BOARD MEETING DATE: October 5, 2007 AGENDA NO. 30

BOARD MEETING DATE: October 5, 2007
AGENDA NO. 30

REPORT:

Legislative Committee

SYNOPSIS:

The Legislative Committee held its regular meeting on Friday, September 14, 2007. The next Legislative Committee meeting is scheduled for Friday, October 12, 2007 at 8:00 a.m. in Conference Room CC8.

RECOMMENDED ACTION:

Receive and file this report.

Jane W. Carney, Chair
Legislative Committee

Attendance [Attachment 1]

The Legislative Committee met on September 14, 2007. Committee Members Jane Carney (Chair), and Roy Wilson were present. Also present via videoconference were Committee Members Michael Antonovich and Tonia Reyes Uranga.

Update on Washington D.C. Legislative Issues

Mark Kadesh, AQMD’s Washington D.C. consultant, reported that the Environmental and Public Works Committee and Senator Boxer’s office will be moving forward with the Marine Vessel Emissions Reduction legislation.

Andrew Kauders, AQMD’s Washington D.C. consultant, reported that Senate Appropriations has only passed 4 of its 12 spending bills and none of them have moved to conference. Mr. Kauders stated that there have not been any activities regarding AQMD priorities and the Senate has not set a date regarding its fiscal year 2008 interior environment bill. With regard to the Energy bill, Mr. Kauders stated that both Senate and the House are looking at two very different tax credit bills that may result in delayed resolution. Mr. Kauders stated that the Senate dropped the tax provisions so he is working with the Senate to see if in their place, tax incentives can be included. Mr. Kauders stated that the House Democratic leadership has a very ambitious climate-change agenda and he is waiting to see what bills will be introduced this year. If it is delayed and not introduced until next year, it could be complicated by the presidential race which usually slows down any policy or legislative initiatives.

Status Report on Bills at the End of 2007-08 Session

William Sanchez, Senior Public Affairs Manager, reported that SB 1028 (Padilla) and SB 886 (Negrete McLeod) are before the Governor for approval. Staff has been working with cities to get letters of support in to the Governor. Mr. Sanchez stated that the most notable challenges remain with the bond implementation with respect to the $2 billion Trade Corridor Improvement Fund (TCIF). Neither SB 9 or SB 19 (Lowenthal) nor AB 995 (Nava) succeeded in getting out of the Legislature. When these bills failed, $250 million in previously appropriated funds for TCIF was stripped in SB 78. Funds will be appropriated next year once the spending criteria is established.

Consequently, the only criteria on the bond expenditures are the bond language itself and SB 88 which has some air quality language but not quite as strict as was hoped. CARB is responsible for promulgating regulations for SB 88 by the end of the year.

William Gonzalez, AQMD’s Sacramento consultant, reported that the railroads were initially excluded from accessing the money for engine retrofits under the $1 billion air quality portion, but they informed the legislature that they would withdraw from the port projects unless they were able to access those monies. Consequently, as part of the Budget compromise, AB 201 (Budget Committee) was passed, allowing the railroads to access and compete for the funds to retrofit their engines. Mr. Gonzalez also reported that the clean construction requirement of the bonds failed.

There was $200 million earmarked for school bus retrofit and the language requires that the funds must now be divided by population of school buses in each air district and allows the air districts to decide what portion of their share will go to retrofit or replacement.

Dr. Barry Wallerstein explained that if AQMD were to assume that the monies were going to be appropriated based upon population, AQMD should receive over $100 million from CARB. If the monies were to be distributed based on the number of pre 1987 school buses still operating, AQMD should receive $80 million of the $200 million.

Committee Chair Jane Carney asked if public and private school buses qualified. Staff responded that only public school buses qualified to receive these funds. Ms. Carney noted that a large amount of money has been spent for retrofit and replacement in the public school fleet. She stated that there should not be too many school buses remaining that need to be retrofitted. Dr. Chung Liu confirmed that substantial progress has been made but there are still a large amount of buses in the basin that need to be retrofitted or replaced.

Richard Polanco, AQMD’s Sacramento consultant, recognized several legislators for their efforts in getting SB 1028 (Padilla) and SB 886 (Negrete McLeod) before the Governor for approval. Dr. Wallerstein stated that Board member Reyes Uranga played a significant role and was very active in speaking with committee members. Dr. Wallerstein commended Mr. Gonzalez, Senator Polanco and the recently hired legislative consultant, Anthony Gonsalves.

Mr. Gonzalez reported on AB 118 (Nuñez). He stated that the bill moved quickly but was significantly rewritten. The bill passed on the Senate Floor with the minimum votes and raises concern for the Board. The bill raises significant funds from sources that have been identified in the past as viable funding resources for air districts – e.g., DMV fees. The bill also sets up a program at the state level parallel to AQMD’s Technology Advancement Office which may present a challenge as we approach reauthorization.

Dr. Wallerstein stated that the funding stream under AB 118 will last until 2016. It will give CARB $90 million per year that can be spent on research, SIP measures, and Carl Moyer projects but it will be dependent upon annual appropriation by the legislature. If the South Coast receives approximately $36 of the $90 million plus the other appropriation of monies from other bonds, the region should be receiving a total of approximately $125 million.

Dr. Wallerstein reported that Board Member Lyou was quoted in the L.A. Times and was reported to be walking in the halls in opposition to AB 118. Dr. Wallerstein stated that there were concerns from the environmental community about a lack of criteria relative to how CARB spent the money. They were also concerned that the bill may potentially promote ethanol use. Dr. Wallerstein stated that Dr. Lyou asked what our mechanism was when a bill was modified this late in the process and asked about the potential to take an opposing position at the Governor’s office level. Dr. Wallerstein told Dr. Lyou that we had a longstanding policy to return to the Legislative Committee and the Board for direction unless prior Board positions provided clear direction. In this instance, our Board has had a long standing position that we need to tap additional revenues and that they preferably come directly to us as opposed to the state. Moreover, with the existing SIP emission-reduction gap, funds should be used to promote technology that could fill that gap and develop technology that could fund diesel engine replacements. In addition, Dr. Wallerstein advised Dr. Lyou that in light of the fact that Speaker Nuñez views this bill as a priority and part of his global warming and greenhouse policy legacy, he would not recommend adding an urgency item allowing us to take an opposing position on this bill.

Board Member Reyes Uranga asked staff if there was a mechanism that would allow the Legislative Committee members to be informed of any bills that have been dramatically changed or bills that would require us to re-evaluate our position towards the end of session. Dr. Wallerstein stated that special Legislative Committee meetings are scheduled on an emergency basis to inform committee members of important issues. Dr. Wallerstein stated that staff will also establish a notification process via e-mails to notify committee members when there are significant changes in bills.