You can have both fuel neutrality and fuel 16 diversity. 17 There is a growing concern that California's 18 demand for natural gas, which is critical as you all know 19 for electricity and industrial production, will outpace 20 supply. California produces very little of its own gas. 21 We only produce 15 percent of it here locally, 22 domestically in the state. All of that is produced by our 23 members. The rest, of course, is by interstate pipeline. 24 Proposals, as you know, to construct LNG 25 facilities and issues around current natural gas mobile PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 fuel standards are very controversial, but they are 2 necessary to meet our growing demand for natural gas. 3 Against this backdrop, natural gas prices in recent years 4 have been marked by instability and lately notable 5 increases. Banning diesel technology to reduce petroleum 6 dependence in favor of natural gas technology only trades 7 one form of energy dependence for another and discards a 8 clean, viable energy-efficient form of transportation fuel 9 supply. That is the exactly the opposite of what the 10 state needs. 11 Some have made the argument that mandating 12 alternative gaseous fuels like CNG, LNG, LPG will 13 facilitate the introduction of hydrogen and in meeting the 14 State's vision of a future hydrogen highway. While our 15 members have been very active into the California Fuel 16 Cell Partnership, mandating CNG will not answer many of 17 the technical questions and economic issues that we all 18 face as we look collectively towards the future. You 19 wouldn't plan for the hydrogen highway by putting in CNG 20 infrastructure first. 21 ACTING CHAIRPERSON RIORDAN: Do you want to -- 22 MS. REHEIS-BOYD: In closing, WSPA urges the 23 Board to take no action on these proposed rules, and 24 instead maintain a position of fuel and technology 25 neutrality, support an energy policy that allows for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 competition in the marketplace and enhances fuel supply, 2 encourages further investment in air quality benefit on 3 clean diesel, and doesn't take an action that results in 4 unintended consequences. 5 ACTING CHAIRPERSON RIORDAN: Thank you very much. 6 Stephanie. 7 MS. WILLIAMS: Good afternoon. My name is 8 Stephanie Williams, and I work for the California Trucking 9 Association. 10 We are not here today to oppose the transit rule 11 or the school bus rule, because we don't represent those 12 constituents. But we are here as a member of the 13 California Sound Fuel Strategies, and standing here with 14 the oil companies at a time when diesel is just 3.25 a 15 gallon today in San Francisco. The national average is 16 2.74. The reason that California's fuel prices are higher 17 is because we have five people in our market. Today, we 18 are here to talk about a plan that would have one person 19 in the market, and trucking is opposed. 20 It's very controversial what is going on right 21 now with LNG and bringing natural gas supply into the 22 United States. It will have a large impact on trucking, 23 because if LNG was used and these different fuels used in 24 the transportation sector, trucks would have to haul it to 25 the people in these communities who frankly do not want PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 it. There's nothing more controversial in areas near the 2 port than the import of LNG. 3 So why are we here? The proposed rules do not 4 provide NOx benefits. The proposed rules do not provide 5 any PM benefits. Fuel price, as trucking has learned, is 6 more based on supply than anything else. How many people 7 are in the market. We want to see more people in the 8 market. This rule would bring less people to the market. 9 The anxious natural gas lobby is seeking a monopoly, and 10 they're asking you to provide it for them. That's why 11 we're here today. 12 This is an industry that is regulated due to 13 monopolistic practices. The natural gas lobby placed a 14 political ad in the Sacramento Bee that defines these 15 rules as cleaning up the air. That's not the case. 16 There's been other articles in the newspaper about the 17 reasons that we're here today. I suggest that you read 18 them. 19 Senate Bill SB 757 and Assembly Bill 151 were 20 introduced in the 2005 legislative session. The South 21 Coast was there to lobby for these bills. These measures 22 failed because the environmental benefits were not found. 23 Petroleum dependency is about picking and choosing winners 24 and losers. The California Trucking Association does not 25 think that that is your job. And we ask that you continue PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 on your mission to protect air quality. CTA asks for this 2 Board to take no action. Thank you. 3 ACTING CHAIRPERSON RIORDAN: Thank you very much. 4 Rick, before you start, just let me remind James 5 Lyons, Allen Schaeffer, Kirk Hunter, be on board. Okay. 6 MR. ZBUR: I think we're a little bit out of 7 order. 8 ACTING CHAIRPERSON RIORDAN: I probably went too 9 fast, and I apologize. 10 (Thereupon an overhead presentation was 11 presented as follows.) 12 MR. ZBUR: I apologize as well. I need these 13 glasses. I've gotten a little bit older since I saw you 14 last and am having a hard time seeing my own comments. 15 My name is Rick Zbur with the Law Firm of Latham 16 and Watkins, counsel to International Truck and Engine 17 Corporation. And today I'd like to focus my comments on 18 concerns regarding CARB's legal authority -- 19 --o0o-- 20 MR. ZBUR: -- to adopt the proposed rules. We'd 21 like to compliment the CARB staff for the excellent review 22 of some of the issues that these rules raise. 23 The action before CARB today from a legal and 24 regulatory perspective is a decision to adopt new engine 25 standards for school buses under CARB's authority to adopt PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 emission standards under the California Health and Safety 2 Code and Federal Clean Air Act. The proposed rules differ 3 in significant respects from the AQMD Fleet Rules and must 4 comply with all statutory and regulatory requirements 5 applicable to CARB's adoption of new emission standards. 6 As such, the adoption of the proposed rules would 7 be precedent setting and represent a sharp departure from 8 CARB's long-standing policies and we believe exceeds 9 CARB's authority in a number of important respects. As we 10 discussed in our comments and I hope we have additional 11 ones, they popped back on our e-mail yesterday, so we've 12 given the staff an additional one to make sure we get in 13 the record. 14 We believe this represents an abandonment of 15 CARB's long-standing policy of fuel neutrality, which has 16 served the State's clean air programs well. If adopted, 17 we believe this would be the first time CARB will adopt an 18 emissions standard with the intention and effect of 19 excluding a comparably low emitting technology. Because 20 the proposed rules are not fuel neutral, as our comments 21 discuss, we believe they violate requirements for approval 22 of a waiver under Section 209(b) of the Federal Clean Air 23 Act because they're not consistent with the federal 24 regulatory framework, which is fuel neutral. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 MR. ZBUR: Second, adoption of the proposed rule 2 would be the first time CARB has adopted piecemeal 3 emissions standards applicable to only a portion of the 4 state. Again, the Federal Clean Air Act Section 209(b) 5 gives EPA authority to waive preemption for emissions 6 standards adopted by the State of California. Congress 7 clearly envisioned that only emissions standards of 8 statewide applicability would qualify for such waivers. 9 CARB has never previously adopted, nor has the U.S. EPA 10 granted a waiver for, emission standards that apply to 11 only a limited portion of the state. 12 --o0o-- 13 MR. ZBUR: Third, the proposed rules violate both 14 the Federal Clean Air Act Section 209(b) and the 15 California Health and Safety Code because the proposed 16 rules, implementation, and enforcement would be delegated 17 to the AQMD. And that's the provision under the Health 18 and Safety Code. Importantly, Health and Safety Code 19 Section 43101 requires that CARB implement emission 20 standards that it adopts. The delegation to the AQMD 21 violates CARB's authority under this provision. 22 Fourth, the proposed rules are inconsistent with 23 Section 209(b) of the Federal Clean Air Act, because they 24 violate lead time and stability requirements. I won't go 25 into this in more detail other than to say the letter that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 was addressed to the AQMD from the U.S. EPA on February 1 2 of this year indicated that EPA believed lead time 3 standards applied in this case. 4 ACTING CHAIRPERSON RIORDAN: We need a final 5 summation. 6 MR. ZBUR: I will just close by saying the one 7 point is that there's only 21 buses that will be affected 8 by this, and that's in response to Dr. Gong's question. 9 And there have been a number of exemptions that have been 10 applicable to the AQMD by AQMD contractors, one in which 11 we are involved with, which I think affected over 150 12 buses. So the LAUSD's issues, they have required 13 significant exemptions under the AQMD rule. 14 Thank you very much. 15 ACTING CHAIRPERSON RIORDAN: Let me follow up on 16 that. The question I asked of the gentlemen who wasn't 17 sure, there are some exemptions that have been asked for 18 by the -- 19 MR. ZBUR: Oh, very significant ones. I would 20 ask -- I think AQMD will have a better sense of the 21 exemption requests, but only one we were involved in on 22 behalf of the one contractor involved. I think it was 23 over 150 buses a couple years ago, because there was not 24 adequate funding to offset the cost differences. 25 ACTING CHAIRPERSON RIORDAN: I probably wasn't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 asking the question to the right person. I probably 2 needed to ask someone else. Thank you very much. 3 MR. ZBUR: Thank you. 4 ACTING CHAIRPERSON RIORDAN: Any other questions 5 for this speaker? 6 James Lyons. 7 (Thereupon an overhead presentation was 8 presented as follows.) 9 MR. LYONS: I'm James Lyons with Sierra Research 10 and speaking today on behalf of the Diesel Technology 11 Forum. I don't have my slides up. I'm going to make some 12 general background comments on -- 13 --o0o-- 14 MR. LYONS: -- diesel emissions and their 15 contribution to total emissions in the state of California 16 as well as the South Coast Air Basin. As my comments are 17 general, they apply to all three rules. And I'd like my 18 testimony to be put in the record if it's acceptable for 19 all three of the items. 20 ACTING CHAIRPERSON RIORDAN: Yes. 21 MR. LYONS: And all of the materials that are in 22 my presentation are also in a report that's been submitted 23 to the staff for the record. 24 As the title indicates, I'm going to talk about 25 the contribution of diesel engines to ROG, NOx, and fine PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 particulate matter emissions over a 45-year period. 2 --o0o-- 3 MR. LYONS: How we did the study is we 4 essentially went to the emissions inventory of the 5 California Air Resources Board, got your information for 6 stationary and air resources, as well as on- and off-road 7 mobile sources. We made a couple of adjustments for 8 regulations that you've adopted that were not yet 9 reflected in the inventories. 10 --o0o-- 11 MR. LYONS: I'm going to start by telling you 12 what we found from our examination of the inventory. We 13 found that diesel engines don't contribute significantly 14 to emissions of reactive organic gasses. That's not 15 surprising, but it is borne out by the inventory data. 16 There is a substantial contribution to NOx 17 emissions both in the South Coast and statewide. However, 18 that contribution is diminishing over time between now and 19 the end of our study period, which was 2020. And because 20 of existing the regulations, the contribution will decline 21 even further if you look out in time beyond that year. 22 And then, finally, we found that diesel engines 23 contribute modestly to PM2.5 emissions in the South Coast 24 and statewide. And as a result of existing regulations, 25 those contributions will also be declining. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 Next slide, please. 2 --o0o-- 3 MR. LYONS: Going to move through just a few 4 pictures and then show what I summarized in words 5 previously. These are stacked graphs. The diesel 6 contribution is at the top of each graph. There are three 7 diesel categories. This is ROG emissions. As I 8 mentioned, diesels don't contribute significantly to ROG. 9 And that's why you see all three groups mushed together at 10 the top there in one single band. 11 Next slide, please. 12 --o0o-- 13 MR. LYONS: This is the situation for NOx. You 14 can see the three colored patches at the top of the figure 15 which indicate the relative diesel contributions. I would 16 draw your attention to as we move out over time from 1995 17 to 2005, those diesel contributions diminish and they 18 become even smaller as we move from 2005 to 2020. 19 Next slide. 20 --o0o-- 21 MR. LYONS: Finally, this is statewide fine 22 particulate matter emissions. The diesel contribution, 23 again, is the three colored sections at the top of the 24 graph. As you can see, the diesel contribution is, 25 indeed, modest. And as you look out over time, it does, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 in fact, diminish. 2 Next slide, please. 3 --o0o-- 4 MR. LYONS: Focusing specifically on on-road 5 motor vehicle emissions of NOx in the South Coast Air 6 Basin, we looked at the contribution of diesels to that. 7 Again, you will see the diesel emissions repeat and have 8 diminished. Similar slide. 9 ACTING CHAIRPERSON RIORDAN: I think you're out 10 of time, so just a quick summation of the slide. 11 MR. LYONS: Can you go to the last slide. 12 --o0o-- 13 MR. LYONS: My conclusions are that existing 14 controls have reduced diesel emissions and that existing 15 regulations will lead to substantial further reductions in 16 diesel emissions. Thank you. 17 ACTING CHAIRPERSON RIORDAN: Thank you very much. 18 Allen Schaeffer. 19 (Thereupon an overhead presentation was 20 presented as follows.) 21 MR. SCHAEFFER: Madam Chairman and members of the 22 Board, thank you very much for the opportunity to be here 23 today. My name is Allen Schaeffer. I'm the Executive 24 Director of the Diesel Technology Forum. And we represent 25 diesel engine and equipment makers, fuel refiners, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 companies that make emissions control systems. And I 2 would say that we support California's goal of clean air. 3 And from Mr. Lyon's presentation just previous to mine, I 4 think can you see that the results are being delivered by 5 clean diesel technology. 6 Next slide. 7 --o0o-- 8 MR. SCHAEFFER: I would like to focus the bulk of 9 my comments on the first bullet on this slide, which is 10 the nature that these rules should be rejected because 11 they are not needed. Others have covered these other 12 points. 13 Next slide, please. 14 --o0o-- 15 MR. SCHAEFFER: I'd like to share with you a 16 moment about why diesel is important in California. Why 17 are fleets using diesel technology. I think it's 18 important for this Board and the ARB staff to recognize 19 that the policies and decisions that you have made over 20 the last decade and more are working. And that's 21 evidenced by the air quality data you just saw. So you 22 have proceeded on a reasonable path of forcing diesel 23 technology to get cleaner. And the very fact that we're 24 here today to have the CNG versus diesel discussion is 25 very good, because we come to you saying we are making PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 substantial progress. And 15, 20 years ago, no one 2 probably would have ever believed that clean diesel could 3 have become competitive with clean natural gas. 4 Next slide, please. 5 --o0o-- 6 MR. SCHAEFFER: Diesels are important because of 7 the reasons you've heard before. But people choose them 8 because of their unique combinations of aspects of being 9 very fuel efficient, very reliable, very performance 10 oriented, and not tethered to a pipeline. These are 11 vehicles that can move anywhere when they need to. And 12 this industry contributes about $12.7 billion to the 13 California economy annually, according to MQ, the study we 14 had done a few years ago. 15 I would say absent any rule or action by this 16 Board, any transit district, School District, solid waste 17 hauler, or others are certainly free to go out and acquire 18 whatever technology they belive is the best suited for 19 their operations. 20 Next slide, please. 21 --o0o-- 22 MR. SCHAEFFER: As you've just heard, the 23 progress improving diesel has been substantial, and you've 24 seen the trends both statewide and at the local level. We 25 have seen dramatic improvements in dropping NOx emissions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 by 30 percent since 1990 statewide. Those will be 2 dropping by 64 percent between now and 2020. Here in the 3 South Coast that first time period 1990 to 2005, a 20 4 percent reduction, and another 68 percent by 2020. 5 Next slide. 6 --o0o-- 7 MR. SCHAEFFER: This is really where the action 8 is. And that is the future of clean diesel between now 9 and 2007 and 2010. This industry is on the path for 10 substantial reductions in both PM and NOx. And let there 11 be no doubt that diesel engine manufacturers will meet 12 that mark. In January 2004 in this very room, the 13 California Air Pollution Control Officers Association, 14 there was testimony given by all the engine manufacturers 15 they would meet these standards. 16 Next slide, please. 17 --o0o-- 18 MR. SCHAEFFER: I think I'd just like to say that 19 folks are out there testing these technologies today. It 20 is being done. They are perfecting these technologies to 21 deliver on-time products and, clearly, we have some 22 challenges ahead. 23 If we can skip to the very last slide. 24 --o0o-- 25 MR. SCHAEFFER: In conclusion, I think the work PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 you have done here in the past 10 and 15 years has been 2 substantial. And clean diesel is now at a point where it 3 will be a real shame to deprive Californians of this cost 4 effective technology and what it can deliver for the 5 future. Thank you. 6 ACTING CHAIRPERSON RIORDAN: Thank you very much. 7 Mr. Hunter, before you begin, Jeffrey Noonan-Day 8 and Bob Lucas and Michael Eaves, if you'd come down, 9 please, to be ready to testify. 10 Mr. Hunter. 11 MR. HUNTER: Thank you. Before I begin, at the 12 end of my comments, I'd like to be able to make two 13 comments on a couple of things that have already been 14 said, for the benefit of Mayor Loveridge, if possible. 15 Good afternoon. My name is Kirk Hunter, aka 16 Mr. Natural Gas. And I'm the CEO of the Southwest 17 Transportation Agency, which is a public joint powers 18 authority that operates 100 school buses, of which 20 are 19 natural gas. We have a 15,000 gallon public access LCNG 20 fueling station and are responsible for bringing the first 21 natural gas liquefier to the San Joaquin Valley hopefully 22 next May, which will produce 40,000 gallons of liquid 23 natural gas for consumption in the state. And we're 24 excited about that. 25 I'm also the Chairman of the School PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 Transportation Coalition, past President of the California 2 Association of School Transportation officials. I'd like 3 to say I'm here today representing one or more of those 4 groups. But today I'm here today representing common 5 sense, a sense that's far often not common anymore. 6 A ride on a California school bus is nine times 7 safer than any other form of surface transportation in the 8 world. Yet, California ranks last in the nation for 9 children who ride the school bus at 11 percent. 10 California ranks last in the nation for the operation of 11 pre-'77 school buses. School transportation is 12 underfunded by over $500 million a year. 13 In school transportation we receive what I call 14 benevolent funding. The more we beg, the more we might 15 get. We do not need, nor can we tolerate, another 16 regulation that adds another layer of cost. We are 17 already the safest form of transportation, the most over 18 regulated and underfunded thing around. 19 One of the things we're dealing with now that 20 nobody's mentioned is the new seat belt law, which now 21 means in order to get two buses, we have to buy three. 22 And there is no funding for that either. So as we talk 23 about adding buses, we're talking about a third more 24 buses. 25 A Fleet Rule for school buses makes absolutely no PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 sense. School Districts have three manufacturers to 2 choose from when buying buses. Within these 3 manufacturers, schools can choose from clean burning 4 diesel or a natural gas technology that meet all federal 5 air quality standards. It is not likely we can go to a 6 third-world country somewhere and use a diesel-spewing bus 7 somewhere and bring it into California. Our choices are 8 already regulated. 9 We are tired of being the low hanging fruit. 10 When everybody wants to try something new, they go after 11 the school bus, because there we are. Nobody -- and I 12 repeat this passionately. Nobody cares more about kids 13 and their safety than the 25,000 professional school bus 14 drivers that take them back and forth to school every day. 15 You're going to hear later who everybody cares about kids 16 and they just kind of leave out the fact or make it seem 17 we don't care. If we were really sincere about cleaning 18 up the air and making kids safer, we would take that 11 19 percent that ride the bus and fund it so 50 percent of the 20 kids that attend a school can ride a school bus. That 21 will clean the air. That will get kids in a safer form of 22 transportation which is even safer than their mom's car. 23 If we don't leave the school bus alone, we will 24 some day be sitting around saying how great the school bus 25 once was. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 Now just two quick comments. 2 ACTING CHAIRPERSON RIORDAN: I'll ask the 3 question. What is it that you wish to tell Mayor 4 Loveridge? 5 MR. HUNTER: It's just a simple comment. The low 6 cost CNG overnight fueling, the 10,000, $12,000 fast fuel 7 thing, that is kind of old technology and not really great 8 anymore. It would be tantamount to you trying to supply 9 your house with natural gas with a propane tank from a 10 barbecue. It would work, but it wouldn't last very long. 11 Our LCNG station at Southwest Transportation was 12 a $1,000,8000. And infrastructure is expensive, but it 13 needs to grow. But it needs to be with Districts that are 14 able to handle it. 15 ACTING CHAIRPERSON RIORDAN: Thank you, 16 Mr. Hunter. Appreciate that. 17 Jeffrey Noonan-Day. 18 MR. NOONAN-DAY: Hello. My name is Jeffrey 19 Noonay-Day, and I represent John Deere. I'm the marketing 20 manager responsible for John Deere's alternative fuels 21 business, and I would ask Madam Chair and Board members 22 that you would please consider applying this to all three 23 of the rules that you're going to be considering today. 24 ACTING CHAIRPERSON RIORDAN: Absolutely. We'll 25 make that part of the record. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 MR. NOONAN-DAY: I had submitted a letter to 2 yourself and the Board talking through some of the 3 statements from John Deere. I'd just like to highlight a 4 couple of those in the brief time we have. 5 One of those is I think all of you are aware we 6 are a non-road diesel engine manufacturer. And in 7 addition to that, we also provide CNG and LNG engines for 8 on-highway school buses, refuse buses, and transit buses 9 and urban buses. Over the past several years, we have 10 invested heavily in developing this technology. 11 I think one of the most recent things that have 12 come out to show the advances that we have made is in the 13 study sponsored by Department of Energy and NREL showing 14 the viability of our John Deere engines related to the 15 diesel-like fuel economy that we have and also the 16 reliability and low operating costs associated with that. 17 I think there's some clarification on some of the 18 products that I would like to review as well because we 19 have a 1.2 gram NOx engine available to the marketplace. 20 We have received EPA certification and CARB certification 21 for this low emission certification that is used in school 22 buses and in refuse and in transit. 23 Also, as mentioned in previous communications to 24 the Board, we are developing a 2007 0.2 gram NOx engine to 25 participate in the same marketplace. And we are well on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 our way. Recently, in July, we announced at the 2 Washington Natural Gas Vehicle Technology Forum that we 3 have successfully demonstrated 0.2 gram NOx and the 4 required PM requirements for that under the 2007 emission 5 standards that are being pulled ahead from 2010. 6 We are introducing this product. We're following 7 the same rigorous process that we apply to all of our 8 products in the marketplace from our ag tractors, to our 9 combines to our construction equipment, to our diesel 10 engines. So we're confident -- and I hope I've made this 11 point very clear, that we will have a product available at 12 that time. We feel our natural gas engine programs, they 13 have been driven largely by the marketplace here in 14 California. We're responded to those market needs, and we 15 believe it's reasonable to expect that the programs 16 continue to be available to reward this investment in 17 technology. 18 ACTING CHAIRPERSON RIORDAN: Thank you very much. 19 Mayor Loveridge. 20 BOARD MEMBER LOVERIDGE: Just the 1.2 you were 21 talking about, what kind of engine were you talking about? 22 MR. NOONAN-DAY: Sir, that's 8.1 liter natural 23 gas engine that's available in school bus, refuse, and the 24 transit market that's available today. It was recently 25 brought down from -- we were previously certified at the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 1.8 gram NOx for the heavy duty and urban bus 2 certification and at 1.5 gram NOx for the heavy duty 3 certification for school bus. 4 ACTING CHAIRPERSON RIORDAN: Thank you very much. 5 Next speaker. 6 MR. EAVES: Yes. Good afternoon, Madam Chairman 7 and Board members. My name is Mike Eaves. I'm the 8 President of the California Natural Gas Vehicle Coalition. 9 I have submitted written comments to you, but I would like 10 these comments included for all the rules today if you 11 could. 12 First of all, on the South Coast Fleet Rules, 13 those South Coast Fleet Rules were not just PM rules. 14 They were NOx rules. And they did set a precedent in 15 being alternative fuel rules. We're pleased that CARB 16 staff has developed a fuel neutral rule that recognizes 17 the best available technology, and that happens to be 18 based on what natural gas can do in the marketplace. 19 The 1.8 gram is the high side of what natural gas 20 can achieve today. As Mr. Noonan-Day mentioned, 1.2 is 21 where we are on our lowest emission products. That 22 technology for the 2007 time frame, the .2 grams, that was 23 developed based on the CARB transit rule that required .02 24 grams in 2007. 25 So I think the other issue is on fuel neutrality, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 Dr. Lloyd and the ARB staff and everything have always 2 indicated that fuel neutral was setting the standard and 3 letting the marketplace compete. I think the Fleet Rules 4 that CARB is proposing allows that. And as Dr. 5 Wallerstein has mentioned, anybody can play in that 6 market. It does not preclude diesel from competing. 7 I was concerned on reading the staff report on 8 the cost effectiveness. And if you look at the cost 9 effectiveness of school buses, that is an overlay over 10 South Coast Fleet Rules. And that's unfortunate, because 11 what it does not -- it recognized the incremental increase 12 of emission reductions on the CARB rule over the South 13 Coast rule, but it does not go back to step one and 14 recognize the emission benefits of the South Coast rules 15 over the existing standards. And I think that's 16 unfortunate. And I think it's also unfortunate that I 17 don't think that the fuel savings and everything have 18 necessarily been properly reflected in those calculations. 19 I think it is important for the ARB to pass these 20 rules. We're supporting all three rules today. And it's 21 required to take the legal issues out of the equation and 22 guarantees that emission benefits under the original South 23 Coast Fleet Rules stay intact. 24 We all know that NOx and PM directly impact 25 children's health and lung function. That's been sited in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 numerous reports. There's been talk today of taking 2 incentive moneys that are available and buying diesel. I 3 think that if you're going to give something to the kids, 4 give them the lowest emission type products that are on 5 the market. And why give the children anything less. 6 ACTING CHAIRPERSON RIORDAN: Thank you very much. 7 I appreciate that. 8 Before our next speaker starts, let me indicate 9 Charles Lapin. Patrick, who represents International 10 Trucks and Engine Corporation, I can't produce your last 11 name. So if you would come forward getting ready there. 12 Sean Edgar and Michael Tunnell and Mitchell Pratt, if 13 you'd position yourself in the front row ready to speak. 14 Next speaker. 15 MR. LUCAS: Thank you. Good afternoon. And 16 thank you for this opportunity. My name is Bob Lucas. 17 I'm here representing the California Council for 18 Environmental and Economic Balance, which many of you know 19 is a nonprofit, non-partisan organization of business, 20 labor, and community groups that's dedicated to making 21 improvements in the environment consistent with the 22 state's economic objectives. 23 Over the last several years, we've been working 24 with the South Coast District, with the Air Board, and 25 with many other people to develop and to maintain a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 coalition that's committed to approving the current Carl 2 Moyer Program. And as I know you're aware, we did have 3 some success last year with the passage of AB 923, which 4 took the entire year to work through. But this coalition 5 is looking for ways to significantly expand the funding 6 opportunities to the programs as well as the allowed uses. 7 Over the course of these negotiations, the topic 8 of the potential use of these new moneys for school buses 9 has come up many times. And each time it does come up, 10 it's emphasized the importance of maintaining the 11 statewide policy of fuel neutrality for the use of these 12 new moneys for this purpose. In the final version of 923 13 that passed, there are two citations that require that any 14 moneys that flow from those sources that are used for this 15 purpose be used consistent with the lower emission school 16 bus program criteria. 17 CEEB does not have a position on the rule before 18 you today. But we do have a concern with regard to some 19 of the language that we find in the reference in the 20 Statement of Reasons. On page 55, it states that in 21 conjunction with this rule, you'll be asked to authorize a 22 change to the lower emission school bus program to allow 23 the District to allocate all the funding that comes under 24 923 that's used for this purpose on natural gas vehicles. 25 We believe this is a mistake. We believe it's a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 significant departure from the current program guidelines. 2 It's a departure from 923, and it's an even further 3 departure from the direction of the discussions for 4 ongoing potential new sources of revenue. We think it's 5 also a mistake that this be undertaken today while you're 6 considering this rule. 7 Now we understand in discussions with staff this 8 morning that this proposed action, having to deal with the 9 statewide program guidelines, is going to be postponed. 10 And I believe the statement by Ms. Witherspoon affirmed 11 that you are going to undertake this in a separate 12 workshop. And we think that's appropriate, and we'll be 13 happy to work with you in that forum on this issue. Thank 14 you. 15 ACTING CHAIRPERSON RIORDAN: Thank you very much. 16 Appreciate that. 17 Ms. Witherspoon, did you wish to comment? 18 EXECUTIVE OFFICER WITHERSPOON: Yes. It's harder 19 to give away money sometimes than it is to regulate 20 sources. And we do have existing school bus guidelines 21 that establish three-part splits for retrofits on existing 22 buses, and then for the remaining two-thirds split 50/50 23 between natural gas and diesel. Those are expressed as 24 goals. These are applied statewide. We haven't hit them 25 exactly over the time that the school bus program has been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 in place. And the lion's share of natural gas buses has, 2 of course, been provided for in the South Coast. 3 And so the question that keeps coming up is 4 whether or not the South Coast should be required to spend 5 part of its funds on diesel, or can supply the statewide 6 portion of natural gas that was part of our original 7 objectives. And then the question is, should the Board 8 revisit the one-third, one-third, one-third split? And I 9 spoke earlier today about the question that will be before 10 you on allocation of dollars for pre-'77 buses, where -- 11 there's not a retrofit issue or fuel issue, but whether we 12 use per capita criteria or some other criteria. So all of 13 that will be before you probably next year. 14 ACTING CHAIRPERSON RIORDAN: Okay. Thank you. I 15 think I remember that discussion before on this. Thank 16 you very much. 17 Next speaker. 18 MR. LAPIN: Hi. My name is Charles Lapin. I'm a 19 toxicologist. Today, I'm working as a consultant to 20 International Truck and Engine Corporation. I'm also a 21 resident of Los Angeles, a health professional, and a 22 parent. So I, too, want cleaner air, healthier air in 23 Los Angeles. 24 As a toxicologist, it's just unclear to me how 25 this rule is going to provide the desired health benefits. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 The rule seems to focus on CNG as a cleaner alternative, 2 and it just doesn't seem to be supported to me by ARB's 3 own research. 4 In a study of transit buses, ARB scientists found 5 that retrofitted diesel buses had lower emission of 6 particulate matter, carbon monoxide, non-methane 7 hydrocarbons, hydrocarbons, and toxics than a typical 8 in-service CNG bus. In particular, the CNG bus had far 9 greater emissions of two known human carcinogens, 10 formaldehyde and acetaldehyde. The fact the ARB 11 scientists had to retrofit the CNG bus with an oxidation 12 catalyst to get its emissions down to the level achieved 13 with the retrofitted diesel bus. Since ARB's landmark 14 study, there are now six additional studies that confirmed 15 these findings. 16 For the 2007 diesels and CNG-fueled school buses, 17 ARB staff report stated in their Statement of Initial 18 Reasons that beginning in 2007 the emissions will be the 19 same. And I want to kind of underline that, the same, 20 because all diesel engines will use a particulate filter 21 that reduces both PM and toxics greatly. And the reason 22 it's noteworthy to me is that the individual components of 23 CNG in low emission diesel engines will be the same is 24 that as a toxicologist, this tells me the health benefits 25 of clean low emission diesel and CNG should be the same. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 Given the problems that other speakers have mentioned 2 earlier, and because this rule doesn't seem to provide an 3 additional health benefit, I'm urging the Board today to 4 adopt the no-action option. Thank you. 5 ACTING CHAIRPERSON RIORDAN: Thank you very much. 6 Are there any questions? 7 Dr. Gong. 8 BOARD MEMBER GONG: Charles, I was wondering, do 9 you know are there any differences in the in-bus pollution 10 in clean diesel versus natural gas school buses? Is there 11 such a study out there? 12 MR. LAPIN: There's actually several studies 13 with -- we're actually going to have another speaker on 14 that. I don't know whether I want to defer. I'll give 15 you my take on it. But Dr. Rob Ireson will be speaking 16 later specifically to your question. 17 The one study that approaches this was funded 18 again by ARB, and you've had a presentation on that I 19 think, or maybe not. I don't know whether it's come to 20 the Board or not, to be honest with you. 21 But I can continue; right? 22 ACTING CHAIRPERSON RIORDAN: Right. Because 23 you're answering a question. And what happened was I have 24 to confess, there's a way for me to do something here and 25 I failed to be able to do it. I thought I was stopping PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 something. 2 BOARD MEMBER GONG: One minute. I'm sorry. 3 BOARD MEMBER LOVERIDGE: Barbara was cutting off 4 Henry. That's what she was doing. 5 MR. LAPIN: I understand. 6 In that study, using the measures that staff 7 used, there seemed to be more in-bus intrusion from the 8 exhaust from the diesel with the aftertreatment. But I'm 9 not sure that bus was functioning properly. None of these 10 buses were measured at the tailpipe for their emissions, 11 and the scientists were measuring a lot of black carbon, 12 which should not appear on the bus. If you see a 13 retrofitted -- or a new tailpipe with a diesel particulate 14 filter in front of it, between it and the engine, that 15 tailpipe stays clean. You can run your finger through it, 16 and you won't get any carbon soot on it. So I have a hard 17 time understanding that the main measure they found on 18 this bus, black carbon was coming from that vehicle, 19 unless the trap wasn't working. 20 I think more studies need to be done. And Dr. 21 Ierson will talk to you more about the studies that are 22 actually being done right now in the state of Washington, 23 and I think these results will be helpful in that answer. 24 ACTING CHAIRPERSON RIORDAN: Thank you. 25 Any further questions? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 Thank you very much. 2 Help me pronounce your name. 3 (Thereupon an overhead presentation was 4 presented as follows.) 5 MR. CHARBONNEAU: I will certainly help you. 6 Madam Chair and Board members, my name is Patrick 7 Charbonneau. I'm Vice President of Government Relations 8 for International Truck and Engine. And I have a long 9 history of working with both the Board and ARB staff in a 10 position of Vice President of Engine Engineering for 11 International Truck and Engine. 