October 13, 1995

South Coast Air Quality

Management District Board

The Legislative Committee held its regular meeting on Friday, September 22, 1995. An attendance record is included for your information (Attachment 1).

Legislative Status Report

Staff provided a comprehensive status report on pending legislation (Attachment 2). To provide clarity for the Board, the legislative status report has been divided into three sections: chaptered bills (signed into law); enrolled bills (on Governor's desk); and two-year bills. The Governor has until October 15 to sign or veto enrolled bills. The Committee specifically discussed the following bills:

• AB 259 (Escutia) would require the District to assist cities in spending their AB 2766 vehicle registration funds. Board Member Hewitt asked how this will be done. Staff replied that the Public Advisor's office is handling these responsibilities already, with support from the District's transportation and advanced technology groups.
  
• AB 531 (Morrissey) would establish a voluntary, statewide registration program for portable engines alongside the District's own permitting system. It is anticipated that several engines will be transferred to statewide control, dropping the number of District permits and incoming fees. However, the District will retain enforcement authority and will be reimbursed by the state for that work. Staff informed the Committee that Rule 2100--Registration of Portable Equipment would be postponed so that staff could assist the Air Resources Board in implementing AB 531.
  
• SB 199 (Kelley) would require the District to make additional efforts to ensure it is not duplicating other agencies' expenditures on alternative-fuel technology, specifically the California Energy Commission and the Air Resources Board. If this bill is signed, the District will have to implement more formal accounting and reporting methods.
  SB 437 (Lewis) and SB 772 (Hurtt) are both regarding employer-based trip reduction. SB 437 would prohibit public agencies from requiring employers to implement trip reduction programs unless federal law expressly requires them and noncompliance will provoke sanctions. SB 772 prohibits the AQMD, only, from requiring employers to prepare trip reduction plans, but says the District may require employers to provide rideshare matching and transit information to their employees.
  
  Chairman Jon Mikels and Board Member Hugh Hewitt asked about the legal implications of both bills. Peter Greenwald, the District's General Counsel, replied that federal law expressly requires employer-based trip reduction programs in extreme nonattainment areas and sanctions are nondiscretionary. Therefore, the AQMD must continue to comply with federal law or face sanctions. Dr. Wallerstein added that Congress is considering changes to the federal mandate and the U.S. EPA is moving towards an "emissions equivalence" policy. These changes could affect the legal situation significantly but the final language and timing is unknown. Although the House and Senate have approved a rider to U.S. EPA's budget removing funding for ridesharing enforcement in FY 1996, President Clinton has threatened to veto the entire VA-HUD package (of which EPA's budget is a small part). Likewise, although the House has scheduled a "Corrections Day" on ridesharing mandates in early October--where H.R. 325 by Congressman Manzullo (R-Illinois) will be considered--there is no parallel process in the Senate. Therefore, the final outcome is unpredictable.
  
  Staff noted that District rules may already satisfy state law since employers are no longer absolutely required to implement trip reduction plans or programs but may elect alternative compliance pathways (due to the Governing Board's actions in April 1995). Mr. Hewitt proposed a legal theory that Rule 1501 (Work Trip Reduction Plans) does not meet state legislation, but that a new regulation along the lines of Rule 1501.1 (Alternatives to Work Trip Reduction Plans) might--if it is fashioned as a stand-alone rule and makes ridesharing purely voluntary. Mr. Hewitt then made four recommendations which were concurred with by the other Board Members present:

1) that staff seek assistance from the Air Resources Board in

obtaining a legal opinion from the state Attorney General on the

impact of SB 437 and SB 772;

2) that staff make every effort to comply with both bills by

January 1, 1996;

3) that staff begin work on a new, stand-alone rule encompassing

the alternatives contained in Rule 1501.1 and making trip

reduction purely voluntary; and

4) that staff contact Senators Hurtt and Lewis to discuss this

approach and report back to the Governing Board on their views.

