SUMMARY MINUTES OF THE BOARD DEC. 7 & 8, 1995

SUMMARY

MINUTES OF THE BOARD OF THE SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

December 7 & 8, 1995

The meeting was called to order at 9:40 a.m. by Chairman Mikels.

CONSENT CALENDAR

2. Minutes of November 17, 1995 Board Meeting

The November 17 Minutes will not be available until the January 12, 1996 Board meeting.

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

4. Establish 1996 Board Meeting Schedule

5. Report of Civil Actions Filed

6. Report of Hearing Board Variances and Appeals

7. Authorization for Removal of Various Fixed Assets from the Inventory

8. Approve the Fiscal Year 1995-97 AB 2766 Discretionary Work Program and
Authorize the Board Chairman to Execute Agreements for Fiscal Year 1995-96
AB 2766 Discretionary Fund

9. Award Technical Support Contracts

10. Award Contract for California Environmental Quality Act Analysis Assistance

This agenda item has been continued to the January 12, 1996 Board meeting.

11. Award Contract to Acquire a Source Apportionment Dispersion Model for the
South Coast Air Basin

12. Award Contracts to AeroVironment, Inc. and Ryan-Belanger Associates for
AB 2588 Health Risk Assessment Support

13. Amend the Agreement for Employee Relations Litigation and Negotiation Services

14. Lease Business Computer Hardware and Software

15. Establish List of Pre-Qualified Vendors to Provide Compressed Gases and Cryogenics

16. Establish List of Pre-Qualified Vendors to Provide Office Supplies

17. Cosponsor the Demonstration of Prototype Residential Fuel Cell Systems

18. Sponsor a Study to Evaluate Particulate Pollution Impact on Morbidity Among
California Kaiser Permanente Members Who Reside in the South Coast Air Basin

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

20. Rule Forecast Report

Agenda Items No. 8 and No. 15 were held for discussion.

ON MOTION OF MS. HAGGARD, SECONDED BY MS. SOTO, A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich, Hewitt, and Loveridge) APPROVING AGENDA ITEMS 3 THROUGH 7, 9, 11 THROUGH 14 AND 16 THROUGH 20 AS RECOMMENDED BY STAFF.

8. Approve the Fiscal Year 1995-97 AB 2766 Discretionary Work Program and Authorize the Board Chairman to Execute Agreements for Fiscal Year 1995-96 AB 2766 Discretionary Fund

Eric Haley, Chairman Emeritus of MSRC's Technical Advisory Committee/Alternate MSRC member, addressed the Board to respond to questions by Ms. Lee as to how the MSRC decides the amount to be allocated for each of the three categories, and how much of the $3 million mentioned in the Board letter is used for administrative costs. Mr. Haley clarified that the $3 million referred to is reserved for future projects only and is not used to cover administrative costs at all.

In response to Ms. Lee's first question, Mr. Paulitz, the Board's representative on the MSRC, explained that the allocations are based on what the MSRC has learned from the previous year as to what types of projects have been successful or not and what types of projects are in need. That program is then refined as proposals are submitted. Mayor John Longville, MSRC Chair, added that when the work program is designed there are broad categories, and narrow categories within the broad categories. The amount of money that is set aside for the broad categories is held firm, and then allocations are shifted within the narrow categories if one category does not attract, a desirable number of proposals.

15. Establish List of Pre-Qualified Vendors to Provide Compressed Gases and Cryogenics

Ms. Lee expressed concern that none of the eight vendors listed are minority, woman or disabled veteran business enterprises (MBE/WBE/DVBE); and asked staff whether or not subcontractors, if any, would be required to be MBE/WBE/DVBE-qualified.

William Fray, Director of Applied Science & Technology, responded that all of the eight companies listed are major, publicly-traded corporations, and therefore not MBE/WBE/DVBE-qualified. Staff was not sure if it was possible to extract commitments from publicly-traded corporations with respect to minority subcontracting for this types of purchase; but if so, staff will pursue such a commitment.

With respect to the advertisement of the RFP in La Opinion newspaper, Ms. Soto pointed out that La Opinion is not read widely by people who are mostly-conversant in English. She suggested that it would be more productive if staff advertised in English language newspapers, which is most likely what people interested in these types of business opportunities would be reading.

Expressing his concern that staff was not aware that publicly-traded companies could be required to subcontract with MBE/WBE/DVBE-qualified businesses, Dr. Burke commented that the MTA is issuing $50 million worth of contracts each week, and they know that subcontractors of any corporation can be required to fulfill a quota. While he is not a product, nor a great advocate, of affirmative action; he believed that if AQMD is going to administer under affirmative action, it should do so appropriately. He stated that he would vote against this item, and any other contract that is not handled properly as long as he is on the Board.

Chairman Mikels directed staff to take the appropriate actions to address the concerns expressed by Ms. Lee, Ms. Soto and Dr. Burke.

(Mr. Loveridge arrived at 9:50 a.m.)

ON MOTION OF DR. WILSON, SECONDED BY DR. BURKE, A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich and Hewitt) APPROVING AGENDA ITEM NO. 8 AS RECOMMENDED.