12 What I wanted to talk to you about today is a 13 diesel revolution that actually occurred here in 14 California in 1999 with ARB, International, and BP which 15 was ARCO at the time. 16 --o0o-- 17 MR. CHARBONNEAU: The technologies for near zero 18 emissions in diesel engines and ultra low sulfur diesel 19 fuel were demonstrated on this California school bus that 20 you see here in 1999 demonstrating ultra clean emissions 21 for children's transportation. What that did is it led to 22 formulating a strategy with ARB, EPA, the Engine 23 Manufacturers, and other stakeholders, such as NRDC, and 24 the American Lung Association. And that strategy was 25 leverage the near zero emissions concept for every PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 heavy-duty diesel that will be built in 2007 and beyond. 2 And there will be one million heavy-duty diesels built in 3 2007. There will be at least 150,000, -- 100- to 150,000 4 will be used in California. And what was the approach? 5 If you go to the next slide. 6 --o0o-- 7 MR. CHARBONNEAU: The approach was reduce the PM 8 and hydrocarbon levels of the diesel to near zero. As you 9 see here, in 2007, they will be as low or lower than CNG 10 particulate and hydrocarbon emissions. And, in fact, 11 today we saw school buses with particulate filters that 12 achieved that. 13 If you go to the next slide, take a phased 14 approach to NOx. 15 --o0o-- 16 MR. CHARBONNEAU: Reduce the NOx levels from our 17 modern engines today from 50 percent in 2007 and then go 18 to 90 percent in 2010. And do this with a total systems 19 approach of the engine, the diesel fuel technology that 20 uses the current infrastructure. 21 This revolution was accomplished with ARB and EPA 22 and the implementation of the 2007 clean diesel rule in 23 2001. And bear in mind that that rule was created after 24 the South Coast Fleet Rules. 25 Unfortunately, the ARB bus Fleet Rules that are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 being proposed will not allow your school systems to take 2 advantage of the ultra clean products until 2010, even 3 though the PM and hydrocarbon emissions levels are 4 equivalent to CNG. If you go to the last slide. 5 --o0o-- 6 MR. CHARBONNEAU: The school bus rule is 7 basically unnecessary. ARB and other stakeholders have 8 worked hard to make sure that the 2007 heavy-duty diesel 9 is a success and will meet the near-zero emission levels. 10 The second thing is this violates the 11 longstanding fuel neutrality and regulatory policy of ARB. 12 We committed to the near zero emissions with ARB for 13 diesel. And now one year before production, we're being 14 mandated to utilize CNG in 2007. 15 And, lastly, there's no emissions benefits. The 16 ARB staff has mentioned there aren't any emissions 17 benefits. And if you take a look at the very high volume 18 2007 product, I'll be able to buy more 2007 diesel 19 products than CNG products and actually have less 20 emissions for both NOx and hydrocarbon emissions. 21 The net result is we've worked very closely with 22 ARB to initiate and complete this revolution. We think 23 that you do not have to take any action on this rule. 24 And, in fact, the South Coast is already implementing it. 25 You don't have to create a new standard. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 1 Thank you very much. And if you have any 2 questions, I'd be more than happy to answer them. 3 ACTING CHAIRPERSON RIORDAN: Are there any 4 questions for this speaker? I don't see any. 5 But before our next speaker, I do want to invite 6 Michael Tunnell to come to the podium. Mitchell Pratt, 7 Brian Decker, and Mark Gaines, if you'd be ready to get on 8 board there, I'd appreciate that. 9 Now Sean Edgar. 10 MR. EDGAR: Good afternoon, Madam Chair and Board 11 members, Sean Edgar. And I've always heard all politics 12 are local. So I'm stepping out of my trash suit for a 13 moment to speak to you as a dad residing in Elk Grove and 14 remind you of the possible implications of the decision 15 you have before you today on the community in which I 16 live. 17 I attached for the record a copy of a Sacramento 18 Bee article that is dated May 19th. The startling 19 headline is "Natural Gas Cuts District Fuel Costs." And 20 I've highlighted a few sections in the article I wanted to 21 review very briefly with you. 22 In the second paragraph, it talked about the 23 Sacramento City Unified School District Board members are 24 redrawing their boundaries and they're going to cut 15 25 non-mandated routes, leaving 48,000-student districts with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 1 almost no bus service. In my community of Elk Grove, they 2 just adjusted the school boundaries earlier this year, 3 cutting bus service and laying off 40 employees last 4 month. 5 The third paragraph, the school administrators 6 are saying this decision will save more than $3 million 7 from the $10 million transportation budget. I think the 8 conclusion is that if you reduce service by not picking up 9 the kids, that's apparently the cost reductions that are 10 involved. 11 I can assure you that our experience, and I'll 12 speak a little bit in some more detail on the refuse rule, 13 but there is no doubt that natural gas technology is 14 costlier to operate. A lot of the folks I work for have 15 been able to make that migration in the communities they 16 serve. And I'll agree with one of the previous speakers 17 that if that's the choice that communities choose to make 18 and they're able to support those costs, that's great. 19 But the representation that was made to you 20 earlier today about somehow the fuel costs less, I'll just 21 briefly mention a few items. TIAX recently released a 22 study that came to the startling conclusion -- this was 23 released about four weeks ago -- that at $30 a barrel of 24 oil, natural gas vehicles are cheaper to operate, to which 25 I asked the study's author if oil is at 65 to $70 a barrel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 1 today, why are natural gas vehicles more costly to operate 2 today? And the answer was we anticipated into the future, 3 and we really think they will be cheaper. 4 The decision before you today is really what I 5 see amounting to the abandoning of a statewide policy that 6 was carefully crafted over many years to perform 7 regulatory gymnastics to provide the public with a higher 8 cost item that doesn't provide any tangible air quality 9 benefits. 10 And as more one, I'm very concerned in my 11 neighborhood where gasoline hybrid transit buses have just 12 appeared -- ISE has a wonderful transit technology package 13 that rolls through my community every day. I'm very 14 concerned that that is eliminated. And I'm very concerned 15 that we're saddling School Districts with tremendously 16 more significant costs at a time where the supply issues 17 for fuel are not certain. 18 And I encourage you to choose Option 2 and take 19 no action on the proposed regulation. Thank you. 20 ACTING CHAIRPERSON RIORDAN: Thank you very much. 21 There is a gentleman that I want to insert in 22 here before we start. Robert Ireson, if you'd come 23 forward, please. Are you here? Then we'll go back to the 24 normal rotation. 25 And while I'm saying that, Paul, I hope I didn't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 1 do something. You should have the control over there, and 2 I hit the wrong thing again. Okay. 3 MR. IRESON: Madam Chairman, members of the 4 Board, thank you. I'm Rob Ireson. I'm an engineer and 5 scientist with about 30 years experience in air quality 6 modeling and monitoring. I'm here to speak specifically 7 to the issue of exhaust intrusion into school bus cabins, 8 otherwise known as self-pollution. We know from a number 9 of studies that the concentrations over roadways are very 10 high, and they enter all vehicles. The ARB has conducted 11 a number of studies on this. But it's very difficult to 12 identify the specific sources because of the chemical 13 similarity of diesel and other exhaust emissions. 14 The school bus self-pollution studies -- 15 ACTING CHAIRPERSON RIORDAN: There's some water 16 there. 17 MR. IRESON: Most of the school bus 18 self-pollution studies that have been done rely on 19 non-specific marker species. There's no unique 20 measurement for diesel particulate. And the result of 21 these studies have a wide variability, anywhere from zero 22 to as much as 20 micrograms per cubic meter of carbon 23 attributed to self-pollution. 24 The only study I'm aware of that actually 25 explicitly identifies the emissions from a single bus is a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 1 study that International sponsored, and in which I was 2 involved. It also had University of Maryland and West 3 Virginia University as participants. 4 We conducted emission tests of the bus to 5 determine the exact relationship between the exhaust PM 6 and fuel-based tracer. Using this technique, we could 7 explicitly identify the portion of the in-bus 8 concentrations coming from the bus's exhaust. And since 9 the tracer is quantitatively related to the actual 10 measurements from the bus, this study was referred to as 11 the gold standard for self-pollution studies. 12 We found for conventional 1995 model year diesel 13 that the exhaust PM concentrations were about two-tenths 14 of a microgram per cubic meter in the bus. This is only a 15 few percentage of the expected diesel concentration in Los 16 Angeles roadways and a portion of a percentage of the 17 total PM2.5 concentrations that we measured. 18 The study shows that self-pollution levels are 19 much lower than those suggested by studies that do not use 20 a quantitative marker. The in-bus exposures appear to be 21 dominated by the same emissions that are encountered by 22 other vehicles over the roadway, rather than the bus 23 exhaust itself. And to the extent that self-pollution 24 occurs, based on information that's been presented 25 previously, there would be no expected difference in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 1 in-bus concentrations from self-pollution in either CNG or 2 a low emission diesel vehicle. And from that, I feel that 3 proposed rule would have a negligible effect on children's 4 exposure in bus. 5 ACTING CHAIRPERSON RIORDAN: Thank you very much. 6 Dr. Gong, do you have any questions? 7 BOARD MEMBER GONG: No. 8 ACTING CHAIRPERSON RIORDAN: All right. 9 MR. IRESON: I can address the issue that you 10 raised with Dr. Lapin about CNG versus -- tests 11 specifically of CNG versus clean diesel, if you'd like. 12 BOARD MEMBER GONG: Are these results published? 13 MR. IRESON: There are two studies that I'm aware 14 of. 15 ACTING CHAIRPERSON RIORDAN: Do you want to get a 16 little closer to that microphone. 17 MR. IRESON: There are two studies I'm aware of 18 that address this. One is the ARB study that tested, 19 although not under the same conditions, the trapped diesel 20 bus, some conventional diesel, and the CNG bus. And 21 there's also, I believe, a study who's data has not been 22 fully released by the Clean Air Task Force, where there 23 are sequential retrofits done on two different diesel 24 buses for both exhaust and crank case emissions, and also 25 comparisons of trapped diesel in CNG. But, again, they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 1 use non-specific methods, and neither the ARB -- the ARB 2 study did use a tracer, but didn't tie quantitatively to 3 the emission rate of the bus. There's no emission 4 measurements made. And the CATF study also relied on 5 non-specific species, and there were some emission 6 measurements made. 7 ACTING CHAIRPERSON RIORDAN: Okay. 8 BOARD MEMBER GONG: Thank you. 9 ACTING CHAIRPERSON RIORDAN: Any other questions? 10 Wait, just before you go, could you put the water 11 back. Because I can just see that water going sliding off 12 with somebody else's presentation. Thank you very much. 13 Michael Tunnell, Mitchell Pratt. 14 MR. TUNNELL: Good afternoon, Madam Chairman and 15 members of the Board. My name is Mike Tunnell. I 16 represent the American Trucking Association. 17 ATA is specifically concerned with the waste 18 collection rule and the private contractor provisions, but 19 these comments apply to all three rules, so I would like 20 to submit them now. 21 ACTING CHAIRPERSON RIORDAN: Absolutely. That's 22 fine. 23 MR. TUNNELL: ATA opposes the Fleet Rule as 24 proposed. ATA supports a fuel neutral approach, which 25 includes clean diesel technologies. ATA's members have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 1 been working with government and industry to ensure a 2 seamless transition to the 2007 heavy-duty diesel engine 3 emission standards which have been adopted by both the 4 U.S. EPA and this Board. This is the standard this Board 5 has set for new diesel engines. 6 ATA members are beginning to test new vehicles 7 with clean diesel technologies to ensure in-use 8 over-the-road reliability and durability more than a year 9 before the standards take effect. The use of these 10 technologies will provide significant air quality 11 benefits, while complementing existing fueling 12 infrastructure and fleet resources. 13 As you know, the Fleet Rules propose to ban the 14 purchase of these technologies. Given the added cost of 15 alternative technology, fleets are very likely to hold 16 on to their existing equipment longer and delay purchasing 17 new vehicles. Delaying new vehicle purchases will provide 18 no air quality benefits. 19 In addition, the proposed Fleet Rules are not 20 cost effective. As shown in a chart, which you should 21 have before you in my slides, the proposed Fleet Rules are 22 four to five times less cost effective than the maximum 23 funding threshold under the Carl Moyer program. Relative 24 to most mobile source regulations adopted by this Board, 25 the proposed Fleet Rules require fleets to spend ten times PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 1 more money to get an equivalent air quality benefit in 2 terms of NOx. 3 In conclusion, ATA recommends the Board reject 4 the proposed Fleet Rule and support a fuel neutral 5 approach, which allows the use of clean diesel 6 technologies consistent with the 2007 heavy-duty diesel 7 engine emission standards. This will allow fleets to 8 purchase cost effective technologies which are supported 9 by the existing fueling infrastructure and fleet 10 resources. This approach will result in cleaner air by 11 supporting rather than discouraging new vehicle purchases. 12 Thank you. 13 ACTING CHAIRPERSON RIORDAN: Thank you very much. 14 Appreciate your comments. And we will make them part of 15 the record. 16 Mitchell Pratt, and next will be Brian Decker, 17 Mark Gaines, and Julie Masters. And perhaps after Julie, 18 I'm going to take a bit of a break. I think we're about 19 ready for that. So Mitchell. 20 MR. PRATT: Good afternoon, Madam Chair, members 21 of the Board. I'm Mitchell Pratt, Vice President, Public 22 Affairs and Business Development for Clean Energy, one of 23 the nation's leading providers of natural gas, both 24 liquefied and compressed natural gas fueling stations. 25 I'm here today to support all the rules, these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 1 comments, if you would apply them to all, but I will have 2 specific comments on the other two rules which I'll hold 3 until then. 4 Your rule here today is important one. You need 5 to provide the consistency for the marketplace to move 6 forward. These rules have been around and in place most 7 of the time since 2000. All of these other whiners and 8 naysayers have either been shifting over to the cleaner 9 technologies or have been able to meet a cleaner engine 10 technology since 2000. You've had your own rule on the 11 transit rule of .2 standard in 2007 since that same time 12 frame, and all the engine providers did make promise, and 13 they are not prepared, nor have they strived to achieve 14 the .2 standard in 2007. 15 Your role here today in adopting these rules 16 really reinforces a clear direction that California and 17 the South Coast Air Quality Management District can 18 enforce a .2 gram standard ultimately. And I would really 19 question that with all the promises previously made of 20 having lower emission diesel technology now for 2005 and 21 '06 and .2 gram standard in '07, that is not going to be 22 materialized, that can we really trust that in 2010 it 23 will be here? Will they be able to make it? 24 The TIAX report -- just as a comment on something 25 you heard earlier was focused on the 2010 technologies. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 1 And we've heard that natural gas engines -- and you'll 2 hear more of that -- will be at the .2 gram standard in 3 2007. And furthermore recently announced in research lab 4 completions a company, ESI, has taken the international 5 engine, improved it, and is operating at -- has gotten the 6 results of .05 grams of NOx. 7 These engine choices that are being made will be 8 on the road, as you've heard from the School Districts, 9 for 20 years. With a 1.2 gram diesel engine in '07 and a 10 .2 gram engine with natural gas for 20 years, a 1 gram 11 improvement right there alone is pretty clear, and it's 12 got a long-term effect over 20 years. 13 I'll mention about the financial picture. The 14 energy and highway bill for the private fleet operator and 15 even for agencies that don't pay taxes have incentives. 16 In fact, for the heavy duty, it's up to a $32,000 tax 17 credit for those heavy-duty school bus and other vehicle 18 purchasers. There is a fuel tax credit also that will be 19 made available for School Districts that own and operate 20 their own stations. We do build and offer fuel station 21 agreements usually for longer-term stations. 22 So let me just wrap up and say leadership is the 23 key thing. I urge you to do as Dr. Wallerstein asked, 24 adopt the 1.5 gram rule and allow other Districts 25 throughout the state to opt in. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 1 ACTING CHAIRPERSON RIORDAN: Thank you very much. 2 Brian Decker. 3 MR. DECKER: My name is Brian Decker. I'm 4 representing CIOMA, the California Independent Oil 5 Marketers Association. I just have some quick comments. 6 The State has already adopted Fleet Rules over a 7 lengthy public participation process. Those rules were 8 negotiated in good faith and contain a sound fuel neutral 9 basis for regulations on the fleets they govern. We have 10 seen no demonstrated need for any of these changes. 11 The CARB staff report demonstrates the 12 insignificant changes in emission benefits this proposal 13 contains. Why is this needed, especially when the South 14 Coast has already obtained authority to proceed with the 15 publicly-owned fleets by way of federal judicial decree. 16 As the primary distributor of diesel in the state, we, 17 CIOMA, must ask whether the market will benefit better 18 from having 250 wholesalers competing on a daily basis in 19 marketing diesel or by having the two regional monopolies, 20 PG&E and Southern California Gas, governing marketing and 21 distribution of a transportation field. 22 It is a wise policy for the state to adopt as 23 many options as possible when attempting to force 24 technology. This allows a myriad of compliance avenues 25 which can align with specific needs, capabilities, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 1 affordability. Limiting the choices will only succeed in 2 frustrating compliance and creating delay. 3 We believe your choice is clear and obvious. We 4 ask that you reject this proposal and let the current 5 fleet rules remain in a manner that led to their unanimous 6 adoption by this Board. Thank you. 7 ACTING CHAIRPERSON RIORDAN: Thank you very much. 8 Appreciate the fact you're here. 9 Mark Gaines followed by Julie Master. 10 MR. WALLACE: Madam Chair and members of the 11 Board, Mr. Gaines, our director of NGV programs was called 12 away. If it's appropriate and with your permission, I'd 13 like to provide a short statement. 14 ACTING CHAIRPERSON RIORDAN: Absolutely. Just 15 identify yourself for the record, though. 16 MR. WALLACE: I'd be happy to. My name is Lee 17 Wallace. I'm here speaking on behalf of the Southern 18 California Gas Company and San Diego Gas and Electric. 19 We're in support of the school bus rule, and we'd also 20 like these comments to be applied to the other two rules 21 before this Board, if it's appropriate. 22 In 2000 and 2001, we also strongly supported the 23 adoption of similar Fleet Rules at the South Coast, 24 because they would speed the introduction of cleaner 25 fueled vehicles into the basin. Since that time, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 1 growth in the natural gas vehicle market in Southern 2 California has been very impressive. In 2004, our 3 utilities provided natural gas vehicle fuel equivalent to 4 over 56 million gallons equivalent to our customers. That 5 was a 60 percent increase from the year 2000 volumes. 6 There's been a notion put forward here that 7 somehow Southern California Gas and PG&E will somehow 8 monopolize this. I'd like to put a few things into 9 context. First of all, in 1995, the PUC directed our 10 companies to sell off our infrastructure and our stations. 11 We're no longer in that business, by PUC order. 12 In addition, I'd like to compare the number here. 13 Fifty-six million gallons of motor vehicle fuel annually. 14 I don't have the number in my memory, but I think the 15 annual consumption of motor vehicle fuel is really in the 16 billions of gallons. I don't know how monopolization 17 power would be accumulated, even if it's 56 million or 18 doubled. So I don't think that's a real feasible charge 19 here. And I would hope you wouldn't consider it also. 20 The AQMD public Fleet Rules under consideration 21 here today play a significant role in the growth of the 22 natural gas vehicle industry. The legal challenge you've 23 been briefed on casts a cloud on it. And you today can 24 improve this situation by adopting rules which will give 25 more substance and legal standing to this effort to try to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 1 bring cleaner vehicles here to the South Coast. This will 2 result in a great benefit to all California, because it 3 will stimulate the continued development of cleaner 4 engines and technology, and this is important, on both 5 sides. 6 This innovation is evidenced on our natural gas 7 side by two natural gas engine manufacturers who have 8 already announced they're going to be bringing forward 9 cleaner heavy duty engines to market in 2007 that will be 10 emitting at a certified level of .2 grams of NOx per brake 11 horsepower hour, or less than 10 percent of the levels of 12 the cleanest currently certified diesel engines. 13 The option to use engines will also bring not 14 only air quality benefits, but also offer our customers a 15 financially attractive alternative to diesel fuel. The 16 pricing of CNG throughout this basin is kind of a checker 17 board thing. It's difficult to try to make comparisons. 18 We've tried to come up with what we think is a common 19 comparison here. And our September CNG fuel cost for 20 transit and School District fleets ranged between $1.70 21 and $1.80 per diesel equivalent gallon by our survey. By 22 comparison, these fleets have been paying over $2.40 per 23 gallon for diesel. We urge you to adopt all three rules. 24 Thank you very much for your consideration. 25 ACTING CHAIRPERSON RIORDAN: Thank you. We PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 1 appreciate that. 2 Yes, there is a question. Dr. Gong. 3 BOARD MEMBER GONG: It has nothing to do with 4 your presentation. In a way it does. I just returned 5 from a very nice symposium on climate change, and there 6 was a lot of discussion by different professions about the 7 carbon dioxide and other greenhouse gasses. Can you make 8 a comment regarding the greenhouse gas emission potential 9 for CNG versus the cleaner diesel exhaust? If not, that's 10 fine. I'm throwing you a hook here. 11 MR. WALLACE: I can song and dance up here, but 12 I'm not going to do that. I can't give you the direct 13 answer, but I'd like to have an opportunity to supplement 14 the record, if I could. 15 BOARD MEMBER GONG: Just putting you on the spot. 16 Thank you. 17 MR. WALLACE: I'm on the spot many times. 18 ACTING CHAIRPERSON RIORDAN: At least he's 19 honest. 20 EXECUTIVE OFFICER WITHERSPOON: Dr. Gong, the 21 natural gas buses have 15 percent lower CO2 emissions than 22 diesel buses. For heavy-duty vehicles in general, that's 23 the case. 24 ACTING CHAIRPERSON RIORDAN: Julie. 25 MS. MASTERS: Thank you. Good afternoon. My PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 241 1 name a Julie Masters. I'm a Senior Attorney with the 2 Natural Resources Defense Council. I'm also one of the 3 attorneys who has defended the Fleet Rules in the ongoing 4 legal challenge brought by EMA and WSPA. NRDC has 5 remained involved with these rules for so long, because we 6 believe they are crucial to the region and for California. 7 First, we cannot ignore ARB's recent school bus 8 study which found pollution inside diesel school buses is 9 generally greater than outside of those buses. Children 10 are among the most vulnerable to the health effects of 11 diesel exhaust and are often on a school bus for hours 12 every day. This rule will put kids on the cleanest buses 13 available and will protect their health. 14 Second, this rule is vital to the South Coast, 15 because we have the worst air quality in the nation. We 16 have a shortfall of over 150 tons per day of NOx in the 17 current AQMD, and we need all the emissions reductions we 18 can get. ARB has the responsibility to ensure that every 19 region of the state reaches attainment. As part of that, 20 you need to consider that some regions simply need more 21 stringent regulations than others. That's precisely what 22 the California State Legislature did when it singled out 23 the South Coast as the only District that can adopt 24 alternative fuel Fleet Rules. The Legislature did this, 25 according to the legislative history, out of a fear the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 242 1 South Coast would not reach attainment on time. 2 Unfortunately, because of the challenge that has 3 been brought by EMA and WSPA, the future of the South 4 Coast rules is now in question. The District Court 5 recently ruled that the Fleet Rules are valid as they 6 apply to private fleets. But because EMA and WSPA have so 7 far limited their legal challenge, there's no ruling yet 8 as to private fleets. And more importantly, while we feel 9 very strongly about our legal case, there is no guarantee 10 that any of the Fleet Rules will survive on appeal. 11 Remember, the AQMD lost in the Supreme Court after winning 12 in the District Court. 13 We need ARB to honor the intent of the California 14 Legislature and provide certainty that the school bus and 15 other Fleet Rules will survive. It will be too late to 16 wait and see how the legal challenge turns out. 17 Notably, both EMA and the Federal government 18 represented to the Supreme Court that ARB could adopt its 19 own Fleet Rules and asked EPA for a waiver. The federal 20 government stated, "The Clean Air Act does not leave the 21 SCAQMD without further recourse. The SCAQMD may request 22 the State of California to seek EPA approval." And that's 23 why we're here today. 24 This Board has not worried before over whether 25 they will get a waiver for your rules. You have simply PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 243 1 done what is right and applied for a waiver later. That's 2 what you should do today. And that's what we ask. 3 Moreover, EPA has very little authority to deny a 4 waiver. In fact, it is required to grant one as long as 5 California, not EPA, determines that its standards are at 6 least as protective, or health protective, as Federal 7 standards. And these rules easily meet this test. 8 Thank you very much. 9 ACTING CHAIRPERSON RIORDAN: Thank you very much. 10 I appreciate your testimony. 11 We're going to take a break here for ten minutes, 12 which would put us back here at about twelve minutes of 13 4:00 by that clock. 14 I want to remind the next speakers who they are 15 so you'll come down and be ready in that front row. 16 Bonnie Holmes-Gen, Virginia Field, Patricia Byrd, Pat 17 Etem, Shabaka Heru, and Joe Lyou, if you would just take 18 that front row, and we'll be back in ten minutes. 19 (Thereupon a recess was taken.) 20 ACTING CHAIRPERSON RIORDAN: Well, I don't see 21 Bonnie. I'm sure Bonnie is just outside. Maybe in the 22 interest of time -- and I saw Joe. Joe, don't leave. I'd 23 like to hear from you, and then you don't have to wait as 24 long. 25 MR. LYOU: I have to wait until Shabaka is done, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 244 1 because I gave him a ride. We carpool at this 2 organization. 3 ACTING CHAIRPERSON RIORDAN: I'm impressed. 4 Thank you very much for doing that. 5 MR. LYOU: Madam Chair, members of the Board, 6 thank you so much for the opportunity to address you on 7 this important issue. My name is Dr. Joseph Lyou. I'm 8 with the California Environmental Rights Alliance, and 9 we're here today to support adoption of all three rules. 10 And I would like to speak to all three rules, because I 11 have twin children at home, and I have to get back to 12 them. 13 I think the things that are clear from the 14 testimony that you're hearing is this is not an unfunded 15 mandate. We've never wanted this to be an unfunded 16 mandate for school buses at all. We're very supportive 17 and concerned about the needs of the School Districts to 18 provide transportation for their children. And, 19 obviously, wouldn't want them to have to sacrifice 20 anything in order to do so. 21 This is also I think kind of a strange debate for 22 fuel neutrality. And at some point I think I've stepped 23 through the looking glass when fuel neutrality means we 24 have to relax our standards in order to accommodate 25 diesel. This is a fuel neutral proposal, because it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 245 1 establishes a performance-based standard. And if diesel 2 can meet it, they can meet it. I think we have a 3 different interpretation from others with regard to this 4 issue of what is and what is not fuel neutral. 5 And, finally, voting yes at this proposal will 6 help environmental justice. And you called me up before I 7 could pull out my slides, so just give me one second. 8 ACTING CHAIRPERSON RIORDAN: Oh, I'm sorry. 9 MR. LYOU: Just take a look at this. And I 10 realize even though I advocate for environmental justice, 11 I discriminated. And I've shown this slide to South Coast 12 AQMD Governing Board many times, and I'm not sure how many 13 times, if at all, I've shown it to ARB. So I shouldn't 14 discriminate. And this came up in conversation with one 15 of the members of the Air Resources Board that people of 16 color, children of color in California are three times 17 more likely than white children to live in high density 18 traffic areas. So whatever you do to reduce diesel 19 emissions is going to benefit those children of color and 20 benefit environmental justice efforts in California. I 21 wanted to make that clear. 22 And, finally, with regard to this rule, questions 23 have come up with why it's needed. I think it boils down 24 to two issues. Legally, it's needed because these rules 25 could be jeopardized through court challenges, and that's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 246 1 why you need to act. And, secondly, there's a public 2 health reason. The CNG benefits public health. That's 3 why South Coast AQMD is arguing so vehemently in favor of 4 these rules. 5 And finally in closing, this is the right thing 6 to do. If EPA is not going to grant your waiver, EPA is 7 going to behave how they're going to behave. You need to 8 fight that. You need to do what you need to do. But this 9 Air Resources Board has time and again done the right 10 thing, and this is the right thing. Thank you. 11 ACTING CHAIRPERSON RIORDAN: Thank you very much. 12 There's a question for you. 13 BOARD MEMBER KENNARD: Dr. Lyou, I had a question 14 regarding your statement about that this is not contrary 15 to fuel neutrality. But how do you reconcile it if, in 16 fact, the standard is set such that only one type of fuel 17 can meet the standard that it is in fact -- how do you 18 reconcile that? 19 MR. LYOU: In my mind, I think there are 20 industries that have invested in developing technologies 21 to meet a higher standard. And since they've made that 22 investment and they have achieved that standard, they 23 should be rewarded for it. I think that diesel should be 24 doing the same thing. And I think competition will be 25 there if you adopt the standard for them to do that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 247 1 Thank you. 2 ACTING CHAIRPERSON RIORDAN: Before we go back, 3 Bonnie, to you, I'm going to -- Shabaka, let me have you 4 come forward, then you can carpool and he will not have to 5 wait. I will have made my commitment -- not made my 6 commitment. I will give you an incentive to carpool more 7 often. That's what I'll be doing. 8 MR. HERU: Good afternoon, Madam Chair and Board 9 members. I represent the Community Coalition for Change 10 and Society for Positive Action environmental 11 organizations in South Los Angeles. We encourage, 12 support, and hope these measures are adopted regarding 13 clean on-road school buses, solid waste collection 14 vehicles, and heavy-duty urban bus engines for public and 15 private fleets. Riding inside school bus is far more 16 dangerous than -- a diesel school bus is far more 17 dangerous than CNG, in terms of air pollution for our 18 children according to the ARB. Thanks very much for your 19 time, and thanks for the carpool note. 20 ACTING CHAIRPERSON RIORDAN: Thank you. 21 Appreciate that. 22 Bonnie, followed by Patricia Byrd. 23 MS. HOLMES-GEN: Good afternoon, Madam Chair and 24 Board members. My name is Bonnie Holmes-Gen. I'm with 25 the American Lung Association of California. And we are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 248 1 here today in strong support of the adoption of the school 2 bus fleet regulation. 3 My first point is that we firmly believe this is 4 an important public health measure, because it will 5 require School Districts to purchase the cleanest possible 6 buses. We believe this regulation will benefit school 7 children, will assist regional efforts to meet State and 8 Federal health-based air quality standards, and will 9 support the efforts by many local governments to promote 10 cleaner and alternative fuel vehicles in the South Coast 11 air basin. 12 The American Lung Association of California 13 believes that replacement of school buses is a very high 14 statewide priority because of children's health concerns. 15 We're extremely aware that children are especially 16 sensitive to air pollution and are very concerned about 17 the effects on children's health, as most recently noted 18 in your own children's health study and also in the school 19 bus study that's been referred to earlier. 20 The CARB-sponsored school bus study showed that 21 higher concentrations of diesel particulates on board 22 school buses are -- higher concentrations of diesel 23 particulates are experienced on board school buses as 24 compared to surrounding traffic. This means that children 25 on school buses have an elevated cancer risk due to their PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 249 1 daily ride to school and are at increased risk for 2 respiratory problems, such as asthma attacks, that are 3 linked to particulate matter exposure. 4 The American Lung Association is very concerned 5 about asthma, and the prevalence of asthma in children is 6 very high in this state. Asthma rates are on the rise, 7 and approximately one million school children in 8 California have asthma. Because of these health concerns, 9 we believe it's extremely important to do everything 10 possible to reduce asthma triggers, such as diesel 11 particulate matter. 12 Secondly, I wanted to comment that this 13 regulation has been carefully balanced to provide 14 flexibility to School Districts, and is accompanied by 15 incentive funding that makes it affordable and workable 16 for local School Districts. These features make the rule 17 practical and workable for local School Districts, and 18 you've heard testimony to that effect today. 19 This rule gives School Districts in the South 20 Coast air basin a push towards CNG certainly, but it also 21 gives them ample resources to be successful, and more than 22 that, the ability to buy more buses than they could 23 otherwise purchase if they were buying only diesel buses. 24 And given the severe air quality problem in the South 25 Coast and the children's health impacts of dirty diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 250 1 buses, we think it is more than reasonable for this rule 2 to give School Districts a little bit of a push towards 3 CNG. 4 My third point, I wanted to remind you that it's 5 important to remember that the existence of cleaner 6 alternative fuels like compressed natural gas is 7 continuing to push diesel to be cleaner. I think it's 8 very important to remember this. Earlier speakers refered 9 to the diesel revolution in California, and we would say 10 that any progress in improving diesel has been directly 11 due to the challenge of CNG and cleaner fuels. 12 And, finally, many of us have been working hard 13 to get incentive funding at the State and local level. 14 We're going to continue those efforts. And you can rest 15 assured there will be additional funding at the state 16 level to support your efforts. 17 ACTING CHAIRPERSON RIORDAN: Thank you very much. 18 Thank you, Bonnie. 19 Just so before our next speaker, Board Members 20 Virginia Field had to leave. So that name is not now on 21 the list. Ms. Byrd. 22 MR. BYRD: My name is Patricia Byrd, and today 23 I'm representing the American Lung Association of the 24 Inland Counties and Los Angeles. And we are in support of 25 the adoption of the three rules mentioned today for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 251 1 transit buses, refuse trucks, and school buses. These 2 rules address the potential impact of the vehicle 3 emissions on our children and our communities at large and 4 makes public health a priority, and that is the mission of 5 ARB. 6 Living here in the South Coast basin, we are 7 bombarded on a daily basis from buses, trucks, and other 8 vehicles. And we appreciate the ARB taking the position 9 of moving these vehicles toward cleaner fuels and 10 technology. And, yes, there is a cost. It will either be 11 the cost of the vehicles and the infrastructure or the 12 cost of chronic illnesses for our children and our general 13 community. 