FRIDAY SEPTEMBER 8, 1995

The meeting was called to order at 9:50 a.m. by Chairman Mikels.

1. Opening Comments

James M. Lents, Ph.D., Executive Officer. Announced that the Annual Technology Advancement Contractors Review Meeting will be held on September 26 and 27, 1995 in the auditorium at AQMD Headquarters.

CONSENT CALENDAR

2. Minutes of August 11, 1995 Board Meeting

3. Report of the Public Advisor, Small Business Assistance, and Economic Development
Offices (909) 396-3235

4. AQMD Advisor, September 1995

Set Public Hearings Consider Amendments to the AQMD's Rules and Regulations,
and to Adopt Any Necessary California Environmental Quality Act Documentation
for the Following Rules:

Set Hearings for October 13, 1995:

5. Amend Rule 1610 - Old Vehicle Scrapping

6. Amend Rule 301 - Permit Fees

Set Hearings for November 17, 1995:

7. Amend Regulation XIII - New Source Review and Rule 212 - Standards
for Approving Permits

This item has been continued to October 12, 1995.

8. Status Report Regarding Implementation of the Business Clean Air Partnership

9. Report on Public Outreach Materials of the AQMD

10. Report of Hearing Board Variances and Appeals

11. Report of Fiscal Year 1994-95 Budget Transfers

12. Recommendation to Award Technical Support Contracts

13. Recommendation to Release a Request for Proposals for Rule 1501.1 Air Quality
Investment Program

14. Status Report on Lead Agency Projects and Environmental Documents Received
by the AQMD

15. Recommendation to Award Bid for Application of an Episodic Aerosol/Visibility
Model to the South Coast Air Basin

16. Recommendation to Purchase Personal Computer Hardware, Software and
Installation Services

17. Rule Forecast Report

18. Recommendation to Release a Request for Proposals to Prepare Air Toxics
"Hot Spots" Information and Assessment Act Health Risk Assessments

19. Recommendation Regarding Requests for Quotations to Pre-qualify Providers of
Compressed Gases and Cryogenics for Laboratory Use

20. Recommendation Regarding Memoranda of Understanding With the Federation of
Public Sector Workers

21. Recommendation Regarding Memorandum of Understanding With the San Bernardino
Public Employees Association

22. Recommendation to Pre-Qualify Vendors to Provide Various Non-Consultant
Services and Supplies

Agenda Items 2, 6, 13, 20 and 21 were held for discussion. At staff's request, Agenda Item No. 41, Recommendation to Adopt Resolutions Authorizing Investments in the Local Agency Investment Fund Administered by the State of California, was moved from "Other Business" to "Consent Calendar".

ON MOTION OF MR. PAULITZ, SECONDED BY MS. HAGGARD, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Antonovich, Braude and Loveridge), APPROVING AGENDA ITEMS
3 THROUGH 5, 7 THROUGH 12, 14 THROUGH 19, 22 AND 41 (ADOPTING RESOLUTIONS NOS. 95-20 AND 95-21, AUTHORIZING INVESTMENT OF AQMD FUNDS), AS RECOMMENDED BY STAFF.

2. Minutes of August 11, 1995 Board Meeting

Ms. Soto requested that Paragraph No. 4 of the motion regarding Agenda Item No. 35 on Page 9 of the Minutes be amended as follows:

"4) INCLUDE THAT, UPON COMPLETION OF ALL REVISIONS TO THE TGD, IT SHALL BE BROUGHT BACK TO THE BOARD FOR APPROVAL AND USED FOR IMPLEMENTATION OF REGULATION XXX."

13. Recommendation to Release a Request for Proposals for Rule 1501.1 Air Quality Investment Program

Mr. Hewitt underscored for staff his hope that in the RFP process, AQMD will be open to--and encourage--innovative proposals, such as funding of endowments or land acquisitions, that would use the bypass fees yielded by Rule 1501.1 for other than immediate short term gain.

6. Set a Public Hearing for October 13, 1995 to Amend Rule 301 - Permit Fees

Dr. Lents brought attention to revisions to PAR 301 recommended by staff, which would allow the Board at the October 13 meeting to adopt a fee reduction for furniture manufacturers that use cleaner coatings.

20. Recommendation Regarding Memoranda of Understanding With the Federation of Public Sector Workers

21. Recommendation Regarding Memorandum of Understanding With the San Bernardino Public Employees Association

At staff's request, Agenda Items 20 and 21 were removed from the agenda.

ON MOTION OF MR. HEWITT, SECONDED BY MS. HAGGARD, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Antonovich, Braude and Loveridge), APPROVING AGENDA ITEMS 2, 6 AND 13 AS RECOMMENDED BY STAFF, WITH THE FOLLOWING CHANGE TO THE MINUTES OF THE AUGUST 11, 1995 BOARD MEETING:

Paragraph No. 4 of the motion regarding Agenda Item No. 35 on Page 9:

"4) INCLUDE THAT, UPON COMPLETION OF ALL REVISIONS TO THE TGD, IT SHALL BE BROUGHT BACK TO THE BOARD FOR APPROVAL AND USED FOR IMPLEMENTATION OF REGULATION XXX."

BOARD CALENDAR

Note: The Advisory Council did not meet in August. The next meeting of the Advisory Council will be September 28, 1995.

23. Administrative Committee Report

24. Legislative Committee Report and Recommendations

25. Mobile Source Committee Report

26. Stationary Source Committee Report

27. Planning Committee Report

28. Technology Committee Report

29. Air Resources Board Monthly Meeting Report

30. Interagency AQMP Implementation Committee Meeting Report

31. Mobile Source Air Pollution Reduction Review Committee Report

Agenda Item No. 24 was held for discussion.

