BOARD MEETING DATE: May 6, 2005 AGENDA NO. 29A

BOARD MEETING DATE: May 6, 2005
AGENDA NO. 29A

REPORT:

Legislative Committee

SYNOPSIS:

The Legislative Committee considered agenda items including the following legislation for which the Board will consider approving a position:

Bill/Title
Recommended
Position

SB 109 (Ortiz) Air Quality Violations

Neutral-unless amended

AJR 8 (Canciamilla) Marine Pollution

Support

AB 1229 (Nation) Air Pollution:
New Motor Vehicles: Air Pollution Label

Support

HR 359 (Terry) Liquefied Natural Gas Act of 2005

Oppose

SB 475 (Runner) Air Pollution:
Stationary Sources: Emission Reductions: Banking

Oppose

SB 1 (Murray) Energy:
Renewable Energy Resources:
Million Solar Roofs Initiative

Support

AB 1430 (Goldberg) Air Contaminants

Oppose

AB 343 (Huff) Utility User Taxes: Exemption

Support

RECOMMENDED ACTION:

Receive and file this report and adopt positions on the bills as specified in this letter.

Jane Carney, Vice-Chair
Legislative Committee

Attendance [Attachment 1]
The Legislative Committee met on April 8, 2005. Present were Vice-Chair Jane Carney (who served as Chair of the Committee) and Committee Member Gary Ovitt. In attendance via videoconference were Committee Members Michael Antonovich, Jan Perry, and Roy Wilson. Absent was Chair Beatrice LaPisto-Kirtley.

Request for Urgency Item
Vice-Chair Carney reported that staff has requested an urgency item be added to the agenda. She stated that staff has learned that SB 475 (Runner) Air Pollution: Stationary Sources: Emission Reductions: Banking, will be amended with regard to transfer of emission credits from the South Coast to Mojave Desert Air Quality Management District. Staff was apprised of this development after the agenda was prepared and posted for public review.

Prior to any action being taken, Committee Member Wilson asked if there was a conflict for him since he sits on the Mojave Air District Board. Principal Deputy District Counsel Barbara Baird replied that it did not create a legal conflict for him.

The Legislative Committee adopted the staff's recommendation to add Urgency Item SB 475 to the Agenda.

Dr. Barry Wallerstein, Executive Officer, reported to the committee that legal counsel has advised him that the Committee cannot take any official interim position on behalf of AQMD without four members of the Committee being present.

Recommended Positions on Bills [Attachment 2]
Oscar Abarca, Assistant Deputy Executive Officer of Public Affairs, thanked Supervisor Wilson for his assistance in providing testimony before the Senate Environmental Quality Committee with regard to SB 459 (Romero) Locomotive Emissions Mitigation, an AQMD-sponsored bill. This was approved by the Senate Committee with a vote of 6 to 3. It will now be heard in the Senate Appropriations Committee on April 18. Mr. Abarca also said that support by other Board members, in the form of providing testimony or contacting their legislators, would be very helpful.

SB 109 (Ortiz) Air Pollution: Minor Violations: Stationary Sources: Prosecution of Violations
Dr. Wallerstein reported that this bill was carried over from the March 11 Legislative Committee meeting, in which the committee approved staff to meet with the author of the bill and discuss several concepts. He said that he and Senator Richard Polanco (Ret.), AQMD Sacramento Legislative Consultant met with the author and other air pollution control officers. The intent of this bill is to increase the effectiveness of the enforcement programs with regard to the worst violators. Dr. Wallerstein stated that other air districts adamantly oppose this bill because they believe it could make it difficult for air districts to settle routine cases, which they feel are being handled appropriately.

Staff recommended the following amendments to the bill: 1) expansion of the reward statute to include stationary sources; 2) a requirement that contractors report tampered equipment to the air districts, when it is discovered during repair or maintenance; 3) the expansion of the Public Nuisance Statute to authorize the recovery of penalties based on both the discharge and the number of individuals, businesses or properties, such as a school, that are affected by a facility that releases pollution; 4) a provision that allows air districts to recover attorney fees by the prevailing party in civil penalty actions when the penalty is in excess of $50 million; and 5) the establishment of a mandatory minimum penalty of $5,000, with the ability to allow the prosecutor to reduce the amount at his or her discretion.

Dr. Wallerstein said that this bill has passed its first committee. The expert who provided testimony at the first committee hearing was a former prosecuting attorney from Imperial County who Dr. Wallerstein felt did not adequately understand how air district programs are managed.