14 I have personally been involved in some phase of 15 environmental work for more than 25 years. And during 16 that time, I have seen that regulation drives technology, 17 and change takes place when businesses and individuals 18 will say that change is not possible. If you think back 19 on what manufacturers said when California said they had 20 to change the requirements on the emissions for 21 automobiles, you know the fight that came with that. So 22 sometimes these types of regulations will help to make 23 those types of changes. 24 We need to emphasize and promote education on the 25 options and the funding available, as well as the new PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 252 1 technologies. From some of the comments made today, it 2 was clear to me that maybe there's some technologies that 3 are out there that people are not aware of. 4 I also want to address a comment made by someone 5 who said the community doesn't want this type of change. 6 Just a personal note. My husband and I are planning to 7 buy my son a car for his graduation from college next 8 year. He's 22 years old. He's an aerospace engineering 9 major. The only option -- we gave free range to make a 10 reasonable choice. The only options he's considering are 11 either alternative fuel vehicles or hybrids. Now, if 12 that's not the community speaking, if that's not our young 13 people speaking looking at what's ahead, I don't know what 14 is. And the question that he asked of me was, if you can 15 get a vehicle that performs and causes less pollution, why 16 would you buy anything else? And that's the question that 17 I want to leave with you as you make this decision, why do 18 anything else? 19 ACTING CHAIRPERSON RIORDAN: Thank you very much. 20 Patricia Etem, Margaret Wilkinson, Charles Hatcher, Todd 21 Campbell, Marty Orozco, if you can come forward, please. 22 She had to leave. 23 Margaret Wilkinson, Charles Hatcher, Todd 24 Campbell, come forward, please, marty Orozco and Robert 25 Van Driel. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 253 1 MS. WILKINSON: Madam Chairman, I have a little 2 cold. Madam Chairman and members of the Board, I'm very 3 honored to be here today. I happen to be an ex-ARB 4 employee, 22 years worth of blood, sweat, and tears. But 5 I cared enough to come today and make sure that you know 6 that those of us who know something about the process 7 really do believe that this is worth doing. And I support 8 all three of the rules, and I do want to go on record as 9 saying that. 10 I also would like to draw your attention -- I've 11 been clipping articles lately, and one came out in the 12 L.A. Times on April 18th of this year talks about bus 13 fumes worse for kids on board. And apparently there was a 14 study that UCLA School of Public Health got involved in, 15 and it was published in the journal Environmental Science 16 and Technology, which also supports the ARB study which 17 concluded that diesel buses are polluting inside the buses 18 as much or more than on the outside. So if you want the 19 documentation of that, it's the Environmental Science and 20 Technology issue of April of this year. And I assume that 21 they did all the proper whatevers to make it believable 22 and acceptable scientifically. 23 I personally grew up with a father who had 24 asthma. And he drove a bus as a young person. So he may 25 very well have been polluted from that. I also had a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 254 1 daughter who had asthma. And all you have to hear is 2 children who can't breathe, and it is so frightening. So 3 I just want to emphasize as you consider these rules, that 4 the health of these people who live along the 710 5 corridor, those people along bus routes, I personally am 6 now commuting when I can on Santa Monica buses which are 7 all CNG and LNG. And I never smell anything from those. 8 And I do hope that in our discussions with the 9 transit agencies -- ARB's discussion with the transit 10 agencies and the School Districts that maybe we could 11 encourage them to coordinate and cooperate in relation to 12 the fueling issues that I've heard some of the -- 13 Santa Monica School District, for example, was concerned 14 about the cost and the availability of getting the fuels. 15 So as we move ahead with the transits and the School 16 Districts, it seems to me it's a place to coordinate on 17 that. 18 And in closing, I just want to say that ARB has a 19 tradition and a history of setting rules that have been 20 copied throughout the country. And I hope that we can do 21 that in this instance as well. I mean, I really think 22 that these rules can continue this tradition. 23 And as some of the testimony we've heard, it's 24 technology forcing. Hey, if we didn't tell them to do it 25 when I was working for ARB, they never did it, you know. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 255 1 In fact, I had one of them tell me one time, "You're just 2 a nit-picker," because I was making him follow the rules. 3 Oh, well. So thank you for your time. 4 ACTING CHAIRPERSON RIORDAN: We appreciate you 5 making the effort to be here today, and it's a commitment 6 that I recognize within the current staff as well as staff 7 like yourselves that have been here before, the commitment 8 to clean air. So thank you for coming. 9 MR. WILKINSON: Oh, you're welcome. I hope I 10 didn't bore you too badly. 11 ACTING CHAIRPERSON RIORDAN: Not at all. 12 Charles Hatcher, Todd Campbell. 13 Charles Hatcher, I don't think he's here. 14 Todd Campbell, followed by Marty Orozco, and 15 Robert Van Driel. 16 MR. CAMPBELL: Good afternoon, Madam Chair and 17 members of the Board. My name is Todd Campbell. I serve 18 as the Policy and Science Director for the Coalition for 19 Clean Air, the Vice Mayor for the City of Burbank, and a 20 Board member for the Mobile Source Air Pollution 21 Committee, which I'm proud to tell you we've allocated $2 22 million in additions to the funds identified today toward 23 school buses this year. 24 Today, we've heard a lot of testimony from inside 25 and out of the region that has trivialized, minimized PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 256 1 exaggerated, spinned, and mischaracterized what this rule 2 will do. Ladies and gentlemen, these special interests 3 took out a $50,000 full-page ad in a major newspaper to 4 scare you into voting no today. 5 And then had the audacity to tell you this issue 6 is over books versus buses. This group spent what it 7 would cost them to purchase half of a new bus or two clean 8 school buses under this proposed rule to tell you that the 9 sky will fall if you adopt this rule, even though it 10 hasn't fallen yet for five years since this rule has been 11 in place. 12 Doesn't that surprise you? And if they didn't 13 get the money from their own budgets, who did they get it 14 from and why? Could it be from the diesel engine 15 manufacturers? Could they be behind it? Could EMA have 16 an interest? The Engine Manufacturers have a 2010 17 deadline to meet that the natural gas industry believes it 18 can meet in 2007. 19 But let's not "haggle over a few grams of 20 pollution," says Doug Snyder from the California 21 Association of School Transportation Officials. I wonder 22 where he got that line from. It sounds pretty good. 23 Maybe you'll hear it again in 2010 when the engine 24 manufacturers can't figure out how safely to control 25 pneumonia with their SCR units. The promises made by the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 257 1 engine manufacturers over chip reflash are a painful 2 memory for all of us. Don't fall for the promises and 3 don't fall for the pitfall language like EPA waiver 4 disapproval. 5 Members of the Board, you may think this rule is 6 just about the South Coast air basin. Don't put 7 yourselves in a position you or EPA cannot get yourselves 8 out of in 2010. You need these rules. And you need a 9 natural gas market as a backstop to uphold your standards 10 and prevent further delay because our regions are falling 11 out of attainment given all the growth and trade in the 12 state. Don't fall for the gram argument. And because 13 one -- and the turnover argument particularly of buses is 14 not being affected by this rule. It's because one out of 15 eight Americans live in the state of California, and we're 16 trying to keep up. That's pure and simple the reason. 17 We need to focus on this rule for the real reason 18 that we're here today. Our children can only be expected 19 to learn if they are first able to breathe. Respiratory 20 illness such as asthma is the most common reason 21 elementary school kids miss school due to sickness in 22 Southern California. And diesel school buses risk the 23 health of our children and have been linked to asthma, but 24 not only asthma, but also lung function loss. 25 California maintains some of the oldest buses, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 258 1 not because of this rule, but because we collect them to 2 keep up with the population. It's not because of the AQMD 3 Fleet Rules. For nearly five years, the AQMD has already 4 had the vision to clean up this problem, and the vision 5 has become reality. Cleaner natural gas buses have been 6 purchased instead of dirty diesel buses, and students now 7 arrive to school, particularly those who travel long 8 distances, more safely also a result. 9 I'm going to conclude by saying this rule 10 protects children by providing the buses that not only 11 meet clear air standards, they beat them. Please vote in 12 favor of this rule. This rule is bigger than just a Fleet 13 Rule. It is important for our region, our stated, and 14 our country. Thank you. 15 ACTING CHAIRPERSON RIORDAN: Thank you, Todd. 16 Marty, is Marty here? Apparently not. He had to 17 leave. 18 Robert Van Driel, followed by Francisca Porchas. 19 MR. VAN DRIEL: Good afternoon, my name is Robert 20 Van Driel. I work for First Student. We own about 1,000 21 buses in this state, about 900 of them are clean diesel, 22 and we have about 17 CNG buses. My feeling is that you 23 should vote for this proposition. Thank you very much. 24 ACTING CHAIRPERSON RIORDAN: Thank you very much. 25 Thank you for here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 259 1 Francisca. 2 MS. PORCHAS: Good afternoon, my name is 3 Francisca Porchas. I'm here on behalf of the Bus Riders 4 Union to urge you today to adopt all three regulations for 5 cleaner urban transit buses, cleaner on-road solid waste 6 collection vehicles, and clean on-road school bus. 7 What is at the core of this 15-year legal and 8 political struggle is our children's lungs. And the need 9 for the cleanest fuel available is a life and death issue. 10 Since the signing of the Civil Rights Consent 11 Decree between the Bus Riders Union and the Metropolitan 12 Transportation Authority, we have aggressively campaigned 13 to force MTA to buy the cleanest fuel available for the 14 transportation system in Los Angeles, and it being 15 compressed natural gas. And continue to command for this 16 for future purposes. Today, L.A.'s MTA prides itself for 17 having the cleanest bus fleet in the whole nation. 18 Along with the demanding and fighting for the 19 expansion of civil rights, we see it as absolutely vital 20 to demand for the purchase of CNG buses as part of 21 building a viable transportation system for people -- for 22 the transit dependent who happens to be mostly low income 23 people of color. These very same low income communities 24 are also mostly affected by the underfunding of the public 25 school system, black, Latino, and Asian Pacific Islander PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 260 1 and working class white children should not be forced to 2 pick between more computers and books and healthy lungs. 3 In this demand for higher funding for education, we must 4 give equal importance to the survival of our children. 5 Once again, I want to reiterate the fact that was 6 given by Coalition for Clean Air. According to the U.S. 7 Department of Education study done in 2001, the number one 8 cause of school absenteeism among children which accounts 9 for more than the 14 million total missed days of school 10 was asthma. 11 So once again, adopting these Fleet Rules is a 12 vital step in order to set standards for real access to 13 education. So we commend you for taking leadership in 14 fighting for our children's lungs and urge you to 15 continue. Thank you. 16 ACTING CHAIRPERSON RIORDAN: Thank you very much. 17 Wynesta Dale, Bernard Waddell, and Henry Hogo, 18 and David Smith. 19 MS. DALE: Good afternoon, Madam Chairman and 20 members of the Board. My name is Wynesta Dale, and I 21 stand before you as just a concerned citizen. 22 I'd really hoped by the time you got to this part 23 of the program this afternoon that someone else would have 24 asked my question, and then I could just say, oh, the 25 issue has already been addressed and excuse myself. But PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 261 1 I'm really surprised that the issue of biodiesel hasn't 2 come up before you. 3 I'm very thankful that I live in a state where 4 the leaders have been concerned about the environment and 5 has driven in most regulations to protect that 6 environment. I've heard others tell you today that you as 7 leaders have the responsibility to protect our children's 8 health, to reduce emissions, and to be fiscally 9 responsible today, and I would say also for the future. 10 And I'm sorry, but I'm going to be a little bit 11 presumptuous, because I'm going to say as leaders I think 12 you also have the responsibility to look at reducing our 13 dependence on foreign oil and developing energy sources 14 that are sustainable. 15 And I would propose that biodiesel actually 16 fulfills all of those responsibilities. It will protect 17 our children's health. It reduces PM emissions. It 18 reduces sulfur emissions. In conjunction with catalytic 19 converters, it can also reduce the NOx emissions. It is a 20 whole lot cheaper than a lot of additional infrastructure 21 that would be required for natural gas. And it's 22 renewable. 23 So I'd urge you, please consider options that 24 would allow us to adopt and encourage the production of 25 biodiesel. My understanding is that the regulations that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 262 1 you propose actually do support the adoption of biodiesel, 2 but don't necessarily condone it -- or maybe I should say 3 it allows the adoption of biodiesel but doesn't really 4 support it. So I guess I'd suggest that you consider the 5 funding to support the certification of biodiesel so it's 6 a more viable option. Thank you. 7 ACTING CHAIRPERSON RIORDAN: Thank you very much. 8 We appreciate the fact you're here. And let me just share 9 with you that people have come to us about biodiesel 10 interests and we, working with the staff, have been able 11 to refer them to the appropriate places. So there is an 12 interest there. And thank you very much. 13 Let me call on Bernard Waddell. 14 MR. WADDELL: Good afternoon. My name is Bernard 15 Waddell, Fleet Coordinator for the Banning Unified School 16 District. I have nothing to say to you all today but 17 great gratification, because when I joined the School 18 District about three years ago, we had buses that, may be 19 about half a mile away you can locate where a bus is by 20 looking at the air. You can see smoke and everything like 21 that. 22 I'm very grateful to all of you. Because of 23 these programs, the children of Banning and the public of 24 Banning Unified School District can breathe better air 25 today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 263 1 On field trips and back and forth to school, the 2 children often -- I mean this sincerely. We want a CNG 3 bus. We do not want a smoking bus. 4 One day I happen to go to one of the school site 5 on a general follow up. I happen to speak to one of the 6 kids, actually about three of them. Say, "Why do you guys 7 like CNG bus?" They simply said, "My clothes get dirty 8 and I feel headache." You know, I said, "Do you think 9 it's the CNG or is it diesel?" They said, "The diesel 10 make noise. It's smelly, and I feel headache." So if 11 kids can be saying that and they can see the difference 12 between a CNG bus, I think we ought to rethink something 13 about this program. 14 And I want to thank George and some of his staff 15 who have helped us tremendously. They understand what we 16 are facing over there at the School District that, hey, we 17 have to do something over there. This program has saved 18 the District, per bus, every year about $7,000 a bus in 19 the last three years we've been on this program. So, 20 again, I just wanted to urge you, please continue with 21 your program. We really appreciate you. Thank you. 22 ACTING CHAIRPERSON RIORDAN: Thank you very much. 23 Henry Hogo. 24 MR. HOGO: Good afternoon, Madam Chair and 25 members of the Board. For the record, my name is Henry PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 264 1 Hogo. I'm the Assistant Deputy Executive Officer here at 2 the AQMD. And I wanted to provide some additional 3 comments relative to the testimony you heard today. 4 And I'm the main person responsible for the 5 implementation of the South Coast Fleet Rules. So I want 6 to comment first on the exemption comments that you heard 7 today, in particular, Mr. Jessie of Anaheim Union. He 8 indicated that it took six months before he received a 9 determination on his exemption request. In actuality, we 10 received that request that was dated May of 2005, and it 11 was not complete. There was a Part 2 that was submitted 12 July 26th of 2005. And, eventually, we actually approved 13 his exemption request on August 5th. So eight days after 14 the completed submittal of his request. 15 Relative to Mr. Lopez of Coachella Valley School 16 District, when they applied for the low emission school 17 bus grant funding, they did not indicate they wanted to 18 take advantage of the 10 percent infrastructure offer for 19 each vehicle. And we actually called them to confirm 20 whether they wanted to or not, and they said no. So they 21 actually turned down money for the infrastructure at that 22 time. 23 Relative to the issue of the diesel particulate 24 traps on school buses, and the fact that the California 25 Highway Patrol had to inspect these buses and they were PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 265 1 actually taken out of service for a week, there was a 2 comment by Mr. Benfield of Tumbleweed. And we actually 3 had started the school bus trap program back in 2003. It 4 took the Highway Patrol almost two-and-a-half years before 5 they started these inspections. So we weren't aware that 6 inspections were needed, and your staff wasn't aware of 7 that. But once these inspections started, we worked 8 closely with your staff to make sure that they were done 9 in a timely manner. So I just want to put that into the 10 record. 11 Relative to emissions and toxics comments that 12 you received, I want to put up a couple slides. 13 --o0o-- 14 MR. HOGO: This is actually from your own transit 15 bus testing that shows the average NOx emissions from 16 diesel buses versus CNG buses. And I drew a line here to 17 show it is about 50 percent cleaner. So the story you've 18 been hearing about clean diesel -- and we really applaud 19 the diesel industry for cleaning up their emissions -- 20 really focus on the PM side. And they really have not 21 focused on the nitrogen oxide side. And this slide 22 here -- 23 --o0o-- 24 MR. HOGO: -- which is also the result of your 25 transit bus study, but using what we call the unit risk PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 266 1 factor to weigh these emissions, you can see here that the 2 diesel bus emissions when weighed is among the highest. 3 But with the trap, emissions almost go down 90 percent. 4 That's what we heard today. 5 And relative to natural gas, it's about the same. 6 However, when natural gas engines are equipped with 7 oxidation catalysts, they go even further down. And 8 because of this result from your studies, our Board made 9 clear to staff that any funding of school buses with 10 natural gas engines have to come equipped with the 11 oxidation catalyst. In fact, I recalled when Dr. Lloyd 12 was Chair of the ARB Board, that was pointed out to us. 13 If I may just -- 14 ACTING CHAIRPERSON RIORDAN: Henry, I have to 15 hold everybody to the same time. So you can make a 16 concluding sentence, please. 17 MR. HOGO: One concluding sentence, we did an 18 analysis of what the emission criteria are, and this shows 19 with the amount of funding you have, you have to buy 20 more -- 21 --o0o-- 22 MR. HOGO: -- diesel buses in order the equate to 23 the same emission reductions you get with CNG, and that 24 equates to more money. 25 ACTING CHAIRPERSON RIORDAN: Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 267 1 BOARD MEMBER LOVERIDGE: Can I ask, put that 2 chart and explain it. It was so fast. What does that 3 say? 4 MR. HOGO: What we did was looked at the cost of 5 the natural gas bus versus what we call rule compliant bus 6 which meets the 1.8 gram standard. As you recall, Dr. 7 Wallerstein had a slide that shows the emission levels. 8 The School District pays 25,000 under the lower emission 9 school bus program and the buy down would be 115 and 85. 10 We calculated the number of buses associated with the buy 11 down. We also included 10 percent of the available funds 12 into the calculation. So it comes out to 78 buses, and 13 117 diesel buses that would comply with your proposed 14 rule. 15 When we calculate the emissions associated with 16 that, it's 3 tons versus 2.34 tons there is three. Well, 17 in order to get the same deduction on the diesel side, you 18 need to buy 39 more buses and that equates to 3.26 million 19 additional dollars that would be needed to achieve the 20 equivalent emissions. 21 ACTING CHAIRPERSON RIORDAN: Any questions? 22 Henry, there's another question. 23 BOARD MEMBER KENNARD: This has raised I think 24 some additional questions. And that is what would be the 25 equivalent cost of a retrofit, an existing bus retrofit? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 268 1 And how do you compare that to a new CNG and the cost of 2 that? 3 MR. HOGO: Right now, the retrofits, as your 4 staff report pointed out, are mainly for particulate 5 matter. And that's about $7500 for the trap for the 6 diesel bus. And recall that the traps only work for 7 post-'94 or newer buses. So that's 7500, it reduces PM, 8 but does not reduce nitrogen oxide. The retrofit that's 9 discussed in your staff report looks at the possibility of 10 nitrogen oxide reductions, which is about $20,000 that's 11 nitrogen oxide plus PM per vehicle, the cost. 12 BOARD MEMBER KENNARD: So that would be about 13 $30,000 for the total retrofit? 14 MR. HOGO: No, 20,000. 20,000. It's about 7500 15 for the PM side and about 12,000 for the -- 16 BOARD MEMBER KENNARD: Thank you. 17 ACTING CHAIRPERSON RIORDAN: Thank you. Any 18 further questions? Okay. 19 David Smith, followed by Bill Haller, and that 20 concludes the list. 21 MR. SMITH: Good afternoon, Dave Smith with BP. 22 Thank you very much. My comments are two. 23 First, pretty simple. I'd like to ask the Board 24 if it would be possible, if the Fleet Rules were to be 25 adopted as proposed, if you would add a requirement that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 269 1 whatever fuel they choose to use or is used that the fleet 2 operator maintain records to show that they have purchased 3 fully compliant motor vehicle fuels that meet your 4 requirements. 5 Currently, for example, under the refuse rule for 6 diesel trucks, they have to keep such records. But as I 7 understand it with the proposed rules you're putting 8 forth, that isn't contained. So I have suggested this for 9 the large spark ignition rule that was supposed to be 10 heard today that was delayed. The staff accepted that, 11 and I believe they included that in that rule. The simple 12 comment, I hope staff wouldn't object to that, for any 13 other rules you adopt today, that you include that 14 provision that they would have to maintain records to show 15 they bought compliant diesel fuel, CNG, LPG, whatever. As 16 a fuel sales company, you can imagine we're interested, 17 because we try to make sure our fuels are compliant with 18 all your requirements. 19 The last comment I would have is that we were 20 very supportive of this last year-and-a-half's efforts to 21 raise more money for the Carl Moyer program and the lower 22 emission school bus program. My company, my personal 23 involvement, was in that. And we are looking forward to 24 continuing that effort to raise further money for schools. 25 My involvement on that is based on the premise of a fuel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 270 1 neutral rule. And I would just encourage you to adopt and 2 continue to maintain that provision, so that I can 3 continue working and helping you find more money for 4 reducing emissions and getting our kids into safer buses. 5 Thank you. 6 ACTING CHAIRPERSON RIORDAN: Thank you very much, 7 Mr. Smith. 8 Mr. Haller. 9 MR. HALLER: I brought my own stopwatch. My name 10 is Bill Haller. I serve with the Sierra Club California 11 Air Quality Committee, and I also serve as President of 12 the West Van Nuys Lake Balboa Neighborhood Council. 13 Obviously, we're definitely in favor of all of 14 the regulations being discussed today. Yesterday, I 15 dropped my four-and-half-year-old daughter off at 16 kindergarten. As we walked toward the line -- we were a 17 little late. But as we walked toward the line, a little 18 girl turned around and said to us, "You know, hey. Have 19 you thought about fuel neutrality?" And I hadn't at that 20 point, and neither had my four-and-a-half-year-old 21 daughter. And then another first grader bounded over and 22 said, "What about cost benefit analysis?" 23 And basically the point I'd like to make -- very 24 silly. But what's the point here is that we're here to 25 reduce human suffering. We're here to alleviate childhood PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 271 1 asthma. I wrote notes that just -- I was flabbergasted. 2 And I have a minute-seven so far on my thing here. If we 3 don't enact these bus policies, the School Districts won't 4 do it. Have you ever heard of a School District that was 5 flush with money and they really want to get new buses? I 6 haven't. Everybody has priorities. 7 I was flabbergasted by the gentleman who works in 8 Anaheim who kept repeating old dirty smelly buses. For 20 9 years he was watching old dirty smelly buses carry special 10 ed kids back and forth. Don't blame the State. Look at 11 yourself. Take care of it. Identify the problem. That's 12 why we have to do it. Because there's no will to make 13 this happen. 14 If I'm an employee of the School District, I need 15 somebody to help me. I need somebody to say here's the 16 regulation. And that's what we rely on the ARB to do for 17 us. 18 The Districts, they should have been on board 19 with this a long time ago, and they don't move until the 20 ARB, AQMD pushes them into the future. 21 All Districts have different needs, but all kids 22 have the same needs. They need clean air, clean water, 23 and a place to play. Again, what I observe from this 24 meeting is diesel is probably not the fuel of the future. 25 I'm kind of questioning also the complaint that was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 272 1 registered about $30,000 per tank to make a CNG engine 2 compliant. 3 Well, the question really is, well, how many 4 kids' lives and lungs were saved in those 15 years of 5 compliance? How many days of attendance were saved? How 6 many hospital ER visits were saved by 15 years of 7 something? And now we're hearing about a $30,000 problem. 8 How many inhalers didn't have to be used because of that? 9 Clean diesel in four years, well, this is 2005. 10 Where have you guys been since World War I? 11 There's legal. There's regulatory. My three 12 minutes is up. There's also moral. Kids trust us. We 13 put them on a bus. They trust us that the ride won't harm 14 their lungs or impact their immune systems or force them 15 to lose school days due to asthma. Please, adopt these 16 rules. 17 ACTING CHAIRPERSON RIORDAN: Thank you, 18 Mr. Haller. 19 Ms. Witherspoon, are there any further comments 20 staff would like to make? 21 EXECUTIVE OFFICER WITHERSPOON: Nothing specific. 22 We'll just stand by and answer your questions. 23 ACTING CHAIRPERSON RIORDAN: All right. Then let 24 me read this into the record. This is to close the 25 record. Since all testimony, written submissions, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 273 1 staff comments for this item have been entered into the 2 record, and the Board has not granted an extension of the 3 comment period, I'm officially closing the record on this 4 portion of the Agenda Item 05-8-4. Written or oral 5 comments received after the comment period has closed will 6 not be accepted as part of the official record on this 7 agenda item. 8 Board members, we do have a requirement for ex 9 parte, and I'm going to assume we've had several. So I'm 10 going to begin to my far right. 11 Supervisor DeSaulnier. 12 SUPERVISOR DeSAULNIER: That's me, to your far 13 right, Madam Chair. 14 ACTING CHAIRPERSON RIORDAN: Oh, that's right. I 15 should have moved you to the left. I apologize about 16 that. 17 SUPERVISOR DeSAULNIER: Let's not jump to 18 conclusions. I'll be faster, because I'm not going to 19 mention -- and I appreciate staff's separating the 20 statewide transit bus rule. But I'll be able to eliminate 21 all these meetings and add them at the next meeting. 22 On August 8th, I had a meeting in my office in 23 Concord with Stephanie Williams and Bill Duplissea. The 24 conversation was consistent with their testimony here 25 today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 274 1 On August 25th, I met with Gretchen Knudsen from 2 the International Truck and Engine Manufacturer also in my 3 office in Concord. 4 On September 1st, I had a phone conversation with 5 Doug Snyder. That conversation and the conversation with 6 Gretchen was also consistent with the testimony today from 7 both of those organizations. 8 On September 7th, I had the pleasure of meeting 9 with Jed Mandel at my office. Again, that conversation 10 was consistent with his testimony today. 11 On September 8th, another meeting in my office in 12 Concord with Mike Eaves and Chris Ferrero, PG&E, again 13 consistent with Mike's testimony today. 14 And, lastly, on September 12th, I had a phone 15 conversation with Julie Masters and Adrian Martinez from 16 the NRDC, consistent with Julie's testimony today. 17 That's all, Madam Chair. 18 ACTING CHAIRPERSON RIORDAN: Thank you. 19 Dr. Gong. 20 BOARD MEMBER GONG: Yes. I had the pleasure of 21 meeting with the following people during these particular 22 days. The presentations during those meetings were 23 consistent with what these people said today or their 24 organizations. 25 On August 9, Gretchen Knudsen and Rich Zbur, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 275 1 International Truck and Engine Corporation. Again, all in 2 my office unless I tell you otherwise. 3 August 16th, Environ Strategy, John McNamara, 4 Staci Heaton from California Trucking Association. 5 On August 22, Michael Eaves from the California 6 Natural Gas Vehicle Coalition. 7 On September 8th, Jed Mandel of the Engine 8 Manufacturers Association and James Halloran from 9 Caterpillar, Inc. 10 September 9, John McNamara called me on the 11 telephone to say he was going to e-mail me an update on 12 the natural gas vehicle users refuse industry report, and, 13 that was so e-mailed. And I forwarded that on to 14 Sacramento ARB. 15 On September 12th, Jim Seal, consulting for 16 California Transport Association; and Raul Lopez from the 17 Coachella Unified School District. 18 On September 12th, Kent Stoddard, Waste 19 Management, and I had a telephone conversation for about 20 30 minutes. 21 And, finally, September 13th, Bonnie Holmes-Gen 22 and Todd Campbell, and I had a teleconference consistent 23 with their testimony this afternoon. 24 I think I've covered everything. That will cover 25 also all three Fleet Rules. I can't tell the difference PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 276 1 now. 2 ACTING CHAIRPERSON RIORDAN: Thank you, Dr. Gong. 3 Ms. D'Adamo. 4 BOARD MEMBER D'ADAMO: Thank you. 5 I met with the following individuals. And before 6 listing them, I'll just say that the discussions that I 7 had with the following individuals were consistent with 8 the testimony presented today, and they were relative to 9 the Fleet Rules in general, as well as specific 10 discussions regarding the three specific rules. 11 On July 28th, meeting in Modesto with Claudia 12 Sherrill, Elk Grove District Director of Transportation; 13 and Kirk Hunter, Former Chair, California Association of 14 School Transportation Officials and President of Southwest 15 Transportation Agency. 16 July 28th, meeting in my Modesto office with 17 International Truck and Engine, David Rodriguez, Gretchen 18 Knudsen, and Rick Zbur. 19 The remaining were all telephone calls. 20 August 3rd, conference call with Dr. Barry 21 Wallerstein with South Coast. 22 September 1st, conference call with a number of 23 individuals from the National Association of Fleet 24 Administrators, Tom Fung, David Snow, Robert Summersett, 25 Dennis Gage, Richard Teebay, Richard Battersby, Patrick PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 277 1 O'Connor, and Steve Fitch. 2 September 8th, conference call with Bonnie 3 Holmes-Gen, American Lung Association; Julie Masters with 4 NRDC; and Todd Campbell, Coalition for Clean Air. 5 September 8th, conference call with Sean Edgar 6 and Alan Marchant with the California Refuse Removal 7 Counsel. 8 September 13, a meeting in my Modesto office with 9 representatives from AC Transit, Mary King and Rick 10 Fernandez. 11 And then on today, the 15th, had a discussion 12 with Bonnie Holmes-Gen with the American Lung Association. 13 ACTING CHAIRPERSON RIORDAN: Thank you. 14 Ms. Kennard. 15 BOARD MEMBER KENNARD: Yes, thank you. 16 All of the conversations I had were relevant to 17 the Fleet Rules that were agendized today and all the 18 conversations were consistent with the testimony of those 19 who testified. 20 I had one in-person meeting on August 10th with 21 International Truck and Engine in El Monte, the ARB 22 offices. Present there were Gretchen Knudsen and Rick 23 Zbur. 24 All the rest were telephone conversations. 25 On September 9th, with Cynthia McLain-Hill. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 278 1 On September 6th, with the National Association 2 of Fleet Administrators, Pat O'Connor. Also present on 3 that call were Richard Teebay, Walter Burnett, and John 4 Hall. 5 On September 13th, Mike Patton representing the 6 Capistrano Unified School District. 7 And also on September 9th, a telephone conference 8 that included Bonnie Holmes-Gen of the American Lung 9 Association; Julie Masters and Adrian Martinez of NRDC; 10 and Joe Lyou of the California Environmental Rights 11 Alliance. 12 Thank you. 13 ACTING CHAIRPERSON RIORDAN: I'll just go through 14 the Chair this way. I'm going to separate mine, so this 15 will apply to the bus rules. And since the publication of 16 the hearing date, I have met with Stephanie Phillips, 17 Assistant Superintendent of Business Service for 18 Ontario/Montclair School District; Dave Walhall, Director 19 of Transportation; and Bob Wigginton, Director of 20 Transportation Rowland Unified School District. 21 I have met with Jed Mandel representing the 22 Engine Manufacturers of America and the Engine 23 Manufacturers Association for Caterpillar; James P. 24 Halloran. And, again, testimony reflected what was a part 25 of the meetings that I had with these individuals. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 279 1 Mayor Loveridge. 2 BOARD MEMBER LOVERIDGE: You had more 3 conversations than I did over this. I assume we don't 4 count ARB staff or South Coast staff in your report out. 5 ACTING GENERAL JENNINGS: That's correct, as far 6 as ARB staff goes. 7 BOARD MEMBER LOVERIDGE: How about South Coast 8 District? 9 ACTING GENERAL JENNINGS: I think it would be 10 useful to identify that. 11 BOARD MEMBER LOVERIDGE: Multiple conversations 12 Barry Wallerstein and Henry Lyou and others. 13 Meeting with Staci Heaton from California 14 Trucking Association. 15 Two meetings with Raul Lopez from the Coachella 16 Valley, and also at the same time the Superintendent of 17 Nuview School District, Jay Newman. 18 Essentially, that's my list. 19 ACTING CHAIRPERSON RIORDAN: Okay. Supervisor 20 Patrick. 21 SUPERVISOR PATRICK: Thank you. 22 On August 4th, I met with Gretchen Knudsen and 23 Rich Zbur from International Truck and Engine. 24 On August 29th, with Doug Snyder of the 25 California Association of School Transportation Officials PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 280 1 and Kirk Hunter of the Southwest Transportation Agency. 2 On August 29th, I met with the California Natural 3 Gas Coalition. There were three members of that: 4 Mitchell Pratt of Clean Energy; Bob Riding of PG&E; and 5 Mike Eaves. 6 And then there was a phone conversation on 7 September 12th with Julie Masters of NRDC; Don Anair of 8 Union of Concerned Scientists; and Joe Lyou of the 9 California Environmental Rights Alliance. 10 And those discussions all mirrored the testimony 11 that we heard today from those various individuals. 12 ACTING CHAIRPERSON RIORDAN: Ms. Berg. 13 BOARD MEMBER BERG: Thank you. 14 On August 9th, I had a meeting in my office with 15 Stephanie Williams. 16 On August 8th, I had a meeting -- I'm sorry. 17 Stephanie with California Trucking Association. 18 Stephanie, I just assume everybody knows you. 19 On August 8th, I met with the Engine 20 Manufacturers, Jed Mandel. 21 On August 8th, I met with 13 members of the 22 California Transit Association, and they were all with the 23 various Districts. And unless we want to read all 13 24 names into the record, I'll just -- that's fine. Thank 25 you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 281 1 And then on September 5th, I met with the 2 National Association of Fleet Administrations via a 3 conference call, and there were five members. 4 And on the 13th, I had a conference call with the 5 American Lung Association with Bonnie Holmes-Gen; and the 6 Coalition for Clean Air, Todd Campbell; and the NRDC, 7 Julie Masters. 8 On September 13th, I met with the International 9 Trucking and Engine group, Gretchen Knudsen, Rick Zbur, 10 and Cynthia. 11 Thank you. 12 ACTING CHAIRPERSON RIORDAN: Thank you. 13 Board members, there is a Resolution before us. 14 Unless maybe I should -- let me take a step back. You may 15 wish to ask of staff some information, and then we'll 16 consider the Resolution. 17 So let me, to my right, are any Board members 18 have questions for staff at this time? No. 19 To the left, let me ask if anyone has any 20 question for staff at this time. 21 Oh, Mayor Loveridge. 