BOARD MEETING DATE: June 15, 2001 AGENDA NO. 30

The Legislative Committee met on May 18, 2001. Present were Committee Chair Beatrice LaPisto-Kirtley, Vice-Chair Jane Carney, and Committee members Cynthia Verdugo-Peralta and Roy Wilson (by videoconference). Pursuant to the Procedures for Standing Committees of the Governing Board, adopted March 8, 1996, Norma Glover, AQMD Vice-Chair, was appointed as an ad hoc member of the Legislative Committee for the May 18, 2001, meeting only. Committee member Supervisor Michael Antonovich was unable to attend. (Attachment 1)

Peter Robertson and Ed Newberry, AQMD Federal Legislative Representatives, reported on four draft federal funding proposals before the Legislative Committee for consideration. [Attachments 2 and 3] The four proposals are a reintroduction of last year’s one proposal that requested $10 million in funding for various projects. This year, each project is a stand-alone proposal that is linked to a Congressional member from the South Coast Air Basin. The proposals were drafted to bring funding to a Congressional member’s district and increase their desire to support the proposal. A marketing strategy will also be prepared and Mr. Newberry added that Board Member contacts with Congressional members are key to gathering support for the proposals. The Legislative Committee approved the four federal funding proposals, with one change to the Congressman Dreier proposal to remove reference to children as a "subpopulation."

On the issue of pollution controls for heavy-duty trucks entering the United States under the North American Free Trade Agreement (NAFTA), Mr. Robertson reported that the NAFTA Dispute Panel is working on the issue of safety standards for these trucks and the United States and Mexico are trying to work cooperatively to devise a plan to allow safety inspections to take place. However, according to the U.S. EPA’s Office of International Activities, there is no organized effort to expand the work of the NAFTA Dispute Panel to include environmental issues. Mr. Robertson will meet with the U.S. EPA’s Deputy Administrator designee to discuss this issue.

There have also been discussions with Congressional staff regarding the likelihood of amending HR 677, Lipinski (which seeks to require safety inspections for trucks entering the U.S. from Mexico), to require the same kind of inspections for pollution as would be required under this legislation for safety. However, Congressman Lipinski is a senior member of the Public Works and Transportation Committee and HR 677 was drafted entirely within that committee’s jurisdiction. If the bill is amended to address pollution control, the bill would then fall jointly into the jurisdiction of the Energy and Commerce Committee, of which Congressman Lipinski is not a member. Although Congressman Lipinski has expressed his concerns regarding pollution from trucks, committee jurisdiction is key in moving legislation swiftly through Congress. Mr. Robertson will continue to follow this issue.

Ms. Carney stated that former AQMD Board Chairman Norton Younglove recently traveled to Washington, D.C., and met with Congressman Oberstar, ranking Democrat on the Public Works and Transportation Committee, about NAFTA and the pollution concerns from trucks. Congressman Oberstar was very interested and mentioned the possibility of a visit to the District. Ms. Carney asked that Mr. Robertson follow up on this issue with Congressman Oberstar’s staff, as well as with Senator Boxer, who has also expressed an interest in this issue and is considering whether to hold general hearings on this issue.

Mr. Robertson reported that energy production issues in general have also been discussed with the U.S. EPA. It appears that Mexico’s President Fox may be more open to considering ways to improve environmental issues along the border. Thought has been given to the possibility of building additional power-generating facilities in the Baja area of Mexico and possibly sizing these facilities large enough to export power to California. However, there continues to be strong resistance to building these facilities in Mexico in accordance with U.S. clean air standards. This issue will likely be discussed in June when U.S. EPA Administrator Christine Todd Whitman travels to U.S. border cities to meet with environmental representatives from Mexico.

President Bush’s Energy Policy was just released, as well as the Energy Policy proposed by the Democrats. Mr. Robertson stated that he plans to review the proposals and prepare a side-by-side comparison, but added that the President’s energy policy includes $6.3 billion in tax credits to promote the purchase of hybrid gas and electric vehicles, residential use of solar power facilities, and other energy conservation and clean energy-type proposals. The President’s Energy Policy contains recommendations from the task force chaired by the Vice President.

President Bush’s Energy Policy also provides for review of New Source Review provisions in the federal Clean Air Act. Under the Policy, U.S. EPA and other agencies would be required to review the current New Source Review regulations to determine what impact they have on energy supply. The Department of Justice and the U.S. EPA are pursuing enforcement actions across the United States regarding these regulations and there is a directive in the Policy to the Attorney General to review the existing enforcement proceedings to see whether those cases should continue. The Policy also contains a general requirement for all federal agencies to review any major federal regulatory activity to understand their impact on energy supply. This would include any new environmental regulations being proposed.