ON MOTION OF MR. PAULITZ, SECONDED BY DR. WILSON, THE BOARD APPROVED AGENDA ITEM NO. 15 AS RECOMMENDED BY STAFF, BY THE FOLLOWING VOTE:

AYES: Braude, Haggard, Loveridge, Mikels, Paulitz, Silva and Wilson.

NOES: Burke, Lee and Soto.

ABSENT: Antonovich and Hewitt.

At Ms. Soto's request, Mr. Fray agreed to follow up with the pre-qualified companies listed and prepare a report for the Board on their existing minority subcontracting.

BOARD CALENDAR

Note: (a) The Interagency AQMP Implementation Committee did not meet in November. The next meeting of the IAIC will be on December 14, 1995.

(b) The Advisory Council did not meet in November. The Minutes of the October 26, 1995 Advisory Council meeting will be submitted at the January 12, 1996 Board meeting.

20(A) Election of Chair and Vice Chair

The floor was opened for nominations for Chair.

MS. LEE NOMINATED THE PRESENT CHAIRMAN, SUPERVISOR
JON D. MIKELS. MS. SOTO SECONDED THE NOMINATION, AND A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich and Hewitt) TO RE-ELECT MR. MIKELS AS CHAIRMAN OF THE SCAQMD GOVERNING BOARD FOR A TWO-YEAR TERM.

The floor was opened for nominations for Vice Chair.

MS. SOTO NOMINATED THE PRESENT VICE CHAIRMAN,
DR. WILLIAM BURKE. MS. HAGGARD SECONDED THE NOMINATION, AND A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich and Hewitt) TO RE-ELECT DR. BURKE AS VICE CHAIRMAN OF THE SCAQMD GOVERNING BOARD FOR A
TWO-YEAR TERM.

21. Administrative Committee Report

22. Legislative Committee Report and Recommendations

23. Mobile Source Committee Report

24. Stationary Source Committee Report

25. Technology Committee Report

26. Air Resources Board Monthly Meeting Report

27. Mobile Source Air Pollution Reduction Review Committee Report

ON MOTION OF MS. HAGGARD, SECONDED BY MR. PAULITZ, A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich and Hewitt) RECEIVING AND FILING AGENDA ITEMS 21 THROUGH 27 AS RECOMMENDED.

28. Appoint Member to the Advisory Council

Mr. Silva noted that while the Advisory Council's report states that the recommendation for Dr. Wolf's appointment was approved by the Administrative Committee, there was no mention of such action in the Administrative Committee's report (Agenda Item No. 21).

Chairman Mikels suggested that this item be continued to the January 12, 1996 Board meeting in order to confirm the Administrative Committee's approval of the recommended appointment. In response to a question by Mr. Loveridge, Chairman Mikels added that the Board could include in its discussion on this item at the January 12 Board meeting whether the number of Advisory Council members should be changed.

ON MOTION OF MR. SILVA, SECONDED BY DR. WILSON, A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich and Hewitt), CONTINUING AGENDA ITEM NO. 28 TO THE JANUARY 12, 1996 BOARD MEETING.

PUBLIC HEARINGS

Upon unanimous consent of the Board, Agenda Item No. 32 was taken out of order.

32. Amend Rule 1134 - Emission of Oxides of Nitrogen from Stationary Gas Turbines

The public hearing was opened and, there being no requests from the public to speak on this item, the hearing was closed.

ON MOTION OF MS. LEE, SECONDED BY MR. PAULITZ, A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich and Hewitt) ADOPTING RESOLUTION NO. 95-37, CERTIFYING THE FINAL SUPPLEMENTAL ENVIRONMENTAL ASSESSMENT AND AMENDING RULE 1134 AS RECOMMENDED BY STAFF.

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

Mr. Silva and Ms. Lee, who were not present at the November 17, 1995 Board meeting, indicated that they had reviewed the tape recordings of the public hearing on this item held at that meeting, as well as the related written materials.

Pat Leyden, DEO of Stationary Source Compliance, summarized the issues raised at the November 17 public hearing that were continued to the December 7 Board meeting, and presented staff's responses to those issues and recommendations for Board action. At Ms. Soto's request, staff agreed to include in the Resolution for this item that once the new guidance document is promulgated by EPA, the Home Rule Working Group will review the document for any opportunities that may exist for additional flexibility and modifications to NSR.

In response to Ms. Haggard's comment that she was still concerned that the offset requirements would discourage new businesses from locating to this region, Ms. Leyden clarified the state and federal laws with respect to requirements for offsetting emission increases from permitted sources.

Mr. Silva indicated that the hearing should be continued to the March 8, 1996 Board meeting since staff was recommending that the majority of the proposed amendments be continued to that date. Also, EPA is expected to have new NSR language by that time.

MR. SILVA MOVED TO CONTINUE THE PUBLIC HEARING TO AMEND REGULATION XIII AND RULE 212 TO THE MARCH 8, 1996 BOARD MEETING.