In response to follow-up questions from Chairman Mikels and Board Member Roy Wilson, staff indicated that new rule language could be completed by the December 1995 Board meeting, that 30-day notice would be required, and that prior CEQA documents on trip reduction alternatives are still valid. Federal approval must also be obtained if the Board acts to change Rule 1501 or 1501.1. Chairman Mikels inquired whether the October public meeting on ridesharing implementation was still needed. Staff replied that it could be postponed, but that many parties are anxious to hear what the Board intends to do and would benefit from an open discussion.

• SB 456 (Kelley) would set criteria for BACT determinations and for retrofit control technology. This bill is virtually identical to the BACT Methodology Guidelines adopted by the District in September 1995, so little additional work is required. However, an issue arose at the end of session that needs attention. Industry wanted to know exactly how the "off-ramp" policy (setting BACT aside for any single source) would work, prepared a draft letter to the Senate Journal stating their interpretation, then asked staff for a reaction. Staff suggested that the District's BACT Task Force address the issue instead, which was agreeable to industry and will occur in the near future.
  
• SB 501 (Calderon) would initiate vehicle scrappage program intended to scrap 75,000 vehicles annually in the South Coast AQMD. However, there is not enough funding for the program. The Air Resources Board and Bureau of Automotive Repair share responsibility for implementation and have to determine the programs viability by 1998. Although SB 501 does not directly require the AQMD to do anything, the District generally assists in implementing the State Implementation Plan. SB 501 will compete with the District's credit rules for local businesses. To date, 5,000-6,000 vehicles have been scrapped under Rule 1501.1, and there is a waiting list for others to participate.
  
• SB 962 (Russell) would modify the District's fee setting authority to prohibit fees based on RECLAIM trading credits. At the same time,
  SB 962 would authorize necessary fee adjustments provided overall revenues do not increase. Staff expressed its appreciation for the efforts of Senator Russell and Curt Coleman, Southern California Air Quality Alliance, in reaching this reasonable compromise, which is a significant improvement over existing law.
  
• SB 1098 (Dills) would allow marketable trading credits for emissions reductions generated from non-permitted and/or unregulated sources. This bill was sponsored by Southern California Edison and the Gas Company, primarily, and is intended to facilitate a "green gold" program whereby small, old high-emitting engines can be retired for full credit. All customary safeguards would still apply to ensure the emission reductions are permanent, surplus, quantifiable and enforceable.
  

Copies of the final bill language on all enrolled bills were also provided to the Legislative Committee, but have not been included with this report due to their bulk.

Special Report on Assembly Bill 59 (Sher)

Staff provided a special report on AB 59, a solid waste bill that was amended at the end of session to restrict air districts' nuisance authority. Specifically, AB 59 prohibits districts from regulating odor problems at composting facilities for two years, using 41700 of the Health & Safety Code (see Attachment 3 for more detail). Although the Bay Area AQMD and the California Air Pollution Control Officers Association have requested a veto, staff recommended that this District accept AB 59 and make the best of it for three reasons. First, a veto request is futile and would only offend Assemblyman Sher. Second, there are other legislative solutions including interim review and bills to exempt South Coast AQMD and/or shorten the preemption period. Finally, AB 59 may be a blessing in disguise since odor complaints often stem from poor land-use decisions and are not easily resolved. Staff noted that AB 59 may not apply to the South Coast AQMD since the District has a separate nuisance regulation (Rule 402) that was not expressly preempted. The Committee agreed that a veto request was inappropriate and directed staff, instead, to complete its legal analysis of AB 59 and to discuss possible future adjustments with Assemblyman Sher.

Discussion on Action Subcommittee

At the request of Board Member William Burke (Legislative Committee chairman), further discussion on this Action Subcommittee was postponed until he could be present.

Ethnic Community Advisory Council

Attached for your information are the Ethnic Community Advisory Council minutes for the June 1995 meeting (Attachment 4).

Next Legislative Committee Meeting

The next Legislative Committee meeting is Friday, October 27, at 8:30 a.m. in Conference Room CC8.

THEREFORE, IT IS RECOMMENDED THAT THE BOARD

--Receive and file this report.

Sincerely,

Dr. William Burke, Chairman

Legislative Committee

TE:CW:DAR

Attachments (4)

(10-95bdlt.doc)