22 BOARD MEMBER LOVERIDGE: How are we going to do 23 this? I have a comment and then a question to staff. 24 ACTING CHAIRPERSON RIORDAN: Can you make your 25 comment and a question to your staff, yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 282 1 BOARD MEMBER LOVERIDGE: Well, this is by way of 2 introduction and then the question in a potential 3 proposal. 4 When you look at Southern California, a couple of 5 things one needs to remember. One is by all kind of 6 measures, in terms of air quality, it is worst in the 7 country. 8 Second, if we were at a separate state, we'd be 9 the third largest state after Texas and Florida. This is 10 a large place with a serious air quality problem. The 11 South Coast District is here, not because it's attempting 12 to look for controversy, but it's attempting to look for 13 reductions after a long and difficult record of 14 reductions, particularly for stationary sources in this 15 basin. 16 I did want to comment about the statement that's 17 on the agenda regarding buses were, I think it's 18 important, the last phrase, "compliance with the 19 regulatory proposal would be contingent upon the 20 availability of grant funding or external funding 21 sources," and the question of no unfunded mandates. I 22 think the exceptions, as identified by the CARB staff, are 23 good and should be a part of the same rules for the South 24 Coast District. 25 It is dramatic to sit here and talk about diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 283 1 revolution and green diesel. It's not a discussion that 2 was here before. I'm not quite sure about the comments. 3 I think it pushed to the extremes of good and bad and 4 talking about diesel and CNG. I did conclude I thought 5 the Colton District was eloquent testimony of what CNG can 6 provide, and did also lead to the conclusion that more CNG 7 buses rather than less in terms of a District are probably 8 helpful. 9 What I would like to talk just briefly about is 10 that it seems to me the most critical part of this is 11 really the emission criteria, with kind of fuel neutrality 12 that's becomes the kind of common reframe. I was looking 13 at the proposed emission criteria and the kind of time 14 line for that and was just going to offer the concept 15 initially of, if we took the time line being 2005 and 2006 16 and looked at that as Option 2, that is there be no 17 requirements except what is now in place including the 18 Federal Court District decision, and that Option 1 would 19 start. And hear I just pick the 2007 to 2009, but bring 20 down the 2005. It would start with the criteria of 2007, 21 2009, and you said as a starting point for Option 1. And 22 I guess I would like to ask Catherine, comment on this 23 potential direction of setting up criteria, waiving 2005 24 to 2006 and looking for Option 1 beginning in 2007. 25 EXECUTIVE OFFICER WITHERSPOON: Well, if I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 284 1 understand you, if the Board were to adopt the regulation 2 we've brought before you, we would delete requirements for 3 '05 through '06, and so the reg would be effective in '07 4 with the .2 standard on this slide; is that correct? As a 5 proposal. 6 And that would mean is that in 2007 through 2009, 7 the .2 standard would only qualify natural gas buses to be 8 purchased in the South Coast. And what's changed is that 9 the 1.8 standard, there was some discussion throughout the 10 day of whether diesel could qualify for that with a long 11 view device, which is not yet certified. So we don't know 12 whether it would be certified in time and if diesel would 13 make it in. But that whole set of issues and whether 1.8 14 is the right standard comes off the table. You are left 15 with a natural gas standard in effect of .2 for '07, '08, 16 '09. And then in 2010 we expected diesel to meet that 17 standard as well, and the rule would revert to diesel or 18 natural gas. 19 BOARD MEMBER LOVERIDGE: What if you brought the 20 2005-2006 standard down to 2007-2009? 21 EXECUTIVE OFFICER WITHERSPOON: Then no one could 22 meet it. Nobody could buy any bus in the South Coast if 23 we dropped 2005 to .2. 24 BOARD MEMBER LOVERIDGE: No. No, the opposite. 25 If you took 2005-2006 and brought it down to 2007 to 2009. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 285 1 EXECUTIVE OFFICER WITHERSPOON: If you made the 2 '07 to '09 standard to 1.8? 3 BOARD MEMBER LOVERIDGE: Yes. 4 EXECUTIVE OFFICER WITHERSPOON: Diesel would 5 qualify in '07 because we expect diesel to be at 1.2 6 roughly in '07 for all vehicles. 7 Tom, help me. Do you think that there will be 8 school bus products at 1.2 for diesel in '07? Yes. 9 Staff's nodding yes. 10 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: What we 11 expect for '07 through '09 is an emissions standard of 1.2 12 for everybody, every diesel engine sold in the 13 United States actually. And there's obviously some 14 averaging that's allowed so maybe some are higher and some 15 are lower. But that would be the standard in place. It 16 would be more stringent than leaving anything at 1.8, 17 which would leave this rule of no effect. 18 BOARD MEMBER LOVERIDGE: I'm not sure exactly -- 19 I'd be interested if anybody else would like to look at 20 that same kind of choice. And what would be an acceptable 21 and appropriate standard for 2007-2009 if -- 22 ACTING CHAIRPERSON RIORDAN: Ms. D'Adamo. 23 BOARD MEMBER D'ADAMO: Well, Mayor, first of all, 24 I really appreciate your comments that, you know, we're 25 really not here about controversy. We're here about PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 286 1 reductions. And what's been so troubling about this 2 rule -- and I told Lydia earlier for having been on the 3 Board as long as I have, I've been going back and forth on 4 this one, because I really and truly do see both sides. 5 And really what troubles me in the end on this is 6 that I just don't think that these issues are ripe enough. 7 And in saying that, what I'd like to do is just quickly go 8 through what's kind of making me go from one end to the 9 next. 10 First of all, this Board has a longstanding 11 position in favor of fuel neutrality. And I've taken 12 several actions at several votes on that issue in the past 13 and do feel that this rule is a departure from that. 14 Having said that, I do feel very strongly that the 15 Legislature has spoken. There's a statute that gives 16 South Coast the authority. And we should respect that 17 authority. It's almost like a big massive pilot project 18 that's underway here. And I hate to come in and -- or I 19 hate this Board to come in and mess with it one way or the 20 other, unless it's necessary. 21 And if we were in the position that we were back 22 in -- well, after the Supreme Court had acted back in 23 2004, I think that I'd personally feel a little more 24 compelled to do what we can to help out South Coast, in 25 light of the fact that the State Legislature has spoken. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 287 1 However, with the most recent court ruling, I 2 just feel that the issues are just not yet ripe. And 3 instead of looking out to the future of, you know, maybe 4 providing some leeway on the standards, I personally would 5 feel better if we could just leave the door open in the 6 event that a court does act to enjoin South Coast rules, 7 that we come back and -- I don't know if that's where 8 other Board members would be coming from. But I feel at 9 that point that it would be more appropriate. 10 When I came here today, I really felt that I'd be 11 taking another position. But several witnesses and the 12 statements made by Ms. Witherspoon and Ms. Johnston 13 regarding the issue of the waiver, and I just have to 14 question whether or not it's worth it for us to take the 15 risk where we are looking for meaningful reductions on 16 other heavy-duty rules, and taking the risk that we could 17 sort of unwittingly trigger this whole issue of lead time 18 and stability. And if we did do that, I'd be very 19 concerned about what it does statewide for a number of 20 other programs and reductions. 21 So I guess what I'm saying is, rather than 22 playing with the standard, I'd feel better about leaving 23 the door open and coming back at a later time if you feel 24 there is a little more time that we could have before a 25 standard kicks in. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 288 1 ACTING CHAIRPERSON RIORDAN: Supervisor 2 DeSaulnier. 3 SUPERVISOR DeSAULNIER: I'll defer to Mayor 4 Loveridge if he wanted to -- I see him reaching for his 5 mic. 6 BOARD MEMBER LOVERIDGE: My strong preference 7 would be to take and approve Option 1, and that would be 8 if I had to make a recommendation. In fact, maybe we 9 ought to see if there's kind of sentiment or judgment that 10 way. So I would just like to put on the floor Option 1 11 for a vote. 12 ACTING CHAIRPERSON RIORDAN: That was your 13 motion? 14 BOARD MEMBER LOVERIDGE: Option 1 as it's found 15 in the staff report. 16 ACTING CHAIRPERSON RIORDAN: But you're making 17 that in the form of a motion. 18 Is there a second to the motion? 19 SUPERVISOR DeSAULNIER: For purposes of 20 discussion, I'll second it. 21 ACTING CHAIRPERSON RIORDAN: Since you were 22 discussing -- 23 SUPERVISOR DeSAULNIER: Yes, sorry. Well, first 24 off, it's hard -- D.D. and I during lunch, I made a 25 comment of, "You're being very quiet," and she said, "So PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 289 1 are you." So I think we both have struggled with this a 2 long time, as she said, trying to balance the very many 3 interests. 4 And I think, for me, one of the things being 5 elected by Districts for many years and representing the 6 Bay Area Air Quality Management District on this State 7 Board for many years, I think there's also a great 8 opportunity here for this Board to do what, unfortunately, 9 for many reasons we've not always been able to do, which 10 is to be from a policy level very supportive of South 11 Coast. And coming from the Bay Area where we don't have 12 the kind of incredible challenges as you have in the South 13 Coast in terms of some day meeting your full attainment, I 14 want to be as supportive as I can. And I think all of us 15 do. 16 I think there's an opportunity here to do that. 17 And I think the idea of -- as I used to say to former 18 Chairman Lloyd that we were agnostic on fuel, and former 19 Chairman Dunlop always said we were fuel neutral. 20 Having said that, and I agree with you, D.D., 21 that's been one of the real strengths on this rule on the 22 statewide level. And sometimes this afternoon I've 23 cursed -- as I've listened to all this and the difficulty 24 of the decision has become evident to me, I've cursed 25 former Executive Director and good friend Mike Kinney for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 290 1 advocating for the dual path on the whole statewide level. 2 And as someone who sort of came late to that, to 3 supporting the dual path, but have seen at least in the 4 Bay Area that that's to a large degree has worked. And 5 we'll talk about that in October. 6 But at the same time, I think South Coast, as 7 Mayor Loveridge has said and APCO has said, you have 8 incredible challenges that I'm glad that I don't have 9 representing the Bay Area. 10 So I think the idea that we can be fuel neutral 11 in the sense that fuels don't work the same in every 12 situation for every jurisdiction. And I think in this 13 case, I would defer to the South Coast in their wisdom in 14 trying to get every ton they can, knowing we're still 15 going to have a competitive marketplace around the state 16 from multiple different opportunities for these 17 constituencies to battle it out. So sort of from that is 18 where I'm coming from. 19 I like the direction, Ron, you were taking in 20 your initial conversation, that at least in the early out 21 knowing that's really early, like tomorrow, that we would 22 make some accommodations, so I'd be supportive of the 23 original direction you were taking, if you want to amend 24 the motion. 25 And then, lastly, just maybe a question to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 291 1 Catherine or to Tom, going back to Barry's original 2 comments, to the degree that D.D. has brought this up, and 3 I agree with her -- but not being a lawyer, although I 4 like to practice being a lawyer. When Barry said you 5 would recommend your Board would suspend it, and you had 6 some reluctance to that, is there a way to have some kind 7 of discussion where we might position ourselves both 8 collectively to be better both legally and political, 9 because I'm not comfortable with that idea. 10 EXECUTIVE OFFICER WITHERSPOON: The reason I 11 urged Dr. Wallerstein not to suspend his rule is because 12 in my judgment, having watched waiver decisions, and now 13 knowing quite a bit more about them as Executive Officer, 14 I honestly don't believe we will obtain a federal waiver 15 before 2010. And in that instance, our rule will never be 16 fully enforceable. 17 And Tom Jennings explained there's a provision of 18 the State Constitution which says you still have to abide 19 by State rules unless an Appellate Court has ruled on the 20 question that our rule presents. So there's some gray 21 area there. But I fundamentally felt we would not have 22 something with full police power, and Barry does. And he 23 should work with his rule. 24 The overlay problem that we've also talked about 25 is if, in fact, the State Constitution makes the rule PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 292 1 enforceable, then it creates an immediate problem for 2 School Districts subject to two different rules that don't 3 match. And they do not match at the moment. At the very 4 least, South Coast needs to go back into their hearing 5 room and match their rule to ours. Because you can't have 6 two different regulations affecting the same party. And 7 they have some time to do that, because we have to process 8 ours through OAL, should the Board choose to adopt it. 9 And so at least the affected industry or -- 10 excuse me -- School Districts would know what they are 11 facing, know what the conditions of the exemptions were, 12 would know what is funded and what is not, because those 13 things don't match perfectly. So that would be my 14 reaction. 15 And Tom. 16 ACTING GENERAL COUNSEL JENNINGS: This isn't 17 really a legal point so much, but I think it's important 18 to remember that if you were to vote to go ahead with the 19 adoption of the regulation today, it doesn't go into 20 effect today. We have to have the staff put together the 21 final Statement of Reasons, which means you will be asking 22 the staff to commit a significant amount of time doing 23 that. It would take several months. Then we have the OAL 24 review period of 30 working days. So even for purposes of 25 State law only, we wouldn't have something in place until PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 293 1 many months down the road, but not more than a year from 2 when the notice was issued. 3 SUPERVISOR DeSAULNIER: Just in conclusion given 4 that background, I would be supportive of a motion you 5 might amend, Ron, to include the kind of language you 6 started with, at least in early-out years. And then ask 7 the South Coast not to suspend its rules obviously, but go 8 through this process and allow staff to protect both of us 9 as best as they see fit. 10 ACTING CHAIRPERSON RIORDAN: Ms. D'Adamo, and 11 then I'm going to move to Supervisor Patrick. 12 BOARD MEMBER D'ADAMO: I'm sorry for butting in, 13 but just a question of Supervisor DeSaulnier and Mayor 14 Loveridge. Would you be willing to, with that motion, 15 amend it such that the rule would not take effect unless 16 an injunction is issued? So it really and truly is ripe 17 and we don't risk this whole issue of the waiver. 18 BOARD MEMBER BERG: Are you asking that we 19 wouldn't even apply for the waiver unless there was an 20 injunction? 21 BOARD MEMBER D'ADAMO: Sort of similar to what we 22 did with chip reflash. We don't act until -- our action 23 would be triggered by another event. 24 And I would defer to you, Mayor, on that. I 25 would be supportive of your motion if it didn't take PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 294 1 effect unless an injection were issued. 2 BOARD MEMBER LOVERIDGE: Well, at least at first 3 glance, I like to hear from other Board members. But I'd 4 be receptive to that motion. 5 ACTING CHAIRPERSON RIORDAN: Supervisor Patrick. 6 SUPERVISOR PATRICK: Thank you. 7 I'm wondering if by taking no action at this time 8 if we're not in a better position. I, too, as a member of 9 an Air District that is, unfortunately, right behind you 10 in terms of air quality, I on the one hand need to be, 11 want to be very supportive of your position. On the other 12 hand, I'm hearing a couple of things. 13 First of all, you have the right to enforce, and 14 are enforcing at this time, and that a waiver not only 15 will take two to five years, but there is some future 16 jeopardy to other waivers that is a potential for any 17 action that this Board might take. And so that is really 18 the issue that is of greatest concern to me. Not that I 19 don't want to be supportive of where you are. 20 And I also think that when you're talking about 21 what I will call a compromise position, which is what you 22 kind of talked about out of the shoot, I'm more 23 comfortable with that. But on the other hand, if we're 24 going to tie that to, you know, the waiver and working 25 with EPA, I'm not sure it's going to get us where we want PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 295 1 to go. And I'm wondering if strategically you're better 2 off going along with the course that you have been taking. 3 And then perhaps as Ms. D'Adamo has suggested, if there is 4 some future court ruling, that then this Board could step 5 in. 6 And right now I'm just thinking out loud. I'm 7 certainly not an attorney. And I'm just wondering if 8 there is some wisdom that taking no action -- because we 9 certainly do not want to put you folks in a position of 10 having us, because of fuel neutrality and because of other 11 issues, having us not vote for your position. 12 ACTING CHAIRPERSON RIORDAN: Ms. Berg. 13 BOARD MEMBER BERG: The other thing that I'm 14 concerned about and would be also in favor of no action, 15 because I'm afraid if we start fooling around with the 16 implementation time and changing the criteria, that that 17 is going to jeopardize South Coast current rule that is 18 enforceable. 19 And the other thing that I'm really troubled by, 20 and I don't think we've had much discussion by it, and 21 that is this will be the first action, as I understand it, 22 that we've ever adopted that is an area specific and is 23 not state specific, or doesn't include the state. And 24 what implications would that have and maybe some 25 unintended consequences that we haven't talked about, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 296 1 because we really haven't talked about the legality of 2 that and how it can be adopted in other places. 3 ACTING CHAIRPERSON RIORDAN: Ms. Kennard, did 4 you -- 5 BOARD MEMBER KENNARD: I'll wait. 6 ACTING CHAIRPERSON RIORDAN: I'm sorry. Is there 7 a question? 8 BOARD MEMBER BERG: I don't know there's a 9 question. It was really a statement. 10 ACTING CHAIRPERSON RIORDAN: Ms. Kennard. 11 BOARD MEMBER KENNARD: I'd like to offer up kind 12 of a little bit different perspective, but first I'd like 13 to applaud the Districts that have been very aggressive 14 like LAUSD and Colton in converting their buses. And I 15 think it's very, very interesting that as we hear from a 16 variety of different Districts that it's all across the 17 board. There's no singular view. Some are for, and some 18 are against. That in some part is -- it's refreshing to 19 see those who have stepped up to plate, but troubling for 20 those who have real, kind of, economic issues. 21 Coming in here, I really did think that this was 22 all about fuel neutrality. And yet with the last speaker 23 who had the four-year-old, I realize that it probably 24 isn't about fuel neutrality at all. That it is really 25 about delivering in the best, most efficient, quickest, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 297 1 and economic way the cleanest buses possible. 2 So with that in mind, I'm troubled by the 3 economic argument. And I'm not at all persuaded that the 4 current program delivers the cleanest buses most quickly. 5 And if you just do the math, there's an argument that the 6 retrofit buses that you could deliver a lot more much more 7 quickly. 8 And so with that context, and also the fact that 9 by doing nothing at this level does not preclude the South 10 Coast from implementing its rules, I don't think that we 11 change the scenario of really incentivizing the Districts 12 to turn over their fleets quickly. So that's kind of 13 where I am. I'm interested to see if there is a middle 14 ground here. 15 ACTING CHAIRPERSON RIORDAN: Let me -- I know 16 you're just dying to say something. But I want to give 17 everybody a chance to speak before I turn it back to you. 18 Dr. Gong. 19 BOARD MEMBER GONG: I'm similar to the other 20 Board members in that I'm conflicted and torn. I've 21 really appreciated all the testimony today and also ex 22 parte discussions. I've tried to do my homework. And 23 I've read up on all these different documents, the 24 propaganda, pro and con, et cetera. 25 I just go back to some basic principles. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 298 1 good or for bad, how much emissions are being reduced? 2 What's the delta? And then I guess you could say, well, 3 how do you calculate that? And do you do it from 2000? 4 Do you do it from 2005 or whatever? So I get a little 5 mixed signals on that. What about the improvement in 6 health effects? Something that I'm interested in. 7 I get the impression that because the amount of 8 pollutant reduction is not that great, does that mean that 9 the health benefits are not going to be that great? I 10 don't think anybody has an answer to that, unfortunately. 11 If I did have an answer to that, I could give you a 12 black-and-white answer right now as to how I feel about 13 this whole thing. But I think we don't have the tools to 14 really tell us that at the moment. 15 So I'm really caught with the political, 16 administrative, legal aspects, as you all are, debating 17 here. Not so much with the medical or scientific, because 18 I don't think the answers are there. And I'm torn. And 19 I'm mixed about this. I feel that both sides have 20 presented very cogent arguments. You may not believe each 21 of their items, but, indeed, truth is somewhere in 22 between, as we say. 23 One question I had perhaps for Diane or Tom is 24 that do we lose anything if we wait for an injunction, 25 that D.D. talked about? Is that going to provide any PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 299 1 political leverage -- or legal leverage if we wait for 2 that to happen? Or are we in a stronger position? 3 ACTING GENERAL JENNINGS: Well, I think there are 4 a couple of issues there. One is how we identify what 5 we're waiting for and then what the impact would be. I 6 think at the District Court level, it's clear that the 7 judge is not going to issue an injunction against the rule 8 as it applies to fleet-operated vehicles. It's more iffy 9 whether it would apply to the contracted vehicles with 10 public agencies. The court may or may not issue an 11 injunction in the summary judgment. 12 But in either case, it would ultimately get 13 appealed to the 9th Circuit, and then the 9th Circuit 14 decision would not necessarily result in an injunction. 15 It might get remanded back. So we would really want to 16 think through how we would identify the triggers. And, 17 frankly, I wouldn't mind the input from the parties in the 18 lawsuit as well as to what kind of triggers we would want 19 to have. 20 But in terms of the time, we have one year to 21 complete this rulemaking, if you want to adopt a 22 regulation based on the proposal. And if we don't -- as I 23 indicated before, it's going to take a lot more staff work 24 to go the rest of the way. But if we don't do that within 25 a year, then we would have to issue a new notice. Now, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 300 1 the work at that point would be much easier, because we 2 could base it on what we've done before. But obviously 3 that would result in a significant delay. 4 ACTING CHAIRPERSON RIORDAN: Thank you. 5 BOARD MEMBER GONG: One further comment. It was 6 brought up during today's discussion about the big picture 7 Ms. Berg brought it up as well now about would we be 8 setting ourselves up in terms of future waiver limitations 9 or restrictions by the EPA should we run into a buzz saw 10 with them, denial in other words. Would they use that as 11 a precedent for future ARB waiver requests? And I'm 12 concerned with the big picture, if I understand the 13 discussion correctly. Because you have to think about the 14 future, not just about the short term. And, to me, that 15 curtails some of our, I think, important activities, 16 potentially. 17 ACTING CHAIRPERSON RIORDAN: Do you want to ask 18 for the staff to comment on that? 19 BOARD MEMBER GONG: Sure. 20 EXECUTIVE OFFICER WITHERSPOON: Yeah. We 21 commented on that a little bit earlier today. And the 22 risk is -- well, first of all, we do think it will take a 23 long amount of time. We will not be -- I think we will 24 not be granted scope of waiver. There will be a new 25 waiver. There will be hearings. You heard testimony from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 301 1 some of industry that they expect litigation. They expect 2 to file litigation if they don't like the signals they're 3 seeing from EPA if they tended to be favorable. 4 And that also in our assessments that the lead 5 time and stability issue would become prominent because it 6 effects how quickly we might be able to enforce the rules 7 we've given EPA to waive. So all of these things could go 8 on. 9 And then there were a few other ones on the side, 10 like could we or could we not have subgeographical areas 11 be waived. That's never been decided before, and that 12 will be kind of constipated at EPA as other issues have 13 been. 14 ACTING CHAIRPERSON RIORDAN: Okay. Mayor 15 Loveridge has wanted to speak for the last ten minutes. 16 BOARD MEMBER LOVERIDGE: I'm not sure I 17 understand that answer. I'm just not sure of Catherine's 18 framing of what this would mean if a waiver was 19 undertaken. A waiver is a request, and it obviously has a 20 particular frame, a particular set of facts around it. 21 Let me just I think -- two things. One is this 22 is not a new proposal. This is what we're talking about 23 Fleet Rules that have been in practice. There is a track 24 record. They have been reviewed in any number of ways by 25 the District staff, by the Board. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 302 1 And so one request is that rather than taking no 2 action, which is really saying we're not in support, the 3 Option 1 is really a statement of support as opposed a 4 statement saying we have questions about your Fleet Rules. 5 And I would be willing and interested in the idea of some 6 kind of trigger language. Would offer that as a part of 7 the motion, although as Tom Jennings says, I'm not quite 8 sure what that trigger language would say. But I would 9 like to modify my motion to request some kind of trigger 10 language. 11 ACTING CHAIRPERSON RIORDAN: Supervisor Patrick. 12 SUPERVISOR PATRICK: Thank you. 13 If we were to move forward and we were to apply 14 for a waiver, would South Coast's day in court against the 15 people that are suing them, would that continue as the 16 waiver continues? Would we be on -- would there be two 17 parallel courses? The waiver continues, and the folks 18 that have refiled -- pardon of me if I'm not using the 19 right legal language. But those that -- this question of 20 whether contractors are part of this, would they not still 21 be continued to be sued? 22 ACTING GENERAL JENNINGS: Yeah. We could proceed 23 with the waiver request, which again wouldn't go in 24 earlier than at least six months from now, because we'd 25 have to complete the rulemaking and get OAL approval. But PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 303 1 there isn't any legal reason why you couldn't have 2 parallel tracks of requesting the waiver and watching 3 what's going on. Maybe I didn't understand. 4 SUPERVISOR PATRICK: No, you did. But my next 5 question is if we're moving forward on this and there's 6 still a lawsuit that's going on and we agree and you get 7 to the point where at the end of a one-year, you know, all 8 of the I's are dotted and all the T's are crossed, and now 9 then we are embroiled in this lawsuit as well, would we 10 not be? 11 ACTING GENERAL JENNINGS: We would be if we got 12 sued. We are not a party of the lawsuit right now. 13 SUPERVISOR PATRICK: Well, we will be. And 14 that's not a joke. We will be. 15 I really do think that the most appropriate 16 course of action for this Board is to take no action. And 17 I do not think that taking no action is saying we do not 18 support you. I think that no action is saying that you 19 have the ability to do this and that you should move 20 forward and do that. And so at this time I'm going to 21 make a motion to table the motion. 22 ACTING GENERAL JENNINGS: I'd like to make one 23 clarification of a statement I made before. As I 24 indicated, the Air Resources Board is not a party of that 25 litigation. But the Attorney General's Office intervened PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 304 1 on behalf of the State. And the Attorney General is a 2 party, although not the Air Resources Board. 3 SUPERVISOR PATRICK: I see. 4 I still would like to table this motion. I do 5 not think that us getting involved in this through any 6 action today is going to benefit. I think it's more 7 likely to complicate. And I still think that at the end 8 of the day it will be 2010 -- 2008, 2010 before any action 9 is made on this by EPA. 10 ACTING CHAIRPERSON RIORDAN: Is there a second to 11 the table motion? 12 BOARD MEMBER KENNARD: I'll second the motion. 13 ACTING CHAIRPERSON RIORDAN: There's a motion and 14 second. 15 Let me remind the Board on the motion of the 16 table. It requires a second, which it has. It is not 17 debatable. It cannot be amended. It requires a majority 18 vote. And it cannot be reconsidered. So the motion to 19 table this motion is before you. And I would ask in this 20 case probably that we ask the Clerk to take a roll call 21 vote. 22 BOARD MEMBER D'ADAMO: Madam Chair, a point of 23 information. 24 ACTING CHAIRPERSON RIORDAN: You can have a point 25 of information. I think that is still higher. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 305 1 BOARD MEMBER D'ADAMO: If the motion to table 2 carries, the motion cannot be reconsidered. But it's my 3 understanding that it could be taken off the table by a 4 subsequent motion, not today, but perhaps at a later time. 5 ACTING CHAIRPERSON RIORDAN: That's correct. 6 BOARD MEMBER D'ADAMO: My question is what is the 7 procedure to take it off the table? 8 ACTING CHAIRPERSON RIORDAN: Let me ask counsel. 9 ACTING GENERAL JENNINGS: We are getting into 10 arcane aspects of Roberts Rules of Order. But my 11 understanding is it would expire. It could be brought 12 back off the table up through your next Board meeting. 13 But if that doesn't happen, then you couldn't overrule the 14 motion to table. But that doesn't necessarily mean that 15 one way or another it couldn't be brought back. 16 ACTING CHAIRPERSON RIORDAN: It's an undetermined 17 amount of time. 18 All right. The motion is before you. Madam 19 Clerk, call the roll, please. 20 SECRETARY ANDREONI: Ms. Berg? 21 BOARD MEMBER BERG: Yes. 22 SECRETARY ANDREONI: Ms. D'Adamo? 23 BOARD MEMBER D'ADAMO: No. 24 SECRETARY ANDREONI: Supervisor DeSaulnier? 25 SUPERVISOR DeSAULNIER: No. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 306 1 SECRETARY ANDREONI: Dr. Gong? 2 BOARD MEMBER GONG: No. 3 SECRETARY ANDREONI: Ms. Kennard? 4 BOARD MEMBER KENNARD: Yes. 5 SECRETARY ANDREONI: Mayor Loveridge? 6 BOARD MEMBER LOVERIDGE: No. 7 SECRETARY ANDREONI: Supervisor Patrick? 8 SUPERVISOR PATRICK: Yes. 9 SECRETARY ANDREONI: And Madam Chair Riordan? 10 ACTING CHAIRPERSON RIORDAN: Yes. 11 So you have an equal number, four-four. So it's 12 a tie. Now tell me -- 13 ACTING GENERAL JENNINGS: Roberts Rules of Order 14 says it needs a majority vote, so it didn't receive a 15 majority vote. 16 ACTING CHAIRPERSON RIORDAN: Okay. So we're open 17 for discussion. It needs to be five to three. And it is 18 four-four. 19 There is a motion on the floor. Is there any 20 change to that motion? Maybe that should be clarified. 21 I'm not sure what motion is on the floor, to be honest 22 with you. 23 SENIOR STAFF COUNSEL JOHNSTON: If I may, it's 24 Diane Johnston. 25 The motion on the floor is Mayor Loveridge's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 307 1 motion to adopt the proposal that the ARB put before the 2 Board. 3 BOARD MEMBER D'ADAMO: I thought there was an 4 amendment. 5 BOARD MEMBER LOVERIDGE: With the amendment of 6 the trigger. 7 SENIOR STAFF COUNSEL JOHNSTON: Thank you. 8 ACTING CHAIRPERSON RIORDAN: And the seconder of 9 the motion, is that acceptable? 10 SUPERVISOR DeSAULNIER: Yes. 11 SUPERVISOR PATRICK: What is the trigger? I'm 12 unclear about a trigger. What is it? 13 BOARD MEMBER LOVERIDGE: Tom, you're the one that 14 said -- you gave the ambiguity or the complexity of the 15 initial amendment. And I would look to you for language 16 of the trigger. 17 EXECUTIVE OFFICER WITHERSPOON: Before Tom does 18 that, if I could respond from plain English. What I heard 19 recommended was that the trigger would be an injunction. 20 And what I would like to clarify for the Board is the 21 possible different scopes of an injunction. So at the 22 moment, South Coast has been authorized -- clearly 23 authorized to regulate public agencies. It is possible in 24 the near future they will receive an injunction on private 25 contractors to public agencies, because that's the only PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 308 1 motion pending, that and federal vehicles and purely 2 private. 3 At some future course of action, one could 4 conceive an injunction against all the rules. But the 5 only one imminent might be a narrow one-third of the trash 6 trucks. It would not affect -- we're on the school bus 7 item. It would affect private contractors to School 8 Districts and staff. Help me. What percent of school 9 buses are private? 50 percent. Okay. So 50 percent of 10 school buses could be at stake. 11 Okay. Tom wants me to remind you of one other 12 thing. 13 Let me just clarify what an injunction is. There 14 is a pending motion with respect to private contractors. 15 Later, there could be other motions about broader aspects 16 of the rule. And as Mr. Cackette pointed out, the school 17 bus money is unaffected either way, and the South Coast 18 could continue to spend its 11 million plus the MSRC 2 19 million which has been appropriated, plus their share of 20 the 25 million. All of that can be spent on natural gas 21 buses without respect to any of this litigation we're 22 talking about. So 92-plus natural gas vehicles will still 23 be purchased every year in this basin. So those are the 24 factual circumstances. 25 Now if Tom could talk about legal trigger PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 309 1 questions. 2 ACTING GENERAL JENNINGS: There are at least a 3 couple issues there. 4 One is what kind of action requires the trigger. 5 I think an injunction definitely is an action that would 6 trigger. I think that since appellate courts don't issue 7 injunctions, it's been suggested that, in terms of the 8 appellate courts, any rule, any decision that invalidates 9 the regulation in its entirety or as it applies to 10 publicly contracted -- or private fleets that are publicly 11 contracted that that probably would be a sufficient 12 trigger. 13 And then the other question, I don't know how we 14 come out on this. But let's assume that it ends up that 15 the District has full authority as far as publicly-owned 16 fleets, but not with privately-operated and contracted 17 fleets. Do you want your regulation to apply to both of 18 those, or just to the part that the District is precluded 19 from enforcing. Was that clear enough? 20 ACTING CHAIRPERSON RIORDAN: All right. The 21 maker of the motion -- 22 BOARD MEMBER LOVERIDGE: I would look to the -- 23 I'm really counting votes here. 24 BOARD MEMBER D'ADAMO: Well, since I had 25 suggested this, if I might just throw it out there. I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 310 1 would not want this trigger to take effect if a narrow 2 portion of the rule is invalidated. So in my opinion, I 3 would be looking at a trigger that would take effect if 4 the rule in its entirety is invalidated or public fleets 5 that are privately operated. And I'm not quite sure if 6 that's too narrow on the public fleets that are privately 7 operated or contracted. I would look to staff to maybe 8 comment. 9 In other words, I don't want to see a trigger for 10 a very narrow circumstance in light of the fact that a lot 11 of us are concerned about the risk that might be involved 12 with the waiver. 13 ACTING GENERAL JENNINGS: Okay. I have to tell 14 you that I think there is some greater likelihood that 15 there would be an invalidation of the privately contracted 16 element in the fleets that are totally run by the public 17 agencies. 18 The question is whether -- and I'm not sure I 19 understood you, Ms. D'Adamo. Do you want an invalidation 20 of the privately contracted portion of the regulation to 21 trigger ours entirely or not? 22 BOARD MEMBER D'ADAMO: I'd like to have a 23 discussion on that, because I'm not sure, just not knowing 24 how many trucks and buses we're talking about. 25 EXECUTIVE OFFICER WITHERSPOON: While the Board PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 311 1 is discussing, another question is when you say a trigger, 2 what is it that you need to trigger? Because we have a 3 regulation before you now, and triggering might mean you 4 want us then to submit it to OAL. Or triggering might 5 mean you want us come and correct it for what got 6 preempted. Or triggering might mean you want us to start 7 the waiver process. So if the Board could clarify when 8 you pull the trigger, what are you asking staff to do? 9 ACTING CHAIRPERSON RIORDAN: I'm going to do 10 something which I think is correct, and that is I'm going 11 to vacate the chair. I'm going to hand the gavel to my 12 colleague so I can speak. 