Notice having been duly given, the regular meeting of the South Coast Air Quality Management District Board was held at District Headquarters, 21865 E. Copley Drive, Diamond Bar, California. Members present:

Supervisor Jon D. Mikels, Chairman
County of San Bernardino

Dr. William Burke, Vice Chairman
Speaker of the Assembly Appointee

Supervisor Michael D. Antonovich (arrived at 10:05 a.m.)
County of Los Angeles

Mayor Candace Haggard
Cities of Orange County

Hugh Hewitt
Governor's Appointee

Ms. Mee H. Lee
Senate Rules Committee Appointee

Mayor Ronald O. Loveridge
Cities of Riverside County

Councilman Leonard Paulitz
Cities of San Bernardino County

Supervisor James W. Silva
County of Orange

Councilwoman Nell Soto
Cities of Los Angeles County - Eastern Region

Members Absent:

Councilman Marvin Braude
Cities of Los Angeles County - Western Region

Supervisor S. Roy Wilson, Ed.D.
County of Riverside

The meeting was called to order at 9:45 a.m. by Chairman Mikels.

1. Opening Comments

James M. Lents, Ph.D., Executive Officer. Announced that a fuel cell bus co-sponsored by AQMD and the Department of Energy was on display at AQMD Headquarters. The bus, which operates on methanol and converts the methanol to hydrogen, will be operated by the MTA.

CONSENT CALENDAR

2. Minutes of July 14, 1995 Board Meeting

3. Report of the Public Advisor, Small Business Assistance, and Economic
Development Offices

Set Public Hearings to 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 on September 8, 1995

4. 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

5. Amend Rule 461 - Gasoline Transfer and Dispensing

6. Adopt Proposed Rule 310 - Amnesty for Unpermitted Equipment

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

8. Amend Regulation VII - Air Pollution Emergencies

9. Amend Rule 1136 - Wood Products Coatings

Set Hearings on October 13, 1995

10. Amend Rule 431.1 - Sulfur Content of Gaseous Fuels

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

12. Report of Hearing Board Variances and Appeals

13. Recommendation to Adopt a Resolution to Issue Bonds to Retire the Unfunded Accrued
Liability for Employees Participating in the San Bernardino County Employees'
Retirement Association

14. Recommendation to Amend Agreement with The Hertz Corporation for Implementation
of Alternative Fuel Vehicles in a Rental Car Fleet

15. Recommendation to Provide Additional Funding for Phase 2 of the Ballard
Fuel Cell Bus Program

16. Recommendation to Cost Share Development and Demonstration of a Renewable
Hydrogen Transportation System for the City of Palm Desert

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

18. Recommendation Regarding a Request for Proposals to Perform a Study on the Development
of a Methodology to Assess Geographic and Temporal Ozone Control Strategies for the
South Coast Air Basin

19. Recommendation to Amend the Sole-Source Contract for Measurement of Ammonia and
Volatile Organic Compound Emissions from Livestock Waste in the South Coast Air Basin

20. Recommendation to Amend Contracts with Telos Consulting Services and Mosakin
Corporation to Increase Funding for Systems Development Work

21. Recommendation to Reissue a Request for Proposals to Enhance Facility Permit Processing Software and Database

22. Rule Forecast Report

23. Recommendation Regarding a Pilot Program to Prepare Air Toxics "Hot Spots" Information
and Assessment Act of 1987 (AB 2588) Health Risk Assessments

24. Recommendation to Award a Sole-Source Contract for the Further Development of
Emission Test Methods and Development of Emission Factors for Various Commercial
Cooking Operations

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

Continued to the September 8, 1995 Board meeting.

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

Continued to the September 8, 1995 Board meeting.

Agenda Items 4, 9, 10 and 19 were held for discussion.

ON MOTION OF MR. SILVA, DULY SECONDED, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Antonovich, Braude and Wilson): (1) APPROVING AGENDA ITEMS 2, 3, 5 THROUGH 8, 11 THROUGH 18 & 20 THROUGH 24; (2) ADOPTING RESOLUTION
NO. 95-17, ISSUING BONDS TO RETIRE THE UNFUNDED ACCRUED LIABILITY FOR EMPLOYEES PARTICIPATING IN THE SAN BERNARDINO COUNTY EMPLOYEES' RETIREMENT ASSOCIATION; AND (3) CONTINUING AGENDA ITEMS 25 & 26 TO SEPTEMBER 8, 1995, AS RECOMMENDED.