Ms. Leyden responded that the forgiveness of NSR debt is an important benefit in
PAR XIII. There are additional flexibility opportunities in the rule and expansion of exemptions. Staff urged the Board to adopt the staff proposal, and continue to March 8, 1996 those items noted by staff. As requested by Ms. Soto, if the new guidance document from EPA offers more flexibility than what is in PAR XIII, staff will bring those items back to the Board for consideration. However, staff believes EPA's guidance will mimic the flexibility contained in the staff proposal.

THE MOTION BY MR. SILVA TO CONTINUE THE PUBLIC HEARING ON REGULATION XIII AND RULE 212 TO THE MARCH 8, 1996 BOARD MEETING DIED, FOR LACK OF A SECOND.

DR. WILSON MOVED THAT THE BOARD:

(1) ADOPT RESOLUTION NO. 95-35 AS AMENDED ON
NOVEMBER 17, 1995, CERTIFYING THE FINAL SUBSEQUENT ENVIRONMENTAL ASSESSMENT AND AMENDING REGULATION XIII AND RULE 212 AS RECOMMENDED BY STAFF;

(2) CONTINUE TO MARCH 8, 1996 CONSIDERATION OF AMENDMENTS REGARDING

a) Federal Class I Area Visibility Protection Analysis and Federal Land Manager Notice,

b) Definition of allowable preconstruction activities in Regulation II,

c) Priority Reserve offsets for private landfills because of recirculation of the Subsequent Environmental Assessment,

d) Technical clarifications,

e) Storage area exemption from residency time for portable equipment,

f) Use of actual emissions for the facility offset exemption and small business BACT, and

g) Assessment of companies that expended $250,000 or more to retire an NSR debt and consideration for equity; AND

(3) FURTHER AMEND REGULATION XIII BY:

Amending Rule 1302 (gg) to read,

"SOURCE means any permitted individual unit, piece of equipment,...."

Amending Rule 1304 (c)(1) to read,

"... a net air quality benefit in the area to which the facility will locate.

This provision shall not apply to the relocation of a facility to a location which is already occupied by an existing facility that is owned or operated by the same person (or by persons under common control) unless In addition, the potential to emit of the combined facility for any air contaminant after the relocation ~~will~~ shall be less than the amounts in Table A of Rule 1304 (d) whenever either the relocating facility or existing facility received the facility offset exemption pursuant to Rule 1304 (d)."

THE MOTION WAS SECONDED BY MR. PAULITZ, AND PASSED BY THE FOLLOWING VOTE:

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

NOES: Silva.

ABSENT: Antonovich and Hewitt.

Written Comments Submitted by:

Carolyn L. Green, Ultramar Inc.

Jeb Stuart, Consultant, Construction Industry Air Quality Coalition

30. Adopt Proposed Rule 2100 - Registration of Portable Equipment

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

Speaking in support of PR 2100:

JEB STUART, Construction Industry Air Quality Coalition

FRANK DRYDEN, Southern California Alliance of POTWs (SCAP)

LEE WALLACE, The Gas Company

ROBERT SHEPHERD, Shepherd Machinery Company and Power Systems Associates

Mr. Dryden expressed concern that there is no guarantee that the state rule which will supersede PR 2100 in August of 1997 will contain the same provisions as PR 2100, particularly with respect to the definition of location. Failure of the state rule to incorporate that definition would make the rule untenable for many POTWs. Therefore they would be reluctant to take advantage of Rule 2100 since they might in the future have to switch back to permitting the equipment under Regulation XIII NSR requirements. Also, the 100 lbs/day project limit in
PR 2100 would mean increased construction time and, consequently, increased costs; without benefiting air pollution.

He recommended that AQMD staff aggressively pursue having the Rule 2100 definition of "location" incorporated into the state rule. Interested industry representatives should be included in such negotiations. Second, a provision must be added to the AQMD's fee structure such that fees for re-filing under NSR will be waived if the equipment that is being registered under
Rule 2100 has to be transferred back to NSR because the state fails to adopt an appropriate definition of location. In order to make the use of portable equipment practical, the 100 lbs/day limit should be applied to each piece of portable equipment actually working on a project, rather than the entire project.

Speaking in opposition to PR 2100:

TERRY ELLIS, Coalition of Petroleum Services

*DOUG VAN ALLEN, BJ Services Company

*ROBERT HASSEBROCK, Weatherford

*Submitted Written Comments

Concerns expressed were that the CAPCOA Model Rule was voted on by all the APC Officers as a consistent statewide means of dealing with the portable equipment issue. AQMD and a number of other districts have chosen to drastically change the intention of the CAPCOA rule to fit individual air districts needs. The problem is, portable equipment is unique and has to be dealt with differently than stationary sources with respect to BACT. The Board was encouraged not to adopt PR 2100, but to direct staff to work with ARB and industry to implement a consistent statewide regulation through the AB 531 Task Force process.

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

Written Comments Submitted by:

Mike Justice, Justice & Associates

James Thomas, Pool California Energy Services, Inc.