13 You know, Board members, we're having a great 14 deal of difficulty with this. And I understand the 15 concerns. But we're having a great deal of difficulty, 16 because we've been put in a very awkward position. There 17 is a lawsuit which is moving along. And we are, I think, 18 being asked to parallel that lawsuit with some other 19 action that's going to be very difficult to actually come 20 to some resolution of the correctness of what we are 21 asking for. 22 The difficulty I see is that we are now beginning 23 to move into an area, what triggers. What we mean by 24 triggering. I can tell you, I see some severe 25 difficulties in this primarily because of the current PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 312 1 lawsuit. Had we been faced with this in a different way 2 at a different time, maybe it could have been handled 3 better. But we are in a very awkward position. And I 4 don't recall in all my years we've quite been at this 5 point. 6 And I'm afraid, one, of acting too hastily with 7 what we're directing staff to do. I mean, if the 8 prevailing notion is to have some support of the motion 9 with some trigger, I would almost say what we ought to do 10 is ask staff to bring back to us some -- you know, not 11 open the hearing again for comment, if that's possible, 12 but to be sure that the language that's being proposed 13 here is what we really want it to do. That's one position 14 I see. 15 The other position is to simply await the 16 decision. And I'm not sure how long that will be. I've 17 known federal courts that take time, and some federal 18 courts move right along. But I just caution you, I see us 19 in a very difficult position. 20 Now I'll take back my gavel. Thank you. 21 SUPERVISOR PATRICK: Madam Chairman. 22 ACTING CHAIRPERSON RIORDAN: Yes. 23 SUPERVISOR PATRICK: Your comments triggered a 24 thought in me. If we were to take no action -- I know. I 25 lost. That's okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 313 1 If we were to take no action, and six months from 2 now or two years from now there were to be an adverse 3 injunction, decision, whatever, against the South Coast 4 District, could we not reconsider at that point in time 5 what we're talking about today in light of any judicial 6 decision that's made? 7 EXECUTIVE OFFICER WITHERSPOON: Yes, you could. 8 And as Mr. Jennings indicated, at that point we would need 9 to run through the OAL and waiver process, and there's 10 some time associated with it. Though, the facts would be 11 different, in terms of the District having lost authority, 12 and it might improve our chances of getting expeditious 13 responses both by State agencies and by Federal agencies. 14 ACTING GENERAL JENNINGS: If we didn't do that 15 within a year from the date this rulemaking was noticed, 16 we would have to issue a new notice and have another 17 hearing. 18 SUPERVISOR PATRICK: Would we not do that anyway? 19 That is very specific to the action that was taken by the 20 court, so that we would move expeditiously in reaction to 21 the court? 22 EXECUTIVE OFFICER WITHERSPOON: Ideally, it 23 should be tailored, because you only need to seek a waiver 24 for what's been preempted. So already the rule that we've 25 written is broader than what we need a waiver for based on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 314 1 Judge Cooper's decision, because public agency vehicles 2 are not preempted. So we don't need a waiver for that 3 part. And we didn't write the rule to only effect 4 privately contracted and purely private. So we'd need to 5 separate that out in our transmittal to EPA. If something 6 changed legally, we might want to reflect that both in the 7 rule you adopt and in what we transmit to EPA. 8 SUPERVISOR PATRICK: Thank you. And I just have 9 one more comment. And that is that Catherine told us that 10 there is money to replace 92 school buses a year between 11 now and 2010; is that correct? 12 EXECUTIVE OFFICER WITHERSPOON: I'm sorry. The 13 lawyers were talking to me. Could you repeat the 14 question? 15 SUPERVISOR PATRICK: I'm glad I'm up here then. 16 CHIEF DEPUTY EXECUTIVE OFFICER CACKETTE: The 17 answer is yes. 18 ACTING GENERAL JENNINGS: Let me just mention 19 what we were talking about is we would not need a waiver 20 for the public fleets part of the regulation. Only if a 21 court were to hold, as they did with the District 22 regulation, that the rule that you're considering has the 23 effect of creating a policy or a rule of the public fleet 24 operators that they're acting in their market participant 25 activity and making contracting decision in what kind of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 315 1 buses they get. And it's not all together clear that our 2 rule would be treated that way. But it's not out of the 3 question. 4 SUPERVISOR PATRICK: So we don't need a waiver to 5 support what the court has already upheld? It would just 6 be that portion that's still under consideration? 7 ACTING GENERAL JENNINGS: Let me put it another 8 way. The California General Services has had a policy for 9 some years saying that, I think, only ULEVs or only LEVs 10 are to be purchased by the State of California as state 11 cars. We never asked for a waiver for that. We don't 12 need a waiver, because we are acting as a market 13 participant rather than a regulator when we have that 14 policy. The question is whether the rule that you adopt 15 would be seen more that way, or would be seen as something 16 that's directly trying to regulate entities, in which case 17 you would need a waiver. 18 SENIOR STAFF COUNSEL JOHNSTON: If I may add, the 19 forum in which staff has proposed a rule to you would need 20 a waiver, because it's not framed as a market participant 21 type of rule. It's framed as a standard. 22 SUPERVISOR PATRICK: Is there any issue with the 23 market participation when the South Coast Air District 24 imposes on other public entities under their -- you know, 25 that are in that area? Does that -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 316 1 SENIOR STAFF COUNSEL JOHNSTON: Judge Cooper has 2 already said the District may impose its rules on fleets 3 that are operated by public entities, both State and local 4 and entities and any State or local Districts. 5 The question that remains and on which EMA has a 6 motion is whether the District is barred as a standard 7 from imposing those rules on private contractors who 8 contract with public agencies. And there are also some 9 other aspects on which the court has not ruled, but that 10 is really not that much -- the vehicles that are affected 11 by those are fairly minimal. 12 SUPERVISOR PATRICK: Thank you. 13 And then I would just make one last comment and 14 then I promise I won't say anything else. But I 15 appreciate you've helped to clarify things for me quite a 16 bit. 17 Ninty-two school buses a year for the next five 18 years, I would imagine that just the School Districts have 19 those without any private contractors whatsoever. So then 20 I'm beginning to question, you know, why we need to move 21 forward with this, when I would bet that it would take 22 every dollar the District has just to change out the 23 school buses that the Districts have now that need to be 24 changed out. 25 Thank you, Madam Chairman. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 317 1 ACTING CHAIRPERSON RIORDAN: Yes, Ms. Berg. 2 BOARD MEMBER BERG: I don't want to belabor the 3 legal aspects, but I have one other question. If we're 4 running a dual path, and we're submitting a waiver that is 5 covering the non-public side and in a year from now 6 something is interpreted in the appeal court to go in 7 favor of the Engine Manufacturers, now we have another 8 group of people that are not covered by the waiver; is 9 that correct? 10 EXECUTIVE OFFICER WITHERSPOON: The single 11 biggest group would be the private contractors, which 12 represent half of the school bus providers. And as Diane 13 Johnston pointed out just a second ago, because of the way 14 we wrote this rule, we actually need a waiver for the 15 public part. South Coast does not need a waiver under 16 Judge Cooper's decision, but we would need one if you 17 adopt this rule. 18 BOARD MEMBER BERG: So we would be moving forward 19 to get a waiver for the full rule and therefore -- okay. 20 I was not clear about that. 21 EXECUTIVE OFFICER WITHERSPOON: I was not either. 22 Diane corrected me. 23 BOARD MEMBER BERG: No problem. 24 I'm also very uncomfortable trying to craft a 25 motion that puts things into play that we really don't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 318 1 have a very strong handle on. And so I feel like what 2 we're trying to do, and I am supportive of that, is to 3 find a way to let South Coast Air Quality know that we do 4 support them as a Board. And because they have Judge 5 Cooper's ruling to enforce the majority of their rule, and 6 yes, there are some -- a little bit of uncertainty on 7 that, but there's a whole lot of uncertainty on what we're 8 looking to vote on. So I'm very uncomfortable, and I 9 don't know how to reconcile that. 10 ACTING CHAIRPERSON RIORDAN: Okay. Mayor 11 Loveridge. 12 BOARD MEMBER LOVERIDGE: Let me try somewhat of a 13 different tact. We began with the notion we're in this 14 game because the California Legislature said here is some 15 ways the District can search to reduce and improve air 16 quality. The District set out on this path. And there's 17 obviously -- there were lawsuits. Out of that came back 18 the interpretation that for the District to go ahead, it 19 needed to ask the State, which then the State would then 20 ask EPA. Maybe easier rather than trying to craft some 21 trigger is we take on the motion as presented by staff 22 originally, which is Option 1, and proceed in that way. 23 And so I -- 24 ACTING CHAIRPERSON RIORDAN: That's up to you, 25 because you're the maker of the motion. You can drop the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 319 1 amendment with the confirmation of a seconder. 2 BOARD MEMBER LOVERIDGE: The more you look for 3 the trigger and what it covers, the more complicated it 4 becomes. And so I would ask that a second if we could 5 just have the original Option 1 as proposed by staff. 6 ACTING CHAIRPERSON RIORDAN: Is that agreeable to 7 the seconder? 8 SUPERVISOR DeSAULNIER: Yes. 9 ACTING CHAIRPERSON RIORDAN: Let me be clear. I 10 thought Dr. Gong seconded the motion. 11 SUPERVISOR DeSAULNIER: I was wearing his glasses 12 at the time. 13 ACTING CHAIRPERSON RIORDAN: I'm sorry. 14 Okay. So we have the motion in front of us. 15 Thank you. 16 Any further discussion? Are we ready for a vote? 17 BOARD MEMBER D'ADAMO: I would just like to 18 clarify, since I'm the one that raised the issue -- or 19 complicated the issue with the trigger discussion, that I 20 won't be supporting that motion because of the comments 21 that I made previously. But I do understand why you want 22 to move forward with it, Mayor. 23 ACTING CHAIRPERSON RIORDAN: All right. I'm 24 going to ask that we ask for a roll call vote on the 25 motion. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 320 1 SECRETARY ANDREONI: Ms. Berg? 2 BOARD MEMBER BERG: No. 3 SECRETARY ANDREONI: Ms. D'Adamo? 4 BOARD MEMBER D'ADAMO: No. 5 SECRETARY ANDREONI: Supervisor DeSaulnier? 6 SUPERVISOR DeSAULNIER: Yes. 7 SECRETARY ANDREONI: Dr. Gong? 8 BOARD MEMBER GONG: Yes. 9 SECRETARY ANDREONI: Ms. Kennard? 10 BOARD MEMBER KENNARD: No. 11 SECRETARY ANDREONI: Mayor Loveridge? 12 BOARD MEMBER LOVERIDGE: Yes. 13 SECRETARY ANDREONI: Supervisor Patrick? 14 SUPERVISOR PATRICK: No. 15 SECRETARY ANDREONI: Madam Chairman Riordan? 16 ACTING CHAIRPERSON RIORDAN: No. 17 Five to three. That disposes of that item. 18 Ladies and gentlemen, we are still have two items in front 19 of us. 20 BOARD MEMBER LOVERIDGE: That's the vote. It was 21 voted down. That doesn't mean there couldn't be some 22 other motion that could be made. 23 ACTING CHAIRPERSON RIORDAN: Mayor Loveridge, I'm 24 listening. 25 BOARD MEMBER LOVERIDGE: I mean, it seems to me PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 321 1 we've had two votes, and we could have a third vote. 2 ACTING CHAIRPERSON RIORDAN: You could. 3 BOARD MEMBER LOVERIDGE: If there was a -- 4 ACTING CHAIRPERSON RIORDAN: I'm waiting to hear 5 from you, if there's a -- 6 BOARD MEMBER LOVERIDGE: Mark. 7 SUPERVISOR DeSAULNIER: I'll give it a try. 8 And I do want to say this really demonstrates I 9 think how difficult this is for all of us. And Barbara 10 strikes me -- for the two members who are former School 11 Board members, I think your comments are to be taken to 12 heart. 13 I would try to go back and revisit D.D.'s. We're 14 going to have a group motion here, D.D., that we would 15 move support of staff's Recommendation 1, but make it 16 contingent on -- and D.D., I'll go back to your language. 17 I'd like some help with that. 18 BOARD MEMBER D'ADAMO: The trigger would be an 19 invalidation of the rule in its entirety or with regard to 20 private contractors that contract with public agencies. 21 And, Mr. Jennings, if you could help me out on 22 that. Does that sound clear? 23 ACTING GENERAL JENNINGS: Yeah. I know lawyers 24 often complicate things. And I am sorry this is going to 25 complicate things a little more. But I just want to make PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 322 1 sure you understand the lay of the land as much as 2 possible. 3 It is possible -- and I would be interested in 4 comment from parties to the lawsuit -- that the judge 5 could decide that the way the District's rule is written, 6 you can't use the market participant doctrine to regulate 7 the private fleets that are contracting with the public 8 agencies. And, therefore, it's in valid. 9 But it could be possible that the District could 10 structure the regulation in a different way that points to 11 the public agency initially, rather than to the private 12 fleet operator initially, and that might be legal. So I 13 don't know what the court's ruling is going to be, but 14 there is that nuance. 15 EXECUTIVE OFFICER WITHERSPOON: What Tom means by 16 that is were the District to lose direct authority over 17 private contractors to public agencies, they could amend 18 their rule to say, public agencies when contracting must 19 provide for the purchase of clean fuel vehicles or all 20 fuel vehicles, so that they have powers of their own that 21 could be exercised and, you know, take away the issue of 22 whether we would need to exercise them in their stead. 23 SUPERVISOR DeSAULNIER: May I make a suggestion 24 that's sort of implicit in the motion is, if we get into 25 that gray area, at that point the Executive Officer would PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 323 1 bring it back to the Board, to whether it would actually 2 go into effect. 3 EXECUTIVE OFFICER WITHERSPOON: Can I ask for a 4 clarification, is what's triggered a report back to the 5 Board, and then we'll figure out what to do then? 6 SUPERVISOR DeSAULNIER: It's D.D.'s 7 recommendation. But if there's any question or deviation 8 from it, then at that point you bring it back to the 9 Board, which gets to some of the other discussion here. 10 We don't know what's going the happen. We're 11 sort of trying to anticipate. We're trying to acknowledge 12 our support, but that support is based on something 13 negative happening from the court to the District. So I'm 14 willing to give you the discretion, if you have some 15 doubts, you bring it back to the Board at that point. 16 EXECUTIVE OFFICER WITHERSPOON: I'm still asking 17 D.D. -- 18 SUPERVISOR DeSAULNIER: A trigger on the trigger. 19 EXECUTIVE OFFICER WITHERSPOON: Is the trigger to 20 seek a waiver? Is the trigger to file with OAL? What's 21 the trigger to do? 22 BOARD MEMBER D'ADAMO: What's before us right 23 now -- or not right now, but in the staff report was to 24 file with OAL first, correct? Go through that process. 25 EXECUTIVE OFFICER WITHERSPOON: We can do it in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 324 1 sequence or concurrently. But I'm asking if you adopt the 2 rules tonight with the trigger, tomorrow are we on hold, 3 or are we starting either process, the OAL process or the 4 waiver process? 5 BOARD MEMBER D'ADAMO: It's my opinion we should 6 be on hold. The trigger would trigger the process of 7 going to OAL. 8 And I did have one other little comment based on 9 what you said, Catherine. And that is that if the 10 District amends its rules, then there's really no need for 11 us to move forward anyway. So I don't view that situation 12 as being sort of the gray area. I think it should come 13 back to us if it's invalidated and -- 14 EXECUTIVE OFFICER WITHERSPOON: And the District 15 has no recourse. 16 BOARD MEMBER D'ADAMO: Right. 17 BOARD MEMBER BERG: Would you say it's all or 18 nothing? If they don't have the ability to go forward 19 with the rule, it's an all or nothing trigger? 20 BOARD MEMBER D'ADAMO: Well, I think Mark is just 21 saying we'd be the backstop. So if the District, as you 22 say, Catherine, has no recourse by virtue of the fact they 23 weren't able to amend their rules -- 24 EXECUTIVE OFFICER WITHERSPOON: The whole market 25 participation doctrine was struck down itself as it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 325 1 applies to the District, then everything would be gone, 2 and they would need a preemption. 3 SUPERVISOR DeSAULNIER: Yes. 4 EXECUTIVE OFFICER WITHERSPOON: They would need a 5 waiver of preemption. 6 ACTING GENERAL JENNINGS: Just for one more 7 clarification. 8 SUPERVISOR DeSAULNIER: You're really treading on 9 thing ice. 10 ACTING GENERAL JENNINGS: We're going to have to 11 write this up afterwards. 12 Would the trigger be pulled if there was a 13 definitive ruling on private fleets contracted, or would 14 the trigger only be pulled if the entire rule was 15 invalidated? 16 BOARD MEMBER D'ADAMO: Either. 17 SUPERVISOR PATRICK: Well, if the District then 18 has the ability to go back and change the rule to say that 19 the School Districts then must contract with people who 20 meet the letter of this law, then why would we get 21 involved in it at that point in time? Why would this not 22 be just if the whole rule is thrown out? 23 BOARD MEMBER D'ADAMO: I agree. And that would 24 be structured into the motion, as I understood it. 25 ACTING CHAIRPERSON RIORDAN: Let's have counsel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 326 1 kind of -- 2 BOARD MEMBER LOVERIDGE: Clarity rather than 3 complexity, Tom. 4 ACTING GENERAL JENNINGS: If a court were to 5 invalidate the rule in its toto, the trigger would be 6 pulled. If the court invalidates elements pertaining to 7 the privately-contracted fleets, I'm understanding the 8 motion to be that the trigger would only be pulled if that 9 was a definitive decision that the District couldn't 10 accomplish that one way or another. 11 SUPERVISOR DeSAULNIER: Yes. 12 ACTING GENERAL JENNINGS: In other words, the 13 court wouldn't leave it open for the District to be able 14 to try to structure it. 15 EXECUTIVE OFFICER WITHERSPOON: What that also 16 means is that the District -- what I'm hearing is the 17 District has an obligation to use its authority first, and 18 need us to only step in if they're unable to -- 19 definitively need a waiver. 20 BOARD MEMBER KENNARD: May I ask a question? 21 That is far too complex. And I'm a lawyer, although 22 recovered lawyer. And until this hearing I though my IQ 23 was a little bit over 100. And now I'm totally confused. 24 And I really do believe that we should just 25 remain at the last vote, which was no action vote. In the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 327 1 event there's a change in status derived from a legal 2 action, then what would preclude this Board from coming 3 back and defining what type of course of action we want to 4 take at that particular time? I think we're just totally 5 trying to predict something that we have no basis to 6 understand what the future may lie relative to litigation 7 on this issue. 8 ACTING CHAIRPERSON RIORDAN: Thank you, Ms. 9 Kennard. 10 ACTING GENERAL JENNINGS: You're correct. 11 Nothing would preclude that. 12 BOARD MEMBER LOVERIDGE: Nothing would preclude 13 what? 14 ACTING GENERAL JENNINGS: The Board getting 15 together again and deciding where to go from there. 16 ACTING CHAIRPERSON RIORDAN: After decision. 17 SENIOR STAFF COUNSEL JOHNSTON: If I may suggest 18 as a matter of parliamentary procedure under Roberts Rules 19 of Order, Mayor Loveridge's motion to take up the 20 consideration of the rule again could also be tabled. Is 21 it Mark's motion now? 22 EXECUTIVE OFFICER WITHERSPOON: It's Mark's 23 motion with an amendment from D.D. 24 ACTING CHAIRPERSON RIORDAN: All right. I'm 25 going to step in as the Chair and indicate -- just so you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 328 1 understand. Any motion can always be amended or tabled at 2 any time. And, obviously, we've had a lot of discussion. 3 The Board needs to do something, and I know Mayor 4 Loveridge is wanting to speak again. 5 BOARD MEMBER LOVERIDGE: Finish your comment. 6 ACTING CHAIRPERSON RIORDAN: Well, no. I'm 7 simply indicating to the Board that probably, either we 8 vote on the motion that's before us, or there be an 9 additional motion to table to accomplish what was just 10 discussed by the last speaker. 11 SUPERVISOR DeSAULNIER: Maybe a suggestion, Madam 12 Chair. Let's take a vote on the motion. The failure of 13 the motion be understood that the issue is tabled. So if 14 we don't get five votes in the affirmative -- 15 ACTING CHAIRPERSON RIORDAN: We can do that, too. 16 SUPERVISOR DeSAULNIER: We'll be up here voting 17 four to four for a long time. 18 ACTING CHAIRPERSON RIORDAN: Mayor Loveridge, and 19 then I am going to go to a vote. 20 BOARD MEMBER LOVERIDGE: I don't see this -- I 21 mean, it seems to me it's more simple then it's being sort 22 of represented. The chasing the complexity I think 23 complicates the position that this Board needs to take. 24 And the motion is to essentially endorse the position the 25 staff has in respect of the work of the South Coast PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 329 1 District of the Fleet Rules. It seems to me that's what's 2 at stake. With the addition, it would come back if there 3 is explicit action that you've identified. I don't see 4 that as being particularly complicated. 5 EXECUTIVE OFFICER WITHERSPOON: If I may clarify, 6 Mayor Loveridge. Staff did not recommend Option 1. Staff 7 brought to the Board two options. 8 BOARD MEMBER LOVERIDGE: I understand, staff 9 Option 1. 10 BOARD MEMBER D'ADAMO: Yes, a question of Mayor 11 Loveridge when he originally made, I think, his first 12 motion to delete the language on the standard for 2005. 13 In other words, it would take effect in 2007. Is it 14 your -- would that be included in your motion -- wait. 15 SUPERVISOR DeSAULNIER: Yes. That's included in 16 the motion. 17 If I could just comment. I think we're really 18 close. This is an indication to everyone in the audience 19 I think our intentions are the same. At least from my 20 perspective, I'm trying to put a little bit more 21 affirmative position on it. But I think the message 22 should be to everyone leaving here regardless of the vote 23 that we're very supportive. It's just how we approach it. 24 ACTING CHAIRPERSON RIORDAN: I think that's 25 correct. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 330 1 Let me call for a vote on the motion, Madam 2 Clerk. 3 SECRETARY ANDREONI: Ms. Berg? 4 BOARD MEMBER BERG: No. 5 SECRETARY ANDREONI: Ms. D'Adamo? 6 BOARD MEMBER D'ADAMO: Yes. 7 SECRETARY ANDREONI: Supervisor DeSaulnier? 8 SUPERVISOR DeSAULNIER: Yes. 9 SECRETARY ANDREONI: Dr. Gong? 10 BOARD MEMBER GONG: Yes. 11 SECRETARY ANDREONI: Ms. Kennard? 12 BOARD MEMBER KENNARD: No. 13 SECRETARY ANDREONI: Mayor Loveridge? 14 BOARD MEMBER LOVERIDGE: Yes. 15 SECRETARY ANDREONI: Supervisor Patrick? 16 SUPERVISOR PATRICK: No. 17 SECRETARY ANDREONI: Madam Chairman Riordan? 18 ACTING CHAIRPERSON RIORDAN: No. 19 So it fails. 20 Board members, it can be brought back at some 21 appropriate time. 22 And I think it is 6:00, and the Chair is going to 23 exercise her prerogative. We'll take a break for dinner. 24 Let me tell the audience that the cafeteria has 25 stayed open for us at our request, and I hope some of you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 331 1 will utilize their services, because they were so nice. 2 They normally do not stay open, and we're very 3 appreciative. So I want to encourage your business, 4 please. We'll be back in session at 6:30. 5 (Thereupon a dinner recess was taken.) 6 ACTING CHAIRPERSON RIORDAN: Ladies and 7 gentlemen, I think we'd like to get started. And I 8 appreciate the fact we are a little bit later than I 9 thought. 10 Let me remind you this item is 05-8-5, Proposed 11 Amendments to ARB's Solid Waste Collection Vehicle Rule to 12 Address the South Coast Air Quality Management District. 13 As my colleagues will recall, ARB's Solid Waste 14 Collection Vehicle Rule was adopted in September of 2003 15 and is now in effect. The ARB Rule is reducing emissions 16 from waste collection vehicles in the South Coast District 17 and throughout the rest of California. However, the main 18 difference is that the State Rule is aimed at cleaning up 19 the existing vehicle fleet, where the South Coast Fleet 20 Rule, by contrast, affects new purchases or leases only. 21 Ms. Witherspoon, would you please introduce this 22 item? Thank you. 23 EXECUTIVE OFFICER WITHERSPOON: Yes, I will. 24 Thank you, Madam Chairman. I'm going to try to abbreviate 25 this a little, because you know -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 332 1 ACTING CHAIRPERSON RIORDAN: Time is marching on. 2 EXECUTIVE OFFICER WITHERSPOON: Well, we have 3 talked about the District's authority to adopt Clean Fuel 4 Fleet Rules, which they adopted a rule for clean on-road 5 residential and commercial refuse collection vehicles in 6 2001, and that the District estimates that Rule 1193, as 7 of February of this year had resulted in the purchase of 8 approximately 1,000 alternative fuel trash trucks. By the 9 same date, the District reported receiving exemption 10 requests to allow the purchase of 335 diesel vehicles and 11 granted exemptions for 241 of those. 12 Staff has developed amendments to the ARB's Solid 13 Waste Collection Vehicle Rule to address the issues raised 14 by the legal challenge to South Coast Rule 113. 15 I will now turn the presentation over the Richard 16 Varenchik of the Mobile Source Control Division. Richard. 17 (Thereupon an overhead presentation was 18 presented as follows.) 19 STAFF AIR POLLUTION SPECIALIST VARENCHIK: Thank 20 you, Ms. Witherspoon, Madam Chairman, and members of the 21 Board. 22 ACTING CHAIRPERSON RIORDAN: Rich, we need to get 23 your microphone on. 24 STAFF AIR POLLUTION SPECIALIST VARENCHIK: Thank 25 you, Ms. Witherspoon, Madam Chairman, and members of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 333 1 Board. In this presentation I will discuss the 2 possibility of amending California's existing Solid Waste 3 Collection Vehicle Regulation, which was adopted by the 4 Air Resources Board in 2003. The proposed amendments are 5 intended to support the South Coast Air Quality Management 6 District's Rule 1193, clean on-road residential and 7 commercial refuse collection vehicles. If adopted, these 8 amendments will apply only in the South Coast District. 9 Let me start with a summary of the District's 10 Rule 1193. 11 --o0o-- 12 STAFF AIR POLLUTION SPECIALIST VARENCHIK: In 13 2000, the South Coast District adopted Rule 1193 dealing 14 with refuse trucks. The District started enforcing the 15 rule in July of 2001. 16 The rule required municipalities or private 17 companies with fleets of 15 or more to purchase or lease 18 only alternative fuel vehicles when acquiring new 19 collection vehicles. As a result of the rule, the 20 District estimates that by February of 2005, 1,000 21 alternative fuel refuse vehicles have been purchased in 22 the District. Rule 113 also allows exemptions if 23 alternative fuel vehicles are not available to fit the 24 particular needs of a waste hauler. The District reported 25 as of February 2005 it had received 335 exemption requests PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 334 1 and granted exemptions for the purchase of 241 diesel 2 vehicles. 3 --o0o-- 4 STAFF AIR POLLUTION SPECIALIST VARENCHIK: 5 California also has a Solid Waste Collection Vehicle Rule 6 adopted by the Air Resources Board in September of 2003. 7 The existing ARB rule seeks primarily to reduce soot or 8 particulate matter exhaust emissions from the 13,000 9 refuse vehicles operating within the state. It applies 10 throughout all of California, including the South Coast 11 District, and it applies to all fleets, those with as few 12 as one vehicle to those with thousands of refuse vehicles. 13 Vehicles subject to the ARB rule are those 14 operated by private companies or cities, counties, special 15 districts, or other government entities. The regulation 16 applies to refuse vehicles with engines as old as 1960, 17 right up to today's vehicles, as long as they weigh at 18 least 14,000 pounds and a fee is charged for waste 19 collection. 20 It does not apply to vehicles used less than 21 1,000 miles a year or transfer trucks, that is trucks that 22 move trash or recyclables from place to place after they 23 have been collected. 24 --o0o-- 25 STAFF AIR POLLUTION SPECIALIST VARENCHIK: While PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 335 1 the District's Rule 1193 allows only the purchase of new 2 alternative fuel vehicles, the ARB's current rule offers 3 greater flexibility with a wider range of compliance 4 options. These options include: Purchasing new diesel 5 trucks with engines certified to the most stringent 2007 6 model year emission standards; keeping older diesel 7 trucks, but fitting them with pollution control devices, 8 such as filters or catalysts that have been verified by 9 ARB for use on particular engines. And as with the South 10 Coast Rule 1193, trucks using alternative fuel, such as 11 compressed natural gas, or liquefied natural gas are an 12 accepted compliance option under the existing ARB rule. 13 --o0o-- 14 STAFF AIR POLLUTION SPECIALIST VARENCHIK: Here 15 you see the proposed amendments to ARB's Refuse Vehicle 16 Rule that could help support South Coast Rule 1193. There 17 are two proposed performance standards: One for waste 18 collection vehicle purchases in 2005 and 2006, and then a 19 more stringent one for purchases from 2007 through 2009. 20 Two things to keep in mind here. One is that 21 most members of the waste collection industry have made 22 their vehicle purchases for 2005, and many have already 23 ordered trucks for 2006. It can take up to six months to 24 take delivery of a new refuse truck after it has been 25 ordered. So the 2005-2006 proposed standards will have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 336 1 little impact on vehicle purchases. 2 The second thing to keep in mind is that the 2007 3 through 2009 standards almost certainly will require 4 purchase of alternative fueled vehicles. It is unlikely 5 that diesel engines, even new ones, will be able to meet 6 these standards in this time period. But there will be 7 alternative fuel engines that do meet the standards. 8 And then starting in 2010, it is expected that 9 heavy-duty diesel engines of the type used in refuse 10 vehicles will come directly from the factory meeting the 11 proposed requirements for both NOx and PM. Therefore, 12 starting in 2010, emissions from new diesel refuse 13 vehicles and new natural gas vehicles will be the same. 14 --o0o-- 15 STAFF AIR POLLUTION SPECIALIST VARENCHIK: Here 16 are calculations of emission benefits or reductions and 17 the costs of the reduction. Since the District is 18 currently enforcing Rule 1193, the additional benefit from 19 adopting the proposed amendments are .1 ton per day of 20 nitrogen oxides. The additional benefit comes from ARB 21 amendments affecting about 375 additional vehicles that 22 are not covered by the District's rule 1193. If the ARB 23 amendments were standing alone, the amount of NOx 24 reduction would increase to .3 tons per day. 25 Cost effectiveness of the NOx reduction comes to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 337 1 $52,000 per ton. To put this in context, most recently 2 adopted mobile source regulations for NOx or hydrocarbons 3 have a cost effectiveness of $10,000 per ton or less. 4 --o0o-- 5 STAFF AIR POLLUTION SPECIALIST VARENCHIK: In 6 addition to what you've already heard in connection with 7 the school bus regulations, here are some of the issues 8 you may hear during today's testimony on the refuse 9 vehicle rule. Waste haulers claim that alternative fuel 10 engines do not have enough power to fill all their needs 11 and work all their routes and jobs they need to carry on 12 their business. 13 That alternative fuel vehicles are much more 14 prone to break down and much more expensive to repair than 15 their diesel counterparts. That the number of alternative 16 fueled engines available for use in collection vehicles is 17 very limited. And in spite of the District's push to have 18 more fueling facilities constructed, waste haulers comment 19 that it can be difficult to gain prompt access to these 20 facilities, which frequently are shared facilities. 21 Haulers also point to the recent disruption of 22 liquid natural gas supplies caused by problems at a main 23 fueling depot in Arizona. Finally, that neighborhoods are 24 subject to harmful diesel exhausts by waste collection 25 vehicles that can make up to three trips a day on waste PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 338 1 collection day. 2 --o0o-- 3 STAFF AIR POLLUTION SPECIALIST VARENCHIK: To 4 conclude, I now present the Board with two options. The 5 first option is to adopt the ARB rule and begin the 6 process of obtaining a Federal waiver. The second option 7 is to take no action and allow the South Coast District to 8 continue enforcing Rule 1193. 9 This concludes my presentation. Thank you. 10 ACTING CHAIRPERSON RIORDAN: Board members, are 11 there any questions for staff? 12 I know that -- you know, I'm suggesting that we 13 make the Ombudsman's report. I know that, Ms. Johnston, 14 you have that. And so just briefly could you tell us what 15 the report is? 16 SENIOR STAFF COUNSEL JOHNSTON: Well, I don't 17 know if I can do it briefly, but I can try to read it 18 quickly. 19 ACTING CHAIRPERSON RIORDAN: We'll make it part 20 of the record. 21 SENIOR STAFF COUNSEL JOHNSTON: Madam Chairman 22 and members of the Board, the rule was developed with 23 input from the natural gas advocacy groups and providers, 24 refuse removal companies, aftertreatment technology 25 providers, vehicle refurnishers, and consultants to each PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 339 1 of these sectors, environmental organizations, 2 municipalities, waste management companies, and service 3 providers associations, and engine manufacturers, oil 4 companies, and other parties interested in residential 5 waste removal also participated in the development of the 6 rule before you. 7 In October 2004, ARB posted on its website a 8 request for public comment concerning the South Coast AQMD 9 Fleet Rules. They requested comment on whether ARB should 10 submit the District Fleet Rules to U.S. EPA for a waiver 11 of preemption pursuant to the Federal Clean Air Act. 12 They received thousands of comments, including 13 more than 4,800 electronic submittals. Staff created a 14 web page dedicated to the amendment effort. The web page 15 was used to notice the rulemaking process and provide 16 relevant background and contact information. 17 From the electronic comments, staff generalized a 18 listserve. More than 5,700 e-mails were sent to informed 19 stakeholders of the rulemaking activities. In addition, 20 hard copies of the workshop notice and draft regulatory 21 concepts were mailed to 832 addressees. E-mails were sent 22 to target groups, including all individuals who had 23 participated in the previous rulemaking for solid waste 24 collection vehicles. Also, notices of the rulemaking 25 activity and workshop were posted on the District's web PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 340 1 page. 2 Staff held one work group meeting on March 3, 3 2005, and one workshop on April 6th, 2005. Both were held 4 in El Monte. Nearly 40 people attended the March meeting 5 representing natural gas advocacy groups and providers, 6 refuse removal companies, aftertreatment technology 7 providers, vehicle refurnishers, and consultants to each 8 of these sectors. 9 And I'm sorry. I misunderstood. We can submit 10 the rest of it on the record. I'm sorry. 11 ACTING CHAIRPERSON RIORDAN: No. No. That's all 12 right. I just thought you were doing your due diligence. 13 SENIOR STAFF COUNSEL JOHNSTON: That's what I was 14 attempting to do. Thank you. 15 ACTING CHAIRPERSON RIORDAN: Now, Board members, 16 any questions for staff? 17 Okay. We're going to then go to our witness 18 list. Dr. Barry Wallerstein, if you'd come forward 19 please. 20 If you'd just pause one moment, I have a feeling 21 that some of the people who signed up may not be here, and 22 I just wanted to doublecheck something. Jacquelin 23 McHenry, are you here? I don't see her. 24 Barbara Spoonhour, are you here? 25 They may have signed up much earlier. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 341 1 Sean Edgar? Sean's here. So you'll be next. 2 Kent Stoddard is here. Very good. You'll follow 3 Sean. 4 And Dave Winnett. He's here. Good. Okay. 5 Those are our first speakers. 6 (Thereupon an overhead presentation was 7 presented as follows.) 8 MR. WALLERSTEIN: Good evening. I didn't get a 9 chance to say good afternoon. 10 As can you see from this slide, similar to our 11 earlier presentation, the state-of-the-art technology in 12 terms of lowest emissions today is natural gas. And we 13 believe because you're setting an emission standard that 14 you have a fuel neutral rule. And let me take one second 15 to explain. 16 If we look at stationary sources, take a power 17 plant as an example. We set a limit of two parts per 18 million NOx. We don't say that you can't use coal. We 19 don't say that you can't use fuel oil. And we don't say 20 that you must use natural gas. We simply say you must 21 meet that emissions limit. And with today's technology it 22 means all power plants in South Coast for now are natural 23 gas. Should the other technologies improve, they're 24 welcome. