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PROPOSAL:

Amend Rule 1610 - Old-Vehicle Scrapping

SYNOPSIS:

At its August 14, 1998 meeting, the Board postponed action for 60 days on staff's proposal to amend Rule 1610 and referred this item to the Technology Committee to resolve issues associated with the parts destruction requirement. The Technology Committee reviewed staff's August 14, 1998 proposal to address U.S. EPA's comments on rule approvability, and indicated that the proposal reasonably responded to the parts recycling issues and directed staff to continue working with impacted parties to further resolve implementation issues. Subsequently, staff conducted a meeting on September 15 to develop a revised parts destruction requirement. Although complete agreement was not obtained, proposed rule language was developed, representing staff's best effort to bridge differences among impacted parties.

COMMITTEE:

Technology Committee, August 28 and September 25, 1998, Reviewed

RECOMMENDED ACTION:

Adopt the attached resolution (1) certifying the Notice of Exemption for Proposed Amended Rule 1610 - Old-Vehicle Scrapping; and (2) amending Rule 1610 - Old-Vehicle Scrapping.

Barry R. Wallerstein, D.Env.
Acting Executive Officer

Background

At the July and August 1998 Board meetings, staff presented proposed amendments to Rule 1610 for the primary purpose of improving rule effectiveness as well as satisfying U.S. EPA approvability requirements. These amendments consisted of two components. The first component, which was approved by the Governing Board during the July Board meeting, focused on improvements to the vehicle eligibility and enforcement provisions. The second component, which was considered for adoption by the Governing Board during the August Board meeting, consisted of requiring the permanent destruction of an expanded list of emissions-related components. This expanded engine component list was provided by U.S. EPA to ensure that these engine components are not used to increase the useful life of remaining old vehicles. However, because of concerns expressed by the public and Board members at the August Board meeting regarding potential parts-availability impacts for low-income residents and car hobbyists, this item was referred to the Technology Committee for further study. Staff was also requested to report back to the Board in 60 days to further consider this amendment or a modification to this amendment.

On August 28, 1998 staff presented information to the Technology Committee reviewing the Rule 1610 August Board meeting proposal as well as the parts availability issue. Staff specifically indicated during this presentation that although the August proposal required the permanent destruction of the engine and emission-related components, members of the public could still reuse a significant portion of scrapped-vehicle components including doors, fenders, bumpers and seats. In addition, under the voluntary Scrappers Code of Conduct, car hobbyists could request the set-aside of up to three percent of vehicles procured under Rule 1610 for resale back to the public. Staff also indicated that Rule 1610 scrapping has a negligible impact on parts availability, since Rule 1610 vehicles contribute about two percent of total vehicles scrapped per year. (This is also consistent with input received from licensed scrappers.) Finally, staff indicated that car hobbyist interest for the identification and purchase of set-aside vehicles has been virtually nonexistent since 1995, based on input received from all Rule 1610 licensed scrappers.

Staff informed the Technology Committee that despite the preceding, parts availability and potential destruction of collector cars remain as issues, and that staff has continued to solicit input from car collectors, the Specialty Equipment Marketing Association (SEMA), and licensed scrappers. In an effort to develop a proposal that would be acceptable to all impacted parties, staff informed the committee that it plans to continue working with U.S. EPA to refine their component destruction list, and incorporate a provision to provide advance notification of scrapped vehicles to car hobbyists. In addition, staff would incorporate into Rule 1610 the three percent voluntary set-aside procedure currently contained in the voluntary Scrapper's Code of Conduct. The Technology Committee directed staff to hold a meeting with impacted parties in an effort to formulate a proposal that would be acceptable to everyone.

A meeting was held on September 15 between the three active licensed scrappers, SEMA (representing car collectors as well), ARB staff, and U.S. EPA staff. Information and a variety of views were exchanged among all participants at this meeting regarding the parts destruction issue.

A proposal by SEMA to maximize part recycling was explored in detail. SEMA supported a drastically reduced parts destruction list (only containing the engine block and cylinder head). Under SEMA's proposal no components on the vehicle would be destroyed ("sanding" the engine would be permissible) until the entire vehicle was made available for parts recovery by the public for up to 45 days. Vehicles with a removed engine block or cylinder head at the end of this time period would not be eligible for MSERC generation. Furthermore, at the end of this period any remaining vehicle components would be fully destroyed. However, District staff and scrappers indicated and all participants agreed that SEMA's proposal could be economically viable and enforceable only if U.S. EPA significantly reduced the engine component list.

