South Coast Air Quality Management District

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Adopt Proposed Rule 1194 – Commercial Airport Ground Access

SYNOPSIS: 

Proposed Rule 1194 will require airport ground access services such as taxi, van shuttle, limousine, and courtesy shuttle services to purchase rule compliant vehicles when adding or replacing vehicles in an existing fleet or forming a new fleet.

COMMITTEE: 

Mobile Source, June 23, 2000 and July 28, 2000, Reviewed.

RECOMMENDED ACTION:

Adopt the attached resolution:

1. Approving the finding that potential adverse environmental impacts from adopting Rule 1194 - Commercial Airport Ground Access are within the scope of the previously prepared and certified Final Program Environmental Assessment for the Proposed Fleet Vehicle Rules and Related Rule Amendments, and no new environmental document is required; and
   
   
2. Adopting Rule 1194 – Commercial Airport Ground Access

Barry R. Wallerstein, D.Env.
Executive Officer

The recent results from the AQMD Multiple Air Toxic Exposure Study (MATES-II) conducted in 1998 indicate that mobile source emissions are major contributors to the potential cancer risk in the South Coast Air Basin. Specifically, the potential cancer risks in and near commercial airports are estimated to be higher than many other areas in the South Coast Air Basin. In 1999, the AQMD conducted a special air monitoring study at locations immediate adjacent to and downwind from Los Angeles International Airport (LAX). Measurements of elemental carbon (indicator of diesel combustion sources) and benzene (indicator of gasoline combustion sources) immediately adjacent to LAX are generally higher than other locations in the surrounding area and are higher than the basinwide average concentrations measured in MATES-II. The higher concentration levels are attributed to mobile source activities in and around commercial airports.

Mobile source emissions are also the major emission sources of the ozone, fine particulate matter and carbon monoxide air quality problem in the South Coast Air Basin. Despite current regulatory actions that have reduced overall mobile source emissions dramatically over the past twenty years, additional mobile source emissions reductions are needed in the near-term to reduce population exposure to toxic air pollutants and to provide progress toward clean air standards. As such, the AQMD Governing Board has directed staff to evaluate ways to reduce mobile source emissions within the AQMD’s regulatory authority.

Under the California Health and Safety Code (HSC) Section 40919(a)(4), "serious" or worse ozone nonattainment areas may require "the use of a significant number of low-emission motor vehicles by operators of motor vehicle fleets." The definition of "low-emission motor vehicles" is further defined in HSC, Section 39037.05. Section 39037.05 excludes the use of diesel fuel in the "low-emission" vehicle definition.

In addition to Section 40919(a)(4), under HSC Section 40447.5 the AQMD may adopt rules requiring public and private fleets with 15 or more vehicles to acquire "methanol or alternatively equivalent clean burning alternative fuel vehicles when adding to or replacing vehicles in an existing fleet or purchasing vehicles to form a new fleet" and to require that these vehicles be operated substantially on alternative fuels.

Several public and private operators at commercial airports in the South Coast Air Basin have embarked on programs to purchase cleaner alternative fuel transportation vehicles over the past several years. The Los Angeles World Airports authority is currently using natural gas transit vehicles at Los Angeles International Airport (LAX) and liquefied petroleum gas (propane) fueled shuttle vehicles at Ontario International Airport. Supershuttle Inc. has been operating natural gas shuttle vans for several years. The taxi service company authorized to pick up passengers at John Wayne International Airport (in Orange County) operates dedicated natural gas passenger vehicles. Other taxicab companies have begun to purchase natural gas passenger vehicles as part of their fleets to bid on a recent request for bids from the City of Los Angeles Taxi Commission. One entity operates electric shuttle vehicles out of LAX.

These efforts locally are part of a national trend towards having cleaner burning vehicles operating at commercial airports. Several major commercial airports outside of the District have required or are in the process of requiring taxicab services to use cleaner burning vehicles. The City of Phoenix recently approved three taxicab services to pick up passengers at its Sky Harbor Airport. The three taxicab services will operate approximately 162 alternative fueled vehicles at the airport. The City of New York allows clean taxicabs to operate an additional two years compared to conventionally fueled taxicabs. Dallas/Ft. Worth International Airport approved a mandate requiring 50 percent of the taxicabs serving the airport to be clean fueled vehicles by 2005. The Airport is considering increasing the mandate to 100 percent. Oakland International Airport approved a mandate requiring 50 percent of the taxicab associations and cooperatives serving the airport to be either electric or natural gas fueled by the beginning of 2001. Lastly, San Francisco provides clean taxi incentives that include reduced city fees, preferred airport access, and extended vehicle operating life.