Jack Broadbent, Assistant DEO of SSC, responded that PR 2100 is a voluntary program, developed at the request of industry. Its adoption would allow equipment to be transferred back and forth between different air districts that have adopted similar programs, and it will serve as an interim measure until the state program is implemented. With respect to the oil industry's concerns, BACT requirements were placed in PR 2100 because of the air quality need in this region. The 100 lbs/day limit was put in place to protect short term air quality standards, particularly the NO₂ standard. Staff believes the program is worthwhile because it will serve as a stop gap measure until the program at the state level is implemented. Although ARB's program is scheduled for adoption in Summer of 1996, there is no real assurance that the program will be enacted at that time.

With respect to recommendation that AQMD staff pursue incorporation of the PR 2100 definition of location in the state program, staff plans to participate and serve on the committee at the state level and will work with ARB to pursue that definition. In terms of the fee request for re-filing under NSR, staff will examine that as part of the Rule 301 fee amendments that will be before the Board in May or June 1996.

ON MOTION OF MR. PAULITZ, SECONDED BY MS. SOTO, A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich, Burke, Hewitt and Loveridge), ADOPTING RESOLUTION NO. 95-36, CERTIFYING THE FINAL ENVIRONMENTAL ASSESSMENT AND ADOPTING RULE 2100 AS RECOMMENDED BY STAFF.

31. Adopt Proposed Rule 518.2 - Federal Alternative Operating Conditions

Staff's recommendation was to continue the public hearing on this item to the January 12, 1996 Board meeting. There were no requests from the public to speak on this item.

ON MOTION OF MS. HAGGARD, SECONDED BY DR. WILSON, A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich, Burke, Hewitt and Loveridge), CONTINUING THE PUBLIC HEARING ON PROPOSED RULE 518.2 TO THE JANUARY 12, 1996 BOARD MEETING AS RECOMMENDED BY STAFF.

33. Rescind Rule 1129 - Aerosol Coatings and Amend Rules 1106.1 - Pleasure Craft Coating Operations; 1107 - Coating of Metal Parts and Products; 1128 - Paper, Fabric, and Film
Coating Operations; 1130 - Graphic Arts; 1145 - Plastic, Rubber, and Glass Coatings; and
1151 - Motor Vehicle and Mobile Equipment Non-Assembly Line Coating Operations

Staff's recommendation was to continue the public hearing on this item to the January 12, 1996 Board meeting. There were no requests from the public to speak on this item.

ON MOTION OF DR. WILSON, SECONDED BY MS. LEE, A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich, Burke, Hewitt and Loveridge) CONTINUING THE PUBLIC HEARING ON RULES 1129, 1106.1, 1107, 1128, 1130, 1145 AND 1151 TO THE JANUARY 12, 1996 BOARD MEETING AS RECOMMENDED BY STAFF.

34. Adopt Proposed Rule 118 - Emergencies

Cindy Greenwald, PTIM Planning & Rules Manager, presented the staff report. The public hearing was opened, and the Board heard testimony from the following individuals:

VINCENT GONZALES, ARCO

Expressed support of PR 118; but recommended that the rule not be limited to equipment used for emergency purposes, because demands for equipment that is not normally used for emergency purposes can be increased during times of emergencies. (Submitted Written Comments.)

GREG ADAMS, Los Angeles County Sanitation Districts/IAIC Technical Advisory Committee

Expressed support of PR 118, and requested that the declarations of emergency be expanded to other than the governor and federal government to perhaps an authorized county health officer.

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

Ms. Greenwald responded that PR 118 would allow for suspension of permit conditions which limit throughput if the action was necessary to protect health or safety, and was not limited to emergency equipment. With respect to the issue of local emergencies, PR 118 was developed to address widespread emergencies where there was need for a great number of variances or a need to bring in equipment from outside the district because the four-county region, with its permitted equipment, could not service that area. For localized emergencies, there is permitted equipment within the basin which can fill that need and there would not be so great a number of variances that the Hearing Board would be overwhelmed. Staff believes the existing system is capable of handling those localized variances.

ON MOTION OF MS. LEE, SECONDED BY MR. PAULITZ, A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich, Hewitt and Loveridge) ADOPTING RESOLUTION NO. 95-38, APPROVING THE NOTICE OF EXEMPTION AND ADOPTING RULE 118 AS RECOMMENDED BY STAFF.

35. Amend Regulation XX - Regional Clean Air Incentive Market (RECLAIM)

William Thompson, SSC Senior Manager, presented the staff report. Because of concerns expressed by industry and new updated information on the increase of CO emissions from the use of tire-derived fuel, it was necessary that the CEQA document for cement kilns be recirculated in order to evaluate the impacts of this potential increase. Also the provisions of Regulation XX dealing with FLM and visibility issues had been delayed to streamline the process. Both items will be brought back to the Board at its March 8, 1996 meeting. In addition, the metal melting industry raised concerns regarding preheated air furnaces, which staff needed to completely research. Staff will bring that issue back to the Board in the Spring of 1996.