ON MOTION OF MS. HAGGARD, SECONDED BY MR. SILVA, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Antonovich, Braude and Loveridge), APPROVING OR RECEIVING AND FILING AGENDA ITEMS 23 AND 25 THROUGH 31 AS RECOMMENDED.

24. Legislative Committee Report and Recommendations

Mr. Paulitz expressed his belief that it was premature to form the three-member "Action" subcommittee, and recommended that the item be discussed further by the Legislative Committee and then referred to the Administrative Committee for approval. Based on his conversations with Mr. Paulitz, Legislative Director Catherine Witherspoon and legal counsel, Dr. Burke agreed that the item needed additional discussions by Legislative Committee members.

ON MOTION OF MR. PAULITZ, SECONDED BY MS. SOTO, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Antonovich, Braude and Loveridge) TO: (1) REFER CREATION OF A THREE-MEMBER "ACTION" SUBCOMMITTEE BACK TO THE LEGISLATIVE COMMITTEE FOR FURTHER DISCUSSION; (2) APPROVE CHANGING AQMD'S POSITION ON SB 456 (Kelley) -- Best Available Control Technology, FROM "OPPOSE" TO "NEUTRAL"; AND (3) RECEIVE AND FILE THE LEGISLATIVE COMMITTEE REPORT.

(Mr. Loveridge arrived at 10:00 a.m.)

PUBLIC HEARINGS

32. Adopt Proposed Rule 310 - Amnesty for Unpermitted Equipment

La Ronda Bowen, Public Advisor, presented the staff report. The public hearing was opened, and the Board heard testimony from the following individuals:

MARTIN LEDWITZ, Southern California Edison Company

MS. DETRICH B. ALLEN, City of Los Angeles

Commented that over the last several years, due to numerous changes to Rule 219 and various interpretations, major companies have found dozens of pieces of equipment that have needed remedial permitting action--minor emission sources, but located at major facilities. Requested that, in order to treat everyone fairly, the amnesty apply to all sources by deleting Subparagraph (b)(1) of the proposed rule.

LEE WALLACE, The Gas Company

Commented that in discussions earlier with staff, they addressed The Gas Company's concern that facilities participating in the amnesty would not be able to benefit from the new BACT guidelines which would likely be approved near the end of the amnesty period.

BRIAN WHITAKER, Southern California Alliance of POTWs

Supported extending the amnesty to include essential public services and larger sources. Commented that large-emitting facilities may have small sources on site that may have been overlooked in the past. This will allow them the opportunity to work with AQMD staff, without fear of punitive action, and make sure that all of their equipment is properly permitted, which will benefit everyone.

Ms. Bowen responded that major sources of emissions (10 tons/day or more of any single criteria pollutant) are inspected by AQMD at least annually--many as frequently as monthly; and therefore should be well aware of the permitting requirements. Staff believed that these companies should not be excluded, under the amnesty program, from having to pay a 15 percent penalty for permitting equipment which they have not been forthright in revealing to the AQMD.

Ms. Haggard and Mr. Hewitt expressed concern about excluding major facilities from the amnesty program, and felt that it was to AQMD's advantage (by regulation of the equipment and revenue from operating/renewal fees) and to the advantage of air quality (by regulation/control of emissions from the equipment) to allow all facilities this one-time opportunity to obtain permits for their unpermitted equipment without being penalized.

MR. HEWITT MOVED TO ADOPT PROPOSED RULE 310 AS RECOMMENDED, WITH THE DELETION OF SUBPARAGRAPH (b)(1). THE MOTION WAS SECONDED BY MS. HAGGARD.

Mr. Mikels raised the question of whether or not, if possible, a distinction should be made between major facilities with unpermitted "small-emitting" pieces of equipment versus major facilities with unpermitted "large-emitting" pieces of equipment.

Speaking in opposition to the motion, Mr. Paulitz and Dr. Burke supported staff's recommendation and intent that amnesty be given to small businesses, because they may not be aware or understand that the equipment needs to be permitted. Dr. Burke pointed out that the larger facilities have the resources--engineers and/or attorneys--to ensure that they understand AQMD rules and regulations. If they choose not to report equipment or not reveal equipment to AQMD inspectors, those facilities should not be rewarded with amnesty.

Ms. Lee and Ms. Soto indicated their agreement with the comments by Mr. Paulitz and
Dr. Burke and their support for small businesses and business retention.

Mr. Hewitt added that he believes there are large facilities that have acted in good faith but may not have had equipment permitted through errors in judgment or other factors, just as there are likely small facilities that have knowingly withheld equipment from being permitted; and vice versa. He felt that the District might be rewarding the worst actors and penalizing the best by drawing an antiquated archetype about big business and small business.

Mr. Mikels indicated that his concern was the large facilities with unreported large-emitting equipment; and commented that perhaps the line should be drawn at large- versus small-emitting equipment, rather than large versus small facility. As an alternative, he suggested that the Board approving the staff recommendation, continue the public hearing to October to discuss how to make a distinction, for facilities above 10 tons, in terms of individual equipment emissions versus entire facility emissions, and then draw a demarcation between those that the Board wants to include in amnesty and those that should not be included.

THE MOTION BY MR. HEWITT TO ADOPT RULE 310, WITH THE DELETION OF SUBPARAGRAPH (b)(1), FAILED BY THE FOLLOWING VOTE:

AYES: Haggard, Hewitt, Silva and Wilson.

NOES: Burke, Lee, Loveridge, Mikels, Paulitz and Soto.

ABSENT: Antonovich and Braude.