Dr. Wallerstein recommended a neutral position unless amended, with the intention of directing staff to negotiate AQMD's concepts to be incorporated into the bill.

Vice Chair Carney wanted to ensure that contractors who discovered tampered equipment were able to fix that equipment. Dr. Wallerstein said that staff would work with the author to ensure that contractors are allowed to repair tampered equipment.

Greg Adams requested clarification regarding public nuisance, such as odors affecting a school. He asked whether an odor that affects an entire school is counted as one violation or multiplied by the number of students. Staff responded that according to the current review of the bill, it would be counted as one violation, and that AQMD is working with the author to change that to count the number of students affected by the violation. Peter Mieras, District Prosecutor clarified that few odor violations that AQMD investigates result in a notice of violation.

The Legislative Committee unanimously adopted staff's recommendation of NEUTRAL UNLESS AMENDED FOR SB 109.

AJR 8 (Canciamilla) Marine Pollution
Dr. Wallerstein said that this is an Assembly joint resolution (AJR) which sets up a low-sulfur zone on the West Coast.

The Legislative Committee unanimously adopted staff's recommendation SUPPORT AJR 8.

AB 1229 (Nation) Air Pollution: New Motor Vehicles: Air Pollution Label
Mr. Abarca reported that this bill would require the placement of stickers on new automobiles to identify their global warming index as well as the air pollution index of the vehicle.

Committee Member Ovitt asked if there was a cost associated with this bill. Dr. Wallerstein said that if a cost is involved it would be minimal for the cost of the sticker.

The Legislative Committee unanimously adopted staff's recommendation to SUPPORT AB 1229.

HR 359 (Terry) Liquefied Natural Gas Act of 2005
Mr. Abarca reported that this bill would take away AQMD's authority to permit LNG facilities and give that authority to the Federal Energy Regulatory Commission.

The Legislative Committee unanimously adopted staff's recommendation to OPPOSE HR 359

SB 475 (Runner) Air Pollution: Stationary Sources: Emission Reductions: Banking
Mr. Abarca reported that staff has learned that Senator Runner will be amending SB 475 to include a provision to eliminate AQMD's authority to approve the transfer of emission credits from the South Coast to Mojave Desert Air Quality Management District. Staff believes that this will place the South Coast Air Basin in jeopardy with regard to the lack of available emission credits, and drive up their cost.

Dr. Wallerstein said that a few years ago Senator Knight introduced similar legislation, and that the Governing Board created a process by which these requests now come before the Governing Board for their consideration.

The Legislative Committee adopted staff's recommendation to OPPOSE SB 475. Committee Member Wilson abstained.

Recommended Consent/Action Items on Recommended Position on Bills
Vice Chair Carney informed the committee members that she was pulling all items from the consent agenda so that each bill will be heard individually. She said that several Board Members had expressed their concern on the volume of bills presented before them, and that they wanted more time for review and input.

Dave Madsen, Senior Public Information Specialist, reported on the following bills which were grouped by category:

Energy

SB 1 (Murray) Energy: Renewable Energy Resources: Million Solar Roofs Initiative
This bill would require the PUC, in consultation with the Energy Commission, to issue an order opening a proceeding or expanding the scope of the existing proceeding to adopt, implement, and finance a comprehensive solar energy program to encourage increased installation of residential and commercial solar energy systems. The goal is to place 1 million solar energy systems on new and existing residential and commercial customer sites throughout the state of California. This bill also targets solar energy systems for 50% of new home developments by December 2018.

The Legislative Committee unanimously adopted staff's recommendation to SUPPORT SB 1.

Staff also provided a brief description of the following bills:

AB 1362 (Levine) Renewable Energy: California Renewables Portfolio Standard Program: Renewable Energy Credits;
SB 107 (Simitian) Renewable Energy;
AB 1547 (Levine) Energy: Renewable Energy: Solar Generation of Electricity; and
AB 1585 (Blakeslee) Renewable Energy Resources: California Renewables Portfolio Standard

Committee Members Antonovich and Ovitt stated that they felt that the agenda package was too large and that they had not been given adequate time for review. Additionally, they both said that they would like to have their respective county legislative staff review the material. Committee Member Antonovich informed the committee that he would not take a position on any bill.

Vice Chair Carney suggested that several of the remaining bills be continued to a Special Legislative Committee meeting, and that only legislation involving critical issues be addressed in the current meeting.

