BOARD MEETING DATE: February 6, 2004
AGENDA NO. 24

Approve Implementation of Initiatives Proposed by Chairman William A. Burke

SYNOPSIS:

At its January 9, 2004 Board meeting, Chairman Burke proposed initiatives to transfer $1.5 million to the Brain Tumor and Air Pollution Foundation, and to provide $12 million for the AQMD’s Lower-Emission School Bus Program. This action is to approve staff’s recommendations on the implementation of Chairman Burke’s proposed initiatives.

COMMITTEE:

Not applicable

RECOMMENDED ACTIONS:

1. Transfer $1.5 million from the RECLAIM AQIP Fund back to the AES Settlement Fund and from there disperse $1.5 Million to the Brain Tumor and Air Pollution Foundation provided:

• The Foundation expands its Charter to include Lung Cancer related research and/or technology development; and
• A percentage of any royalties resulting from research funded by the Foundation be directed back to AQMD.

2. Transfer $12 Million from Rule 1309.1 Priority Reserve Fund to the Lower Emission School Bus Program Fund for the implementation of the Chairman’s School Bus Initiative.
    
3. Approve issuance of Program Announcement & Application #PA 2004-07 to replace and retrofit school buses in an amount not to exceed $12 million from the Lower-Emission School Bus Program Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Brain Tumor and Air Pollution Foundation
In 2003, the Board approved the establishment of the Brain Tumor and Air Pollution Foundation (BTAP) and recognized 10% of FY 2002-03 penalty revenues to assist with funding the Foundation. The mission of BTAP includes funding research to determine the relation of air pollution and the risk of brain cancer and to develop better prevention or treatment options. The BTAP Board has used these funds to initiate two research projects looking at air pollutant exposure and brain tumors. Under an agreement approved by the Governing Board at its October 3, 2003 meeting, BTAP shall provide the AQMD Governing Board a report annually of the grants and a summary of the results achieved from the research conducted as a result of said grants.

Lower-Emission School Bus Program
Exhaust emissions from high-emitting, diesel-fueled school buses are harmful to children and are a key source of public exposure to toxic diesel exhaust emissions and smog-forming pollutants. Since 1999, with the help of state funding, AQMD has approved more than $43 million in cleaning up and replacement of diesel-powered school buses in the South Coast Air Basin. Projects approved include the purchase of compressed natural gas-powered school buses, lower-emitting new diesel buses and the retrofitting of diesel buses with particulate emission traps. To date 287 pre-1987 school buses have been replaced with 201 CNG and 86 lower-emitting diesel buses, and 1,295 model year 1994 and newer buses have been retrofitted with particulate traps.

At the January 9, 2004 Board Meeting, Chairman Burke proposed an initiative to expand the activities of the Brain Tumor and Air Pollution Foundation and to provide additional funding for the Lower-Emission School Bus Program.

Proposal

Brain Tumor and Air Pollution Foundation
At the January 2004 meeting, Chairman Burke requested that the Foundation consider expanding its activities to include lung cancer research, and that an additional $1.5 million be provided to the Foundation to support this research. Dr. Burke noted that most brain cancers start in the lungs and then migrate to the brain, and that air pollution exposure is a risk factor for lung cancer. Additionally, Dr. Burke asked the BTAP Board to negotiate that a percentage of any royalties resulting from research funded be directed to the AQMD.

Staff proposes that the Board authorize a transfer of $1.5 million from the RECLAIM AQIP Fund to the Brain Tumor and Asthma Foundation provided the Foundation expands its Charter to include Lung Cancer research and a percentage of any royalties are directed to AQMD.

Lower-Emission School Bus Program
The school bus initiative was originally proposed by Chairman Burke at the January 2003 Board meeting. Subsequently an ad hoc committee composed of Board Vice Chair Roy Wilson, Board Members Michael Antonovich, Jane Carney, William Craycraft, Beatrice LaPisto-Kirtley, and Ronald Loveridge, was formed to develop recommendations on program implementation of the School Bus Initiative.