MS. LEE MOVED TO: (1) ADOPT RULE 310 AS RECOMMENDED BY STAFF; (2) CONTINUE THE PUBLIC HEARING ON RULE 310 TO THE OCTOBER 13, 1995 BOARD MEETING; AND(3) DIRECT STAFF TO BRING BACK TO THE BOARD FOR DISCUSSION AT THE OCTOBER BOARD MEETING A PROPOSAL AS TO HOW, IF POSSIBLE, A DISTINCTION CAN BE MADE BETWEEN TYPES OF EQUIPMENT THAT HAVE SMALL OR LARGE EMISSIONS, IN ORDER TO DETERMINE WHAT, IF ANY, SOURCES ABOVE 10 TONS SHOULD BE INCLUDED IN THE AMNESTY PERIOD. THE MOTION WAS SECONDED BY MS. SOTO, AND PASSED BY THE FOLLOWING VOTE:

AYES: Burke, Lee, Loveridge, Mikels, Paulitz, Soto and Wilson.

NOES: Haggard, Hewitt and Silva.

ABSENT: Antonovich and Braude.

33. Amend Regulation VII - Emergencies

Melvin Zeldin, Planning Manager, presented the staff report. The public hearing was opened, and the Board heard testimony from the following individuals:

JULIE HANSEN, American Lung Association

Recommended that AQMD continue to take a proactive, aggressive stance on
Regulation VII and get the requirements reduced to the health advisory level to better protect public health.

BRUCE ROBERTS, City of Los Angeles

Commented that the City of Los Angeles and other employers have trip reduction plans requiring the inclusion of Regulation VII plans due before the January 1, 1996 effective date of amended Regulation VII, which would eliminate that requirement. Therefore, in order to reduce the administrative burden, requested that Amended Regulation VII become effective immediately upon adoption by the Board.

Mr. Zeldin responded that staff recommended an effective date of January 1, 1996 in order to allow time for outreach to the schools, which are just coming back into session. Also, the beginning of the year is a period when air pollution episodes are minimal, as opposed to this time of the year.

There being no further testimony, the public hearing was closed.

ON MOTION OF DR. WILSON, SECONDED BY MR. PAULITZ, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Antonovich and Braude) TO:

(1) ADOPT RESOLUTION NO. 95-22, AMENDING REGULATION VII: RULE 701 AND RESCINDING RULES 702 THROUGH 715 FROM REGULATION VII, AS RECOMMENDED BY STAFF; AND

(2) DIRECT STAFF TO NOTIFY THOSE COMPANIES SUBJECT TO THE EPISODE NOTIFICATION PROCEDURES IN REGULATION VII THAT HAVE REGULATION VII PLANS DUE BETWEEN SEPTEMBER 8 AND DECEMBER 31, 1995 TO SEND A WRITTEN REQUEST TO AQMD FOR AN EXTENSION OF THEIR PLAN SUBMITTAL DATE BEYOND DECEMBER 31, 1995.

34. Adopt the Recommendations of the Best Available Control Technology Methodology Report

Pat Leyden, DEO/Stationary Source Compliance, presented the staff report; and noted that an Errata Sheet containing minor language modifications to the User's Guide portion of the BACT Methodology Report had been distributed to Board members and copies made available to the public.

The public hearing was opened, and the Board heard testimony from the following individuals:

HAROLD DERUS, PAMCO Stewart & Stevenson, Inc.

Expressed a desire to work further with staff on developing a BACT standard for landfill or digester gas fired internal combustion engines which, because of variations in site conditions and types of fuel, would probably come under the "off-ramp" procedures. (Submitted Written Comments.)

GREG ADAMS, Technical Advisory Committee of the IAIC

LEE WALLACE, The Gas Company

JEB STUART, California Aerospace Environmental Association and Construction Industry
Air Quality Coalition

RON WILKNISS, Western States Petroleum Association

LANCE BROWN, City of Los Angeles

Recommended, because of the policy considerations involved and in order to afford the public the opportunity to fully discuss the ramifications of any change, that any updates to the Methodology Report, the initial BACT Guideline which the Board will consider in approximately 9 months--as well as all updates thereto, should be brought before the Board by staff at least as consent calendar items.

Mr. Stuart suggested, as part of any future BACT determination, that a competitive analysis be conducted on the cost of opening a facility in the SCAB and the cost for opening the same facility in another major metropolitan area that does not attain the air quality standard.
Mr. Wilkniss suggested, in keeping with the positive philosophies of RECLAIM and the Business Clean Air Partnership, that AQMD provide worthwhile incentives to industry to install new control technologies, as opposed to the AQMD continuing to mandate them.

RON McELHANY, Quretech

RITA LOOF and RICK RUPPERT, Radtech

SALLY RAMSEY, Ecology Coatings

GORDON JONES, UCB Chemicals

Requested that ultraviolet/electron beam curable (UV/EB) inks, adhesives and coatings technology be included in the BACT Guideline for processes such as flexographic and lithographic printing and coating on wood, plastics, and metal. Mr. McElhany offered Quretech's assistance in educating the public on the success of UV/EB technology in a variety of applications, and encouraged AQMD participation in demonstrations at facilities in the Southern California region.

There being no further testimony, the public hearing was closed.

Ms. Soto indicated her agreement that the BACT Guidelines and any updates or revisions should be placed on the consent calendar for Board approval.

In response to Ms. Haggard, Ms. Leyden commented that staff could report back to the Board on the issue raised in public testimony concerning inclusion of UV technology in the new BACT Guideline when the Guideline is brought before the Board for adoption. However, the Guideline basically addresses control equipment and does not set grams-per-liter standards for products such as inks or coatings. UV is an alternate for products which contain--and emit--VOCs and for which there are grams-per-liter standards set for VOC content.

