South Coast Air Quality Management District
South Coast Air Quality Management District
BOARD MEETING DATE: October 20, 2000 AGENDA NO. 39
Amend Rule 1194 – Commercial Airport Ground Access
SYNOPSIS:
Proposed Amendments to Rule 1194 will require airport taxicab services to purchase rule compliant vehicles when adding or replacing vehicles in an existing fleet or forming a new fleet.
COMMITTEE:
Mobile Source, August 25, 2000 and September 22, 2000, Reviewed
RECOMMENDED ACTION:
Adopt the attached resolution:
Barry R. Wallerstein, D.Env.
Executive Officer
Background
On August 18, 2000, the AQMD Governing Board adopted Rule 1194 – Commercial Airport Ground Access to require public and private operators who pickup and dropoff passengers at commercial airport terminals to purchase cleaner burning gasoline or alternative-fueled vehicles when adding or replacing vehicles. The AQMD staff recommended that taxicab services be included under Rule 1194. However, the AQMD Governing Board decided not to take action relative to taxicab services for 60 days until the AQMD staff and the affected taxicab entities discussed further the economic impacts of the rule proposal on individual taxicab owners/drivers and potential funding mechanisms.
Proposal
For PAR 1194, beginning January 1, 2002, taxicab 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 when adding or replacing vehicles in their fleets.
PAR 1194 provides an exemption to allow individual taxicab vehicle purchaser to purchase non-rule compliant vehicles if incentives funding is not available to make up the difference in the purchase cost of a rule compliant vehicle less $10,000 (and applicable taxes, registration and license fees) to be provided by the taxicab vehicle purchaser. In addition, the cost to convert the vehicle to meet taxicab specifications would be borne by the purchaser.
PAR 1194 is unique among the AQMD fleet vehicle rules in that it effects drivers who belong to co-operatives or associations and who, in many instances, have limited financial resources. The development of the funding provisions contained in PAR 1194 is based on the uniqueness of this situation.
Public Process
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 separated the original PR 1190 into several standalone 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 and included requirements for taxicab pickup services at commercial airport terminals. 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. PR 1194 was adopted by the AQMD Governing Board on August 18, 2000. Requirements for taxicab operators were not considered by the Governing Board at that time. However, the Governing Board continued the taxicab provisions of Rule 1194 for 60 days so that the AQMD staff could continue discussions with affected taxicab entities on the economic impacts of the rule proposals on individual taxicab owner/drivers and to refine potential funding mechanisms.
Policy Issues
Definition of Fleet
In addition to the economic impacts on individual taxicab owner/drivers, 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. In addition, in the City of Los Angeles most of these individual owner/drivers belong to either an association or a cooperative. The associations or cooperatives 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 associations or cooperatives provide 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.
Cost of Vehicle
Many taxicab operators purchase used vehicles at a substantially lower cost compared to a new vehicle. In addition, to comply with PAR 1194, many taxicab service providers would purchase an alternative-fueled ULEV vehicle. While PAR 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 larger passenger cars such as the Ford Crown Victoria. At this time, larger passenger cars are only commercially available in an alternative-fueled configuration that meet the ULEV emission standard. The additional purchase cost of an alternative-fueled vehicle would add to the economic concerns raised by the taxicab industry. However, 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 Automated Taxicab Supervision, Inc. (ATS) to develop mechanisms that will provide additional funds to offset the additional capital costs. ATS is a organization authorized by the City of Los Angeles to manage taxicab pickup services at LAX. ATS recently agreed to propose raising the current airport surcharge fee from $2.50 to $3.50 per passenger pick up. The additional dollar would be placed into a separate fund and the monies would be used to offset the cost of purchasing a Rule 1194 compliant vehicle. Lastly, staff has been evaluating the potential use of AQMD funds from one or more of its programs to defray any remaining cost differentials. This is discussed further under the Socioeconomic Assessment Section below.
Alternative-Fuel Refueling Infrastructure
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.