Committee Directives

At its first meeting on March 7, 2003, the ad hoc Committee directed staff to develop an implementation plan with the following guidelines:

1. The funding ratio of alternative fuel replacement buses & related infrastructure to particulate trap retrofits will be 60 to 40 percent respectively.
    
2. Public schools and private operators will be eligible for alternative fuel buses, infrastructure, and PM trap retrofits. Public schools will be given first preference in all categories.
    
3. The acquisition of new CNG buses and the concomitant crushing of older highly polluting diesel-fueled school buses will replace pre-1987 buses, with pre-1977 buses having priority.
    
4. Payment for CNG infrastructure will be allowed only for fleets without adequate infrastructure for the operation of the new buses.
    
5. Purchase and installation of PM traps will be on 1994 and newer diesel buses. These buses will be required to operate on low-sulfur diesel fuel with 15 ppm or lower sulfur content.
    
6. Distribution of the funds for both school buses and PM retrofits will take into consideration the environmental justice provisions of the Health & Safety Code as amended by AB 1390 (Firebaugh).
    
7. Up to $60,000 will be provided for a new CNG school bus.

Implementation Plan

At the April 4, 2003 Ad Hoc Committee meeting, staff presented a plan based on the foregoing directives that was approved by the Committee. The plan was subsequently approved by the Board on May 2, 2003, as described below:

A) Funding for CNG Buses
Sixty percent of the penalty funds allocated by the AQMD for the Chairman’s School Bus Initiative will go towards the purchase of CNG school buses and infrastructure, whenever deemed necessary. Award amounts will follow the Mobile Source Air Pollution Reduction Review Committee (MSRC) guidelines for new CNG bus funding. In particular, these guidelines provide for three levels of funding, depending on the size of the CNG bus being requested:

a)	Type D, CNG transit bus, the largest full-size school bus, will be awarded up to $60,000. This funding will more than offset the incremental cost of the CNG bus compared to a diesel bus.
b)	Mid-size CNG bus will be eligible for funding of up to $50,000.
c)	Type A, CNG bus, or the smallest size bus, will be eligible for funding of up to $25,000.

School districts and private school bus transportation contractors would fund the remaining balance. Those school districts developing a CNG refueling infrastructure for the operation of the new buses would be eligible for up to $12,000 per CNG school bus as contribution towards the school’s CNG infrastructure. The balance will be funded by the school districts. All new CNG school bus awards are required to be equipped with an oxidation catalyst.

B) Funding for Particulate Matter Trap Retrofits of Diesel School Buses
Particulate matter (PM) traps are capable of reducing diesel exhaust particulate matter emissions by over 85 percent and have been verified by CARB for 1994 and newer diesel buses. The AQMD has provided funds for the purchase and installation of 1,295 PM traps to date on 1994 and newer diesel school buses owned by public school district and private school bus transportation contractors. Past programs gave preference to buses owned by public school districts, and all public school districts which applied for PM traps were granted their full requests. Thus, there are only about 85 diesel buses owned by public school districts that remain eligible for retrofits, whereas there are about 1900 school buses owned by private school bus transportation contractors that are 1994 and newer and are potentially eligible for retrofits. Staff will contact the school districts with buses eligible for retrofit traps and offer funding for the installation of traps. The balance of the funding allocated for traps will be awarded to private contractors. It is proposed that $6,500 be awarded per diesel school bus retrofit to cover the purchase and installation costs of the PM traps, and an additional one-time $500 per bus to cover the initial incremental cost of low-sulfur fuel. Depending on available funds, staff recommends that buses owned by public school districts be given first preference.

C) Implementation Procedure
Staff proposes the issuance of Program Announcement & Application #PA 2004-07 to solicit applications for replacement and retrofit of school buses under the Chairman’s School Bus Initiative Program. The amount of available funding will be $7.2 million and $4.8 million for school bus replacement and retrofit respectively. The Program Announcement & Application #PA 2004-07 in the attachment is developed according to the following criteria:

School Bus Replacement

• Los Angeles Unified School District’s funding eligibility will be limited to a maximum of thirty-one percent of the total funds.
   