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 342 1 MR. WALLERSTEIN: The next slide shows that this 2 rulemaking, if approved by your Board, would lock in and 3 guarantee three tons a day of NOx reduction. That is a 4 sizable amount, more than ten times the amount that many 5 AQMD specific rulemakings encompass in the way of emission 6 reductions. And then your staff has provided the frosting 7 on top, which is indicated in the yellow. I think it's 8 important to note -- 9 --o0o-- 10 MR. WALLERSTEIN: -- if you look at the staff 11 report, which I know you all have, but for the sake of the 12 audience, the costs that your staff has identified, a 13 dollar per household per year, eight cents per month, we 14 think the public's willing to pay for that. It's also 15 been said -- 16 --o0o-- 17 MR. WALLERSTEIN: -- frequently today if we just 18 look at the disparity in cost between diesel fuel and 19 natural gas today, there's a significant opportunity for 20 substantial fuel cost savings. I think it's also -- 21 --o0o-- 22 MR. WALLERSTEIN: -- important to note that about 23 20 percent of our current vehicles are already natural gas 24 based technology. The technology works. 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 343 1 MR. WALLERSTEIN: The next chart is a little bit 2 complicated. I'll try to explain quickly. This shows all 3 of the heavy-duty engines certified as of August this year 4 using your staff's data. The triangles are the diesel 5 engines. As indicated, the little stars are natural gas; 6 the diamonds, gasoline; and the square, propane. 7 The light blue area is where people have to get 8 to under your standards by 2007. And the white area is 9 where we clearly ultimately need to be. 10 Gas is leading the way. Diesel is hopefully 11 following. We think you need to reward the natural gas, 12 the propane, and gasoline engine manufacturers for their 13 investment and their lower emissions. 14 --o0o-- 15 MR. WALLERSTEIN: You're going to hear a 16 significant issue this evening about LNG supply. We 17 actually had a recent disruption due to lightning hitting 18 a production plant that is outside of California. It 19 caused the loss of service on one day to one operator, and 20 it caused others to make logistical changes. What we 21 wanted to share with you is we will be coming to our 22 October Governing Board meeting with some funding requests 23 of our Board to help on contingency plans to increase 24 supply and increase fuel storage and delivery here in 25 Southern California. And we have the funds readily PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 344 1 available to do that. 2 --o0o-- 3 MR. WALLERSTEIN: Similar to the last rule, we 4 are requesting one amendment to the staff proposal. That 5 is to take the standard of 1.8 and lower it to 1.5 and 6 take the standard of .03 particulate and lower it to .01 7 because that would truly reflect the natural gas 8 technology, the best technology. And as the last 9 presentation -- 10 --o0o-- 11 MR. WALLERSTEIN: -- clear air can't wait in 12 Southern California. And we respectfully request your 13 assistance. 14 ACTING CHAIRPERSON RIORDAN: Thank you, Dr. 15 Wallerstein. 16 Sean Edgar. 17 (Thereupon an overhead presentation was 18 presented as follows.) 19 MR. EDGAR: Madam Chair and Board members, good 20 evening. Sean Edgar on behalf of the California Refuse 21 Removal Council. 22 I felt the need to have something emotional to 23 talk about today. You know, if I didn't come down here, I 24 was going to be at home watching the Judge Roberts 25 hearings. And unlike the candidate, maybe I won't dodge PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 345 1 the question. The Refuse Removal Council is decidedly pro 2 choice when it comes to fuels. And when I say pro 3 choice -- 4 --o0o-- 5 MR. EDGAR: -- as we move choice, no single fuel 6 is going to provide the emission reductions nor the 7 ability for us to service 6 million people throughout the 8 state of California. We take the issue before us very 9 seriously. 10 And I guess I would comment after a very -- I 11 won't belabor the issue with regard to all the motions we 12 saw earlier. What I can assure you is we don't need a 13 backstop, because right now we're hitting the ball out of 14 the park in the form of a statewide regulation this Board 15 gave us, which by the way was the largest, most 16 aggressive, most costly retrofit mandate ever on private 17 business in the state of California, if not the world. 18 And I assure you that is delivering tangible 19 emissions reductions today. And we need to go no further 20 than your own staff report to understand that the frosting 21 on Mr. Wallerstein's cake, hopefully it's low cal, or I'm 22 getting a little bit -- low carb, because that frosting 23 comes at a cost of $83 million. 24 And unlike the school bus regulation, which you 25 all looked at, which is predicated upon the granting of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 346 1 funding, and unlike the transit bus proposal which the 2 quid pro quo is the 80 percent of the cost of a new diesel 3 bus or 83 percent of the cost of a new natural gas bus, 4 that $83 million supposedly will come out of the rate 5 payers' pocket at some stage in the future. 6 I'm encouraged that Mr. Wallerstein has some 7 money laying around to make this fuel supply issue a 8 little bit better. If that's the case, perhaps the 9 District will be more aggressive on assisting the private 10 haulers to get toward cleaner technology. 11 But if this really boiled down to cost, it's a 12 no-brainer with regard to significant increased costs that 13 are not automatically reimbursable. If it came down to 14 air quality benefits, I think that's fairly a no-brainer 15 as well, because your own staff report describes that with 16 a minor delay in purchases, there is zero NOx benefit. 17 First of all, we don't get any PM reductions here, because 18 these are already covered in your statewide rule. So we 19 get .1 tons per day of NOx perhaps at the $83 million. 20 And with a slight delay in purchases, you get actually a 21 NOx disbenefit. 22 So low and behold, if we end up with delays 23 toward 2010, as your staff report indicates, we end up 24 with no NOx benefit whatsoever. And the painful reality 25 is with regard to what we feel is our commitment from this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 347 1 Board to work toward fuel neutral solutions, not that I 2 want to rehash that, because everybody had their 3 outpouring of emotion on that, but we feel fuel neutral 4 solutions are going to be the way going forward. 5 And to borrow from the Executive Officer's 6 discussion regarding federal waiver, I'll just borrow from 7 that, that we can be constipated for the next two to five 8 years wondering whether garbage trucks are going to go out 9 every day. 10 --o0o-- 11 MR. EDGAR: I'll briefly hit -- and this is in 12 your package. Just to hit Item Number 2 and 3, we 13 understand that all new technology has glitches. We're 14 the folks who figured out how to make recycling happen 15 over the last 15 years. We've rolled out three cans in 16 front of 24 million people in California. What a miracle. 17 We've done so by reinventing our entire industry. And 18 guess what? We're the next big heavy hitters on 19 greenhouse gasses. We are being relied upon to dig deeper 20 into the recycling bin to reduce greenhouse gasses. And 21 we're going to need to get there by using fuel neutral 22 solutions. 23 So with that, I will thank you for moving toward 24 rejecting the package before you today. 25 ACTING CHAIRPERSON RIORDAN: Thank you, Sean. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 348 1 Kent Stoddard. 2 MR. STODDARD: Madam Chair, members of the Board, 3 Kent Stoddard representing Waste Management. We share the 4 concerns the District has about the legal vulnerabilities 5 of their rule. We've been working with the Direct for 6 ten years to advance the use of natural gas in the refuse 7 industry sector. And during that time, we've put together 8 one of the largest fleets of natural gas vehicles in the 9 entire country. We don't want to see the rug pulled out 10 on that program. 11 So I can't speak to the timing of when your 12 action should be, given the debate you just had. But I 13 would say we think it's extremely important that the Board 14 be prepared to backstop the South Coast District if, in 15 fact, there's litigation or legal action that would 16 severely constrain the rule. And in our opinion, that 17 would mean if the private contractors who contract with 18 the public agencies are out, that would be a concern to 19 us. We're four years into this program. We've invested a 20 lot of money, a lot of time. We'd like to see this 21 program continue. 22 I would say I think there are a lot of good 23 policy reasons to do that; the lower emissions, the 15 24 percent reduction in greenhouse gas emissions, reduced 25 petroleum dependence, the bridge to hydrogen. I mean, I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 349 1 think these are all right-on policy issues that would call 2 for the Board to be there to support the South Coast 3 District if, in fact, this rule was eviscerated at some 4 point because of some other legal actions. 5 I'd add that the cost situation is much more 6 favorable today than it ever has been. I think others 7 have mentioned the Federal Energy Act and the Highway Act 8 that was just signed by the President includes terrific 9 incentives for natural gas. As a refuse hauler, we'll be 10 eligible for up to $32,000 in tax credit for every natural 11 gas truck we purchase. That will just about cover the 12 incremental cost. There are also fuel incentives that are 13 in the Highway Bill. Nets out to about 37 cents per 14 gallon of LNG fuel, which is a very significant tax credit 15 as well. 16 So we think the economics are far more favorable. 17 We think program has been successful. We'd like to see it 18 continue. I would say if the Board goes forward with 19 their own rule -- and your proposal is different from the 20 South Coast rule, the main difference is accelerating that 21 .2 gram standard, and we would really urge, if you go down 22 that path, that we make sure there's a mechanism for the 23 Board and South Coast to evaluate the in-use performance 24 of those engines, the .2 gram engines for at least 1200 25 hours in-use, so that we all know that that's an engine PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 350 1 that's going to meet the performance needs of our 2 industry. You'll hear lots of concerns about performance 3 and reliability. A lot of these are legitimate, but I 4 think they can be overcome if you do in-use performance 5 evaluation at 1200 hours. We're going to know if those 6 engines are good engines. 7 The other thing that we -- 8 ACTING CHAIRPERSON RIORDAN: I'll let you get one 9 last sentence in there for conclusion. 10 MR. STODDARD: The LNG supply is also extremely 11 important to us. If you go forward with a rule, we would 12 also want your Executive Officer to be working to make 13 sure the contingency plan is, in fact, in place to make 14 sure we have an adequate supply of LNG fuel. And we're 15 very encouraged by the things the South Coast District is 16 doing on that front. 17 ACTING CHAIRPERSON RIORDAN: Mr. Stoddard, I have 18 one question, just a repeat. What is your tax credit that 19 you get for each truck, did you say? 20 MR. STODDARD: You get 80 percent of the 21 incremental cost capped at $40,000. So that will net out 22 to be a $32,000 federal tax credit for each truck that we 23 purchase. 24 ACTING CHAIRPERSON RIORDAN: And can you take 25 that in the year you buy it? Is that fully credited to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 351 1 you the year of purchase? 2 MR. STODDARD: Actually, I'm not positive how the 3 mechanics will work. It's effective in January 2006. 4 ACTING CHAIRPERSON RIORDAN: 2006? 5 MR. STODDARD: So truck purchases we make next 6 year we believe will be eligible on our 2006 return for us 7 to claim that tax credit. 8 ACTING CHAIRPERSON RIORDAN: Thank you very much. 9 Mayor Loveridge. 10 BOARD MEMBER LOVERIDGE: Kent, what would be your 11 tally of Waste Management in terms of number of 12 alternative fuel trucks you have? 13 MR. STODDARD: Four hunderd-eighty-four trucks 14 today that we operate. Most of those in the South Coast 15 District. 16 ACTING CHAIRPERSON RIORDAN: And how many do you 17 operate, other trucks? How many beyond the 400 and so 18 many? 19 MR. STODDARD: Total trucks in the South Coast 20 District, we have about 1200 trucks. And in fact while 21 I'm on that point, if I could, all of our trucks -- most 22 of our trucks operated under contract to a public agency. 23 So if I looked at my 1200 trucks, about 80 percent of 24 those operate under some kind of a contract with a public 25 agency. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 352 1 So if the legal challenge comes down that says 2 you're out of the system, that's pretty much my whole 3 fleet. I won't be required to do anything. And we don't 4 think that's very desirable. At this stage of the game, 5 this far into it, that's not where we want to be. 6 So I guess that's why we really want to encourage 7 the Board to be there to help protect this rule in the 8 event that private contracts with publics starts to get 9 eliminated or whittled down to a very insignificant 10 number. 11 ACTING CHAIRPERSON RIORDAN: Thank you for your 12 testimony. 13 Next speaker, please. 14 MR. WINNETT: Good evening, Madam Chairman, 15 members of the Board. My name is Dave Winnett. I'm the 16 Fleet Services Manager for the City of Torrance. And the 17 comments I'm going to make this evening are applicable to 18 both the refuse truck and transit rules. 19 The City of Torrance is committed to maintaining 20 clean air standards. We do this through an aggressive 21 approach, preventative maintenance on our vehicles, as 22 well as ensuring that we remain compliant with all clean 23 air mandates. The City has remained committed to the use 24 of ultra clean diesel fuel along with CARB-approved 25 filters designed to capture diesel particulate matter. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 353 1 Our entire transit fleet has been retrofitted with Level 3 2 diesel, particulate filters. And to date, one-third of 3 our refuse vehicle fleet has had Level 3 filters 4 installed. 5 The City of Torrance strongly recommends that if 6 CARB chooses to adopt these rules that they be written in 7 such a way as to be fuel neutral, thereby allowing the 8 diesel engine manufacturers the incentives to continue 9 improvement of diesel to engines technologies. They've 10 made significant strides in the past several years. The 11 City of Torrance feels the use of ultra low sulfur diesel 12 together with the use properly maintained particulate 13 filters will produce emissions that are already on par 14 with natural gas powered vehicles. 15 The infrastructure set up costs keeping in mind 16 the City currently has no natural gas vehicles. CARB's 17 proposed rules for transit buses and refuse collection 18 vehicles state that for 2010 and subsequent model years, 19 the staff projects emissions from diesel and natural gas 20 to be equivalent. 21 We have concerns about the statement, designing 22 and building the necessary infrastructure needed to 23 support and maintain a fleet of natural gas powered 24 vehicle at our facilities, would require installation of a 25 pipeline from Hawthorne Boulevard to the city yard, a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 354 1 distance of over one mile through residential 2 neighborhoods. It would require installation of a fueling 3 station sufficient in capacity to support the needs of our 4 sizable and varied fleet well beyond the trash trucks and 5 the buses, as well as extensive physical modifications to 6 our existing maintenance facilities. 7 Cost estimates for this project range as high as 8 $8 million. Implementation of such a plan would take a 9 minimum of a year-and-a-half to two years before we would 10 actually be able to use the facilities. That puts us into 11 as early as 2008. However, if in the year 2010 12 restrictions on purchasing diesel vehicles are lifted, 13 because they're declared equivalent, we could very well 14 find ourselves transitioning back to diesel powered 15 vehicles after having spent millions of dollars on the 16 aforementioned infrastructure upgrades. 17 The reality is if the emissions technologies are 18 equivalent at that time, and if budgetary restrictions 19 force us to cut operational costs for whatever reason, 20 which happens quite often in local governments, we will do 21 what we have to do. So off we'll go, back down the diesel 22 path where we started off in the first place, having spent 23 millions of dollars along the way for a couple of years' 24 benefit. 25 This is very important. Disaster response and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 355 1 preparedness. The aftermath of Hurricane Katrina, 2 summarize it to say that we're concerned that if we're 3 totally reliant on natural gas that we're going to have a 4 problem responding to emergencies, because there won't be 5 sufficient supplies of diesel fuel for the rescue and 6 recovery efforts. 7 ACTING CHAIRPERSON RIORDAN: Thank you very much. 8 Appreciate your testimony. 9 And let me -- Russell Dix, Patrick O'Connor, 10 Kelly Astor, Dave Smith, and Julie Masters, so let me find 11 out if Russell -- okay. Patrick, you're here. Come on 12 down, Kelly, Dave, and Julie, all come to the front. 13 MR. DIX: Madam Chair, members of the Board, my 14 name is Russell Dix. I'm the area President for 15 Consolidated Disposal Services, who has a large fleet of 16 trucks operating in L.A. County, Orange County, and 17 Ventura County. We are in complete compliance with the 18 ARB current ruling and also with the current 1193. 19 However, we stand to oppose the ruling, although we do 20 agree with cleaner air. We're completely in favor of 21 that. 22 Let me just run down a couple things as a 23 practical nature as operating the fleet of trucks that we 24 run into frequently with LNG. The purchase of a vehicle 25 alone is more than $40,000, the initial purchase. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 356 1 fuel consumption, our trucks that are without LNG 2.61 2 gallons per hour. The LNG is running 6.1 gallons per 3 hour. That's a 233 percent increase in fuel consumption 4 per hour. The cost difference there is $5.83 per hour, as 5 opposed to $9.41 per hour. That's a 61 percent increase 6 in fuel to us. 7 To make all this happen, we attempted a couple 8 years ago to get a couple fueling stations. We went to 9 the city of Gardena where one of our yards is, and they 10 completely refused. Not only no, but absolutely not. We 11 went to the city of Long Beach and received some 12 inferences that it might be a good idea. We purchased the 13 equipment almost a year-and-a-half ago and have yet been 14 able to install it, because now they're opposing the 15 fueling station. 16 With that in mind, we have to travel a great 17 distance. We have to employ additional employees to drive 18 back and forth to fueling stations. We can no longer fuel 19 them in our yards. Additional costs not only employees, 20 but the extra consumption of fuel which also creates more 21 emissions. 22 And as was mentioned earlier several times -- not 23 just once, several times, we've been faced with no fuel, 24 which causes a big panic. You know, every day we route 25 our trucks to pick up a certain number of homes or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 357 1 commercial accounts. And when you can't get started until 2 noon because that's when the fuel is available, it's very, 3 very difficult to catch up. Been times when I've had 4 trucks sitting in the yards and not been able to use them. 5 So what does this mean? This means that I'm 6 paying a whole lot more for a truck, and sometimes I can't 7 use it. The trucks consume more fuel. And if you look at 8 the emissions that our trucks that we currently use 9 compared to the LNG trucks we currently use, the diesel 10 truck has 3.7 grams per hour emits, and the LNG is 2.5. 11 But if you take that 2.5 times the 2.33 -- in other words, 12 233 percent more fuel in an hour, you actually are now 13 emitting 5.82 grams of NOx. 14 So you've lessened the problem, now if those 15 figures are accurate, the figures that I received today. 16 But the problem is that we've got -- emissions have gotten 17 worse, not only because of the additional from the LNG is 18 that we've delayed some of the purchases on our trucks, 19 and now we're running older trucks in lieu of buying new 20 trucks. 21 ACTING CHAIRPERSON RIORDAN: Thank you, Mr. Dix. 22 Patrick O'Connor. Is Patrick here? 23 Kelly Astor. 24 MR. ASTOR: Thank you, Madam Chair and members. 25 I'm Kelly Astor. I serve as General Counsel for four PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 358 1 separate waste industry trade associations. Tonight, I'm 2 appearing on behalf of the Inland Empire Disposal 3 Association, also the Solid Waste Association of Orange 4 County. 5 One point that I don't think we can over 6 emphasize in this discussion is that this is an 7 environmental services industry that I represent. It 8 performs a critically vital function on a daily basis. 9 From a public policy perspective, our role is less 10 important than police, fire, and a number of other 11 municipal services who we all rely on and often take for 12 granted. 13 A number of years ago, I guess it's been five, I 14 stood up at this very podium in front of the AQMD and 15 testified in support of the adoption of Rule 1193. The 16 difference between then and now is we now have the benefit 17 of experience with natural gas technologies. We now know 18 that several Of the assumptions underlying our prior 19 position have proven false. 20 Despite assurances and projections to the 21 contrary, we now know the natural gas equipment is a 22 maintenance nightmare. We now know that natural gas 23 equipment is not available in sufficient quantities to 24 serve our needs. These are the engine chassis 25 configurations I'm speaking of. We know that natural gas PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 359 1 operating costs far exceed those of the diesel 2 counterpart. You just heard testimony to that effect. We 3 also now know the threat of fuel supply disruption is 4 real. It's already occurred and is likely to happen 5 again. 6 We either deliver reliable service, or we're out 7 of business and in default under our municipal contracts. 8 In order to deliver reliable service, we must have a 9 reliable fuel supply and reliable equipment. At this 10 juncture, the natural gas option offers neither. 11 The proposed amendments to the ARB rule are 12 untimely and premature, because the infrastructure and 13 equipment necessary to make natural as a viable 14 alternative is not yet there. There are cost issues and 15 performance issues that also bear consideration. Cities 16 that regulate our rates don't always compensate us for the 17 additional costs of converting to natural gas. 18 But of primary significance to us in the waste 19 industry is the absolute need for reliably performing 20 equipment and assured fuel supplies. Without these, the 21 risk to public health and safety is potentially grave and 22 widespread. 23 I hope this is not a debate about cleaner air. 24 That's an objective everybody shares. And I have four 25 children. They all live in the district. We're all I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 360 1 think in sync on that point. It ought to be a discussion 2 about how we get there. Let's do so in a manner that does 3 not create other equally significant environmental risks. 4 We, therefore, urge with all due respect that you do not 5 adopt the rule and take no action. 6 One final comment, there was testimony earlier 7 about 8 cents a day being the cost estimate for this rule. 8 I think that refers to the retrofit program, not the cost 9 that would be visited upon the industry if we ended up 10 with what amounts to a natural gas rule. The costs there 11 far exceed eight cents per day per person. 12 Thank you, and I'm available for any questions if 13 you have them. 14 ACTING CHAIRPERSON RIORDAN: Thank you, Kelly. 15 Any questions for this speaker? 16 I don't see any. Thank you very much. 17 Dave Smith, followed by Julie Masters, followed 18 by Bonnie Holmes-Gen. I don't know if she's still here. 19 And Todd Campbell and Jeffrey Noonan-Day, all of you come 20 forward, please. 21 MR. SMITH: Good evening. I'm Dave Smith. I 22 work for BP. I would just like to reiterate my earlier 23 request, that if you go ahead and adopt this rule, that 24 you would ask that the fleets be required to maintain 25 records that they purchase compliant fuels. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 361 1 The second thing I'd like to ask is that, as I 2 understand it, if you go ahead with this proposed rule 3 that no longer would refuse trucks in this South Coast 4 subject to this rule would be eligible for any Carl Moyer 5 funding. That's what I understood the staff report to 6 say. 7 And I bring this slide here just to bring this to 8 your attention, because I still think there are some 9 considerable issues about how the Carl Moyer program is 10 being implemented with the Refuse Fleet Rules. 11 In 2000, the Rule 1193 was adopted. And as 12 you've heard, about 1,000 trucks were to be impacted. At 13 that time, it was estimated that the tons of NOx per year 14 were going to be between 60 and 130 tons of NOx per year, 15 depending on the year of the implementation of the rule. 16 Between 2000 and 2005, the South Coast spent 17 somewhere between 8 and $9 million subsidizing the refuse 18 trucks in their air district. Actually, it turns out to 19 be about 520 of those 1,000 trucks received some form of 20 Carl Moyer funding. If you recall, the Carl Moyer funding 21 program is supposed to be for helping fund surplus 22 emissions or projects that wouldn't otherwise be required. 23 So there's some serious questions about how the Carl Moyer 24 funding is being spent. 25 We're not having a hearing on the Carl Moyer, but PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 362 1 we have talked to the staff about this issue. We 2 understand the Carl Moyer program guidelines are going to 3 be reviewed possibly in November, and these are the kind 4 of issues we're going to bring to you for your 5 consideration. 6 ACTING CHAIRPERSON RIORDAN: Thank you. 7 Julie Masters. Todd, are you still here? Yes. 8 Good. Jeffrey Noonan-Day and Bruce Magnani. 9 MS. MASTERS: Again, I'm Julie Masters with the 10 Natural Resources Defense Council. For all the same 11 reasons that we supported the school bus rule, we urge you 12 to adopt the trash truck rule amendments as they are 13 proposed with the .2 gram NOx standard in 2007. 14 First, just like the school bus rule, this rule, 15 too, is important from a public health perspective. Trash 16 trucks travel in and out of our neighborhoods on a daily 17 basis. In fact, as the staff report makes clear, in some 18 neighborhoods and commercial districts, there may be as 19 many as three trash truck hauls on waste collection day to 20 pick up different types of refuse, household garbage, 21 green waste, and recyclables. As we know, the health 22 impacts of diesel exhaust including cancer risk and asthma 23 are greater the closer the person is to the source. 24 Second, like the rest of the Fleet Rules, this 25 rule is important to the South Coast, because we do have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 363 1 the worst air quality in the nation and need all of the 2 emission benefits that we can get. This rule and the 3 other Fleet Rules would further the Legislature's goal to 4 have clean fuel Fleet Rules in the region where they are 5 most urgently needed. 6 Third, this rule would further ARB's and the 7 Governor's important goal to increase fuel diversity. The 8 Governor recently stated, "We must take advantage of every 9 alternative fuel technology and opportunity to reduce 10 gasoline and diesel use." The Fleet Rules further this 11 goal by providing a critical market for alternative fuels. 12 This market also ensures that there is competition, which 13 provides the necessary incentives for all engine 14 manufacturers to become progressively cleaner. 15 We've heard concerns raised about fuel 16 neutrality. But we believe that true fuel neutrality is 17 where the Board sets the most stringent standard feasible 18 and allows the purchase of any engine that can meet it. 19 To set a weaker standard just so diesel can meet it would 20 put profits honestly of the diesel industry, which already 21 has over 90 percent of the market share, over the health 22 of our communities. It would also penalize those 23 alternative fuel manufacturers who have spent the money 24 and the time and the resources to develop .2 gram NOx 25 engine by 2007. I think that is the opposite of fair PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 364 1 competition. 2 Finally, we have heard a lot about the costs of 3 these rules. But the staff proposal on page 37 I think 4 puts the cost into perspective when it states if these 5 costs are passed on to consumers, it will only cost $1 per 6 household per year from 2006 to 2020 to implement this 7 amendment. And that's certainly not a high price to pay 8 for clean air. 9 Thank you. 10 ACTING CHAIRPERSON RIORDAN: Thank you very much. 11 Todd Campbell. 12 MR. CAMPBELL: Good evening, Madam Chair and 13 members of the Board. My name is Todd Campbell, Policy 14 and Science Director for the Coalition for Clean Air and 15 Vice Mayor for the City of Burbank. 16 And I want to state Burbank supports these rules. 17 We have a natural gas refuse truck fleet. It operates 18 very well. And the biggest thing for us is when we have 19 folks come down to the dias, residents they say, "We 20 really like our new diesel trucks." And, you know, they 21 are our new diesel trucks in a sense, because they are not 22 only penetrating our neighborhoods, but our residents are 23 noticing the difference in terms of emissions. And I 24 think that's critical. 25 Do we have our problems? Of course, we have our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 365 1 problems. We sometimes have a fueling station that goes 2 down and we have to go to the next door city or 3 neighboring city, either Glendale or Pasadena, to fuel up. 4 But it's not an insurmountable challenge. And I don't 5 know how well you know Burbank, but our landfill number 6 three is up in the mountain side. It's not something 7 where we are facing performance challenges that hills are 8 an issue. In fact, we're quite satisfied with their 9 performance. 10 And drivers that I talk to I always ask -- I run 11 up by the landfill and I ask the drivers that park 12 sometimes and have lunch or whatever and they say, "You 13 know, the only complaint we have is we wish that we could 14 fuel up our trucks a little bit faster. But other than 15 that, it feels like a diesel." So our view is it's worth 16 the extra inconvenience. It's a good thing to do, and 17 it's been well received by our community. 18 I also want to say in terms of fuel neutrality, 19 we'd like to see the standards set at a health protective 20 level. I mean, that's what we're asking for. And if 21 diesel were to come into play and was able to meet a 22 standard that natural gas could, we wouldn't have any 23 objection to that. But my view is that the market isn't 24 fair currently. Diesel is used in 95 percent of the 25 nation, or probably even greater than that. And we're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 366 1 trying to at least establish, or save this market that I 2 feel has been driving diesel to near zero emissions. 3 That's the key. And if we indirectly or involuntarily 4 dislodge that market, if we no longer have a driver, what 5 is our backstop? 6 I want to make sure we get to 2010 heavy-duty 7 standards just like every one of you who are sitting up on 8 the dias also hopes we get there. And my fear is we're 9 adding further disincentives for having them achieve that 10 standard. 11 I just want to say at the end, I would really 12 like to urge each and every one of you to reconsider 13 establishing a trigger. I think it's very important that 14 if, for whatever reason, the AQMD's rules are invalidated 15 that we have an immediate response to try to get these 16 rules back on track. And that's all I would really ask 17 from you, from a local elected official and someone who 18 breathes in the South Coast Air Basin, I would like to 19 know that the people that I care about are protected. And 20 I want swift action. I would really hate for a further 21 delay. And I appreciate your time. Thank you. 22 ACTING CHAIRPERSON RIORDAN: Thank you very much, 23 Todd. 24 Jeffrey Noonan-Day, are you here? 25 Bruce Magnani, Paul Ryan -- excuse me. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 367 1 MR. MAGNANI: Madam Chair and members, good 2 evening. Bruce Magnani with the California Chamber of 3 Commerce and Californians For a Sound Fuel Strategy. And 4 for all the reasons I stated before in the school bus 5 rule, we are opposed to this rule as well. And I'll try 6 to be as brief as possible. 7 I think it's been demonstrated, as Mr. Edgar 8 pointed out, it's not a cost effective rule. And I also 9 think people shouldn't make the assumption that the costs 10 can't be recovered by the waste haulers when you talk 11 about how much it will cost a household. There are no 12 guarantees that the local jurisdictions will allow that 13 cost recovery. 14 The second point I'd like to make is that -- and 15 we've had this discussion before -- is the South Coast has 16 certainly won in court. And I think the ARB should be 17 careful about inserting itself in this arena, knowing that 18 the South Coast can actually enforce the rule as they 19 please. 20 The idea of a backstop I think is poor public 21 policy. And the ARB could come back and have this 22 discussion at another time if the rule were invalidated, 23 rather than taking the proposed rule while one can still 24 be enforced in that same standard. 25 And the last thing, again, I'd like to point out PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 368 1 the lead time and stability issue which I think is very 2 important. And I think that you're again inviting a 3 punitive decision from Federal EPA, and I really urge you 4 to reject this rule, because I don't believe when you 5 really look at the science and the benefits that you get 6 from this, I don't believe that this risk you are taking 7 on by asking for that federal waiver are commensurate with 8 the benefits you'll get. 9 So with that, I'll end my testimony. Thank you very 10 much. 11 ACTING CHAIRPERSON RIORDAN: Thank you very much. 12 Paul Ryan. I don't see Paul. 13 Jed Mandel, if you'd come forward. I'd like to 14 ask Gordan Exel, Charlie Ker, Staci Heaton, Gretchen 15 Knudsen, Cathy Reheis-Boyd, all of you come down in this 16 first row. I'm trying to get this moving along, and it 17 takes time when you walk down. Thank you. 18 Mr. Mandel. 19 MR. MANDEL: I'm still Jed Mandel. I'm still 20 speaking behalf of EMA. 21 A couple points I'd like to make very briefly. 22 The lead time and stability issues that you all focused on 23 that Bruce Magnani just commented on are still very much 24 in play for this rule as they were on the school bus rule. 25 Another issue that's very much in play that you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 369 1 should be concerned about is certainty. We talk about 2 lead time. We talk about stability. We also talk about 3 certainty. This Board has adopted rules that apply to 4 waste haulers. Those rules are some of the most stringent 5 emissions-forcing technology-forcing standards ever 6 adopted anywhere. They would apply starting in 2007 and 7 again the next step in 2010. Engines that meet those 8 standards are in demonstration fleets today, more than a 9 year before the rule goes into effect. That's 10 unprecedented in this industry. It's usually much later 11 in the process that the engines are actually being 12 demonstrated to meet that rule. 13 For this Board to adopt the proposed waste hauler 14 rules essentially pulls the wool out from under the 15 industry that has made the commitment. I've heard many 16 comments today about rewarding those manufacturers who 17 have been able to produce CNG engines. They are to be 18 commended. Those are our members. That has been framed 19 up as an us and them, diesel industry versus the CNG 20 industry. The manufacturers who make those products are 21 engine manufacturers. They get the sale either which way. 22 But we are setting a terrible precedent, bad public policy 23 to change the rules so late in the game. 24 You really have to ask yourself, as I think you 25 did to a large degree in your previous colloquy, would you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 370 1 even be here if we hadn't prevailed in the United States 2 Supreme Court. I think there's no question. You would 3 never be having this discussion. You would not have 4 expended such enormous resources on the part of the staff 5 and frankly all the rest of us. 6 Guess what? As a practical matter, we didn't 7 prevail in the Supreme Court. Judge Cooper has 8 eviscerated whatever victory we had. The Fleet Rules in 9 the South Coast are fully enforceable today. People seem 10 to have a lot of confidence that we're somehow going to 11 prevail. If that happens, I'm sure we'll be back up here 12 having a discussion much more focused as to what the real 13 issues are, as opposed to you trying to figure out all of 14 the ins and outs of litigation when we have incredibly 15 skilled lawyers on the part of the South Coast and NRDC, 16 because they definitely prevailed skillfully back before 17 Judge Cooper, and I know that we are very skilled 18 representing industry. 19 But we have failed every single time challenging 20 these rules, except in one very big venue, I must say. 21 But I don't know we'll ever get back before that very big 22 venue again. And if that should happen, we all have 23 another discussion. 24 I'd be pleased to answer any questions. I know 25 there's been a lot of discussion today about issues that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 371 1 I'm very directly involved in. If I can shed any light on 2 them, I'd be pleased to. 3 ACTING CHAIRPERSON RIORDAN: Board members, any 4 questions at this time? I don't think there are. 5 MR. MANDEL: Thank you. 6 ACTING CHAIRPERSON RIORDAN: Thank you. 7 MR. EXEL: Good evening. My name is Gordan Exel. 8 I'm speaking today on behalf of Cummins Westport, or CWI. 9 I'm Vice President and General Manager responsible for 10 North and South America. 11 I have a very, very brief comment that I'd like 12 to enter into the record for the refuse rules and have 13 this entered into the transit discussion as well. 14 ACTING CHAIRPERSON RIORDAN: That would be fine. 15 Happy to do that. 16 MR. EXEL: CWI currently has a .2 gram NOx urban 17 bus and truck engine in product development for launch in 18 2007. Development of this product has progressed to the 19 point of CWI being able to express strong confidence in 20 meeting this introduction date. CWI will continue to 21 aggressively market Cummins Westport Natural Gas as the 22 lowest emissions engines in the marketplace. 