4. Set Public Hearing on September 8, 1995 to 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

Curtis Coleman, Attorney at Law, addressed the Board on behalf of the California Manufacturers Association's Southern California Air Quality Alliance and requested that, at the September 8 public hearing on this item, the Board consider extending the interim reporting procedures for facilities that have been granted variances because of their inability to meet the
July 1, 1995 date in Rules 2011 and 2012 for CEMS certification.

9. Set a Public Hearing on September 8, 1995 to Amend Rule 1136 - Wood Products Coatings

The following individuals addressed the Board on this item:

RICHARD REBER, Kushwood Manufacturing

ALBERT SANDBERG, Sandberg Furniture Manufacturing

ROGER BENVENUTI, Akzo Nobel Coatings

DOUGLAS TOWNSEND, Catalina Furniture

JACK D. ADAMS, J-W Finishing

ELMER SALCIDO, Executive Office Concepts

GREG PARRY, Guardsman Products

JOHNNY LAMBRECHT, Cardinal Church Furniture

*CURTIS COLEMAN, Small Business Coalition/California Furniture Manufacturers Association (CFMA)/Southern California Finishers and Fabricators Association (SCFFA)

*ED LAIRD, Small Business Coalition

GARY STAFFORD, Terra Furniture/CFMA

DOUG BOND, Southwest Mill & Lumber

ROBERT ANDERSON, SCFFA

MICHAEL CARROLL, Attorney, Fender Musical Instruments

*Submitted Written Comments

(Mr. Antonovich arrived at 10:05, during public testimony.)

There was substantial testimony by users, manufacturers and suppliers of wood products coatings regarding the status of waterborne technology for this industry. While progress has been made, existing waterborne coatings that will comply with the September 1, 1995 VOC limits in Rule 1136 are not suitable for use by the large majority of companies subject to the rule requirements. Additionally, significant time and cost is required to convert operations to waterborne technology. Industry representatives raised the following issues and suggestions, which were not addressed by PAR 1136:

Issue: Despite diligent effort, 90 percent of the affected companies are unable to comply with the VOC limits in Subsection (c)(1)(A) of Rule 1136 which will become effective September 1, 1995.

Suggestion: Extend the existing VOC limits to July 1, 1996, as currently allowed by special exemptions now in the rule.

Issue: Potentially 150 of the affected companies could be included in VOC RECLAIM, expected for Board adoption in January 1996; and at that time those companies would be allowed to continue using solvent-based coatings. It would be a tremendous hardship to the companies if required to convert their operations to waterborne coatings for the interim period between September 1995 and January 1996.

Suggestion: Dovetail Rule 1136 requirements with VOC RECLAIM.

Issue: AQMD staff is pushing the use of waterborne coatings. These coatings contain glycol ethers, which will soon be officially listed as toxic. This will create another "Catch-22" situation, as 1,1,1, Trichloroethane did when staff pushed industry in that direction, only to declare it an ODC.

Suggestion: Incentivize using waterborne coatings by allowing quarterly reports, rather than daily logs. Also, allow averaging of super-complying and under-complying formulations without any discounting.

Issue: Acetone has recently been determined by EPA to be non-reactive. Exempting acetone would allow industry greater flexibility in the types of coatings that could be used.

Suggestion: Immediately exclude acetone from the definition of VOC set forth in Subparagraph (b)(39) of Rule 1136.

With respect to the acetone exemption, Dr. Lents responded that in June 1995 EPA made the determination that acetone is non-reactive, and ARB has agreed with that determination. Staff is presently conducting the CEQA review, and expects to bring this issue to the Board in October or November 1995.

Regarding the lower VOC limits and status of waterborne coatings, William Fray, Assistant DEO/Stationary Source Compliance, responded that this issue was last considered by the Board in August 1994, when the Board adopted the Sept. 1, 1995 date for the lower VOC limits. Since then, staff has been working with industry as directed, visiting facilities and checking on industry progress and expectations as far as compliance with the September 1 VOC limits. Based on the public testimony, however, it seemed that facility operators were reluctant to tell AQMD inspectors that their operations would not comply with the rule.

In addition, in May 1995 staff sent letters to 900 companies offering assistance and asking if there were any companies or issues that AQMD was not aware of; as well as reminding them of AQMD's small business assistance and technology assistance programs. AQMD received only three responses to that letter.

The reason for staff bringing PAR 1136 to the Board at this time was to respond to rule deficiencies identified by EPA. It was only by circumstance that the rule is in the amendment process, and the proposed amendments can be revised to address most of the issues raised by industry.