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

CURTIS COLEMAN, California Portland Cement Company

Supported the staff recommendation, and continuation of the cement kiln issue.

*JOHN BILLHEIMER, Consultant

TOM DODSON, local ski resorts

Supported the staff recommendation. Mr. Billheimer raised the question, with respect to the ski slope exemption, as to whether or not the north slope of the mountains facing the desert are in fact within AQMD's jurisdiction. (*Submitted Written Comments.)

RON WILKNISS, Western States Petroleum Association

Opposed the deletion of the provision in Rule 2006 (c)(5) for a 30-day notification to the permit holder before the permit conditions are amended.

MICHAEL WEBSTER, Los Angeles Department of Water & Power

With respect to Rule 2012 Protocol, Appendix A, Attachment F (40), which limits operation of peaking units to 200 hours per year, expressed concern that these units may not be operated for several years, but could exceed 200 hours during a year of high demand. Requested the opportunity to discuss with staff adding language to the rule to allow a two or three year averaging.

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

Pang Mueller, SSC Senior Manager, responded that staff believed it necessary to delete the 30-day notification requirement because a number of RECLAIM facilities are subject to the federal Title V programs as well, which set forth various notification requirements that conflict with the 30-day requirement in Regulation XX. With respect to the 200 hours/year limitation, staff was willing to postpone that issue for further discussion with industry and bring it back to the Board at a later date.

ON MOTION OF MR. PAULITZ, SECONDED BY MS. SOTO, A UNANIMOUS VOTE WAS CAST BY THE BOARD MEMBERS PRESENT (Absent: Antonovich, Hewitt and Loveridge) ADOPTING RESOLUTION
NO. 95-39, CERTIFYING THE FINAL SUPPLEMENTAL ENVIRONMENTAL ASSESSMENT AND AMENDING REGULATION XX AS RECOMMENDED BY STAFF, WITH THE EXCEPTION OF THE PROPOSED AMENDED DEFINITION OF "PEAKING UNIT" IN RULE 2012 PROTOCOL, APPENDIX A, ATTACHMENT F(40), WHICH STAFF WILL BRING BACK TO THE BOARD AT A LATER DATE.

ADJOURNMENT

The meeting was adjourned by Chairman Mikels at 11:40 a.m., to 9:30 a.m. on
December 8, 1995, in the Auditorium at AQMD Headquarters, 21865 E. Copley Drive,
Diamond Bar, California.

Board Members present on December 8:

Supervisor Jon D. Mikels, Chairman
County of San Bernardino

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

Supervisor Michael D. Antonovich
County of Los Angeles

Councilman Marvin Braude
Cities of Los Angeles County - Western Region

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

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

DECEMBER 8, 1995

The adjourned meeting was called to order at 9:35 a.m. by Chairman Mikels.
Barry Wallerstein, DEO of Planning, Transportation & Information Management, announced that there was overflow seating available in Room CC6 which would provide video and audio coverage of the Board meeting.

PUBLIC HEARING

36. Adopt Proposed Rule 2202 - On-Road Motor Vehicle Mitigation Options and Rescind
Rules 1501 and 1501.1

Dr. Wallerstein presented the staff report; and brought attention to Language Modifications to Proposed Rule 2202, copies of which had been distributed to Board members and made available to the public. The public hearing was opened, and the Board heard testimony from the following individuals.

Speaking in support of the staff recommendation:

RON HOFFMAN, Los Angeles County Department of Regional Planning

*DENICE DE PAEPE, Sears, Roebuck and Company

RUTHANNE TAYLOR BERGER, Western Riverside Council of Governments

*CAROL REDFERN, Southern California Regional Rail Authority (Metrolink)

LILLIAN KAWASAKI, City of Los Angeles

LINDA WAADE, Coalition for Clean Air and Natural Resources Defense Council

ERIC SCHREFFLER, Consultant

*DEBBIE CHRISTENSEN, Western States Petroleum Association

EVELYN GUTIERREZ, County of Los Angeles

JUDY WRIGHT and JACKI BACHARACH, SCAG

*CYNTHIA SCHABARUM, Foothill Transit

MARTIN GILVAN, Marine Corps Air Station, El Toro

RHEO SCHULER, The Weitzman Company and Inland Auto Dismantlers' Association

*Submitted Written Comments

In addition to expressing support for the staff recommendation, the following suggestions/comments were made:

Suggest: Put the wording on the transitional period for the filing dates and the three-year extension into the rule itself rather than in the staff report. Also, suggest the addition of a definition of "Emission Reduction Program" that is used throughout the rule.

Three points were emphasized: (i) The 1994 AQMP and the California SIP depended upon ridesharing for the conformity finding; (ii) The rule does not transfer any additional burden to stationary sources; and (iii) PR 2202 is important to remain in compliance with the federal CAA.

Request: That priority be given to Metrolink to receive a share of the moneys collected through the AQIP. These moneys would be used for the development and implementation of incentive programs aimed at the employer market to encourage new ridership and retain current riders.

Comment: Significant progress is being made toward meeting trip and VMT reduction goals and the ongoing cost effectiveness evaluations are being used to modify these programs on an ongoing basis so that improvements can be made.