For PR 1194, beginning July 1, 2001, public and private airport fleet operators that operate 15 or more vehicles used to pick up passengers from commercial airport terminals must purchase or lease ultra-low emission (ULEV) or cleaner light- or medium-duty vehicles or alternative fueled heavy-duty vehicles when adding or replacing vehicles in their fleets. Transportation services such as taxicab, limousine, shuttle van, and courtesy shuttle services typically use light- and medium-duty vehicles. In addition, some services such as services providing transportation to passengers from airport terminals to remote parking lots, rental car lots or to hotels/motels may also use heavy-duty vehicles. For shuttle van services that provide multiple-party passenger transportation and generally do not operate on fixed, scheduled routes such as Supershuttle, PR 1194 would require that at least 50 percent of new purchases or leases be ULEV or cleaner beginning July 1, 2001 and 100 percent beginning July 1, 2002. Shuttle van services are given additional time since these vehicles do not operate on fixed routes and due to the nature of their operations (in that they generally go to multiple locations to pick up passengers) may not have ready access to alternative-fuel fueling stations.

PR 1194 exempts transit buses, commonly termed motorcoaches, that travel in and out of the District, and other heavy-duty vehicles that are covered by other fleet rules. In addition, if a demonstration is made that an alternative fuel engine/chassis configuration is not commercially available or could be used, then a conventionally fueled vehicle may be purchased.

In November 1999, staff originally proposed an umbrella on-road motor vehicle fleet rule (PR 1190) and a preliminary draft staff report was prepared and released in December 1999. Two public workshops were conducted (December 21, 1999 and January 12, 2000) at which over 700 members from the public attended in total. The most significant comments made were: costs associated with alternative-fueled vehicle purchases and maintenance, development of alternate-fueling infrastructure, availability of alternative-fueled engines/chassis specifications to meet certain medium- and heavy-duty vehicle applications, and that the rule development schedule was too aggressive and more time was needed for public review and input.

In response to these comments, staff proposed to separate the original PR 1190 into several rule development efforts that cover each of the specific fleet vehicle types (i.e., light- and medium-duty vehicles, transit vehicles and urban buses, refuse collection vehicles, school buses, street sweepers, heavy-duty vehicles, and airport ground access). The separation of PR 1190 into seven separate rules provided the public a better understanding of the impacts of the rule development and staff the ability to address rule implementation issues more specifically. In addition, the rule development schedule was extended to allow more time for the public to review and comment on each of the rule proposals. The preliminary draft staff report (dated December 1999) continued to serve as the staff report for the seven separate rule proposals.

Draft rule language for PR 1194 (the fourth in the series of "PR 1190" fleet rules), was released on May 3, 2000. An additional public workshop was conducted on May 10, 2000 to solicit further public comments. A draft staff report on PR 1194 was released in July 18, 2000 that represented a revision to the December 1999 Preliminary Draft Staff Report on PR 1190.

In addition to the public workshops, a series of PR 1194 public meetings were conducted with affected parties to seek specific comments on the impacts of PR 1194. Implementation issues focused primarily to the taxicab industry. Questions were raised as to the definition of a fleet since the proposed rule would apply to fleets of 15 or more vehicles. Many of the taxicab drivers in the Basin own their vehicles and most do not own more than one vehicle. However, in the City of Los Angeles most of these individual owner/drivers belong to either an association or a cooperative. The association or cooperative act as the responsible entity that a regulatory body (e.g., taxicab commissions, city or county regulatory bodies that the power to regulate taxicab services within their jurisdiction) can hold responsible in enforcing local codes or ordinances. The association or cooperative provides centralized dispatching of its taxicab members.

Relative to whether these organizations are considered a "fleet", by definition under this rule, a vehicle "fleet" is a collection of vehicles that "operate as a unit". Under this definition, the vehicles that are in an association or cooperative would be considered a "fleet" since they operate as a unit. Factors entering into this definition include the fact that an association or cooperative performs the operation of directing (or assigning) available taxicabs to pick up passengers. In addition, the association or cooperative have a common color scheme and logo for the vehicles and provides an identification number. In the City of Los Angeles Department of Transportation Taxicab Rules and Regulations of the Board of Taxicab Commissioners, Section 101 defines an "ASSOCIATION or CO-OPERATIVE means a Board [Board of Taxicab Commissioners of the City of Los Angeles] authorized independent taxicab enterprise or organization owned and operated by its Members for the financial benefit of its Members" and Section 127 defines a "TAXICAB POOL means the fleet of taxicabs that is managed and controlled completely by Grantee [as defined in Section 110 including association and co-operatives] and not by a member of Grantee." As such, the Taxicab Rules and Regulations clearly point to associations and cooperatives as entities that manage fleets of taxicab vehicles even though these vehicles may be individually owned. In the "Request for Proposals (RFP) for Taxicab Franchises in All Service Zones of the City of Los Angeles" recently released by the City of Los Angeles Department of Transportation, a "minimum fleet size" of 70 taxicabs for any Grantee must be met (page 3 of the RFP). Thus, the City of Los Angeles recognizes associations and cooperatives as operators of fleets of taxicabs. HSC Section 40919(a)(4) states that the AQMD may develop "measures to achieve the use of a significant number of low-emission motor vehicles by operators of motor vehicle fleets." Under this statute, it is not required that all fleet vehicles be owned by the same person. The association or cooperative serves as the "operator". As such, PR 1194 would apply to operators who direct or assign taxicabs to specific destinations for passenger pickup. The 15 or more vehicles restriction proposed in the rule is provided for consistency with HSC Section 40447.5 and other fleet rule proposals.