The U.S. EPA would also be directed under the President’s Energy Policy to develop multi-pollutant legislation that would target NOx, sulfur dioxide and mercury, but not carbon dioxide. It would be a market-based mechanism probably to include a cap and trade program similar to what has taken place under U.S. EPA’s Acid Rain Program.

Dr. Wallerstein commented that U.S. EPA also plans to review gasoline standards throughout the country to determine whether there should be regulatory reform in this area. Mr. Robertson responded that there was a direction to the U.S. EPA, the Department of Energy, and the Department of Transportation to work on a number of these issues. The Vice President’s task force also recommended that the U.S. EPA study opportunities to maintain or improve the environmental benefits of state and local boutique clean fuel programs. Dr. Wallerstein shared his concern that during this review an implementation scenario could possibly be developed that could prohibit California from having more stringent requirements on fuels in order to allow increased availability of fuels to transfer from one region to another in order to control the price of gasoline.

Dr. Wallerstein also added that consideration was being given to further deregulating the energy markets to stimulate production. Mr. Robertson responded that this issue, as well as review of many environmentally sensitive rules and regulations, will be under consideration as the Administration works to develop a comprehensive energy policy with Congress. The Energy Policy will then be a basis for legislation in Congress that may amend the federal Clean Air Act or other statutes in ways that could affect California’s ability to implement more protective programs.

Allan Lind and Michael Corbett, AQMD Sacramento Legislative Representatives, provided an update on activities in Sacramento by teleconference. [Attachments 3
and 4] Mr. Lind reported that the Governor released his May Budget Revise and it contains cuts, including reducing the year-end rainy day reserve by about $1.4 billion, deferring $1.3 billion in highway projects, cutting $1.3 billion in various one-time expenditures and other cuts to various miscellaneous items. There are no cuts proposed for local air district subvention funding, the Governor’s Diesel NOx Emission Reduction Program, designed to create emission credits for peaker power plants, or the Zero-Emission Vehicle Incentive Program. The May Revise, however, contains no new funding for ARB’s School Bus Replacement Program.

With respect to the Governor’s Diesel NOx Reduction Program, the Legislature has restructured the program and added an additional $25 million. There is now $125 million, with $68 million to be spent for the Diesel NOx Reduction Program and the other $57 million to be allocated into a new Energy Crisis Environmental Justice Air Emissions Program, with $19 million to the Carl Moyer Program, $19 million for school buses, and $19 million for local air districts to provide assistance, compliance and mitigation programs for standby diesel generators.

The Legislature continues to explore ideas to provide for a more stable and reliable energy future, and recently passed four major bills:

Mr. Lind reported that efforts are ongoing on the AQMD 2001 State Legislative Proposals. There are a few bills that are moving in this area but they are now on the suspense file of the respective Appropriations Committees.

Mr. Lind also reported on the status of another bill that the District has been following. AB 1528 (Wyman) would remove the authority of a local air district governing board to approve the transfer of emission reduction credits between air districts. The bill was heard in the Assembly Natural Resources Committee, where the AQMD expressed concerns with the bill. At the conclusion of the hearing the author asked that the committee hold the bill without further action this year. No movement is expected on the bill until January. Dr. Wallerstein commented that Supervisor Antonovich has scheduled a meeting to discuss with bill with Assemblyman Wyman and has asked for AQMD staff to attend.

Staff provided analyses and recommendations on six bills and provided a brief description of each bill. [Attachment 5]

Bill/Title	Recommended Position
AB 845 (Nakano) – Dry Cleaning Technologies	SUPPORT
AB 986 (Firebaugh) – Heavy-Duty Diesel Engines	WATCH
SB 433 (Monteith) – Carl Moyer Program	SUPPORT
SB 545 (McClintock) – HOV Lanes Standards	SUPPORT IN CONCEPT
SB 829 (Karnette) – Transportation Funding	WATCH
SB 1111 (Kuehl) – International Trade and the Environment	SUPPORT; SUGGEST AMENDMENT

AB 845, Nakano, would require the ARB to designate "qualified alternative technologies" for dry cleaning that are more protective of air and water quality than perchloroethylene. Any dry cleaner that installs an ARB-qualified alternative technology can receive a 50% tax credit for the cost of implementing this technology. Oscar Abarca, Assistant Deputy Executive Officer/Public Affairs and Transportation Programs, stated that AB 845 has no direct impact on the AQMD, but ARB-certified technology will likely be more stringent than what is currently required under AQMD rules and will help expand the use of cleaner technologies sooner then expected. Staff recommends a Support position. The Legislative Committee concurred with staff’s recommendation to Support AB 845.