• At least one-half of the total funding will be expended in compliance with AB 1390, Firebaugh, to directly benefit low-income communities and communities of color that are disproportionately impacted by air pollution. All applications will be evaluated against criteria of poverty level, PM exposure, and air toxics exposure according to the following protocols:
   

  A)	Poverty Level: All school districts in areas where at least 10% of the population falls below the Federal poverty level based on the Year 2000 census data will be eligible to be ranked in this category.
  B)	PM Exposure: All applicants in areas with the highest 15% of PM concentration will be eligible to be ranked in this category. The highest 15% of PM concentration is 46 micrograms per cubic meter and above, based on an annual average.
  C)	Air Toxics Exposure: All applicants in areas with the highest 15% of toxic exposure (based on MATES II estimates), will be eligible to be ranked in this category. The highest 15% represents a cancer risk of 1,139 in a million and above.

Applicants in areas with at least 10% of the population below poverty level, and with the highest 15% exposure level to either PM or toxics will qualify under AB 1390. If there is an oversubscription under AB 1390, applicants will be ranked as follows: 1) 40 points to the applicant with the highest poverty level in its area, 2) 30 points to the applicant with the highest PM exposure level in its area, and 3) 30 points to the applicant with the highest cancer risk in its area. All the other applicants will be ranked proportionately in descending order in all three categories.

• Funds under AB 1390 will be awarded starting with applicants with the highest overall score in descending order until one-half of total available funding has been expended. The remaining one-half of funds will be awarded to the remaining applicants on a first come first served basis.
   
• Public school districts both in the AB 1390 and the first come first served category will be given preference over contractors.
   
• Applicants receiving the award for a new CNG bus will be required to crush a pre-1987 school bus, with pre-1977 buses to be crushed first, if present in the fleet. The award recipient could also offer its pre-1987 bus to another entity (such as a private school, private operator, etc.) to have a pre-1977 bus owned by that specific entity crushed.

PM Trap Retrofits
Public school districts, which apply will be given priority in the award of the PM traps, with private operators to be funded next. Only 1994 and newer diesel buses will be eligible for such retrofits. Pre-1994 diesel buses could be eligible if there is a CARB verification for that engine’s model year.

Schedule
Staff recommends to issue the Program Announcement & Application #PA 2004-07 upon Board’s approval on February 9, 2004. Staff will conduct an outreach effort to school districts with smaller fleets to make them aware of this funding opportunity and if necessary, help them with their application preparation.

Benefits to AQMD

The AQMP relies on the expedited implementation of advanced technologies and clean-burning fuels in Southern California to achieve air quality standards.

School buses operate in close proximity to students, teachers and neighbors. Many schools provide bus services in heavily populated areas. The successful implementation of the Chairman’s school bus initiative will provide less polluting and safer school transportation for school children. In addition, the program will maximize the potential emission benefits in low income, high diesel and high PM10 exposure areas, and will enhance the objectives of the Environmental Justice, and Children’s Health initiatives previously adopted by the Governing Board.

Resource Impact

Total amount of funding to the Brain Tumor and Air Pollution Foundation shall not exceed $1.5 million from the RECLAIM AQIP Fund.

Total amount of funding for the Chairman’s School Bus Initiative Program shall not exceed $12 million from the Rule 1309.1 Priority Reserve Fund to be placed in the Lower-Emission School Bus Fund. The Rule 1309.1 Priority Reserve Fund is intended to mitigate PM10. Funds used in the Lower-Emissions School Bus Program will accomplish this goal by directly reducing diesel PM10 and by reducing NOx emissions which is a precursor to PM10.

Attachment

Program Announcement & Application #PA 2004-07 – Chairman’s Initiative - Lower-
    Emission School Bus Replacement and Retrofit Program

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