Concern: The definitions under the employee commute reduction option of PR 2202 place facilities that operate 24 hours/day, 7 days/week and that have implemented compressed work week programs to comply with ridesharing rule requirements at a disadvantage. Recommendation: The following amendments to the definitions of AVR Window and Compressed Work Week:

"AVR WINDOW is the period of time, Monday through Friday between the hours of 6:00 a.m. and 10:00 a.m. used to calculate AVR in accordance with these guidelines. AVR Window, as applies for businesses operating 24 hours a day, 7 days a week, is the period of time, Sunday through Saturday between the hours of 6:00 a.m. and 10:00 a.m., used to calculate AVR in accordance with these guidelines. A business operating a work week other than Monday through Friday must notify the District to change the AVR window for its annual survey and AVR calculation."

"COMPRESSED WORK WEEK .... when all days worked and all earned days off fall within the AVR survey week, except in cases where businesses operate 24 hours a day, 7 days a week. In those cases, compressed work week credit will be granted when an employee completes the required work days and scheduled days off within a 7 day period."

Recommendation: Continuation of voluntary rideshare programs and continuation of employer-based public transit subsidies.

Speaking in support of the staff recommendation, only if amended as proposed by COALESCE:

*ROBERT WYMAN, Attorney representing COALESCE

MIKE RIEHLE, Unocal

*DEBORAH KURILCHYK, Southern California Edison

SUSAN AMBROSE, Orange County Transportation Coalition

Mr. Wyman expressed COALESCE's support of the adoption of PR 2202 as an interim emission reduction strategy to replace the current trip reduction mandate until it can be replaced with a direct incentive motorist program within the three-year time frame proposed, only if amended as follows:

1) Expand the Categories of emission Credits to Include RTCs:

Modify 2202 (f)(6) as follows:

"(f)(6) Emission Reduction Credits (ERC) and RECLAIM Trading Credits (RTC) from Stationary Sources

Any person may elect to use Emission Reduction Credits (ERC) or RECLAIM Trading Credits (RTC) generated from stationary sources ~~after January 1, 1996~~, in accordance with the provisions of Regulations XIII and XX."

2) Expand Available Emission Reduction Strategies:

Adopt new paragraphs (m) and (n) as follows:

"(m) Other Emission Reduction Strategies

Notwithstanding the foregoing provisions, any employer may receive credit toward its ERT for any emission reduction strategy that the employer or other person demonstrates to the Executive Officer achieves quantifiable surplus emission reductions for a discrete period of time. Such strategies may include, without limitation, the reduction of non-work trips, other vehicle or engine accelerated turnover programs, investments in clean fuel infrastructure, clean fuel fleet purchases or conversions, the provision of new vehicle purchase subsidies or discounts, and local community or development projects that reduce trip or energy demand or that expand clean fuel or high-occupancy travel options.

(n) General Emissions Credit Provisions

The following provisions shall apply to any of the emission credit strategies identified in this rule.

(1) an employer or other person seeking credit under this rule may use 15,000 annual miles per vehicle, or alternative estimates of vehicle miles traveled (VMT), if it cannot reasonably estimate VMT;

(a) the strategy meets or exceeds the performance requirement for at least two of the three pollutants; or

(b) the sum of surplus emission reductions for all three pollutants meets or exceeds the combined pollutant reduction requirement (i.e., HC + NOx + CO).

(3) any person holding surplus emission credits under this rule may trade some or all of those credits to other employers for their use;

(4) any person holding surplus emission credits under this rule may bank some or all of those credits for future year use; and

(5) upon the expiration of this rule, any unused surplus emission credits may be applied to other emission reduction responsibilities under other District rules and regulations, consistent with such other rules and regulations."

Speaking in opposition to the staff recommendation:

*SENATOR ROB HURTT, Senate Republican Leader, California State Senate

JAMES LANTRY, California Retail Air Quality Coalition

ALLENE MCDOWELL, Kirkhill Rubber Company

GERALD BREITBART, California Restaurant Association

TOM MARTIN, California Industrial Leadership Council

JULIE PUENTES, Orange County Business Council and Private Sector Task Force

LEE WALLACE, The Gas Company

*JUDITH WARE, Santa Ana Chamber of Commerce

DR. KENNETH GREEN, Reason Foundation

Senator Rob Hurtt, the author of Senate Bill 772, which eliminates mandatory trip reduction plans, expressed his belief that PR 2202 would circumvent SB 772 and SB 437. It was his belief that most of the options presented in PR 2202 are unacceptable to most of the business and employer community and the majority of employers will be forced to continue with the trip reduction plan mandate. Proposed Rule 2202 is very similar to Regulation XV and, in his opinion, may be even more onerous. He urged total elimination of Rules 1501 and 1501.1 and the adoption of a new rule as part of the AQMP planning process with more effective mobile source emission reduction strategies which will not unnecessarily burden the employer community

In addition, the following comments/concerns were expressed by the other speakers listed above:

For most employers, PR 2202 leaves only two choices: either a strategy based on employee trip reduction, or a strategy based on old vehicle scrapping. The other options allowed to employers are impractical.