AQMD staff received a significant number of comments relative to the development of the public fleet rules. Since PR 1194 affects a smaller sector of fleet operations most of comments relative to PR 1194 were on the impact on smaller owner/operators, and the costs associated with alternative fuel vehicle purchases, maintenance, and operations. In addition, concerns have been raised relative to the economic impacts of PR 1194 in terms of "pass through" costs associated with the purchase of alternative fuel vehicles in the form of rate increases.

Many taxicab operators purchase used vehicles at a substantially lower cost compared to a new vehicle. In addition, to comply with PR 1194, many taxicab service providers would purchase an alternative-fueled ULEV vehicle. While PR 1194 would require the purchase of an ULEV or cleaner vehicle of which both gasoline and alternative fueled vehicles are commercially available, taxicab service providers prefer the larger passenger cars. At this time the larger passenger cars are only commercially available in an alternative-fueled configuration. The additional purchase cost of an alternative-fueled vehicle would add to the economic concerns raised by the taxicab industry. However, more recently several public and private entities are proposing financial incentives packages that would offset the majority of the costs associated with the purchase of an alternative fueled vehicle. In addition, funds are available from the Mobile Source Emission Reductions Review Committee (MSRC) that would be applied in addition to the proposed financial incentives packages. The AQMD staff is working with the City of Los Angeles to develop mechanisms that will provide additional funds to offset the additional capital costs. Lastly, staff has been evaluating the potential use of AQMD funds from one or more of its programs to defray any remaining cost differentials. Relative to the fueling infrastructure, it is believed that the affected parties would be able to find sufficient fueling locations within the Basin as new fueling stations are built to meet the implementation needs of the other fleet vehicle rules. Lastly, alternative fuel refueling stations are available near LAX and at Long Beach. There are plans to build alternative fuel refueling stations at John Wayne and Burbank Airports in the near term. The taxicab company currently operating at John Wayne Airport is already using natural gas vehicles and fuels its vehicles at a nearby location.

PR 1194 would affect approximately 4800 vehicles in the current public and private fleets today that operate out of commercial airports. Based on an average purchase/ replacement rate of five years for light- and medium-duty vehicles and 10 years for heavy-duty vehicles, it is estimated that by 2010 hydrocarbon emissions would be reduced by 8 tons/year, nitrogen oxide emissions by 92 tons/year, carbon monoxide emissions by 288 tons/year, and particulate matter emissions by 6 tons/year. In addition, there would be a reduction in air toxic emissions. Finally, Rule 1194 will promote technology advancement that will likely result in emission reductions beyond those indicated above.

In accordance with the California Environmental Quality Act (CEQA), the AQMD, as the Lead Agency, has reviewed the proposed fleet vehicle rules and related rule amendments, which includes PR 1194. Pursuant to state CEQA Guidelines Sections 15168 and 15252, the AQMD prepared a Draft Program Environmental Assessment (PEA) for the proposed project which was released on March 10, 2000 for a 45-day public review and comment period. The Draft PEA analyzed potential adverse environmental impacts that are comprised primarily of cross-media impacts, including air quality, water resources, transportation, energy, hazards, public services and solid/hazardous waste, from refinery modifications to produce low sulfur fuel and construction of alternative fuel refueling stations. The analysis concluded that short-term construction-related air quality impacts were significant. Significant adverse construction air quality impacts were related primarily to refinery modifications to implement the proposed amendments to Rule 431.2. All comments received on the Draft PEA were addressed and incorporated into the Final PEA for the proposed fleet vehicle rules including PR 1194.

