BOARD MEETING DATE: September 9, 2005
AGENDA NO. 13

Status Report on CARB/Railroad Statewide Agreement

SYNOPSIS:

The Executive Officer of CARB has negotiated and signed an MOU with the two railroads which conduct over 80 percent of the rail-transport business in the state. The MOU, which was negotiated behind closed doors, contains a "poison pill" provision 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 the AQMD and in proposed rulemakings requested by the Governing Board. This report provides an update on CARB and AQMD staff activities since the July Board meeting.

COMMITTEE:

Not Applicable

RECOMMENDED ACTIONS:

Receive and file.

Barry R. Wallerstein, D.Env.
Executive Officer

On June 24, 2005, the staff of the California Air Resources Board announced that it had executed a Memorandum of Understanding with the two interstate railroads serving California—Burlington Northern & Santa Fe, and Union Pacific. This report summarizes the events that have transpired since the MOU was executed.

SCAQMD Board Meeting. On July 8, 2005, the SCAQMD Governing Board held a public meeting regarding the MOU. The meeting was attended by over 200 people including the CARB Executive Officer, elected officials and representatives of community groups, local governments, environmental and health organizations, businesses, and others. All witnesses with the exception of CARB’s Executive Officer and the representative of the BNSF Railroad testified in opposition to the MOU and the closed door process in which it was crafted.

At the conclusion of public comment, the SCAQMD Board passed a motion (Attachment 1) requesting a CARB Board hearing on the MOU, and that the MOU be held in abeyance until such hearing is conducted. The Board further directed staff to continue the development of Regulation 35, related to locomotive idling and railyard risk assessment and reduction, and continue to seek approval of SCAQMD’s legislative proposals relating to rail operations. The Board also renewed its request for a CARB/SCAQMD Board Retreat.

CARB Board Action on July 21, 2005. At a public hearing on July 21, 2005, the CARB Governing Board approved a resolution rescinding its Executive Officer’s authority to enter into future binding MOUs (and binding amendments to existing MOUs) without Board approval. The resolution further required the Executive Officer to notify the Board and the public when negotiations regarding a MOU are initiated, to communicate with the stakeholders during the negotiation process, and to solicit public comment on the terms of the MOU.

The Board also directed the CARB staff to hold consultation meetings to give interested parties an opportunity to provide input regarding the June 2005 MOU. Finally, a special meeting of the CARB Board was set for September 22 to decide what action, if any, the Board should take relative to the June 2005 MOU. CARB’s counsel stated that at the September 22 meeting the Board would have a full range of options, ranging from finding that the MOU is acceptable and taking no further action, to deciding to rescind the MOU or to direct the Executive Officer to attempt to negotiate modified terms.

August 10 CARB Staff Workshop in Sacramento. On August 10, 2005, the CARB staff conducted it first public consultation meeting regarding the MOU. The meeting took place in Sacramento and was attended by community groups, elected officials, and representatives of air districts from around the state. SCAQMD staff made presentations consistent with the Board’s direction at the July monthly meeting and recommended that the MOU be rescinded. We also noted, however, if the CARB Board decides not to rescind the MOU, that, at a minimum, the "poison pill" termination clause be eliminated and CARB support state and local actions seeking to further control emissions from rail operations. The SCAQMD staff also presented slides (Attachment 2) providing specific section by section recommendations to indicate the weaknesses of the MOU. As with our Board’s hearing, the overwhelming public comment was in opposition to the MOU.

August 31 CARB Workshop in City of Commerce. On August 31, CARB staff conducted its second public consultation meeting regarding the MOU. Over 200 members of the public attended and over 60 presented testimony. The event lasted five hours, from 6 to 11 p.m. More than 20 public officials (council members, school board members, representatives for legislators, etc.) addressed the CARB staff in opposition to the MOU. Public comments were extensive with most everyone opposing the MOU and almost everyone requesting that the entire document be thrown out. There were, however, five speakers in favor of the agreement. They represented both railroads, the Los Angeles Chamber of Commerce, and the Pacific Merchant Shipping Association.

Mayors LaPisto-Kirtley and Yates both presented testimony in opposition to the MOU, and Supervisor Antonovich had his field representative provide testimony on his behalf regarding the Supervisor’s opposition to the agreement.

SCAQMD staff also presented comments concentrating on the following themes (Attachment 3):

1. The unacceptability of the termination clause, process, and other key points.
2. Impact on abilities of state and local agencies to proceed with emission control requirements, and
3. The inadequacy of the MOU’s enforcement provisions.

District legal staff also described opinions obtained from three prominent attorneys concluding that virtually all terms of the MOU could have been adopted by CARB as regulations. (Attachments 4, 5, 6 and 7). This testimony responded to CARB’s claims that the MOU was appropriate because state and local governments are preempted by federal law from regulating many aspects of rail operations.

In addition, Chung Liu made a brief presentation showing photographs from a recent trip to Europe where he visited a particulate trap manufacturing plant and railroad facilities where traps are being used on locomotives of a size equal to those in line-haul service in California. (Attachment 8).

Three CARB Board Members were present for at least part of the evening: Sandra Berg, Ron Loveridge, and Patricia Pineda. CARB staff included Mike Scheible, Dean Simeroth, Harold Holmes, Lynn Terry, Linda Murchison, and others.

There is a possibility that the webcast of the August 31 workshop was recorded and will soon appear on CARB’s website for viewing.

Upcoming Actions. CARB has scheduled a Board meeting to consider the MOU. The hearing is currently scheduled for September 22 near Los Angeles International Airport. Staff intends to continue presenting the Board’s opposition to the MOU and highlighting its numerous flaws, most significant of which is the termination clause.

Attachments (EXE 13.2mb)

1. Motion Adopted by SCAQMD Governing Board, July 8, 2005
2. SCAQMD Comments, August 10, 2005
3. SCAQMD Comments, August 31, 2005
4. SCAQMD Legal Comments, August 31, 2005
5. Legal Opinion of Seth Waxman, Solicitor General of the United States, 1997-2001
6. Legal Opinion of Justice Cruz Reynoso, California Supreme Court, 1982-1987
7. Legal Opinion of David Nawi, General Counsel, CARB, 1979-1089
8. SCAQMD Comments - Diesel Particulate Control, August 31, 2005

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