PR 2202 places an unfair burden on businesses, which are already mandated to clean up their own emissions.

It is offensive to assume, in the face of the passage of state legislation and pending federal action, that a replacement rule for Regulation XV should be employer-based. The proposed rule was hastily drafted without benefit of socioeconomic or business impacts and without consideration of other alternatives which could lead to more effective solutions.

Rather than PR 2202, the Board needs to adopt a program, on an aggressive timetable, that would shift the focus and burden from an employer-based approach to a regional approach, involving more innovative, market-oriented solutions.

Urge the Board, if it decides to adopt PR 2202, to include the amendments proposed by COALESCE.

The following individuals did not express a specific position on the staff recommendation, but expressed the following concerns and/or comments:

JOHN OWYANG, Market-Based Solutions and Old Vehicle Clearinghouse

Urged the Board to act decisively. Establish who should be responsible for reducing the emissions, and then determine the most cost effective way of achieving those reductions. The Board should not say that PR 2202 will sunset in three years if it does not truly believe that will happen because it makes it difficult for businesses to plan ahead. Also, if the Board does not truly feel that equivalent emission reductions can be achieved at the AQIP fee levels established, the Board should direct staff to determine the appropriate level where the market will establish. The business community does not want the Board to set the fee at a low level now, only to be increased in several months.

RENZO VENTURO, Hughes Electronics

Expressed concern that the AQMD is not pressing the issue that the Inspection and Maintenance Program and the federal standards on engines are where the emissions reductions need to come from and should be allocated.

STAN SHAW, Clean Air Fuels

Commented on a biodegradeable, alcohol-based product he has developed which, when added to gasoline, can increase vehicle mileage by 20 to 30 percent, as well as reduce hydrocarbons by 70 percent, CO by 60 - 80 percent, and NOx by 50 -60 percent.

ALAN TRUDELL, Garden Grove Unified School District

Requested that those school districts that effectively shut down during the summer be relieved of burdensome documentation and AVR requirements.

CURTIS COLEMAN, CMA Southern California Air Quality Alliance

1) Supported rescinding Rules 1501 and 1501.1 and replacing those rules with more effective programs directed at the causes of emissions rather than at employers. 2) Expressed concern that the PR 2202 will likely be in place longer than the three-year phaseout period during which other emission reduction programs are to be developed. 3) Recommended that inclusion of RTCs as a compliance option in Rule 2202 should be considered along with NSR, RECLAIM and MSERCs in a comprehensive manner, rather than dealing with each on an "ad hoc" rule-by-rule basis.

GREG ADAMS, Los Angeles County Sanitation Districts

Suggested that whatever findings result from the Intercredit Study scheduled for February 1996, those findings should be incorporated into Rule 2202.

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

Written Comments Submitted by:

Dee Angell and Stephen McCaughey, Association for Commuter Transportation

Mayor Robert T. Bartlett, City of Monrovia

John F. Dean, Ed.D., Orange County Department of Education

Rob Heien, Ogden Entertainment Services

Assemblyman Richard Katz, Assembly, California Legislature

Gary K. Sloan, City of La Mirada

Dr. Wallerstein noted that during public testimony staff prepared and distributed to Board members a written response to the COALESCE proposal. Staff believed a number of issues in the COALESCE proposal would be appropriately addressed in the Intercredit Study, and during the next six weeks staff will complete the technical analysis, CEQA analysis, and make sure that all parties that would be affected are afforded the opportunity to offer their views on a number of the items.

The first item proposed by COALESCE involved the use of existing ERCs and RTCs. These are specific items that are being addressed in the Intercredit Trading Study, where staff believes a comprehensive policy is needed. Therefore, staff recommended the Board adopt the original language as proposed by staff. The second request by COALESCE was to open up the option list to include a generic provision that would allow the Executive Officer the latitude to approve strategies that achieve surplus emission reductions under federal and state law. Staff was agreeable to including that provision, with the clarification that in addition to surplus, the emission reductions are also "real" and "enforceable". However, staff believed the addition of the following sentence at the end of the paragraph was necessary, to assure that whatever is granted through this generic option is consistent with the Board's guidance and policies:

"The Executive Officer shall not approve an alternative emission reduction program unless it is consistent with other District regulations and Governing Board policies, and shall consider guidelines established by the ARB and EPA."

Staff suggested modifying COALESCE's proposed subparagraph (m)(1) as follows to reflect ARB guidance in the appropriate technical data:

(1) an employer or other person seeking credit under this rule may use ~~15,000 annual miles~~ actual annual mileage per vehicle, or alternative estimates of vehicle miles traveled (VMT~~), if it cannot reasonably estimate VMT~~ contained in Rule 2202 implementation guidelines adopted (date of adoption).