Concerned that 90 percent of industry could be out of compliance as of September 1, Mr. Silva expressed his support for delaying the lower VOC limits until July 1996 as suggested by industry. He also expressed concern that if VOC RECLAIM is adopted in January 1996, the economic effects to industry would be devastating for them to try to comply with the lower VOC limits between September 1995 and January 1996.

Referring to staff's representation that 80 to 90 percent of the facility owners/operators surveyed expected to be in compliance and were content with Rule 1136, Ms. Lee suggested that any future surveys of this type be conducted by independent, non-AQMD personnel.

Dr. Burke commented that he visited facilities and found that concerns were not forthcoming from the facility operators. He pointed out that if the operators do not let the real facts be known, it is difficult for the Board to evaluate the rule in any other light than what is provided by staff.

In response to a question by Chairman Mikels, District Counsel Peter Greenwald expressed staff's belief that the public notice and CEQA documents for the September 8, 1995 public hearing on PAR 1136 are broad enough to permit the Board to undertake all five of the suggestions by industry--except for the acetone exemption. With there being only one week between the September 1, 1995 effective date for the lower VOC limits and the September 8, 1995 public hearing on PAR 1136 when the Board will consider extending the effective date for those limits, the Board could direct staff, as a matter of prosecutorial discretion, to devote its enforcement resources elsewhere for that week.

Mr. Loveridge commented that there should be some type of incentive or advantage for those who have complied with the lower VOC limits; and expressed his support for industry's suggestion to incentivize use of waterborne coatings.

Ms. Soto agreed with Ms. Lee's comments on the survey process, and emphasized the need for truthful responses to the surveys in order for staff to be accurate in the statements and recommendations that they make to the Board.

In response to a question by Mr. Hewitt, Mr. Fray indicated that the extension of the VOC limits eclipses the acetone issue, since acetone is an alternative way to meet those limits.

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

1) SETTING A PUBLIC HEARING FOR SEPTEMBER 8, 1995 TO AMEND RULE 1136 AS RECOMMENDED BY STAFF;

2) SPECIFYING THAT THE BOARD WILL CONSIDER ON SEPTEMBER 8, 1995 EXTENDING THE SEPTEMBER 1, 1995 COMPLIANCE DATE FOR VOC LIMITS REQUIRED BY SUBPARAGRAPH (c)(1)(A) OF RULE 1136 TO JULY 1, 1996; AND

3) DIRECTING STAFF TO INCORPORATE INTO THE PROPOSED AMENDED RULE 1136 WHICH THE BOARD WILL CONSIDER ON SEPTEMBER 8, 1995 THE FOLLOWING AMENDMENTS SUGGESTED BY INDUSTRY:

Extend the final VOC limits in the rule to July 1, 1996.

Dovetail rule requirements with RECLAIM.

Allow averaging of super-complying and under-complying formulations without any discounting.

Incentivize using waterborne coatings by allowing quarterly reports, rather than daily logs.

ON MOTION OF MS. HAGGARD, SECONDED BY DR. BURKE, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Braude and Wilson) APPROVING AGENDA ITEM NO. 4 (SET PUBLIC HEARING FOR SEPTEMBER 8, 1995 TO AMEND RULES 2011 AND 2012) AS RECOMMENDED BY STAFF.

10. Set a Public Hearing for October 13, 1995 to Amend Rule 431.1 - Sulfur Content of Gaseous Fuels

Pat Leyden, DEO of Stationary Source Compliance, pointed out that copies of Pages 68 and 69 of the Draft Staff Report on this item, which had inadvertently been left out, were distributed to Board members and made available to the public.

ON MOTION OF MR. PAULITZ, DULY SECONDED, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Braude and Wilson), APPROVING AGENDA ITEM NO. 10 AS RECOMMENDED BY STAFF.

19. Recommendation to Amend the Sole-Source Contract for Measurement of Ammonia and Volatile Organic Compound Emissions from Livestock Waste in the South Coast Air Basin

Barry Wallerstein, DEO of Planning, Transportation & Information Management, noted the following change to the last sentence in the synopsis for this item listed on the agenda:

"This item was reviewed and approved by the Administrative Committee on July 21, 1995, and accepted by discussed with the PM10 Task Force at its July 7 and August 4, 1995 meetings."

Copies of the revised language were distributed to Board members and made available to the public.