ARB staff indicated their intent to propose for adoption a statewide vehicle scrapping rule by the end of this year that would require the destruction of the entire vehicle. All air quality districts with vehicle scrapping rules would have to conform with this statewide rule.

Finally, after hearing all of the arguments by the licensed scrappers and SEMA, U.S. EPA indicated, verbally on September 17 and in writing on September 27, that they would not modify the parts destruction list. U.S. EPA staff believes that reducing the number of components on this list would result in increasing the useful life of the remaining in-use vehicles. This situation would be contrary to the principle that a vehicle scrapping program should accelerate the retirement of vehicles.

In response to these developments, staff has developed a revised proposal to amend the rule that was presented to the Technology Committee on September 25, 1998. This proposed amendment would incorporate U.S. EPA's parts destruction list, enhance notification procedures to car hobbyists regarding cars planned for scrapping, as well as incorporate the voluntary code of conduct into the rule. The Technology Committee found staff's proposal to be a reasonable course of action. A public consultation meeting was held on October 21 to solicit public comment on this revised Rule 1610 proposal. Minor clarifications in response to public comments received since October 21, 1998 have been incorporated into the rule language.

Proposal

Although flexibility regarding the parts destruction issue was not apparent among the impacted parties, proposed rule language was developed, representing staff's best effort to bridge differences and address underlying issues associated with U.S. EPA's parts destruction list. AQMD staff believes that the best course of action is as follows. First, adopt U.S. EPA's parts destruction list and associated enforcement procedures as indicated in subdivisions (c), (e) and (l), since ultimately U.S. EPA must approve Rule 1610. Second, provide for improved notification to car hobbyists of vehicles scheduled for scrapping as contained in subdivision (d) by requiring the licensed scrappers to submit to the AQMD a description (make, model, and model year) of the vehicles two weeks prior to scrapping. AQMD staff would make these vehicle descriptions available on its Internet site allowing for immediate and widespread public dissemination of this information. Finally, incorporate the voluntary scrapper's code of conduct into Rule 1610 with regard to the mandatory set-aside of vehicles (up to three percent of vehicles procured for scrapping) at the request of any member of the public for potential repurchase. This requirement would be contained in subdivision (q). With regard to the issue concerning parts availability to low-income residents, staff has evaluated the potential demand for Rule 1610 vehicles and supply of various vehicle components and concluded that there should be ample supply of vehicle parts in the market for the public. In addition, the availability of parts not included on the U.S. EPA list and the up to 3% set-aside would further minimize the market impacts, if any. Finally staff is proposing clarifying language in subdivision (g) to: (1) allow the Licensed Scrapper or another designated person to operate the old vehicle during the vehicle eligibility testing, and (2) allow the licensed scrapper to implement an additional driving test option utilizing a dynamometer. In addition, in response to verbal comments received by U.S. EPA on October 7, staff proposes that language be deleted which allows the Executive Officer discretion in determining rule compliance with set-aside cars. Similarly, in response to comments from Licensed Scrappers, staff proposes that operable odometers shall only be required if the three-mile driving test or three-mile dynamometer test is implemented by the Licensed Scrapper as contained in clause (g)(4)(E)(i) or (g)(4)(E)(iii). The effective date for the Rule 1610 amendments is proposed to be January 1, 1999. This Board letter serves as a staff report for this item.

AQMP & Legal Mandates

The proposed amendments provide greater specificity for the bases of the credit generation and MSERC calculations. Therefore, the proposed amendments to Rule 1610 provide no possibility for an adverse effect on air quality or emissions limitations, and are consistent with the AQMP.

CEQA & Socioeconomic Analysis

The AQMD has reviewed the proposed project pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15002(k) Three Step Process, to determine which type of CEQA document to prepare for the proposed action. The AQMD has determined that the proposed amendments to Rule 1610 are exempt from CEQA pursuant to CEQA Guidelines Section 15061 Review for Exemption, since the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. A Notice of Exemption will be sent to the county clerks upon approval by the Governing Board. Since the proposed amendments are administrative in nature, they do not result in any adverse socioeconomic impacts. However, additional administrative costs associated with the proposed amendments will be incurred relative to the additional time spent on vehicle inspection, confirming documentation, and recordkeeping. To recover the financial impacts of this enhanced enforcement presence in the field, staff intends to develop amendments to Rule 309 to be presented to the Governing Board in May 1999 as part of the overall Regulation III amendment process.

Attachments

A. Resolution
B. Notice of Exemption from CEQA
C. Rule Language, Proposed Amended Rule 1610
D. U.S. EPA Comment Letter
E. CEQA Comment Letter and Response

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