The Final PEA for the proposed fleet vehicle rules and related amendments was certified by the SCAQMD Governing Board at the June 16, 2000 Public Hearing on three of the fleet vehicle rule proposals (Rules 1191, 1192, and 1193). CEQA Guidelines §15168(c) states that, "Subsequent activities in the program must be examined in the light of the program [EA] to determine whether an additional environmental document must be prepared." CEQA Guidelines §15168(c)(2) states further, "If the agency finds that pursuant to Section 15162, no new effects could occur or no new mitigation measures would be required, the agency can approve the activity as being within the scope of the project covered by the program [EA], and no new environmental document would be required." The Final PEA analyzes potential adverse environmental effects of the overall fleet vehicle rule program as specifically and comprehensively as possible given the level of detail of the program. The environmental analysis in the Final PEA provides sufficient detail of the potential adverse environmental impacts generated by the proposed fleet vehicle rule program in general, that the environmental effects of implementing PR 1194 are considered to be within the scope of the Final PEA. Therefore, no further environmental documentation is required [CEQA Guidelines §15168(c)(5)].

AQMD staff has also prepared an Economic Report for the Proposed Fleet Vehicle Rules which includes PR 1194. The Economic Report was approved by the Governing Board on June 16, 2000 as part of its action on Rules 1191, 1192, and 1193. Additional socioeconomic impact assessment of PR 1194 was conducted and is provided as part of the PR 1194 Staff Report. Based on the assessment, it is envisioned that the majority of the capital cost differential associated with the purchase of alternative fueled vehicles can be covered by the various financial incentive packages. Comments were raised that there would be additional operational and maintenance costs associated with alternative fuel vehicles compared to conventionally fueled vehicles. The additional socioeconomic impact assessment indicates that the cost effectiveness of PR 1194 would be $2,690 per ton of criteria pollutant reduced. The cost-effectiveness includes capital and operational costs.

While the cost per ton of emissions reduced is very low compared to other AQMD mobile and stationary source rules, the majority of the affected industry due to implementation of PR 1194 would be on the individual owner/driver of taxicabs. Staff has evaluated financial incentive packages that could offset substantially the increased costs associated with the purchase of PR 1194 compliant vehicle compared to a used vehicle typically purchased by taxicab drivers. Table 21 of the PR 1194 Staff Report (Attachment E) illustrates an example financial cost analysis of the purchase of a PR 1194 compliant vehicle. There are several financial incentive programs provided in Table 21 that could amount to approximately $9,546. Staff estimated the additional capital cost to be about $11,500 per vehicle (assuming that there are $2,000 per vehicle funding from the AQMD). In addition, staff estimated the monthly cost associated with financing the vehicle at $11,500 either through a lease agreement or a purchase contract over a three-year period. The monthly cost is estimated to be approximately $471. While there is a monthly payment to purchase the vehicle, there are operational cost savings associated with the new vehicle estimated to be approximately $337 or more per month. The savings are in fuel costs and maintenance costs associated with the use of an alternative fueled vehicle. In addition, staff is proposing that current transportation coupon programs that provide greater public transportation access be augmented with additional funds when a Rule 1194 compliant vehicle is used to provide taxicab services to passengers utilizing transportation coupons. Transportation coupons (or vouchers) are used by citizens of low-income or the elderly who do not have ready access to transportation. In most areas of Los Angeles County, transportation coupons are purchased for a nominal cost but have a greater face value and up to two coupons can be used per trip. A similar system could be developed for taxicab services that use a Rule 1194 compliant vehicle to pick up passengers in area of higher exposure to air toxics and smog precursors. The coupons would represent addition income to an individual taxicab owner/driver of a Rule 1194 compliant vehicle. The addition income would offset the monthly financial costs associated with the purchase of a rule compliant vehicle to about $26 per month that an individual taxicab owner/driver would have to pay. However, after the third year of financing, there would be economic benefits realized from the fuel savings and other incentive programs.

PR 1194 would require public and private operators to purchase alternative-fueled vehicles at the time the operators are adding or replacing vehicles in their fleets. It is envisioned that operators will specify in their procurement process the purchase of ULEV or cleaner or alternative fueled vehicles that would be rule compliant. Staff believes that there will be minimal resource impacts on the AQMD since fleet operators keep records of their purchases and procurement information. There will be small administrative costs associated with random inspection of fleet operators for rule implementation and enforcement purposes and the tracking of the penetration of alternative fueled vehicles into the market.

In order to facilitate full implementation of Rule 1194, staff estimates that $1,000,000 would be recommended for AQMD funding assistance. Staff will pursue grant sources as well as examining other opportunities.

Staff recommends that proposed Rule 1194 be adopted. The proposed rule will provide criteria pollutant air quality and toxic air pollutant benefits specifically in areas surrounding commercial airports.

Attachments
A. Summary of PR 1194 Proposal
B. Rule Development Process
C. Resolution
D. Proposed Rule 1194 Language
E. Staff Report
F. Final Environmental Assessment (available to the Public upon request)

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