Ms. Leyden suggested that it might be more appropriate to include UV technology either under VOC RECLAIM, where it could offer companies a way to meet reduced emissions allocations and have allocations to sell; or, under command-and-control, it would be an issue of the Board prescribing VOC limits that, in theory, could only be met through use of UV coatings.

MR. PAULITZ MOVED TO:

1) RECEIVE AND FILE THE BACT METHODOLOGY REPORT, INCLUDING THE MODIFICATIONS TO THE USER'S GUIDE CONTAINED IN THE ERRATA SHEET;

2) ESTABLISH THE SCIENTIFIC REVIEW COMMITTEE AS A STANDING COMMITTEE TO CONSIDER FUTURE BACT ISSUES; AND

3) DIRECT STAFF TO BRING THE NEW BACT GUIDELINE AND ANY SUBSEQUENT UPDATES OR REVISIONS BACK TO THE BOARD FOR APPROVAL AS A CONSENT CALENDAR ITEM.

THE MOTION WAS SECONDED BY MS. SOTO, AND APPROVED BY A UNANIMOUS VOTE OF THE BOARD MEMBERS PRESENT (Absent: Antonovich and Braude).

Agenda Item No. 39 was taken out of order, since 49 individuals had submitted requests to address the Board on Item No. 35 and only 4 requests to speak had been submitted for Item No. 39.

Ms. Soto made a motion to take up Agenda Item No. 37 immediately following Item
No. 39. The motion died, for lack of a second.

39. Amend Rule 1130 - Graphic Arts

In the interest of time, William Fray, Assistant DEO/Stationary Source Compliance, waived the staff presentation on this item. The public hearing was opened, and the Board heard testimony from the following individuals:

GERALD BONETTO, Printing Industries of California

Commented that AQMD is the only air district in California that requires daily, rather than monthly, recordkeeping; and urged the Board to have staff bring this issue back to the Board for consideration in the near future.

RITA LOOF and LONNIE MURPHY, Radtech

DAVID KANDEL, Avery Dennison LDNA

Commented that UV/EB products are currently available, and are viable alternatives for flexographic, lithographic and gravure printing operations to meet industry standards and AQMD regulations.

CURTIS COLEMAN, California Film Extruder's and Converters' Association

Requested that the Board direct staff to conduct a technology audit for compliance with Rule 1130 for several specialty inks used in plastic film printing operations and report back to the Board at its January 1996 Board meeting regarding what amendments to the Rule are warranted to address this situation, including a date by which such amendments could be brought back to the Board for adoption.

AYJAY WILSON, AQC Environmental Engineers, Inc.

Submitted written comments and indicated that in working with staff, he had resolved some technical issues.

There being no further testimony, the public hearing was closed.

With respect to the recordkeeping issue raised, Dr. Lents responded that staff was in the process of gathering information on whether other air districts in California required monthly or daily records; and could report back to the Board on that issue in January 1996.

ON MOTION OF MS. HAGGARD, SECONDED BY MR. PAULITZ, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Antonovich and Braude):

1) ADOPTING RESOLUTION NO. 95-28, AMENDING RULE 1130 AND CERTIFYING THE EXEMPTION FROM CEQA REQUIREMENTS AS RECOMMENDED;

2) DIRECTING STAFF TO CONDUCT A TECHNOLOGY AUDIT FOR RULE 1130 AS IT EFFECTS PLASTIC FILM PRINTING OPERATIONS AND REPORT BACK TO THE BOARD AT THE JANUARY 1996 BOARD MEETING; AND

3) REPORT BACK TO THE BOARD AT ITS JANUARY 1996 MEETING WITH RESPECT TO RECORDKEEPING REQUIREMENTS OF OTHER AIR DISTRICTS (DAILY OR MONTHLY) AND THE IMPLICATIONS OF CHANGING AQMD'S RECORDKEEPING REQUIREMENTS FROM DAILY TO MONTHLY.

CLOSED SESSION

40. Recommendation Regarding a Closed Session to Consider Pending or Potential Litigation and Personnel Matters

The Board recessed to closed session at 12:00 noon as follows:

(i) Pursuant to Government Code Section 54957.6, to confer with designated representatives regarding salaries and benefits of represented and unrepresented employees;

Agency Negotiator: Nick Nikkila/Charles Goldstein

Employee Organization: Federation of Public Sector Workers and
San Bernardino Public Employees Association

(ii) Pursuant to Government Code Section 54956.8, to confer with its real property negotiator regarding property located at 9150 Flair Drive, El Monte, CA 91731

Negotiating Party: Asian Business Co-Op

Under Negotiation: Price and terms of payment

(Dr. Burke left at 12:45 p.m.)

The Board reconvened at 12:45 p.m.

PUBLIC HEARINGS (Continued)

35. Amend Rule 1136 - Wood Products Coatings

Mr. Fray presented the staff report, and the public hearing was opened. Since 49 individuals had submitted requests to speak on this item--only two of which had indicated opposition to the staff recommendation--and there were three other public hearing items yet to be considered by the Board, Chairman Mikels proposed the following in order to expedite the proceedings:

(i) that Mr. Silva present, in concept, the motion he intended to make following public testimony, modifying staff's recommendation;

(ii) take a straw poll to determine if there was any significant dissent among Board members to staff's recommendation with Mr. Silva's proposed modifications; and

(iii) limit public testimony to only those individuals who wished to comment in opposition to the staff recommendation with Mr. Silva's proposed modifications.