Dr. Wallerstein stated that several of the bills listed on the agenda are potentially detrimental to the AQMD and staff is concerned these bills will be heard in their policy committees prior to AQMD being able to take a position. He said that in his opinion, if only certain bills could be addressed at this meeting, he recommended that the Committee take positions on certain Assembly bills, which staff would highlight.

David Madsen provided a brief description of the following bills with staff's recommendation:

Planning/Rules

AB 1430 (Goldberg) Air Contaminants
This bill is contrary to Board adopted regulations and federal law. This bill would limit the ability of air districts to amend or adopt credit trading programs. It would also limit AQMD authority to amend its existing Pilot Credit Generation rules in order to generate PM10 Emission Reduction Credits to be used in New Source Review.

Committee Member Antonovich asked why this bill was not listed as a high priority bill and was not highlighted. Dr. Wallerstein replied that staff recently met with the author, and received a "white paper," which contained the intention of the bill. This information was not available to staff before.

Greg Adams, who said that he was speaking unauthorized on behalf of the Home Rule Advisory Group, said that this bill would make it difficult for businesses to grow.

Dr. Wallerstein said that he met with CCEEB and its members, and they, too, are concerned about this bill.

The Legislative Committee adopted staff's recommendation to OPPOSE 1430. Committee Members Antonovich and Ovitts abstained.

Taxes/Fees

AB 343 (Huff) Utility User Taxes: Exemption
Dr. Wallerstein said that to comply with AQMD's fleet rules, transit authorities have been purchasing and placing into their fleets natural gas powered transit buses, and on occasion, they fuel the buses in different city yards (away from their home base). He said that he has been approached by several organizations requesting AQMD's support in prohibiting cities from taxing natural gas used by transit bus operators. He also said that the League of Cities is opposing this bill because they see it as an infringement on the city's right to set local taxes. Dr. Wallerstein said that staff believes that transit authorities are trying to do their best to operate in a cost effective manner while benefiting the environment, and a natural gas tax would threaten their cost effectiveness.

Committee Member Ovitt said that he serves on the Omnitrans Board and that natural gas taxes would make it more difficult for them to operate because using natural gas has saved Omnitrans money, which has enabled them to stay within their budget.

The Legislative Committee adopted staff's recommendation to SUPPORT AB 343. Committee Member Antonovich abstained.

After a brief discussion, the Committee members agreed to convene a Special Legislative Committee meeting to address the bills that were not addressed at the current meeting. Dr. Wallerstein noted to the Committee members that the original draft of the agenda contained an additional 15 bills that he had removed. Mr. Abarca commented that staff has identified over 20 spot bills relating to air quality which staff will present to the Committee once they are amended.

Committee members agreed to be polled to determine the date for a Special Legislative Committee meeting.

Federal Report/Update [Attachment 3]
Chris Strobel and Emily Bacque, AQMD federal legislative consultants, reported that the Transportation Reauthorization Bill has passed the House and will move to the Senate. The Energy Bill has moved in the House Energy and Commerce Committee. Emily Bacque said that this bill contains 16 titles and that they have only gone through the first title. The next markup of the bill is scheduled for the week of April 11. They will continue to monitor it and report back to the Committee.

Sacramento Report/Update [Attachment 4]
Allan Lind, AQMD state legislative representative, reported that in the past, Committee members have requested that staff provide them with analysis from the Republican Caucus. He said that minority analysis is not posted on any web site, and as a general rule is not made available to the public. Requests can be made, but the analysis is a working document and is generally for internal purposes only. He said if a bill is heard in committee, the analysis is generally posted either the day before the hearing, or shortly after the hearing.

He also said that April is typically the month when authors will determine if they want to move forward with their bills, and spot bills will start to be amended and/or dropped.

Other Business

Mr. Abarca stated that staff has learned that the proposed Federal Energy Policy Act of 2005 (Energy Bill) contains language that would make the United States Department of Energy the lead agency for refinery permits and take such authority away from AQMD. He said that in the past, the Governing Board has taken an oppose position on these efforts. He also said that AQMD was contacted by Congresswoman Hilda Solis for opinion on this issue. AQMD provided her with comments reflecting the previous position of the Governing Board opposing this effort. AQMD has requested her assistance in striking the language out of the Energy Bill and staff will keep the committee informed as this legislation moves through Congress.