ON MOTION OF MS. SOTO, SECONDED BY MS. LEE, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Braude and Wilson), APPROVING AGENDA ITEM NO. 19 AS RECOMMENDED BY STAFF.

BOARD CALENDAR

27. Administrative Committee Report

28. Legislative Committee Report and Recommendations

29. Mobile Source Committee Report

30. Stationary Source Committee Report

31. Technology Committee Report

32. Air Resources Board Monthly Meeting Report

33. Mobile Source Air Pollution Reduction Review Committee Report

34. Advisory Council Minutes of May 25, 1995 Meeting

There being no comment or discussion on the Board Calendar items,

ON MOTION OF DR. BURKE, SECONDED BY MS. SOTO, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Braude and Wilson), APPROVING AGENDA ITEMS 27 THROUGH 34 AS RECOMMENDED.

PUBLIC HEARINGS

35. Amend Regulation XXX -Title V Permits and Rule 518 - Hearing Board Procedures for Title V Facilities; and Adopt Proposed Rule 518.1 - Permit Appeal Procedures for Title V Facilities

Ms. Leyden presented the staff report; and pointed out that, in order to allow owners/operators of Title V facilities to make changes requiring no permit revision, staff recommended the following modification to Subparagraph (i) of Rule 3005:

"(i) Prohibition on Changes Not Specifically Allowed by Permit

A Title V facility shall not, without a permit revision, make any change that is not addressed or prohibited by the Title V permit, if such change is:

1 subject to any requirement under Title IV of the federal Clean Air Act; or

2 subject to Administrative permit revision, minor permit revision, or significant permit revision procedures, except in accordance with subdivision (g), Operational Flexibility, or subparagraph (a)(2)(C) of this rule, Administrative Permit Revision Procedures or;

3 a modification under any provisions of Title I of the federal Clean Air Act."

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

DAVID HOWEKAMP, Environmental Protection Agency

GREG ADAMS, Los Angeles County Sanitation Districts

RON WILKNISS, Western States Petroleum Association

*STEVEN A. BROILES, Attorney, Cities of Burbank, Glendale and Pasadena

CURTIS COLEMAN, Attorney, CMA/Southern California Air Quality Alliance

FRANK DRYDEN, Southern California Alliance of POTWs

BOB WALKER, Chevron USA

LEE WALLACE, The Gas Company

*TIM CARMICHAEL, Coalition for Clean Air and Natural Resources Defense Council

MIKE WEBSTER, Los Angeles Department of Water and Power

MIKE CARROLL, Attorney, Regulatory Flexibility Group

KEVIN HADDEN, County Sanitation Districts of Orange County

*Submitted Written Comments

Mr. Howekamp commented that the proposed amendments to Regulation XXX represent AQMD's considerable efforts to efficiently address issues which EPA had identified in the October 1993 version of the regulation, and also the issues raised by industry with respect to the June 1995 version. He believed that, if adopted by the Board as proposed, amended Regulation XXX would be eligible for interim approval by EPA.

During public testimony unanimous support was expressed for the proposed amendments to Regulation XXX, and three major issues were raised. Those issues (indicated by ), and comments/suggestions relating to each, are summarized as follows:

Development of a proposed amendment to Rule 518 to establish procedures by which a Title V facility obtaining a variance from the AQMD Hearing Board may obtain approval of an alternative operating condition that would be recognized by EPA.

(i) A monthly progress report on development of the proposed amendment should be given
to the Governing Board.

(ii) The public hearing on the proposed amendments to Rule 518 should be set by the Board
for December 8, 1995.

(iii) Because of concerns that shorter term variances may not be the beneficiary of EPA
approval, staff should continue during the next two months to explore options for
handling interim variances and short variances that address both industry's needs and
EPA's concerns, with minimal administrative burden.

Technical Guidance Document (TGD), which provides detailed implementation instructions to assist facilities in application preparation and compliance.

(i) The TGD is an integral part of Regulation XXX and makes implicit and explicit policy
clarifications. Therefore, it should be adopted by the Board at a public hearing; or
reviewed by the Board's Stationary Source Committee and brought before the full Board
for action only if there are unresolved issues remaining after the Committee's review.

(ii) The TGD should be revised to conform with the proposed amendments to Regulation
XXX; and to reflect comments received on the TGD and on the forms during the public
comment period on the TGD.

Interim guidance/flexibility from EPA.

(i) Any interim guidance issued by EPA in memo or white paper form to further streamline
or make the program more flexible should be implemented immediately; as well as the
implementation as soon as possible of any flexibility that results when 40 CFR Part 70 is
re-promulgated.