Mr. Silva presented his proposal that the Board:

1) Adopt the staff recommendations for PAR 1136, with the following modifications,

extend the September 1, 1995 compliance date for Rule 1136 until July 1, 1996;

include incentives for companies that make an early conversion to clean coatings, including quarterly reporting and use of alternative spray equipment for super-compliant coatings;

allow averaging of super-compliant and under-compliant formulations with EPA's 10 percent discount; and

dovetail Rule 1136 with RECLAIM;

2) Direct staff to

propose amendments to Rule 102 to include acetone as an exempt solvent;

propose amendments to Rule 301 to provide a 25 percent discount in annual fees for any Rule 1136 company that makes an early conversion to clean coatings; and

form a working group with an industry task force to address issues and to study the national Reg/Neg Rule as a possible alternative to Rule 1136.

In response to a question by Mr. Loveridge, Mr. Silva clarified that the intent of his recommendation to form a working group was to create a means for staff and industry to resolve any issues or disagreements that might arise.

Commenting on the same recommendation, Ms. Lee, Mr. Paulitz and Dr. Wilson expressed concern with leaving Rule 1136 open at this point to possible alternatives. They believed it would be the wrong message to send to industry that the July 1, 1996 compliance date, which has already been extended several times, might not be definite because of the possibility that the national standards may be adopted.

Mr. Silva indicated that in order to address the concerns expressed by Board members, he was agreeable to amending the last recommendation to delete the language following the word "issues".

The Board heard testimony in opposition to the staff recommendation, with Mr. Silva's proposed modifications, from the following individuals:

*LEE RUBOTTOM, W.L. Rubottom Company

JESSE J. RINCON, Commercial Wood Products

ROBERT PEDERSEN, Water Colors All in One

JIM VINCOLISI, Custom Wood Shed

ADAM M. SMITH, Eclectic Products, Inc.

*Submitted Written Comments

Opposed extending the compliance date in Rule 1136 because there are compliant water-based coatings which have been available for several years and can be supplied at reasonable, competitive prices, with minimal equipment changes for most operations.

MR. G.M. CURRIER, Akzo Nobel

Supported adoption of the national standard throughout the United States in order to level the playing field between various regions. (Submitted Written Comments.)

MICHAEL CARROLL, Attorney, Fender Musical Instruments

Requested that the Board extend the present exemption for classic guitars, Subparagraph (k)(3), from January 1, 1996 to July 1, 1996 in order to dovetail with VOC RECLAIM; the development and implementation of which was recently postponed for several months. (Submitted Written Comments.)

Chairman Mikels closed the public hearing, and called for a formal motion on the item; at which time the public hearing would be re-opened to allow further comments, if any, on the motion.

MR. SILVA MOVED THAT THE BOARD:

1) ADOPT RESOLUTION NO. 95-24, AMENDING RULE 1136 AND CERTIFYING THE PREVIOUSLY-PREPARED CEQA DOCUMENTS AND ADDENDUM, AS RECOMMENDED BY STAFF, WITH THE FOLLOWING MODIFICATIONS,

extend the September 1, 1995 compliance date for Rule 1136 until
July 1, 1996;

include incentives for companies that make an early conversion to clean coatings, including quarterly reporting and use of alternative spray equipment for super-compliant coatings;

allow averaging of super-compliant and under-compliant formulations with EPA's 10 percent discount;

dovetail Rule 1136 with RECLAIM; and

extend the exemption for classic guitars in Subparagraph (k)(3) of Rule 1136 from January 1, 1996 to July 1, 1996.

2) DIRECT STAFF TO

propose amendments to Rule 102 to include acetone as an exempt solvent;

propose amendments to Rule 301 to provide a 25 percent discount in annual fees for any Rule 1136 company that makes an early conversion to clean coatings; and

form a working group with an industry task force to address issues.

THE MOTION WAS SECONDED BY MS. SOTO.

Mr. Hewitt expressed his support of the motion, although he would have preferred leaving in the language regarding studying the Reg/Neg rule as a possible alternative.

The public hearing was re-opened, and the Board heard testimony from the following individuals:

ROGER BENVENUTTI, Akzo Nobel

CHARLES GRUBBS, Lilly Industries, Montebello, CA

ARCHIE MARTZ, Lilly Industries, High Point, NC

*ED LAIRD, Small Business Coalition

* Submitted Written Comments

Supported the Reg/Neg Rule as an alternative because, while water-based coatings work for some operations all of the time and all operations some of the time, it does not work for all operations all of the time. Many problems still remain to be solved in the application of water-based finishes on wood furniture; and it was doubtful that all those problems would be resolved by the proposed July 1, 1996 compliance date.

Chairman Mikels pointed out that removing the language regarding the Reg/Neg Rule from the motion does not preclude that from being one of the issues that will be addressed by the working group.

There being no further testimony, the public hearing was closed.

Written Comments Submitted by:

Larry F. Runyan, American Furniture Manufacturers Association

John Billheimer, Consultant

Brad Miller, The Business and Institutional Furniture Manufacturer's Association

Stanley Ekstrom/Robert H. Sypowicz, Cardinal Industrial Finishes

Robert Anderson, ENRO Environmental Services, Inc.

Richard L. Sinclair, Executive Office Concepts

Erick Kasner, PhD, The Hydrocote Company

C. Richard Titus, Kitchen Cabinet Manufacturers Association

Mike Sundell, Matrix Coatings Inc.

Ms. Haggard added that she was interested in learning more about the Reg/Neg Rule and having it studied; and that it would definitely be part of the working group discussions.