23 I should also add we are the largest dedicated 24 natural gas engine manufacturer in the world -- heavy-duty 25 engine manufacturer in the world with over 10,000 units in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 372 1 service to date. Thank you. 2 ACTING CHAIRPERSON RIORDAN: Thank you. And we 3 appreciate the testimony. 4 Next speaker. 5 MR. KER: Madam Chairman, members of the Board, 6 my name is Charlie Ker, and I'm here on behalf of Westport 7 Innovations to provide comment on today's discussions, 8 particularly as they relate to Fleet Rules around solid 9 waste collection vehicles and transit, and I hope the 10 records show that. 11 As a leading developer of fuel engine 12 technologies for the transportation sector, Westport 13 supports the Fleet Rules and emission standards for 2007 14 solid waste collection and transit at .2 grams brake 15 horsepower hour NOx and particulate matter emissions of 16 .01. Let me say that Westport gratefully acknowledges the 17 support it has received from the Air Resources Board 18 through its ICAT program in the late 1990s. 19 As our company gets ready to celebrate its 20 ten-year anniversary in 2006, we can look back on the 21 values espoused by the Air Resources Board, particularly 22 those of leadership, collaboration, innovation, and 23 integrity as the cornerstones of our business dealings, 24 past and future. 25 To this end, we've made it our goal to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 373 1 continuously and consistently set the emission and 2 reliability benchmark for the market applications to which 3 we supply technology. We've done so in refuse collection 4 and transit through our affiliation with Cummins Westport. 5 As a parent of this joint venture company, Westport 6 approved expenditures of many millions for the development 7 of an engine to meet a .2 gram NOx standard. Moreover, we 8 made it a priority to have this engine commercially 9 available for 2007. 10 The ARB established stringent emission standards 11 because it believed those standards were necessary to 12 protect the health of the citizens of California. We've 13 always had an emissions advantage, and we believe there is 14 an economic advantage at hand with the advent of the 15 engine in 2007. And let's not forget the 15 percent 16 greenhouse gas benefit that the Executive Officer 17 mentioned earlier. 18 Natural gas refuse collection vehicles and 19 transit buses that meet the ARB 2004-2006 requirements are 20 commercially available today with PM emissions at 2010 21 levels. Westport is committed to ensuring that these 22 vehicles meet the 2010 emissions standard and be 23 commercially available in 2007. It is Westport's view 24 that a relaxed standard would set a precedent that 25 jeopardizes California's effort for timely introductions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 374 1 of the lowest emissions technology. A relaxed standard 2 would undermine one of the Air Resources Board key 3 tenants, that being the continuous improvement in 4 application of science and technology. 5 Again, for these reasons, Westport supports the 6 Fleet Rules and 2007 standard of .2 gram NOx and a .01 PM 7 for solid waste collection of transit. 8 ACTING CHAIRPERSON RIORDAN: Thank you very much. 9 Thank you for your testimony. 10 Staci. 11 MS. HEATON: Yes. Pardon me. Good evening, 12 Madam Chair and members of the Board. My name is Staci 13 Heaton. I'm the Director of Environmental Affairs for the 14 California Trucking Association. I've also been asked to 15 speak on behalf of the American Trucking Association by 16 Mike Tunnell, because he had to leave. So if you would 17 have their name applied to our comments as well, that 18 would be appreciated. 19 As we stated earlier, we are in opposition to 20 this rule, and we would like to apply our earlier comments 21 to the solid waste rule as well. We support fuel 22 neutrality and believe this rule will, in fact, delay new 23 vehicle purchases in the solid waste collection vehicle 24 arena and will keep older trucks on the road longer. And 25 as others have said, natural gas applying technology does PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 375 1 not meet the needs of heavy-duty solid waste collection 2 applications. And we would actually recommend lead time 3 and stability for the natural gas engine manufacturers so 4 we can bring their technology up to speed for our 5 applications. 6 And in summary, we would just ask that the Board 7 take no action on this rule. Thank you. 8 ACTING CHAIRPERSON RIORDAN: Thank you very much. 9 So next have Gretchen and Cathy Reheis-Boyd, 10 Michael Eaves, Michael Pratt, and Guy Burgess, all of you 11 come down, please. 12 MS. KNUDSEN: Good evening. I'm Gretchen Knudsen 13 with the International Truck and Engine. And because it 14 is the evening, I will keep my comments brief. 15 International would like to let the comments that 16 were stated earlier in the school bus rule stand for this 17 rule as well. We are in opposition. 18 And just in response to some of the comments that 19 were stated as far as CNG encouraging diesel to move 20 towards more lower emissions or near zero emissions, I'd 21 just like to point out, at the time some of these rules 22 are passed there were diesel engines that were certified 23 that were actually lower on PM emissions. And, in fact, 24 it was that technology which pushed the CNG manufacturers 25 to drive their standards down lower and come out with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 376 1 something that met the .01 standard. 2 So there's competition, and competition pushes 3 both technologies to be cleaner and all technologies to be 4 more cost effective. And, certainly, we'd like to have as 5 much opportunity to experiment with fuels and technologies 6 including biodiesel and other types of fuels and diesel 7 hybrids. So we would encourage a fuel neutral position on 8 this. Thank you. 9 ACTING CHAIRPERSON RIORDAN: Thank you very much. 10 Cathy Reheis-Boyd. 11 MS. REHEIS-BOYD: Yes. My name is Cathy 12 Reheis-Boyd, and I'm the Chief Operating Officer of WSPA. 13 I think you'll be pleased to tell you I'm not going to 14 take my three minutes. I actually was able to take my 15 double-spaced five-page three-minute version down to one 16 card, so I'll make it quick. 17 You know how we feel. Like the previous rule, we 18 can find no reason to support Board action, not from the 19 basis of fuel neutrality, not from the basis of air 20 quality, not from the basis of fuel supply. This is not 21 the bridge to the hydrogen highway. Not from the basis of 22 cost effectiveness, reliability, availability, delayed 23 purchases, timing. Simply, we cannot find any 24 justification for you to move forward on this rule, as the 25 previous rule. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 377 1 We urge you to take no action. We urge you not 2 to consider a backstop. And I also support all of the 3 specific details that Jed Mandel of EMA also provided to 4 you earlier. 5 ACTING CHAIRPERSON RIORDAN: Thank you. Thank 6 you for your timing. 7 Mayor Loveridge. 8 BOARD MEMBER LOVERIDGE: Help me out on this fuel 9 neutrality. The 2007 standard of .2 and .01, isn't that 10 fuel neutrality standard, or what is your take on that? 11 MS. REHEIS-BOYD: Well, the way I understand the 12 rule is you get a -- there is this sort of cyclic. You 13 have standards that have to be met, and then there's a 14 break in the standard, and then there's the next set. So 15 there is the interim period where diesel cannot be 16 afforded the same opportunities as the natural gas. 17 BOARD MEMBER LOVERIDGE: 2007, .2, .01, isn't 18 that a fuel neutral standard? 19 MS. REHEIS-BOYD: I can't find anything, Mayor 20 Loveridge, in this rule that qualifies as fuel neutral, in 21 my opinion. 22 BOARD MEMBER LOVERIDGE: Then what is fuel 23 neutral? 24 MS. REHEIS-BOYD: Fuel neutral as allowing fuels 25 to compete in the marketplace. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 378 1 BOARD MEMBER LOVERIDGE: Any kind of fuel? 2 MS. REHEIS-BOYD: Certainly. 3 BOARD MEMBER LOVERIDGE: No matter what its 4 emissions? 5 MS. REHEIS-BOYD: I don't think this rule as 6 evidenced, provides air quality benefits. I think the 7 staff and the presentations previously made supported this 8 is not a justified rule on an air quality basis. I think 9 the quotes relative to the tons received and dollars spent 10 do not justify passage of this rule. 11 BOARD MEMBER LOVERIDGE: I just thought emission 12 criteria were a way to try to have fuels which reduce and 13 improve air quality. 14 MS. REHEIS-BOYD: The fuel technologies that 15 we're talking about today are the cleanest fuels in the 16 marketplace. I find it difficult to support a rule that 17 literally bans the cleanest technology on the marketplace. 18 BOARD MEMBER LOVERIDGE: Okay. 19 ACTING CHAIRPERSON RIORDAN: Thank you. 20 Any other questions for this speaker? 21 All right. Michael Eaves, followed by Mitchell 22 Pratt, Guy Burgess, and our last speaker is Henry Hogo. 23 MR. EAVES: Yes, good evening, Madam Chairman, 24 and Board members. My name is Michael Eaves with 25 California NGV Coalition. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 379 1 I think that last exchange is kind of 2 extraordinary. I think 1.5, 1.8 gram engines trump 2.4, 3 2.5 gram engines any day. We support the rules. We 4 support this Board taking action. I think we support this 5 Board taking action to send a signal to the marketplace 6 that emissions are important. The previous Rule 1139 was 7 an alternative fuel rule only. This is an emission driven 8 rule. The emissions are on the table. They're 9 achievable. They're in the marketplace. I think you 10 should adopt them. Thank you. 11 ACTING CHAIRPERSON RIORDAN: Thank you very much. 12 Mitchell Pratt. 13 MR. PRATT: Madam Chair, members of the Board, 14 Mitchell Pratt with Clean Energy, Vice President of Public 15 Affairs and Business Development. Just a few additional 16 comments here. 17 I'd like to first address the supply issue, and 18 I'm glad to say that I wasn't the owner and operator of 19 the lightning struck plant. But to this end, we are very 20 concerned about always supplying customers with 21 much-needed fuel. And we did make extra fuel supplies 22 available during that time period. But we are in the 23 process of securing additional supplies, both in and out 24 of state that will be available for backup and support to 25 the area. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 380 1 We are also working on and nearing completion of 2 negotiations with a site identified in California for the 3 production for an LNG plant that will produce up to 4 240,000 gallons of LNG a day. This plant is already 5 authorized in many regards for fast permitting, and we 6 expect it to be online in 2007. We are also extremely 7 interested in extending our efforts to work with South 8 Coast on ensuring their backup supply that they're 9 planning to take up to the Board. 10 On another note, station costs and upgrading 11 facilities for station costs for customers, we are able 12 and have done a number of projects where we've entirely 13 financed the cost of the stations. We enter into 14 long-term ten-year contracts, and up to ten years and 15 often shorter, but fuel supply agreements at a fixed fuel 16 price. Our customers, refuse, school buses, and transit 17 customers are enjoying prices well below diesel, often in 18 the $1.60 to $1.80 range. 19 I would like to also mention about emissions, I 20 agree with Mayor Loveridge. I don't see how you get any 21 more fuel neutral than setting a standard and letting 22 everybody compete to it. Duh, if I don't get it. 23 So I'd like to add in one other piece here that 24 our D.C. representatives have talked with executives of 25 EPA on a number of occasions entirely through this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 381 1 process, and EPA officials have repeatedly told our 2 representatives that they will support a waiver if it is a 3 State rule passed by CARB applied for South Coast, that 4 they will support a waiver. And so I'd be happy to get 5 our representatives in contact. I think they have been in 6 contact with your staff. 7 And, finally, people don't change. You've 8 already heard all these folks that if Waste Management 9 with vision and leadership can operate these trucks and do 10 so successfully, then anybody else can. And I would 11 encourage you to pass and adopt the rule tonight. Send 12 the right signal. Thank you. 13 ACTING CHAIRPERSON RIORDAN: Thank you very much. 14 Guy Burgess, Henry Hogo. 15 MR. HOGO: Thank you, Madam Chair, and good 16 evening again. For the record, Henry Hogo with South 17 Coast AQMD. 18 I want to make two quick points here. And that 19 is to reaffirm that the dollar per household per year is 20 in your staff report. And this is from the noticing 21 points that out. 22 What I really want to focus in on, and Dr. 23 Wallerstein mentioned about the LNG supply, and AQMD staff 24 is believing we can provide sufficient contingencies. 25 But I want to talk about the engine performance. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 382 1 And we are working with the U.S. Department of Energy on 2 several natural gas engine demonstrations at the .2 gram 3 level, and all the major manufacturers have agreed that 4 doing a 1200 hour in-use demonstration in a vocation such 5 as waste haulers or transit buses can be done, and they 6 will plan to do that. I just want to reiterate that. 7 Mr. Mandel mentioned certainty. And we have 8 certainty that natural gas engines will be there in 2007. 9 We do not have certainty whether diesel engines will be 10 there at .2 grams in 2010. We actually got this comment 11 from the waste hauling industry. As such, our Governing 12 Board approved research demonstration with two major 13 engine manufacturers to have a .2 gram diesel engine 14 demonstrated next year. So we are moving ahead with that 15 process. So we are looking at all fuel types in meeting 16 .2. So I just wanted to mention that. 17 And, lastly, the enforceability of a rule really 18 depends on how you interpret the market participant 19 doctrine. And we believe that there's a potential that 20 2,000 vehicles currently subject to our rule may not be. 21 So we're looking at that very closely. And what that 22 means is that, if you recall Dr. Wallerstein's chart with 23 the three tons per day of emissions from our rule, those 24 three tons are actually embedded in your staff's 25 calculation of your diesel retrofit rule. In South Coast PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 383 1 when refuse haulers meet your rule, they actually will be 2 buying alternative fuel vehicles. So that is actually 3 imbedded in your baseline. 4 I'm just going to end with one comment about 5 fuel. And it's true that California has the cleanest 6 fuels in the nation and the majority of the world, but 7 it's the engines using those fuels that are different. 8 And if all these engines can be clean, then we wouldn't be 9 talking today. Thank you. 10 ACTING CHAIRPERSON RIORDAN: Thank you, Henry. 11 Are there any questions for this speaker? 12 Seeing none, that concludes the persons that have 13 signed up to speak. 14 So I'm going to close the record. Since all the 15 testimony, written submissions, and staff comments for 16 this item have been entered into the record and the Board 17 has not granted an extension of comment period, I'm 18 official closing the record on this portion of Item 5-8-5. 19 Written or oral comments received after the comment period 20 has closed will not be accepted as part of the official 21 record on this agenda item. 22 We do have ex parte. At this time I'm going to 23 start on my left and work to the right. 24 Ms. Berg, do you have any items to declare? 25 BOARD MEMBER BERG: Yes, I do. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 384 1 On August 9th, I met with Stephanie Williams with 2 the California Trucking Association in my office. And her 3 comments were the same as her comments from the last that 4 she carried over that were applied. 5 On September 8th, I met with the Engine 6 Manufacturers in my office. And their comments were the 7 same as well. So that's transit. 8 On September 8th, I also had a telephone 9 conference with the National Association of Fleet 10 Administrators. 11 And on September 13th, I had a telephone 12 conversation with the American Lung Association, the 13 Coalition for Clean Air, and the NRDC. 14 And then on September 13th, I also had a 15 conversation with International Truck and Engine group, 16 which would be Gretchen Knudsen and Rick Zbur and Cynthia, 17 and all of their comments were consistent with their 18 testimonies today. 19 ACTING CHAIRPERSON RIORDAN: Supervisor Patrick. 20 SUPERVISOR PATRICK: If there are no changes from 21 what I said before, do I need to say it again? 22 ACTING CHAIRPERSON RIORDAN: That's okay. Thank 23 you. 24 Mayor Loveridge. 25 BOARD MEMBER LOVERIDGE: September 13th, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 385 1 telephone conversation with Kent Stoddard, information 2 same as in the letter we all received. 3 ACTING CHAIRPERSON RIORDAN: Okay. For myself, I 4 had a telephone conversation with Kent Stoddard, who's 5 Vice President of Waste Management. Why couldn't I 6 remember that? I'm putting him back before that. And his 7 conversation mirrored his testimony today. 8 Indirectly, we may have mentioned in a 9 conversation where I met with the National Association of 10 Fleet Administrators solid waste disposal trucks, but 11 generally speaking, it was more on to the fleets in 12 general. But I just wanted to cover that also this week. 13 Ms. D'Adamo. 14 BOARD MEMBER D'ADAMO: Nothing new to add. 15 ACTING CHAIRPERSON RIORDAN: Mr. Gong. 16 BOARD MEMBER GONG: Nothing new to add. 17 ACTING CHAIRPERSON RIORDAN: Supervisor 18 DeSaulnier. 19 SUPERVISOR DeSAULNIER: Nothing new to add. Hard 20 for me to say. 21 ACTING CHAIRPERSON RIORDAN: Board members, 22 action is now before us for discussion, and we do have a 23 Resolution in front of us as well. Comments? Discussion? 24 Somebody want to -- who's the brave sole? 25 Mayor Loveridge. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 386 1 BOARD MEMBER LOVERIDGE: In some ways, I feel 2 like you've been through this drill earlier. But, you 3 know, we've talked about the air quality problem in the 4 South Coast, and we've talked about the State's 5 legislative authority. And we've talked about the strong 6 and unanimous District Board request. 7 What I would add to this I think is really the 8 comment that came from listening to Kent Stoddard, that 9 for four years this has been in effect, to having gone 10 down a road of working on certain expectations in 11 development of programs, and this is not a time to go 12 backward. I thought he identified some interesting cost 13 elements and obviously premises in the new federal energy 14 legislation. I know our own waste hauler is in the 15 process of acquiring 14 alternative fuel vehicles. 16 So I would offer the motion for what has been 17 prepared by staff, which requires all owners of solid 18 waste collection vehicles operating in the South Coast Air 19 Quality Management District to purchase the lowest 20 emitting trucks available, and that's by the criteria in 21 the staff report. 22 ACTING CHAIRPERSON RIORDAN: Okay. That's 23 Resolution 05-49. Okay. Second? Is there a second to 24 the motion? 25 SUPERVISOR DeSAULNIER: For purposes of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 387 1 discussion, I'd second it. 2 ACTING CHAIRPERSON RIORDAN: Thank you. And I'll 3 let you go right ahead with your discussion. 4 SUPERVISOR DeSAULNIER: I think the Board -- it 5 would be nice to not go through what we went through last 6 time, although I think that was instructive for all of us 7 as we struggle with this. But given the hour and sort of 8 the redundant nature of this, I did suggest to staff maybe 9 an idea to prepare a Resolution that would commit us. So 10 this is just an approach. Because I don't want to appear, 11 at least for myself, to be equivocating on my support for 12 what you've asked for, Ron. And I don't know if everyone 13 has a copy of this or not. 14 But, in general, it basically is a Resolution 15 committing us to support all of the efforts we're making, 16 but without getting into the discussion sort of on the 17 approach. It's more of a global approach. And I'll ask 18 Catherine maybe to follow up. 19 EXECUTIVE OFFICER WITHERSPOON: We haven't had an 20 opportunity to distribute it yet to the audience. But 21 what we did is as we went through tonight's proceeding, 22 there was no resolution on the overview item and 23 background for the South Coast Fleet Rules. So we used 24 that item number, which is 05-8-3 and created a Resolution 25 where there had been none before to memorialize the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 388 1 sentiment that we heard on the Board of recognition of the 2 South Coast's unique and extreme air pollution problem, of 3 the authority given them to the State Legislature, of 4 legitimate exercise of the Board's authority and 5 discretion and to have you direct us, you know -- it 6 notices, too, there are legal challenges and the local 7 proceedings are continuing and then -- 8 ACTING GENERAL JENNINGS: If we have an extra 9 copy, it's been suggested we could put it on the screen. 10 EXECUTIVE OFFICER WITHERSPOON: We could do that. 11 SUPERVISOR DeSAULNIER: Catherine, to interrupt 12 briefly, because I always wanted to interrupt you. I want 13 to act like a Supreme Court Justice for once in my life 14 and interrupt. This is from my perspective at least for 15 discussion so we can have the same discussion. 16 Ron, I'm seconding you motion. I support it. 17 That would be my preference. But if we can't get there, 18 rather than going through what we went through last time, 19 recognizing we now have an odd number of Board numbers 20 here, it would be better to have this discussion, And I 21 look forward to others' comments. 22 EXECUTIVE OFFICER WITHERSPOON: Just to clarify, 23 this is not a substitute Resolution for the one that Mayor 24 Loveridge advanced as his motion. This would be something 25 you would take up after all three rules had been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 389 1 discussed, because you did not close the record on Agenda 2 Item 8-3-4, whatever it was, 5-3-8. You could go back to 3 that and consider this new resolution at this time. That 4 was the idea. 5 ACTING CHAIRPERSON RIORDAN: Ms. D'Adamos. 6 BOARD MEMBER D'ADAMO: I would like to lend my 7 support to this approach for a couple of reasons. One is 8 in light of what Supervisor DeSaulnier noted that, you 9 know, we have one less member here, it appears that we'd 10 have sort of an inconsistent approach if we tried the 11 route that we did earlier. And this as more global 12 approach. It does not -- recognizing it does not go as 13 far as what you would like, Mayor Loveridge, but I think 14 that it would take the whole, all three, as a package, and 15 we would get the trigger, in the sense that the staff 16 would be directed to come back to us in the event that the 17 District would lose its authority through the legal 18 proceedings being rather general. And then we would be 19 able to avoid the hair splitting that we were going 20 through earlier on the language, that I think was for good 21 reason making many Board members pretty nervous about the 22 approach. 23 ACTING CHAIRPERSON RIORDAN: Okay. I'm hoping 24 the audience can read what is on the board so you have an 25 understanding of what we are discussing. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 390 1 Board members, any further discussion? 2 Obviously, there's a motion in front of us, as well as a 3 Resolution that has been offered for consideration as 4 well. 5 And so I'm going to Ms. Berg. 6 BOARD MEMBER BERG: I just would like just to be 7 very clear that the current South Coast has the authority 8 to currently enforce their rules. 9 SENIOR STAFF COUNSEL JOHNSTON: That is correct, 10 Ms. Berg. 11 BOARD MEMBER BERG: In full. 12 SENIOR STAFF COUNSEL JOHNSTON: Not in full. 13 Purely private waste haulers out there collecting refuse 14 from households and businesses, those refuse haulers are 15 still not -- they're not complying with the South Coast 16 rule because of Judge Cooper's rule. I don't know what 17 percentage that is, but maybe staff can help out. 18 BOARD MEMBER BERG: Would anybody from South 19 Coast like to give me a guess? 20 MR. WALLERSTEIN: Twenty-five percent. 21 BOARD MEMBER BERG: Thank you very much, Mr. 22 Wallerstein. 23 EXECUTIVE OFFICER WITHERSPOON: No. It's 10 24 percent. 25 BOARD MEMBER LOVERIDGE: Ten percent are covered? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 391 1 EXECUTIVE OFFICER WITHERSPOON: Ten percent are 2 outside the rule's scope at the moment. It's 500 out of 3 5,000. That's our estimate. 4 ACTING GENERAL JENNINGS: I'd like to make a 5 clarification on the Resolution that' on the floor. My 6 understanding is that Mayor Loveridge's Resolution remains 7 on the floor. 8 ACTING CHAIRPERSON RIORDAN: Yes, it is on the 9 floor. One is on the floor, and one is sitting out there 10 sort of in limbo. So let's sort of take one at a time. 11 And Supervisor DeSaulnier. 12 SUPERVISOR DeSAULNIER: I just want to be clear 13 that from my perspective -- I don't know how we should do 14 in terms of point of order here. But I support the motion 15 as stated and seconded. We can go through that, or this 16 idea at least for me it would apply to all three items, 17 including the previous item. Is that correct? 18 ACTING GENERAL JENNINGS: That's correct. That's 19 the way it's drafted. 20 ACTING CHAIRPERSON RIORDAN: So in recognition of 21 that, my thought would be to dispose of the motion that's 22 on the table, and then we could take this up. Okay. 23 So I'm going to ask, if there's no further 24 discussion, the motion that has been made by Mayor 25 Loveridge, I'm going to ask for again a roll call vote. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 392 1 SECRETARY ANDREONI: Ms. Berg? 2 BOARD MEMBER BERG: No. 3 SECRETARY ANDREONI: Ms. D'Adamo? 4 BOARD MEMBER D'ADAMO: No. 5 SECRETARY ANDREONI: Supervisor DeSaulnier? 6 SUPERVISOR DeSAULNIER: Yes. 7 SECRETARY ANDREONI: Dr. Gong? 8 BOARD MEMBER GONG: Yes. 9 SECRETARY ANDREONI: Mayor Loveridge? 10 BOARD MEMBER LOVERIDGE: Yes. 11 SECRETARY ANDREONI: Supervisor Patrick? 12 SUPERVISOR PATRICK: No. 13 SECRETARY ANDREONI: Madam Chairman Riordan? 14 ACTING CHAIRPERSON RIORDAN: No. 15 Now would somebody like to -- 16 SUPERVISOR DeSAULNIER: Yes, Madam Chair. I 17 would move the Resolution 05-60 dated September 15th, 18 2005, and it lists Agenda Items 05-8-3 which would 19 encompass all three. 20 BOARD MEMBER D'ADAMO: Second. 21 ACTING CHAIRPERSON RIORDAN: Any further 22 discussion? 23 BOARD MEMBER LOVERIDGE: Wouldn't 8-6 include the 24 next one, too? 25 ACTING CHAIRPERSON RIORDAN: It's all together. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 393 1 All three. May we do that? 2 SENIOR STAFF COUNSEL JOHNSTON: Yes, but it might 3 be helpful, because it was very difficult for everyone to 4 see exactly the whole provision, you might want to read 5 the most critical provisions into the record. 6 ACTING CHAIRPERSON RIORDAN: Let's do that. I'll 7 be happy to. 8 "Now, therefore, be it resolved, that the Air 9 Resources Board fully supports the District's 10 efforts to reduce the harmful effects in public 11 health of air pollution. 12 "Be it further resolved, that the ARB 13 recognizes the authority of the District to adopt 14 rules affecting fleet purchases as provided in 15 state law. 16 "Be it further resolved, that the ARB 17 supports the District's effort in currently 18 pending litigation to maximize the extent to 19 which the District's Fleet Rules are exempt under 20 the market participant doctrine from federal 21 preemption. 22 "Be it further resolved, that the staff is 23 directed to monitor these legal proceedings 24 closely, to apprise the Board of any significant 25 changes to the District's clean fuel fleet PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 394 1 authority, and to return to the Board with 2 options for action, should the District lose its 3 authority to regulate public agencies or private 4 contractors to public agencies with respect to 5 the purchase or lease of clean fuel fleet 6 vehicles." 7 Okay. I'll ask, is there any further discussion? 8 Then Madam Clerk, do you want to take the vote, please? 9 SECRETARY ANDREONI: Ms. Berg? 10 BOARD MEMBER BERG: Yes. 11 SECRETARY ANDREONI: Ms. D'Adamo? 12 BOARD MEMBER D'ADAMO: Yes. 13 SECRETARY ANDREONI: Supervisor DeSaulnier? 14 SUPERVISOR DeSAULNIER: Yes. 15 SECRETARY ANDREONI: Dr. Gong? 16 BOARD MEMBER GONG: Yes. 17 SECRETARY ANDREONI: Mayor Loveridge? 18 BOARD MEMBER LOVERIDGE: No. 19 SECRETARY ANDREONI: Supervisor Patrick? 20 SUPERVISOR PATRICK: Aye. 21 SECRETARY ANDREONI: And Madam Chairman Riordan? 22 ACTING CHAIRPERSON RIORDAN: Aye. 23 Thank you very much, those of you who were a part 24 of working out this last Resolution. I think it's a very 25 good idea and will allow us to move on expe,ditiously I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 395 1 believe, a good Resolution. 2 EXECUTIVE OFFICER WITHERSPOON: Madam Chair, a 3 point of order, the Resolution the Board just adopted 4 covers all three Fleet Rules, but not does not dispense of 5 the next agenda item. 6 ACTING CHAIRPERSON RIORDAN: We're going to go 7 through that, yes, indeed. We would never leave an agenda 8 item untouched. 9 This is Agenda Item 5-8-6. And Ms. Witherspoon, 10 would you like to introduce this. 11 EXECUTIVE OFFICER WITHERSPOON: We have a 12 statewide transit rule. So in addressing the District's 13 Fleet Rule, we made amendments to it to incorporate the 14 clean fuel purchase requirement. And staff will describe 15 that very briefly. 16 (Thereupon an overhead presentation was 17 presented as follows.) 18 STAFF AIR POLLUTION SPECIALIST SALARDINO: Good 19 evening, Madam Chairman, members of the Board, ladies and 20 gentlemen. 21 In this presentation I will discuss the 22 possibility of amending Californian's existing Fleet Rule 23 for transit agencies, which was adopted by the Air 24 Resources Board in 2000. The proposed amendments are 25 intended to support the South Coast Air Quality Management PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 396 1 District's Rule 1192, clean on-road transit buses. If 2 adopted, these amendments will apply only in the South 3 Coast District. 4 --o0o-- 5 STAFF AIR POLLUTION SPECIALIST SALARDINO: I 6 would like to start with a description of South Coast's 7 existing transit bus rule. In 2000, the South Coast 8 District adopted Rule 1192. Beginning in 2001, transit 9 agencies in South Coast Air District were required to 10 purchase or lease alternative fuel vehicles. This applies 11 to both public transit agencies and private agencies under 12 contract to transit agencies that operate 15 or more 13 transit vehicles that have a gross vehicle weight rating 14 of 14,000 pounds or more. As previously mentioned in this 15 hearing, the District is currently enforcing this rule. 16 --o0o-- 17 STAFF AIR POLLUTION SPECIALIST SALARDINO: In 18 2000, ARB adopted its own fleet rule for transit agencies. 19 This rule was designed to reduce emissions by setting 20 fleet-wide NOx and PM emission reduction requirements for 21 urban buses through the purchasing of cleaner engines, 22 accelerated vehicle retirement, and the retrofit of 23 existing engines. Each transit agency was required to 24 make a non-revokeable compliance path selection, either 25 the diesel path or the alternative fuel path, by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 397 1 January 1st of 2001. 2 The chosen path establishes the fuel type for new 3 urban bus purchases or leases by the transit agency 4 through model year 2015. The rule also requires each 5 transit agency to use ultra low sulfur diesel, reduces NOx 6 fleet average, and reduces PM emissions. Additionally, 7 there is a zero emission bus demonstration and purchase 8 requirement for larger transit agencies. 9 --o0o-- 10 STAFF AIR POLLUTION SPECIALIST SALARDINO: Staff 11 is before the Board today with a proposal to modify ARB's 12 existing Fleet Rule. The modification would affect only 13 the urban bus requirement of the Fleet Rule for transit 14 agencies. It would require all transit agencies in the 15 South Coast to follow the alternative fuel path, requiring 16 that 85 percent of new urban bus purchases or leases be 17 alternative fuel and they meet all the compliance 18 deadlines of the alternative fuel path. 19 --o0o-- 20 STAFF AIR POLLUTION SPECIALIST SALARDINO: As can 21 be seen in this slide, most agencies in the District are 22 already on the alternative fuel path. The regulatory 23 modification presented here would not impact transit 24 agencies already on the alternative fuel path. 25 The modification would impact 10 percent of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 398 1 buses operating in the South Coast, which are operated by 2 six transit agencies on the diesel path. Five of these 3 agencies already have plans to purchase alternative fuel 4 buses, mostly gasoline hybrids. 5 If South Coast's Rule 1192 should not be 6 enforced, these transit agencies could purchase diesel 7 fueled urban buses. The amendment would switch these six 8 diesel path transit agencies to the alternative fuel path, 9 requiring them to purchase alternative fueled urban buses 10 until 2015. 11 --o0o-- 12 STAFF AIR POLLUTION SPECIALIST SALARDINO: Since 13 the District is currently enforcing Rule 1192, we believe 14 the ARB's rule and the District's rule will get the same 15 benefits. There are no additional benefits of ARB's rule 16 beyond the District rule. 17 But if ARB's rule were a stand-alone rule, it 18 would reduce NOx emissions by 0.13 tons per day in 2010. 19 It should be noted here that this number differs from the 20 number that was provided in the initial Statement of 21 Reasons based on input that was received during the 45-day 22 comment period. 23 Staff based cost estimates on information 24 obtained from South Coast transit agencies, and the 25 resulting cost effectiveness ratio is $10,784 per ton of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 399 1 NOx reduced. 2 --o0o-- 3 STAFF AIR POLLUTION SPECIALIST SALARDINO: The 4 major issues that you may have heard with regard to 5 today's proposal are similar to the previous 6 presentations, that the ARB rule is not fuel neutral and 7 is an alternative fuel mandate. And also that if transit 8 agencies are required to purchase alternative fuel buses, 9 they may try to hold off purchasing new buses for as long 10 as possible, resulting in longer operation of older buses. 11 --o0o-- 12 STAFF AIR POLLUTION SPECIALIST SALARDINO: With 13 that, I now present for the Board's consideration the same 14 two options as the previous presentations. 15 Thank you. And that concludes my presentation. 16 ACTING CHAIRPERSON RIORDAN: Thank you. Turn on 17 my microphone. Thank you very much. 18 Board members, are there any questions for staff? 19 Ms. Berg. 20 BOARD MEMBER BERG: I just wanted to get 21 clarification on what year did the ARB pass its transit 22 rule? 23 EXECUTIVE OFFICER WITHERSPOON: 2000. 24 BOARD MEMBER BERG: 2000. Thank you. 25 ACTING CHAIRPERSON RIORDAN: Mr. Johnston, would PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 400 1 you like-- 2 SENIOR STAFF COUNSEL JOHNSTON: Would you like me 3 just to enter it into the record? 4 ACTING CHAIRPERSON RIORDAN: I think that would 5 be wonderful. Make it part of the record, thank you. 6 Let me invite Joshua Shaw, James Parker, John 7 Hall, Allan Pollock, and Julie Masters to come forward and 8 get into this front row. And we're going to start to 9 work. 10 MR. SHAW: Madam Chairman, Joshua Shaw, Executive 11 Director of the California Transit Association. 12 We started working hard eight years ago to form 13 that statewide rule you just heard about. It allows 14 choice. It allows two fuel paths whose emissions 15 standards do convene in the year 2010. It works around 16 the state. We are opposed to the Option 1 which would be 17 a carve-out for the South Coast Rule. For all of the 18 reasons you heard for the other two rules earlier tonight, 19 we would urge to you reject that position and not do a 20 carve-out for the South Coast. Thank you. 21 ACTING CHAIRPERSON RIORDAN: Thank you, Mr. Shaw. 22 James Parker. 23 MR. PARKER: Thank you, Madam Chairman and 24 members of the Board. I'm Jim Parker, Director of 25 Transportation for Norwalk Transit, which serves seven PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 401 1 cities in the southeast region of Los Angeles County. 2 We've done all of our due diligence. We have 3 tried to be partners and have, in fact, become partners 4 with CARB and AQMD in achieving what we could, given the 5 competing issues in our constraints and meeting emission 6 standards. We have 100 percent aftertreatment 7 installation of traps. We have reduced our PM by 65 8 percent below the 4.8 average standard of NOx. And we 9 feel that by eliminating the diesel path, it would 10 eradicate this investment. We've done training for our 11 mechanics. We ask you not to adopt this carve-out issue. 12 Thank you very much. 13 ACTING CHAIRPERSON RIORDAN: Thank you very much. 14 John Hall. 15 Mr. HALL: Madam Chair, I'm John Hall, Service 16 Manager for the Torrance Transit. We oppose the 17 carve-out. 18 I gave the Chair some documents that I hope the 19 rest of you have. If you look on the last few pages, that 20 is a retrofit bus that I put a new engine in which CARB 21 tested. The emissions on it are very clean. So the 22 emissions between the natural gas and the current diesel 23 technology are very small. 24 I'd like to thank your staff. They've been very 25 helpful. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 402 1 I'll talk a little bit about what Dave didn't get 2 to talk about. We are concerned as far as a national 3 emergency. With natural gas, you can't deliver natural 4 gas if the natural gas lines go down in a major 5 earthquake. As a city, we have to respond. If we are 6 stuck on natural gas, more than likely we won't be able to 7 respond. So, again, we'd like to see you fuel neutral for 8 the entire state. And thank you. 9 ACTING CHAIRPERSON RIORDAN: Appreciate that, 10 Mr. Hall. Thank you very much. 11 Allen Pollock, Julie Masters, and Todd Campbell 12 and Francisca Porchas. 13 MR. POLLOCK: Good evening, Madam Chairman and 14 members of the Board. I'm Allan Pollock, Director of 15 Transportation for the City of Montebello's Public Transit 16 Service, Montebello Bus Lines. 