Emission Reductions
PAR 1194 would affect approximately 2800 taxicab vehicles in the taxicab fleets today that operate out of commercial airports. As part of the adoption of Rule 1194, an estimate of the emission reductions associated with implementing Rule 1194 included taxicabs. Based on an average purchase/replacement rate of five years for light- and medium-duty vehicles, it is estimated that by 2010 hydrocarbon emissions would be reduced by 6.8 tons/year, nitrogen oxide emissions by 13 tons/year, and carbon monoxide emissions by 249 tons/year with the 2800 taxicabs meeting the requirements of PAR 1194. In addition, there would be a reduction in air toxic emissions especially at commercial airports. Finally, Amended Rule 1194 will promote technology advancement that will likely result in emission reductions beyond those indicated above.
California Environmental Quality Act (CEQA)
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 PAR 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 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 PAR 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)].
Due to the bulk of this document, the Final PEA has been provided to the Governing Board. Members of the public may receive copies of the Final PEA upon request from the Public Information Center at no charge or alternatively by accessing the AQMD’s website at "www.aqmd.gov".
Socioeconomic Assessment
AQMD staff has also prepared an Economic Report for the Proposed Fleet Vehicle Rules which includes PAR 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 (dated August 2000). 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 provided in the PR 1194 Staff Report (dated August 2000, see Attachment F) indicates that the cost effectiveness of PR 1194 would be $2,690 per ton of criteria pollutant reduced (the cost-effectiveness includes taxicab services along with shuttle services). The cost-effectiveness calculated as part of the August 2000 Staff Report included taxicab services and assumed that the purchaser of a rule compliant taxicab vehicle would pay an additional $5,000 per vehicle. However, under PAR 1194 purchase of a rule compliant taxicab would be offset by funding programs (less $10,000 to be paid by the purchaser). If funding is not available, the purchaser may purchase a non-rule compliant vehicle. Therefore, relative to taxicabs, PAR 1194 would result in no capital cost to the purchaser. A more detail discussion follows.
Since the adoption of Rule 1194, AQMD staff has conducted extensive discussions with the majority of the taxicab associations and cooperatives to discuss the economic impact of the rule proposal. The taxicab associations and cooperatives indicated that individual taxicab owner/drivers in their organizations are willing to provide $10,000 towards the cost of purchasing a rule compliant vehicle and that other funding programs would be needed to make up the differential capital cost of the vehicle. To ensure that the economic impacts are minimized, the taxicab organizations requested that there be assurance that should funding levels are not available, a non-rule compliant vehicle could be purchased. As such, PAR 1194 provides an exemption in the event incentive funds are not made available within a certain time period.
Staff has identified potential funding programs that could reduce the differential cost of a rule compliant vehicle and the $10,000 amount provided by the taxicab purchaser. The potential funding programs are shown in Attachment E. In addition, pages 33 and 34 of the Rule 1194 Staff Report dated August 2000 would be revised to reflect the additional information. The revised discussion is also provided in Attachment E. As discussed earlier, the funding programs assume that there will be an additional passenger pick up fee at LAX and other commercial airports that would be placed into a separate fund for use in purchasing rule compliant vehicles. While the taxicab organizations supported this concept, it was agreed that such a program would require the approval of the City of Los Angeles. Staff will work with the taxicab organizations and the ATS in pursuing the additional airport fee with the City of Los Angeles.
Resource Impacts
PAR 1194 would require taxicab vehicle purchasers to purchase ULEV or cleaner 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. However, some purchasers seeking additional financial assistance to offset the cost difference between a rule compliant vehicle less $10,000 (the amount that most taxicab purchasers agreed would be paid "out of pocket"), would need to apply to the AQMD or an AQMD designated agent for the financial assistance. There will be administrative costs associated with the process of applying for the financial assistance and procuring a designated agent for the AQMD. In addition, in order to facilitate full implementation of Rule 1194, staff estimates that up to $600,000 per year may be recommended for AQMD funding assistance. Staff will pursue grant sources as well as examining other funding opportunities.
Recommendation
Staff recommends that proposed amendments to Rule 1194 be adopted. The proposed rule amendments will provide criteria pollutant air quality and toxic air pollutant benefits specifically in areas surrounding commercial airports.
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