A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich, Braude and Burke) APPROVING THE MOTION BY
MR. SILVA TO:

1) ADOPT RESOLUTION NO. 95-24, AMENDING RULE 1136 AND CERTIFYING THE PREVIOUSLY-PREPARED CEQA DOCUMENTS AND ADDENDUM, AS RECOMMENDED BY STAFF, WITH THE FOLLOWING MODIFICATIONS,

extend the September 1, 1995 compliance date for Rule 1136 until
July 1, 1996;

include incentives for companies that make an early conversion to clean coatings, including quarterly reporting and use of alternative spray equipment for super-compliant coatings;

allow averaging of super-compliant and under-compliant formulations with EPA's 10 percent discount;

dovetail Rule 1136 with RECLAIM; and

extend the exemption for classic guitars in Subparagraph (k)(3) of Rule 1136 from January 1, 1996 to July 1, 1996.

2) DIRECT STAFF TO

propose amendments to Rule 102 to include acetone as an exempt solvent;

propose amendments to Rule 301 to provide a 25 percent discount in annual fees for any Rule 1136 company that makes an early conversion to clean coatings; and

form a working group with an industry task force to address issues.

36. Amend Rule 461 - Gasoline Transfer and Dispensing

The staff report was presented by Larry Bowen, Senior Air Quality Engineering Manager. The public hearing was opened, and the Board heard testimony from the following individuals:

RON WILKNISS, Western States Petroleum Association

KEN SCARBROUGH, GTE

Mr. Wilkniss and Mr. Scarbrough expressed support for PAR 461; with Mr. Scarbrough's support being contingent upon availability of the technology.

Mr. Bowen responded that there are at least three manufacturers located in the basin that have Phase I and Phase II vapor recovery systems available, and staff will work with GTE and help them through the ARB certification process.

JOHN BILLHEIMER, Consultant

Commented that while owners/operators are required to obtain permits for diesel fuel storage, transfer and dispensing equipment, emissions from the equipment are not regulated by any District rule.

Written Comments Submitted by:

Arfan Salemi, Sunkist Growers, Inc.

There being no further testimony, the public hearing was closed.

ON MOTION OF MS. LEE, SECONDED BY MR. PAULITZ, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Antonovich, Braude, Burke and Silva), ADOPTING RESOLUTION NO. 95-24, AMENDING RULE 461 AND CERTIFYING THE FINAL ENVIRONMENTAL ASSESSMENT, AS RECOMMENDED BY STAFF.

37. Adopt Proposed Rule 1612 - Credits for Clean On-Road Vehicles and Rule 1620 - Credits for Clean Off-Road Equipment

Planning Director Jack Broadbent presented the staff report, and noted that copies of an Errata Sheet on this item had been distributed to Board members and made available to the public. The Errata Sheet contained minor changes to the staff report in order to be consistent with
PR 1612.

The public hearing was opened, and the Board heard testimony from the following individuals:

MARK ABRAMOWITZ, Coalition for Innovative Solutions

1) Supported PR 1612 and PR 1620, and suggested the following amendments to address the concern that the rule does not offer truly effective incentives for companies to adopt innovative conversion programs nor optimum flexibility for companies in future years, when credits will be needed most:

PR 1612

Amend definition for Discount Factor under subparagraphs (g)(1)(A), (g)(1)(B), (g)(4)(A) and (g)(4)(B), as well as paragraphs (g)(2) and (g)(3) as follows:

DF = Discount Factor, for the purpose of generating credits, equal to 1.0 for credits used for compliance with REG XV rules or NSR offsets; equal to 1.2 for credits used for compliance with REG XI rules or RECLAIM.

Insert after paragraph (h)(1), new paragraph (h)(2), and renumber subsequent paragraphs accordingly:

For the purpose of using MSERCs pursuant to subparagraphs (h)(1)(A) and (h)(1)(B), a discount factor equal to 1.2 shall be applied except for MSERCs generated by the (1) operation of post 1992 model-year vehicles that are certified at or below ultra-low-emission standards; (2) operation of CNG, LPG, or methanol heavy-duty engines certified to optional emission standards using ARB certified conversion kits; or (3) operation of zero-emission vehicles. For other uses pursuant to paragraph (h)(1), a discount factor equal to 1.0 shall be applied unless specified otherwise in District regulations.

PR 1620

Amend definition for Discount Factor under paragraphs (g)(1) and (g)(2) as follows:

DF = Discount Factor, for the purpose of generating credits, equal to 1.0 for credits used for compliance with REG XV rules or NSR offsets; equal to 1.2 for credits used for compliance with RECLAIM and REG XI rules.

Insert paragraph (h)(1), new paragraph (h)(2), and renumber subsequent paragraphs accordingly:

For the purpose of using MSERCs pursuant to subparagraph (h)(1)(A) and (h)(1)(B), a discount factor equal to 1.2 shall be applied, except that a discount factor equal to 1.0 shall be applied for operation of zero-emission equipment. For other uses pursuant to paragraph (h)(1), a discount factor equal to 1.0 shall be applied unless specified otherwise in District regulations.

2) With respect to their concern that the proposed rules do not allow banking, supported staff's intent to address the banking issue through the Intercredit Trading Report and, if the Board provides, for staff to bring the rules back for amendment in Spring of 1996.

3) Suggested that the rule explicitly allow for trading or selling of mobile credits between sources. (Submitted Written Comments.)

REYNOLD MACK, 3M Company

*EUGENE GREMBOWSKI, National Association of Fleet Administrators

FRANK CAPONI, Los Angeles County Sanitation Districts

* Submitted Written Comments

Expressed support of PR 1612 and PR 1620 as recommended.

DEBORAH KURILCHYK, Southern California Edison

1) Supported the proposed rules, and emphasized the need for banking of credits, which would encourage early investment in new technologies, stimulate technology development in the early years, and ease the cost of compliance in the long run.

2) Commented that Senate Bill 456 (Kelley) which is currently before the State Legislature would allow the use of credits in lieu of BARCT; and suggested, upon passage of that bill, that the Board amend Regulation XVI to incorporate the legislative changes and expand the use of credits.