17 We have been a partner with ARB and have made 18 significant financial commitments to reducing our 19 emissions. We have reduced our PM emissions by 79 percent 20 since our base average, as well as reducing our NOx below 21 the 4.8. 22 And for all of the reasons that have already been 23 mentioned, I'm not going to repeat them, we ask you not to 24 support Option 1, and take no action and oppose the 25 carve-out. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 403 1 ACTING CHAIRPERSON RIORDAN: Thank you very much. 2 Julie Masters 3 MS. MASTERS: Julie Masters with NRDC. 4 Not surprisingly, we completely support this 5 amendment to put South Coast fleets on the alternative 6 fuel path. And I'm just going to incorporate my comments 7 from the two prior rules. I've no new arguments to make, 8 but only to say that alternative fuels are the most 9 advanced in the transit sector, and it makes the most 10 sense to adopt this rule. Thank you. 11 ACTING CHAIRPERSON RIORDAN: Thank you very much. 12 Todd Campbell. 13 MR. CAMPBELL: Good evening, again. Todd 14 Campbell, Coalition for Clean Air. 15 I think there is a difference with this rule. 16 This rule is extremely cost effective, even by your own 17 staff numbers, and is extremely important for us given 18 where Southern California is going in terms of density. 19 Sacramento continually is putting pressure on decision 20 makers to make higher-density projects to provide low 21 income housing. And in my view, I have a lot people come 22 to the dias and complain about congestion. And the only 23 thing I can do except widen streets, which I really don't 24 want to do, is provide clean public transit. 25 This rule helps me in a number of ways. One, it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 404 1 gives me the cleanest option. Two, it educates decision 2 makers. Not everybody has someone from the Coalition for 3 Clean Air on their Council. It really helps us out. And 4 I would as -- again for this rule, I would really 5 appreciate if we consider to support a waiver that would 6 go into play if the District's rules are ruled invalid in 7 court. It's extremely important not to have any lag time. 8 And I think you actually have the votes. If we 9 tried to push for a motion that that would support at 10 least moving toward forward with the trigger, I would 11 really hope we would have the support from the Air 12 Resources Board. It's critical. And it's critical for 13 getting ridership. People want to ride and feel good 14 about their public transit commute. And getting on that 15 clean air natural gas bus or a clean air bus, period, is 16 important to them. It's about doing the right thing. 17 And you really help me at least guide people in 18 Southern California that struggle with air pollution, 19 particularly when we get into denser and denser and denser 20 communities. And that's clearly where we're headed. If 21 you look at downtown L.A., you know live/work, the lofts, 22 all the things that are being created, we're trying to 23 rejuvenate our downtown centers, we really need clean 24 transit. And I hope you move forward with waiver 25 language. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 405 1 ACTING CHAIRPERSON RIORDAN: Thank you. 2 Ms. D'Adamo. 3 BOARD MEMBER D'ADAMO: Well, Todd, I just feel 4 compelled to say that even though we tried on the first 5 round, I think it's important for us to be consistent. 6 And I'm hoping that you'll see the wisdom in this 7 language, and you continue to monitor the situation and 8 keep us appraised as well. 9 And just wanted to ask staff, is there anything 10 different about this rule that would make us want to treat 11 it differently? I remain concerned about the whole issue 12 of lag time and stability. 13 EXECUTIVE OFFICER WITHERSPOON: This rule is 14 different, in answer to your question, because we also 15 need a waiver for the transit rule in light of the Supreme 16 Court decision and how our own new vehicle standards 17 apply. And we have already, in our rule, locked in 17 18 Districts in the south land to the natural gas path -- 11 19 of 17 to the natural gas path through 2015. And the rule 20 we're proposing would lock in the last six. Mr. Cackette 21 and I were chatting about that kind of a waiver request is 22 not so different from the one we're asking for already. 23 So should you choose to take this one up, we would be able 24 to act on it separately. The form is different. The 25 scope of it's different than the first two. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 406 1 BOARD MEMBER D'ADAMO: I guess my only remaining 2 concern would be an inconsistent approach with how we 3 handled the other two rules. Would you have any concerns 4 about that in light of what you just said, that this seems 5 to be different in that we need a waiver anyway? 6 EXECUTIVE OFFICER WITHERSPOON: Well, the other 7 thing is the District can enforce against those six 8 districts already, because they haven't lost their 9 authority over their government. And the reason they 10 haven't is because those five of the six districts are 11 complying. Although calling themselves diesel, they're 12 buying gasoline hybrids. They haven't provoked an 13 enforcement action. And I believe the sixth hasn't bought 14 anything at all, sitting on their hands. 15 What they would like to see you do, those six, is 16 give them permission to go to diesel. I don't think you 17 have that option, as I said at the very outset of this 18 proceeding, because you can't overrule the District. And 19 so either you do nothing, or you sweep them into the 20 all-fuel path where arguably they should have been from 21 the time we adopted the rule and the South Coast had 22 theirs on the books. 23 ACTING CHAIRPERSON RIORDAN: Ms. Berg. 24 BOARD MEMBER BERG: What was the discussion, 25 since I wasn't a Board member in 2000? We obviously had PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 407 1 this discussion in 2000 and South Coast was adopting their 2 rule in 2000. It seems to me that we've left six 3 districts in a very precarious position, illregardless if 4 we start looking at the ARB sweeping them into. I 5 understand the South Coast, and I have no problem that 6 they can enforce their rules. But what was the discussion 7 around the fact that we were setting up a problem later in 8 the making anyway? 9 EXECUTIVE OFFICER WITHERSPOON: What happened is 10 South Coast adopted its rule first. And then the Air 11 Board took up the question, what should the policy be for 12 the entire state? And when the Air Board considered it, 13 we had -- the Board had said in 1999 in a Resolution that 14 it intended ultimately to adopt a natural gas rule for 15 transit. But by the time that the hearing came around in 16 2000, the Board's view had shifted based on stakeholder 17 input. And so the Board at that time elected to adopt a 18 dual fuel path that roughly balanced the obligations and 19 emission standards on each one. So if you were going to 20 be diesel, you had to do more and move faster. If you 21 were natural gas, you got extra time and a little less 22 obligation in the out years. 23 The Board was asked the overrule the South 24 Coast's transit rule in the statewide action and Board 25 refused. The Board said that was the District's rule and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 408 1 was legally nested within hours. 2 Our rule required by 2001 for all transit 3 agencies in the state to make a non-revokable decision 4 which path they were on. And we were informed that six 5 districts in the South Coast wanted to be diesel path. 6 And we thought, well, that's very nice. You can't do that 7 in the South Coast, but it was up to the South Coast to 8 bring the enforcement action. And by then they were in 9 litigation. So they let it sit. 10 And also, as I've indicated, these six transit 11 districts didn't actually violate the South Coast rule. 12 They ultimately bought gasoline hybrids. So it's a 13 preference they continue to have, but it is an option they 14 are not allowed under the South Coast rules. And you 15 cannot give it to them. 16 BOARD MEMBER BERG: No. I don't intend to. I 17 just wanted a clarification. Thank you. 18 ACTING CHAIRPERSON RIORDAN: Excuse me. I have 19 to do something. Here I go to have a conference with the 20 Mayor. 21 Francisca is not here. Michael Eaves, Barry 22 Wallerstein, Jed Mandel, and Mitchell Pratt. Let's start 23 with Michael. Are you here? Yes. 24 MR. EAVES: Wouldn't miss staying until the end. 25 Thank you, Madam Chairman. Just a couple of things. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 409 1 In my written comments I submitted to the Board 2 the other day, I went on with probably too much verbiage 3 and everything about cost effectiveness. This transit 4 rule is as a good example of what I was saying in the cost 5 effectiveness. In the staff report the cost effectiveness 6 for this rule was listed as $67,000 a ton. And it has 7 gone down to $10,000, $10,700 a ton, and probably for the 8 reasons that I put in my written comments. 9 Also I wanted to make a little bit of a comment 10 on something that was just mentioned earlier. It said 11 emissions -- the two paths, that natural gas path or 12 alternate fuel path and the diesel path, converged in 13 emissions in 2010. I'd like to remind the Board that the 14 2000 CARB transit rule, those emissions converged at .2 15 grams in 2007, not 2010. And the reason you see the .2 16 grams listed in the standards for the school bus and the 17 refuse rule is that those engine manufacturers are 18 intending to deliver that .2 product in 2007. Thank you. 19 ACTING CHAIRPERSON RIORDAN: Thank you very much. 20 EXECUTIVE OFFICER WITHERSPOON: Madam Chair, 21 before Mr. Wallerstein speaks, let me do the mea culpa. 22 He pointed out to me that my chronology was wrong, that 23 South Coast adopted after ARB. But they were in the 24 rulemaking process, so we were aware they are going to do 25 a natural gas requirement and that it would take precedent PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 410 1 locally over our rule. But he can tell you more about 2 that. 3 MR. WALLERSTEIN: If you ask me after my three 4 minutes, I'll be happy to clarify. But I'm going to be 5 real quick and forgo the slide. 6 ACTING CHAIRPERSON RIORDAN: I'll allow you to do 7 that because I have a question for you, too, but 8 afterwards. 9 MR. WALLERSEIN: Thank you, Madam Chair and Board 10 members. I'm going to be very brief given the late hour. 11 I wanted to share with you that 97 percent of the 12 transit vehicles in Southern California are alternative 13 fuel. They're either natural gas or we actually have a 14 couple of gasoline hybrids. Not only that, we have 264 15 gasoline hybrids on order by our transit agencies for 16 Southern California. 17 Several folks have noted the revised cost 18 effectiveness number is less than 11,000 a ton. That's a 19 really good number. Very cost effective by any standard. 20 We also wanted to note in the staff report that 21 it points out the total cost for all the affected transit 22 districts, all six, is a total of about $708,000 a year. 23 We looked up their annual operating budgets, which are in 24 total, collectively, 151 million. So the cost we're 25 talking about here is less than a half of 1 percent. So PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 411 1 we don't think that is too much to ask. 2 I want to focus in on the waiver issue. You 3 delayed today consideration of alignment or forcing 4 everyone to the alternative fuel path in your transit rule 5 and are taking that up, as I understand it, next month. 6 If you can, as one of the options, consider putting 7 everybody throughout the state on the alternative path 8 mode, then certainly we could take these six districts 9 that are already buying alternative fueled vehicles and 10 put them in that mode. And I would thank you for doing 11 that on behalf of my Board, and I wouldn't have to 12 necessarily come testify before you when that item comes 13 up. So with that, we would request approval of the staff 14 recommendation. 15 ACTING CHAIRPERSON RIORDAN: All right. 16 Are you finished? Are you truly finished? 17 MR. WALLERSTEIN: Yes, Madam Chairman. 18 ACTING CHAIRPERSON RIORDAN: Now you were going 19 to respond to something. What are we going to do? 20 MR. WALLERSTEIN: I was going to clarify the 21 time. 22 ACTING CHAIRPERSON RIORDAN: You do that and then 23 I have my question. 24 MR. WALLERSTEIN: Your adoption was February 25 2000. Ours was June 2000. Your staff and the Board was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 412 1 aware we were working on our rule. But I appeared before 2 the Board and I asked you in your rulemaking to make all 3 the transits go on the alternative fuel path, or to 4 delegate the power to our Board to do that, because we 5 felt, again, the legal footing would be better. And for 6 whatever set of reasons, the Board decided not to do that. 7 And here we are today before you again really, in effect, 8 making the same request, knowing that the diesel path 9 hasn't performed the way that everyone had expected in 10 2000, and that our air quality problems still mandate this 11 need. 12 ACTING CHAIRPERSON RIORDAN: Okay. Thank you. 13 And here's my question. The gasoline hybrid, 14 tell me is this something the District supports? And why 15 yes or why not? 16 MR. WALLERSTEIN: The answer is most definitely a 17 yes. Bus if we look at the NOx emissions, that is at, as 18 I understand it, 0.5 as compared to the natural gas buses 19 which right now are at 1.2 for the preferred engine. And 20 the diesel buses are about twice where the natural gas 21 buses are. 22 So when you did your last amendment to the 23 transit bus rules and you provided some additional 24 flexibility, you might recall I appeared before the Board 25 and said please don't do that. They have gasoline hybrids PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 413 1 as an option. We think it's a wonderful option. We 2 really are fuel neutral. We just want the lowest 3 emissions. We don't care what the fuel is. It can be 4 gasoline, diesel, or natural gas. 5 ACTING CHAIRPERSON RIORDAN: Are you helping them 6 purchase these to the degree that you're helping with 7 compressed natural gas? 8 MR. WALLERSTEIN: The answer is yes. 9 ACTING CHAIRPERSON RIORDAN: Yes. Okay. Thank 10 you. 11 MR. WALLERSTEIN: You're welcome and thank you. 12 And thank you for the Resolution on the last item. 13 ACTING CHAIRPERSON RIORDAN: Jed Mandel, Mitchell 14 Pratt, Joshua Goldman, and Staci Heaton. 15 I think you have to go over there. 16 MR. MANDEL: You look a whole lot different from 17 this podium. 18 ACTING CHAIRPERSON RIORDAN: Do we look better or 19 worse? 20 MR. MANDEL: I'm not going to respond to that. 21 There's been some comments this evening -- I'm 22 Jed Mandel speaking on behalf of EMA. There have been 23 some comments this evening, that all of a sudden it 24 strikes me people are suggesting the transit rule bus is 25 cost effective. This is the staff's analysis of the cost PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 414 1 of the three rules that were before you today, two of 2 which you've already addressed. The most expensive under 3 the staff's analysis is the transit rule, which is that 4 dot way up there. So I don't think we want to suggest 5 that this transit bus rule is cost effective. 6 What I'd like to address briefly is the long 7 somewhat tortuous history of the transit bus rule at ARB. 8 You know our position with respect to ARB's own Fleet 9 Rules. We have other formus to address that. We think 10 you ought to leave it alone and not try to take any action 11 that would be a backstop to what they are doing. 12 But to the degree you are looking at it from our 13 own transit bus rule perspective, for which there is a 14 long history -- I suspect you'll be hearing more about 15 that next month -- I want to remind you that those 16 transits who opted for the diesel fleet overachieved 17 compared to the CNG fleets for the earlier years of the 18 program on PM because diesel engines had lower PM early on 19 than CNG. Gretchen Knudsen from International spoke a 20 little bit how diesel drove lower emissions on CNG. 21 I also want to remind you that a lot of the 22 discussion was about NOx, as we're talking about again 23 today. And those fleets that opted for the diesel path 24 under your transit bus rule had overachieved on NOx 25 compared to the CNG fleets in 2004-2005. There was a .5 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 415 1 NOx standard for diesel fleets. I believe it was a 2.4 2 at that point for CNG. The .5 turned out not to be a 3 standard that any engine manufacturer could meet or 4 supply. The Board recognized that, adopted a fleet 5 average provision that achieved the effectiveness of as if 6 they had bought new. 7 So the point I'm trying to make, those fleets in 8 the South Coast, those six fleets representing only 10 9 percent of the population, who opted for the diesel fleet 10 have, in reliance on your rule, holding aside what they 11 can and cannot do in the South Coast under the South Coast 12 fleet rules in reliance of your rule, they overachieved. 13 And now under this proposal, you would you tell them, that 14 was nice. You to have convert to CNG anyway. So you're 15 changing the rules at the last minute after they, in 16 reliance on it, overachieved. I think Mayor Loveridge is 17 shaking his head at me. 18 ACTING CHAIRPERSON RIORDAN: I'm waiting for you 19 to finish, and then he can comment and ask you questions. 20 MR. MANDEL: I'm finished. 21 ACTING CHAIRPERSON RIORDAN: Oh, you are. 22 I'm sorry. Mayor Loveridge. 23 BOARD MEMBER LOVERIDGE: You've been an eloquent 24 and powerful advocate for your position. And I think I've 25 understood and accepted every point you've made, except PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 416 1 for the last one. I'm not sure we want to take out 2 what -- Barry just went through how well the districts are 3 doing with the diesel hybrids and how we're helping them. 4 We're not about to wipe that out and require CNG. 5 MR. MANDEL: I think there is no reason for this 6 Board to act at all to change the existing status quo. 7 BOARD MEMBER LOVERIDGE: I wasn't arguing that. 8 The point I was making is that our Board is not about to 9 take out the success stories that have been identified to 10 the other five. 11 MR. MANDEL: And I certainly agree with that. 12 But as we look at this Board taking any action to change 13 what was a very complicated rule -- 14 BOARD MEMBER LOVERIDGE: We don't disagree. I'm 15 not ready to go back and start over again with the other 16 districts. 17 ACTING CHAIRPERSON RIORDAN: Okay. Any other 18 questions for this speaker? 19 Thank you. 20 MR. MANDEL: Thank you. 21 ACTING CHAIRPERSON RIORDAN: Mitchell Pratt, 22 Joshua Goldman, Staci Heaton, Bruce Magnani, and David 23 Smith, all be down here and be ready. 24 MR. PRATT: Madam Chair, members of the Board, 25 thank you. I'm Mitchell Pratt with Clean Energy. I'll PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 417 1 make this short. 2 There are numerous transit fleets operating 3 throughout California and around North America that are 4 operating successfully on natural gas vehicles. Their 5 buses have been operating -- L.A. MTA has got over 2000 6 buses. Sacramento is 100 percent natural gas. San Diego 7 has a large fleet. These buses work successfully and are 8 very clean. 9 Contrary to what was previously stated by some 10 other speakers, this is the clearest pathway to hydrogen. 11 Every facility modification is one that will allow 12 hydrogen to come into being just that much sooner. Every 13 gaseous fuel technician is capable of handling that as 14 well. There is an effort to move forward with the 15 cleanest fuels ultimately going to hydrogen. I urge you 16 to support natural gas and this further by submitting a 17 waiver that asks for it. 18 Now, I'll just say that the whole waiver request, 19 as I understood it, the whole process of tonight was so 20 that your exhibiting of submitting waivers allowed these 21 rules to go forward with additional support and backup 22 that would be moving along on a parallel path as along 23 with this court. This is an action that will, regardless 24 of the night's effort -- and I appreciate the effort to 25 pass that waiver, it will be seen as a reversing of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 418 1 direction by a lot of people that I deal with all across 2 North America. And so I'd urge you to support this. 3 Thank you. 4 ACTING CHAIRPERSON RIORDAN: Thank you. 5 Joshua Goldman. 6 MR. GOLDMAN: Hello. Good evening, Madam Chair, 7 members of the Board. I'm here on behalf of ISE 8 Corporation. My name is Joshua Goldman, a lead engineer 9 and involved in all of the certification of our products 10 with the California Air Resources Board and EPA. 11 ISE is a leading supplier of diesel and 12 alternative fuel hybrid electric drive trains for urban 13 buses and other vehicles. The company has invested its 14 own funds, as well as various governmental agencies, to 15 produce systems that meet or exceed the current emission 16 standards and will always continue to do so. As emission 17 regulations become more stringent over the next five 18 years, ISE will continue to produce these turnkey 19 production systems to provide cost-effective, 20 low-emissions power trains for various vehicles, including 21 tomorrow's urban fleets. ISE has experience in all forms 22 of alternative fuel and diesel engine technology. 23 We offer hybrid electric drive systems on various 24 fuels to meet our customers' needs. We currently do sell 25 our gasoline hybrid urban bus power trains certified at .4 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 419 1 grams per brake horsepower hour NOx, and this is under the 2 alternative fuel path. 3 We're also in application for the 1.8 gram NOx 4 standard with the diesel hybrid technology. We have 5 developed a hydrogen hybrid bus that generates less than 6 .1 gram per brake horsepower hour of NOx, and we believe 7 this holds future promise for urban bus engines. 8 In addition, we have recently partnered with 9 South Coast Air Quality Management District and San Diego 10 Transit and are initiating a program to produce a 11 compressed natural gas hybrid system for transit bus 12 operation in California. 13 ISE maintains a fuel neutral position. However, 14 we encourage our customers to purchase the cleanest 15 solutions available. The air quality in California is 16 poor in many areas, with some areas now listed as extreme. 17 Childhood asthma is raising to record levels and this has 18 been directly correlated to air quality. We can do our 19 part so this situation does not worsen. 20 Therefore, we do not support any changes that 21 would degrade California air quality. If the 2000 22 standards remain as currently stated, ISE does intend to 23 offer the gasoline, compressed natural gasoline, and 24 nitrogen systems to meet the .2 NOx standard. We will 25 work with diesel engine manufacturers to pursue a diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 420 1 alternative as well. If standards are aligned with EPA, 2 we will likely defer further emissions reduction and 3 develop more cost effective systems with those standards 4 that are met. 5 This a commercial reality we believe CARB does 6 not fully appreciate. With these complex systems, 7 companies cannot rapidly change directions, cannot invest 8 more funds in the attempting to hit moving targets, and 9 cannot be commercially viable producing these systems to 10 meet these changing standards. The process of research, 11 product development, and validation, certification, and 12 recertification cost a great deal of time and money, which 13 is often related in the cost of our systems to our 14 customers. It is, therefore, important that when 15 standards are set, they are maintained. We would like to 16 acknowledge all parties involved the funding and 17 development of our hybrid systems. Our partners include 18 Federal, State -- 19 ACTING CHAIRPERSON RIORDAN: Wait. Joshua, 20 you're out of time. You need to make a concluding 21 sentence. 22 MR. GOLDMAN: Again, I want to thank all partners 23 including California Air Resources, Air Quality Management 24 District, Long Beach, City of Montebello, Los Angeles 25 Department of Transportation, and all of the properties PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 421 1 listed that are producing and purchasing our gas and 2 hybrid buses. Thank you. 3 ACTING CHAIRPERSON RIORDAN: Thank you very much. 4 Staci Heaton. Staci's gone. 5 Bruce, followed by David Smith and Richard 6 Teebay. 7 MR. MAGNANI: Madam Chair and Board members, 8 again Bruce Magnani with the California Chamber of 9 Commerce and Californians for Sound Fuel Strategy. I'll 10 be brief. 11 We are asking that you reject the rule for all 12 the reasons stated in our previous testimony. And I'd 13 like to applaud the Board and staff for their mental and 14 intellectual stamina today. You took on a very daunting 15 task with the agenda, and I think it was done very 16 professionally. So thank you. 17 ACTING CHAIRPERSON RIORDAN: Thank you very much. 18 David Smith. 19 MR. SMITH: No, thank you. 20 ACTING CHAIRPERSON RIORDAN: Richard. 21 MR. TEEBAY: Madam Chair, Board, thank you very 22 much for allowing us to comment. We strongly support the 23 significant progress that's been made as a result of the 24 efforts of both your Board and the South Coast Air Quality 25 Management District, and we've partnered with both PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 422 1 organizations. But we do not support the mandatory 2 alignment of the transit districts in the alternative fuel 3 path. 4 Regardless of what action you take tonight, I 5 want you to know that our agency, my agency, will do its 6 best to comply with whatever rules and regulations South 7 Coast and the ARB adopt. We have been -- we still have 8 twelve DEV stations. We've been using ultra low sulfur 9 diesel for the past three years. We have retrofitted more 10 than 80 of our trucks. We have worked with suppliers both 11 on alternate fuel equipment and on the aftertreatment 12 devices we're currently -- we hope to have four SCR 13 devices on both on-road and off-road diesel equipment. 14 We have more than 20 LPG sweepers. I haven't 15 heard much about LPG, but L.A. DOT's DASH fleet of 200 16 buses is propane. And we have eleven of those buses that 17 are very similar to that. We use those for small 18 community runs. We do that because we lease them to the 19 operators for a dollar a month. That allows the small 20 operators to provide service with an alternative fuel 21 vehicle. If you lock in CNG and eliminate the propane 22 path, what happens is it eliminates all the small 23 businesses. 24 If you adopt the -- if you stay with the 2007 25 rule, most of the funding that's available will go away, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 423 1 because there won't be anything better to buy. Or if they 2 do, if there is something that's at .0 or .01 grams, it 3 won't be cost effective to fund. 4 We believe that we're simply trading one energy 5 dependence for another. And to follow up with Henry 6 Hogo's remarks, which I have great respect for Henry, even 7 if we purchase zero emissions vehicles beginning tomorrow, 8 we would still have 20 years of legacy diesel vehicles on 9 the roads. 10 A lot of what I've heard today has a little bit 11 of a hollow ring, because as I travel, my daughter is 12 asthmatic. We were at her soccer game Saturday. And 13 across the field, I saw some buses. And I wandered into 14 that yard and found that all the buses were fairly late 15 model, were diesel powered. I have seen a contractor for 16 one of the major School Districts with diesel buses. 17 I would like to thank you for your time. And I 18 would like to add that I believe ultimately we're going to 19 find that anything we burn, it will harm us and our 20 children. Thank you. 21 ACTING CHAIRPERSON RIORDAN: Richard, just for 22 the record, you neglected to say who you represented. And 23 I know who you are, but let's put it on the record. 24 MR. TEEBAY: I'm with Los Angeles County 25 Department of Public Works. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 424 1 ACTING CHAIRPERSON RIORDAN: Thank you very much. 2 Any questions for this speaker? 3 Thank you very much. 4 MR. TEEBAY: I'd like to say to Todd, I do like 5 his diesel buses not at the Bob Hope Airport. 6 ACTING CHAIRPERSON RIORDAN: That concludes the 7 witness list. And so I'm going to remind the Board 8 members that we'll close the record. Since all the 9 testimony and written submissions and staff comments for 10 this item have been entered into the record and the Board 11 has not granted an extension of comment period, I'm 12 officially closing the record on this portion of the 13 Agenda Item Number 05-8-6. Written or oral comments 14 received after the comment period has closed will not be 15 accepted as part of the official record on this agenda 16 item. 17 We do have a requirement for ex parte, so let me 18 begin with my far right. 19 SUPERVISOR DeSAULNIER: As long as the Board 20 doesn't do as the APCO suggested, I have no new comments. 21 If we're going to stick with South Coast, that's it. 22 ACTING CHAIRPERSON RIORDAN: All right. 23 BOARD MEMBER GONG: Nothing new. 24 BOARD MEMBER D'ADAMO: Nothing new. 25 ACTING CHAIRPERSON RIORDAN: I do need to note PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 425 1 that I met with the California Transit Association. And I 2 have a long list of names, and I will provide those in 3 writing for the record. The National Association of Fleet 4 Administrators, again a number of names, and I'll provide 5 that for the record, as well as the Engine Manufacturers 6 of America. And I will provide that for the record. And 7 their testimony tonight mirrored our conversations in 8 those meetings. 9 Mayor Loveridge. 10 BOARD MEMBER LOVERIDGE: Nothing new. 11 ACTING CHAIRPERSON RIORDAN: Supervisor Patrick. 12 SUPERVISOR PATRICK: Nothing new. 13 ACTING CHAIRPERSON RIORDAN: Ms. Berg. 14 BOARD MEMBER BERG: Nothing new. 15 ACTING CHAIRPERSON RIORDAN: Very good. There is 16 obviously the Resolution before us as well as the 17 Resolution that we've passed. 18 What's the pleasure of the Board? I'm looking 19 around. 20 All right. Absent any motion, then the motion 21 for the Resolution that we passed, whose number I have 22 forgotten -- 23 SUPERVISOR DeSAULNIER: Madam Chair, actually, I 24 was deferring to Ron, but -- 25 ACTING CHAIRPERSON RIORDAN: I'm sorry. You do PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 426 1 have a motion, do you? 2 SUPERVISOR DeSAULNIER: Actually, I prefer for 3 him to make it. But if he doesn't, I will move staff's 4 recommendation on this item, which is Option 1. 5 ACTING CHAIRPERSON RIORDAN: Is there a second to 6 the motion? 7 BOARD MEMBER D'ADAMO: Second. 8 ACTING CHAIRPERSON RIORDAN: Okay. Discussion? 9 BOARD MEMBER D'ADAMO: I just thought I should 10 clarify my position in light of the fact that I voted no 11 on the last one. I think a compelling case was made on 12 this one, and it distinguishes from the other rules before 13 us this evening. 14 ACTING CHAIRPERSON RIORDAN: Okay. Any other 15 discussion? 16 SUPERVISOR PATRICK: And that is because we 17 already have to do a waiver that will include this? 18 BOARD MEMBER D'ADAMO: Right. Yes. 19 BOARD MEMBER GONG: That means the Resolution 20 doesn't apply to this one? 21 SUPERVISOR DeSAULNIER: It's somewhat redundant, 22 but I think they complement one another. 23 ACTING CHAIRPERSON RIORDAN: Okay. In 24 complementary. 25 Mayor Loveridge, did you wish to comment? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 427 1 BOARD MEMBER LOVERIDGE: I tried two motions, so 2 I'll won't try a third. 3 ACTING CHAIRPERSON RIORDAN: If there's no 4 further -- 5 BOARD MEMBER BERG: I just have a point of 6 clarification. Is the current motion before us, how does 7 it change for the six districts that have elected diesel, 8 even though they cannot do diesel under the South Coast 9 rule? I'm confused on that. 10 EXECUTIVE OFFICER WITHERSPOON: The South Coast 11 rule requires that transit agencies with 15 or more buses 12 buy alternative fuel vehicles, and they have a definition 13 that encompasses, as I understand it, gasoline hybrids. 14 So it would not require the five that are buying gasoline 15 hybrids to switch to natural gas, but it would prohibit 16 them from electing to buy new diesel vehicles unless 17 granted an exemption from the South Coast. 18 BOARD MEMBER BERG: But regardless of whether we 19 pass this motion or not, they are prohibited from buying, 20 I mean, diesel? 21 EXECUTIVE OFFICER WITHERSPOON: Under the 22 District rule, that's correct. 23 BOARD MEMBER BERG: Thank you. 24 EXECUTIVE OFFICER WITHERSPOON: And the way I 25 would reconcile this action with the prior Resolution is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 428 1 should any of the court proceedings effect the transit 2 rule, which we don't think they will, but should they, we 3 will be coming back and talking to you about that, too. 4 BOARD MEMBER BERG: Madam Chairman, one other 5 question. 6 ACTING CHAIRPERSON RIORDAN: Yes, Ms. Berg. 7 BOARD MEMBER BERG: This is only for the South 8 Coast Air Quality? 9 EXECUTIVE OFFICER WITHERSPOON: That's correct. 10 BOARD MEMBER BERG: This motion does not effect 11 the state of California? 12 EXECUTIVE OFFICER WITHERSPOON: It does not. In 13 October, you'll have an opportunity to discuss the state 14 of California and what its requirement should be for 15 transit buses. 16 BOARD MEMBER BERG: Thank you. 17 BOARD MEMBER D'ADAMO: Madam Chair, Ms. 18 Witherspoon, could you just clarify then on the issue of 19 waiver, we have to apply for a waiver any way on the 20 alternative fuel path of the State rule anyway; correct? 21 EXECUTIVE OFFICER WITHERSPOON: Right. 22 ACTING CHAIRPERSON RIORDAN: Supervisor 23 DeSaulnier. 24 SUPERVISOR DeSAULNIER: From my perspective, I 25 wouldn't have made the motion if it didn't apply just to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 429 1 South Coast. Without being overly redundant at this late 2 hour, I think there's a real distinction in this case from 3 the rest of the state. 4 ACTING CHAIRPERSON RIORDAN: All right. 5 BOARD MEMBER BERG: And you're comfortable with 6 that distinction? 7 SUPERVISOR DeSAULNIER: Absolutely, or I would be 8 looking for a home in Southern California this evening. 9 ACTING CHAIRPERSON RIORDAN: Board members, 10 there's motion before us. 11 I think we're ready, Madam Clerk. 12 SECRETARY ANDREONI: Ms. Berg? 13 BOARD MEMBER BERG: Aye. 14 SECRETARY ANDREONI: Ms. D'Adamo? 15 BOARD MEMBER D'ADAMO: Aye. 16 SECRETARY ANDREONI: Supervisor DeSaulnier? 17 SUPERVISOR DeSAULNIER: Aye. 18 SECRETARY ANDREONI: Dr. Gong? 19 BOARD MEMBER GONG: Yes. 20 SECRETARY ANDREONI: Mayor Loveridge? 21 BOARD MEMBER LOVERIDGE: Yes. 22 SECRETARY ANDREONI: Supervisor Patrick? 23 SUPERVISOR PATRICK: Aye. 24 SECRETARY ANDREONI: Madam Chairman Riordan. 25 ACTING CHAIRPERSON RIORDAN: No. And I'll PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 430 1 explain why. 2 I have some concerns about those transit agencies 3 that are now working with sort of a divided stock of the 4 vehicles. And I would have to know, and I don't feel 5 comfortable that I have enough information that would 6 cause me to believe that they are okay in this sense that 7 they can still travel down the path of kind of using the 8 best technology that they can find that doesn't 9 necessarily always mean compressed natural gas. And so I 10 just have a concern for those. They made a pretty 11 compelling case to me for what they were doing that they 12 were really intent upon improving the fleets that they 13 had. And but they still had a very strong compelling 14 reason to diversify, and I do support that. So that's the 15 reason for my no vote. 16 Board members, with that, we'll move on to the 17 next item, which is public comment. We have two who have 18 asked to speak, Richard Teebay, and Bill Haller. Come 19 forward, please. 20 BOARD MEMBER D'ADAMO: Madam Chair, while they're 21 coming forward, I would like to complement you on the way 22 you handled today's hearing. I can't believe we got 23 through as many witnesses as we did. You did a terrific 24 job. 25 ACTING CHAIRPERSON RIORDAN: Well, the Board has PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 431 1 been great, and the audience has been great. And without 2 exception, we had people who stayed within the time limit. 3 That's the most important thing. We had such nice 4 cooperation and I really appreciate that. Thank you for 5 your complement. 6 Richard. 7 MR. TEEBAY: Thank you very much. 8 One last thought, and that is I hope that when 9 there is an emergency, and there will be one like 10 Northridge or some other awful event, that you don't 11 regret this decision that you made tonight. 12 And I would simply like to say that I really 13 appreciate how difficult these decisions are. Even though 14 I have my own feelings and my own positions and I know my 15 organizations's feelings and positions, I found myself in 16 the same situation that many of you did. So thank you 17 very much for your deliberations. I realize how difficult 18 it was today. Thank you. 19 ACTING CHAIRPERSON RIORDAN: Thank you very much, 20 Mr. Teebay. 21 Bill Haller, is he here still? I don't see him. 22 Well, we've come to the end of our meeting. I 23 would like, though, that we adjourn in Dr. Bill Friedman's 24 memory, you'll remember that. And we look forward to 25 seeing some of you next month in Sacramento at our next PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 432 1 meeting. 2 I do want to thank the staff and those of you who 3 have exhibited such endurance. We are right at 9:00. And 4 somebody thought we would end at 9:00, and whoever choose 5 that time for this conclusion, I must complement you. You 6 better go out and buy some lottery tickets or whatever you 7 like. But thank you very much for everybody's 8 cooperation. And we'll see you in Sacramento in October. 9 (Thereupon the California Air Resources Board 10 adjourned at 8:57 p.m.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 433 1 CERTIFICATE OF REPORTER 2 I, TIFFANY C. KRAFT, a Certified Shorthand 3 Reporter of the State of California, and Registered 4 Professional Reporter, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing hearing was reported in shorthand by me, 7 Tiffany C. Kraft, a Certified Shorthand Reporter of the 8 State of California, and thereafter transcribed into 9 typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said hearing nor in any 12 way interested in the outcome of said hearing. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 29th day of September, 2005. 15 16 17 18 19 20 21 22 23 TIFFANY C. KRAFT, CSR, RPR 24 Certified Shorthand Reporter 25 License No. 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345