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

Written Comments Submitted by:

John Billheimer, Consultant

Ms. Soto commented in favor of the Board approving the TGD for implementation as soon as possible. If, after the public comment period, there are significant changes made to the TGD, it should be brought back to the Board for review.

Mr. Greenwald pointed out that the TGD currently does not conform with the proposed amendments to Regulation XXX. In addition, Carol Coy, Assistant Director of Stationary Source Compliance, commented that staff anticipates additional guidance and flexibility from EPA in October 1995 on a number of key issues that should be incorporated into the TGD. Therefore, the earliest that staff could commit to having the TGD ready for adoption by the Board would be December 1995. Staff recommended, however, that the TGD be brought back to the Board for adoption after EPA has taken action on approving AQMD's Title V program, which is not expected to occur until January 1996.

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

1) ADOPT RESOLUTION NO. 95-18, AMENDING REGULATION XXX AND RULE 518, ADOPTING RULE 518.1, AND CERTIFYING THE EXEMPTION FROM CEQA REQUIREMENTS;

2) DIRECT STAFF TO CONTINUE WORKING WITH EPA, ARB, AND THE INTERESTED PUBLIC ON THE DEVELOPMENT OF A NEW FEDERALLY ENFORCEABLE RULE PROPOSAL FOR ALTERNATIVE OPERATING CONDITIONS FOR TITLE V FACILITIES; AND PRESENT IT BEFORE THE BOARD FOR CONSIDERATION AS SOON AS POSSIBLE;

3) DIRECT STAFF TO REVISE REGULATION XXX - TITLE V PERMITS, AS REQUIRED, IF EPA ADOPTS REVISIONS TO THE FEDERAL OPERATING PERMIT PROGRAM (TITLE V), AND PRESENT IT BEFORE THE BOARD FOR CONSIDERATION AS SOON AS POSSIBLE; AND

4) INCLUDE THAT, UPON COMPLETION OF ALL REVISIONS TO THE TGD, IT SHALL BE USED FOR IMPLEMENTATION OF REGULATION XXX.

At Mr. Hewitt's suggestion,

MS. SOTO AMENDED HER MOTION TO INCLUDE THAT PAR 518 BE BROUGHT BACK TO THE BOARD AT ITS DECEMBER 8, 1995 BOARD MEETING. A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich, Braude, Burke, Lee and Wilson) APPROVING THAT AMENDMENT TO THE MOTION.

36. Adopt Rule 301.2 - Annual Operating Permit Emissions Fee - Reduced Penalty for Underpayments

Staff waived an oral presentation on this item. The public hearing was opened; and, there being no requests from the audience to speak on this item, the hearing was closed.

ON MOTION OF MS. HAGGARD, SECONDED BY MS. SOTO, A UNANIMOUS VOTE WAS CAST OF THE BOARD MEMBERS PRESENT (Absent: Antonovich, Braude, Burke, Lee and Wilson) TO ADOPT RESOLUTION NO. 95-19, ADOPTING PROPOSED RULE 301.2, AS RECOMMENDED BY STAFF.

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

Mary Crain, former AQMD employee, expressed to the Board her desire to see a resolution soon to pending litigation initiated by her against the AQMD.

CLOSED SESSION

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

The Board recessed to closed session at 12:05 p.m.: (i) to confer with its Labor Negotiator pursuant to Government Code Section 54957.6; and (ii) to discuss real estate negotiations with its designated representatives, pursuant to Government Code Section 54956.8, concerning sale and/or lease of property located at 9150 East Flair Drive, El Monte, California.

ADJOURNMENT

There being no action taken in closed session which required a report, Chairman Mikels adjourned the meeting at 12:45 p.m.

The foregoing is a true statement of the proceedings held by the South Coast Air Quality Management District Board on August 11, 1995.

Respectfully Submitted,

SAUNDRA MCDANIEL

Senior Deputy Clerk

Date Minutes Approved: ______________________________

_________________________________________________

Jon D. Mikels, Chairman

ACRONYMS

AQMD = Air Quality Management District

ARB = California Air Resources Board

CEMs = Continuous Emissions Monitors

CEQA = California Environmental Quality Act

EPA = Environmental Protection Agency

MTA = Los Angeles County Metropolitan Transportation Authority

ODC = Ozone Depleting Compound

PAR = Proposed Amended Rule

RECLAIM = REgional CLean Air Incentives Market

VOC = Volatile Organic Compound