JAMES DIVEN, American Airlines

GARY PETERSEN, Waste Management/Recycle America

Supported the proposed rules, and the amendments presented by the Coalition for Innovative Solutions.

ROBERT WYMAN, Coalition for Local Environmental Solutions and a Competitive Economy (COALESCE)

Supported PR 1612 and PR 1620, and urged the Board to direct staff to set a public hearing by no later than the February 1996 Board meeting for consideration of: (i) extending credit life (i.e., banking); (ii) expanding eligible credit uses; and (iii) removing discounts. (Submitted Written Comments.)

JEB STUART, Construction Industry

Supported PR 1620, but wanted to have on the record that what was being proposed would not be used as leverage for owners/operators of the equipment to replace equipment more rapidly than the normal turnover that would occur if national standards are set for emissions from diesel-driven off-road equipment.

There being no further testimony, the public hearing was closed.

Written Comments Submitted by:

K.D. Drachand, Air Resources Board

Robert O. Price, CH2M HILL

Gregory Vlasek, California Natural Gas Vehicle Coalition

Matthew Hall, Dunaway & Cross

Kevin Weddle, Golden State Natural Gas Systems

Sung Key Ma, Riverside County Waste Resources Management District

Melissa Sherlock, Unocal Corporation

Mr. Paulitz requested that staff respond regarding the banking issue. Mr. Broadbent responded that staff is looking at unlimited banking as part of the Intercredit Study. Staff does not disagree with the comment that banking provisions can provide a powerful incentive for technological development; however staff wants to examine that issue relative to the different trading programs, understanding that banking could have a potential impact on the overall attainment demonstration. With respect to expanding the use of credits, that is also an issue staff wants to examine to ensure enforcement capability.

In response to the request during public testimony for clarification, Mr. Broadbent added for the record that these rules will allow the generation and use of credits for the selling, trading and buying of MSERCs.

With respect to the request by COALESCE, Mr. Broadbent indicated that staff was supportive of setting a public hearing on the issues specified by no later than February 1996 for Rules 1612 and 1620 and many other District Rules. Staff plans to have the Intercredit Study released in October 1995, with an action plan before the Board in January 1996 for public hearing.

MS. SOTO MOVED THAT THE BOARD:

(1) ADOPT RESOLUTION NO. 95-25, ADOPTING RULE 1612 AND RULE 1620 AND CERTIFYING THE FINAL ENVIRONMENTAL ASSESSMENT, AS RECOMMENDED BY STAFF, WITH THE FOLLOWING MODIFICATIONS REQUESTED BY THE COALITION FOR INNOVATIVE SOLUTIONS,

PR 1612

Amend definition for Discount Factor under subparagraphs (g)(1)(A), (g)(1)(B), (g)(4)(A) and (g)(4)(B), as well as paragraphs (g)(2) and (g)(3) as follows:

"DF = Discount Factor, for the purpose of generating credits, equal to 1.0 for credits used for compliance with REG XV rules or NSR offsets; equal to 1.2 for credits used for compliance with REG XI rules or RECLAIM."

Insert after paragraph (h)(1), new paragraph (h)(2), and renumber subsequent paragraphs accordingly:

"For the purpose of using MSERCs pursuant to subparagraphs (h)(1)(A) and (h)(1)(B), a discount factor equal to 1.2 shall be applied except for MSERCs generated by the (1) operation of post 1992 model-year vehicles that are certified at or below ultra-low-emission standards; (2) operation of CNG, LPG, or methanol heavy-duty engines certified to optional emission standards using ARB certified conversion kits; or (3) operation of zero-emission vehicles. For other uses pursuant to paragraph (h)(1), a discount factor equal to 1.0 shall be applied unless specified otherwise in District regulations."

PR 1620

Amend definition for Discount Factor under paragraphs (g)(1) and (g)(2) as follows:

"DF = Discount Factor, for the purpose of generating credits, equal to 1.0 for credits used for compliance with REG XV rules or NSR offsets; equal to 1.2 for credits used for compliance with RECLAIM and REG XI rules."

Insert paragraph (h)(1), new paragraph (h)(2), and renumber subsequent paragraphs accordingly:

"For the purpose of using MSERCs pursuant to subparagraph (h)(1)(A) and (h)(1)(B), a discount factor equal to 1.2 shall be applied, except that a discount factor equal to 1.0 shall be applied for operation of zero-emission equipment. For other uses pursuant to paragraph (h)(1), a discount factor equal to 1.0 shall be applied unless specified otherwise in District regulations."

(2) DIRECT STAFF TO SET A PUBLIC HEARING BY NO LATER THAN THE FEBRUARY 1996 BOARD MEETING FOR CONSIDERATION OF EXTENDING CREDIT LIFE (i.e., BANKING), EXPANDING ELIGIBLE CREDIT USES, AND REMOVING DISCOUNTS.

THE MOTION WAS SECONDED BY MS. HAGGARD, AND PASSED BY A UNANIMOUS VOTE OF THE BOARD MEMBERS PRESENT (Absent: Antonovich, Braude, Burke and Silva).

(Ms. Soto and Mr. Hewitt left at 2:40 p.m.)

38. Amend Rule 2011 - Requirements for Monitoring, Reporting and Recordkeeping for Oxides of Sulfur Emissions; and Amend Rule 2012 - Requirements for Monitoring, Reporting and Recordkeeping for Oxides of Nitrogen Emissions

Pat Leyden, DEO of Stationary Source Compliance, presented the staff report and pointed out that references to "clauses (E)(1)(e)(i), (E)(1)(e)(ii) and (E)(1)(e)(iii)" in subparagraphs v. and vi. of Chapter 2.E.1.d. of the Proposed Amended Protocols for Rules 2011 and 2012 had been corrected to "clauses (E)(1)(d)(i), (E)(1)(d)(ii) and (E)(1)(d)(iii)". Corrected copies of the relevant pages were distributed to Board members and made available to the public.

