BOARD MEETING DATE: July 8, 2005
AGENDA NO. 33

Overview of CARB/Railroad Statewide Agreement and Consideration of Further AQMD Action

SYNOPSIS:

The Executive Officer of CARB has negotiated and signed an MOU with the two railroads conducting over 80 percent of the rail-transport business in the state. The MOU, which was negotiated behind closed doors, contains a termination clause undermining any negotiations by any governmental body on the program areas addressed in the MOU. The MOU’s program areas are identical to the regulatory proposals contained in pending legislation sponsored by AQMD and in proposed rulemakings requested by the Governing Board.

COMMITTEE:

Not Applicable

RECOMMENDED ACTION:

Provide direction to staff on actions to take in light of the MOU.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Executive Officer CARB has recently entered into an MOU with Union Pacific Railroad Company and The BNSF Railway Company. This item is to advise the Board of the MOU and to obtain guidance regarding future AQMD actions controlling emissions from locomotives and railyards.

The MOU—which largely addresses locomotive and railyard emission-reduction programs contained in legislation and rules proposed by the AQMD—was released just prior to final policy committee hearings on AQMD-sponsored railroad legislation. CARB announced that it had entered into the MOU on Friday, June 24, 2005, and the final policy committee hearings on AQMD’s railroad bills were scheduled for the following Monday, June 27, 2005. The MOU contains a termination clause that undercuts locomotive and railyard rules scheduled on the AQMD’s rule-adoption calendar for September of 2005. The MOU’s termination clause not only undermines these efforts but also will seriously impede future rule adoption or enforcement efforts by any federal, state, or local agency attempting to reduce emissions from railroads or rail yards.

Negotiations for the MOU were conducted behind closed doors without the knowledge or participation of the public or communities impacted by railroad emissions. The MOU was prepared without any opportunity for public review or input, even though numerous Legislative hearings had been conducted on the program elements contained in the MOU and further public hearings would be conducted in the future, both at the AQMD and possibly before the Legislature.

The MOU provides for limited public involvement in implementing the program elements. Certain program elements provide for implementing committees with public members. However, the MOU itself can be completely revised by the CARB Executive Officer without any input or participation by the public, or from the CARB Board. And most elements of the MOU can be implemented without any involvement by the public or even public notice.

CARB has attempted to justify the MOU by asserting that state and local agencies lack sufficient authority to regulate railroads, and that most state and local authority is preempted by federal law. However, most if not all provisions in the MOU are within the scope of non-preempted state or local regulatory authority. AQMD’s proposed legislation and rules overlap with many of the program elements in the MOU and in most cases are more stringent. AQMD’s legal staff and outside attorneys—including an attorney who served for ten years as CARB’s General Counsel—have spent many hours researching federal preemption issues and drafting the AQMD’s legislative and regulatory proposals so that they avoid federal preemption. CARB’s justification for the MOU, that it fills a gap in regulatory authority, is incorrect.

Because it was negotiated without involvement of the full CARB Board or the public, the MOU contains flaws that would have been corrected had the MOU been subjected to a public process. At least one of the standards, for visible emissions, is weaker than the standards that AQMD is currently enforcing. Other standards—for idling reduction—are weaker than the standards in AQMD’s proposed rules. Most program elements contain requirements that are vague and place too much discretion in the hands of the railroads. The MOU contains a very weak penalty schedule. The penalties in the MOU are lower than those that the Legislature adopted by statute for air-pollution violations. Also, the maximum penalties under the MOU for visible emissions are much lower than liquidated damages that the railroads agreed to pay AQMD for the same violations in a 1993 settlement agreement. Attachment A is an analysis of the MOU prepared by AQMD staff that describes the shortcomings in greater detail.

Because of these numerous problems and the lack of public process, the AQMD Board Chairman has sent a letter to the chairperson of the ARB Board requesting that the ARB Board conduct hearings on the MOU. In addition, legislators in both the Senate and Assembly have indicated that they intend to hold hearings on the MOU. Staff will keep the Board apprised of any further developments in this area.

In light of the MOU’s termination clause, the AQMD, and any other agencies considering railroad regulation in California, must consider the statewide effects of their regulatory efforts. This is because the termination clause provides that the railroads, at their sole discretion, may choose not to perform their obligations under any program element in the MOU if an agency "adopts or attempts to enforce any requirement addressing the goal of any Program Element." Thus, for example, if AQMD adopts a requirement that the railroads submit emissions inventories and prepare heath-risk assessments for railyards on a more expedited schedule than in the MOU, the railroads could walk away from their state-wide obligations to implement the MOU’s risk-assessment program. The MOU’s risk-assessment program will have air quality and health benefits for persons living in the parts of the state lacking aggressive regulatory programs. The AQMD has regulatory efforts either in effect or in the planning stages for each of the program elements contained in the MOU.

Attachment (DOC* 181kb)

Attachment A – Analysis of CARB’s June 30, 2005 Railroad MOU

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