AB 986, Firebaugh, would create a new Carl Moyer Program aimed at reducing particulate matter with funding from a self-imposed fee on intrastate trucks and a partial fee imposed on interstate trucks. The bill also contains provisions that would exempt the trucking facilities from Proposition 65 warnings, which have been a matter of litigation in recent years. Provisions also would take away the AQMD’s ability under AB 2588, the Air Toxic "Hot Spots" law, to designate a trucking terminal as a toxic hot spot.

The Office of the Attorney General, as well as organized labor and environmental groups, recently came out in opposition to the Proposition 65 provisions of AB 986. Dr. Wallerstein commented that he has had several discussions with Mike Kenny of ARB about this bill, and they both recognize the inherent benefits of the Carl Moyer Program portion of the bill. However, at this time, Dr. Wallerstein recommended that the Legislative Committee and the Board continue to have a Watch position on AB 986 and direct staff to continue to work with the sponsor on the Proposition 65 and air toxic provisions of the bill.

Ms. Verdugo-Peralta asked if staff has met with Assemblyman Firebaugh on this bill. Dr. Wallerstein responded that he has not talked directly with Assemblyman Firebaugh, but has discussed the bill with the California Trucking Association, the sponsor of the bill, and they welcome our help in trying to bring people together on this bill. The Committee concurred with staff’s recommendation to continue to Watch AB 986.

SB 433, Monteith, would appropriate $50 million annually, beginning with Fiscal Year 2001-02, from the General Fund to continue funding the existing Carl Moyer Program. Staff recommends a Support position. The Legislative Committee concurred with staff’s recommendation to Support SB 433.

SB 545, McClintock, would require Caltrans to establish standards to be used to assess the success or failure of HOV lanes. Staff recommends a Support in Concept position and recommends working with the author to consider available modeling techniques and timelines that are reasonable to ensure that this is a successful endeavor. Currently, the legislation proposes modeling techniques that are not available and timelines that have been proven to be unrealistic.

Ms. Carney commented that she understands why the AQMD is concerned about HOV lanes, but has concerns with supporting legislation by the author who has previously attempted to eliminate HOV lanes altogether. Chair LaPisto-Kirtley stated that it was her understanding that the bill only requires a study to measure the effectiveness of HOV lanes, but suggested that staff closely monitor the bill to ensure it remains objective. Dr. Wallerstein added that the Planning and Conservation League has taken a support position on the bill.

Mr. Lind commented that the Planning and Conservation League believes that an objective study as outlined in the bill will demonstrate the efficacy of HOV lanes and HOT lanes. The author believes that an objective study will demonstrate the inefficiency of these lanes. They have the opposite expectations and yet they agree that objectivity will, in each case, prove their point.

Mr. Abarca added that the bill passed the Senate Transportation Committee with a 10-0 vote and is currently in the Senate Appropriations Committee. The Legislative Committee concurred with staff’s recommendation to Support in Concept SB 545, with objection by Ms. Verdugo-Peralta.

SB 829, Karnette, would continue indefinitely the transfer of monies from the General Fund received from the state sales tax on gasoline to the Traffic Congestion Relief Act for transportation programs. The funding currently sunsets in June 2006, at which time the money reverts back to the General Fund. Staff recommends a Support in Concept position and recommends seeking a commitment from the author that these funds would be available for alternative fuel vehicles.

Dr. Wallerstein stated that the analysis for this bill was prepared prior to the Governor’s release of the May Revise and one of the items in the May Revise was to delay certain transportation funding for a few years. Mr. Lind added that funding for the Traffic Congestion Relief Act from the General Fund was for the next five years. The May Revise delays the first two years of funding and allows them to occur in years six and seven. Dr. Wallerstein recommended revising staff’s position from Support in Concept to Watch for another month. The Legislative Committee concurred with staff’s recommendation to Watch SB 829.

SB 1111, Kuehl, would begin the process of taking a closer look at trade agreements executed by the federal government and their impacts on California’s ability to enforce its environmental regulations. Staff recommends a Support position and suggests working with the author to ensure that the proposed report is also transmitted to the appropriate federal agencies. The Legislative Committee concurred with staff’s recommendation to Support SB 1111.

John Billheimer, Environmental Reality, stated that SB 1111 seems to show a bias or presumption that foreign trade agreements are inherently adverse to the California and United States environmental objectives and provided written comments on SB 1111 to the Committee. [Attachment 7]

Attached for information are the Ethnic Community Advisory Group minutes for the March 14, 2001 and April 11, 2001, meetings. [Attachments 8 and 9]

South Coast Air Quality Management District