The public hearing was opened, and the Board heard testimony from the following individuals:

*SHARON RUBALCAVA, Mobil Oil Corporation

CURTIS COLEMAN, CMA Southern California Air Quality Alliance

RON WILKNISS, Western States Petroleum Association

MIKE JUSTICE, Justice & Associates

CHARLES AARNI, Chevron USA Products Company

* Submitted Written Comments

Supported the proposed amendments, and requested: (i) that subparagraphs (c)(3)(A) of Rules 2011 and 2012 be amended to allow use of interim reporting procedures until
December 31, 1995; and (ii) an additional amendment for consideration by the Board, after the required public notice has been provided, to subparagraph iv. of Chapter 2.E.1.d. of Rules 2011 and 2012 Protocols to extend the use of interim reporting procedures until December 31, 1995, retroactively from July 1, 1995, for companies that have been granted variances by the Hearing Board from the requirement to have an approved RECLAIM certified CEMS and/or RTU installed by July 1, 1995.

Ms. Leyden agreed that the RTUs are complicated, technology-forcing pieces of equipment and indicated that staff was agreeable to bringing the issue back to the Board at a later date for amendment. However, for the record, staff did not concur with the request to remove the missing data provisions for large emitters under a variance. It was staff's belief that the missing data provisions were included in the rules to accelerate those companies in installing and operating the CEMS.

MARTIN LEDWITZ, Southern California Edison

TODD JOHNSON, Industrial Asphalt

RICHARD BURNETT, All American Asphalt

TODD LITTLEWORTH, Attorney, Corona Energy

LEE WALLACE, The Gas Company

Expressed support for the proposed amendments and willingness to continue working with AQMD staff to solve other problems with Rules 2011 and 2012.

BYRON GEE, Edgington Oil Company

Urged adoption of the proposed amendments, specifically the "Super Compliance" provisions, which would allow certain facilities to be reclassified as large, rather than major, NOx or SOx sources, and thereby not have to install expensive, complex monitoring equipment.

There being no further testimony, the public hearing was closed.

MS. LEE MOVED THAT THE BOARD:

(1) ADOPT RESOLUTION NO. 95-26, AMENDING RECLAIM RULES 2011 AND 2012 AND CERTIFYING THE NOTICE OF EXEMPTION, AS RECOMMENDED BY STAFF, WITH THE FOLLOWING MODIFICATIONS:

Rule 2011 (c)(3)(A) and Rule 2012 (c)(3)(A)

"If the facility experiences a power, computer, or other system failure that prevents a reporting of total daily mass emissions of SOx [NOx for Rule 2012] and daily status codes, the Facility Permit holder shall be granted 12 hours to submit the required report; after the 12-hour extension, emissions shall be calculated using interim reporting procedures set forth in Appendix A, Chapter 2 until December 31, 1995 and thereafter pursuant to the missing data requirements set forth in Appendix A, Chapter 2."

Subparagraphs v. and vi. of Chapter 2.E.1.d. of the Protocols for
Rule 2011 and Rule 2012

" . . . clauses (E)(1)(e d)(i), (E)(1)(e d)(ii) and (E)(1)(e d)(iii) . . ."

2) REFER THE AMENDMENTS TO RULES 2011 AND 2012 PROTOCOLS REQUESTED BY THE CMA TO THE APPROPRIATE COMMITTEE FOR RECONSIDERATION AND FURTHER DISCUSSIONS WITH STAFF, AND A RECOMMENDATION BACK TO THE BOARD REGARDING CONSIDERATION OF THE REQUESTED AMENDMENTS BY THE BOARD AT A LATER DATE.

THE MOTION WAS DULY SECONDED, AND PASSED BY A UNANIMOUS VOTE OF THE BOARD MEMBERS PRESENT (Absent: Antonovich, Braude, Burke, Hewitt and Soto).

PUBLIC COMMENT PERIOD - (Public Comment on Non-Agenda Items,
Pursuant to Government Code Section 54954.3)

There was no public comment on non-agenda items.

ADJOURNMENT

The meeting was adjourned by Chairman Mikels at 3:05 p.m.

The foregoing is a true statement of the proceedings held by the South Coast Air Quality Management District Board on September 8, 1995.

Respectfully Submitted,

SAUNDRA MCDANIEL

Senior Deputy Clerk

Date Minutes Approved: _______________________

__________________________________________

Jon D. Mikels, Chairman

ACRONYMS

AQMD = South Coast Air Quality Management District RECLAIM = REgional CLean Air Incentives AQMP = Air Quality Management Plan Market

ARB = California Air Resources Board Reg/Neg = Regulations/Negotiations

BACT = Best Available Control Technology RFP = Request for Proposals

BARCT = Best Available Retrofit Control Technology RTU = Remote Terminal Unit

CEMs = Continuous Emissions Monitors SCAB = South Coast Air Basin

CEQA = California Environmental Quality Act SOx = Oxides of Sulfur

CMA = California Manufacturers Association VOC = Volatile Organic Compound

CNG = Compressed Natural Gas

EPA = Environmental Protection Agency

IAIC - Interagency AQMP Implementation Committee

MSERCs = Mobile Source Emission Reduction Credits

NOx = Oxides of Nitrogen

PAR = Proposed Amended Rule

PM₁₀ = Particulate Matter < 10 microns

PR = Proposed Rule