COALESCE's proposed subparagraph (m)(2) relates to interpollutant trading and could potentially cause problems in terms of demonstrating emissions equivalency. For that reason, staff recommended deleting (a) and (b) of that section. However, to provide additional flexibility and, if the opportunity exists, to use the AQIP to help incentivize and commercialize technologies that otherwise might not have as strong a place in the selection process, staff suggested addition of the following language at the end of the subparagraph (m)(2):

(2) emission credit strategies that do not provide the precise amount of surplus emission reductions for each of the three pollutants addressed by this rule (VOC, NOx, CO) may still qualify for equivalent credit if the employer provides equivalent credits obtained pursuant to paragraph (m)(3) or the District achieves equivalent reductions through the AQIP.

Staff suggested the following correction to COALESCE's proposed subparagraph (m)(3) to make sure to stay within the scope of the CEQA analysis; but staff would be willing to consider the additional language in the future as a potential rule amendment:

(3) any person holding surplus emission credits, other than vehicle trip emission credits, under this rule may trade some or all of those credits to other employers for their use;

Staff recommended deleting subparagraph (m)(4) of the COALESCE proposal because it is an intercredit study issue, and staff needs to complete the technical analysis that is underway prior to making a formal recommendation.

Regarding the school districts exemption, staff agreed that the issue deserves further attention, and intends to meet with the Garden Grove School District and other appropriate parties to further evaluate that issue.

With respect to the clean fuel issues raised, staff recommended that be brought before the Technology Committee for review. Regarding the request by Metrolink to seek AQIP funds, staff welcomed an appropriate proposal from Metrolink through the RFP process.

DR. WILSON MOVED TO ADOPT RESOLUTION NO. 95-40, CERTIFYING THE FINAL ENVIRONMENTAL ASSESSMENT, ADOPTING RULE 2202 AND REPEALING RULES 1501 AND 1501.1, AS RECOMMENDED BY STAFF, INCLUDING THE MODIFICATIONS SET FORTH IN "Language Modifications for Proposed Rule 2202" AND THE FOLLOWING:

Add to Rule 2202 paragraphs (f)(8) and (m)

"(f)(8) Other Emission Reduction Strategies

Notwithstanding the foregoing provisions, any employer may receive credit toward its ERT for any emission reduction strategy that the employer or other person demonstrates to the Executive Officer achieves real, quantifiable, enforceable, and surplus emission reductions for a discrete period of time. Such strategies may include, but are not limited to, the reduction of non-work trips, other vehicle or engine accelerated turnover programs, investments in clean fuel infrastructure, clean fuel fleet purchases or conversions as specified in Regulation XVI, the provision of new vehicle purchase subsidies or discounts, and local community or development projects that reduce trip or energy demand or that expand clean fuel or high-occupancy travel options. The Executive Officer shall not approve an alternative emission reduction program unless it is consistent with other District regulations and Governing Board policies, and shall consider guidelines established by the ARB and EPA.

(m) General Emissions Credit Provisions

The following provisions shall apply to any of the emission credit strategies identified in this rule.

(1) an employer or other person seeking credit under this rule may use actual annual mileage per vehicle, or alternative estimates of vehicle miles traveled (VMT) contained in Rule 2202 implementation guidelines adopted December 8, 1995;

(2) emission credit strategies that do not provide the precise amount of surplus emission reductions for each of the three pollutants addressed by this rule (VOC, NOx, CO) may still qualify for equivalent credit if the employer provides equivalent credits obtained pursuant to paragraph (m)(3) or the District achieves equivalent reductions through the AQIP

(3) any person holding surplus emission credits, other than vehicle trip emission credits, under this rule may trade some or all of those credits to other employers for their use;

(4) upon the expiration of this rule, any unused surplus emission credits may be applied to other emission reduction responsibilities under other District rules and regulations, consistent with such other rules and regulations."

THE MOTION WAS SECONDED BY MR. PAULITZ.

Mr. Antonovich commented that exempting county law enforcement agencies and medical facilities that operate 24 hours/day from AVR requirements or allowing those facilities more leeway in meeting AVR requirements without having to pay fines, would result in substantial savings for limited county resources. He also asked if staff could report back to the Board regarding the biodegradeable fuel additive mentioned during the public hearing.

Dr. Wallerstein recommended that staff quantify the impacts and report back to the Board's Mobile Source Committee in terms of the number of county law enforcement and medical facilities, and what the overall impacts would be with respect to exempting or allowing them leeway in meeting AVR requirements. Staff was agreeable to reporting back to the Technology Committee on the biodegradeable fuel additive mentioned.

In response to Mr. Loveridge, General Counsel Peter Greenwald explained the existing state and federal laws concerning employer ridesharing plans and sanctions for failure to comply with the federal CAA. It was staff's opinion that neither SB 437, which imposes limitations on the AQMD's authority to require employers to implement trip reduction programs, nor SB 772, which prohibits a mandate of trip reduction plans, would prohibit Regulation XV or Rule 2202. The Manzullo Bill (HR 325), pending federal legislation, would in staff's view authorize the withdrawal of the current submission of Regulation XV as part of the SIP only if the state has an alternative means of achieving emission reductions which are equivalent to those that would be achieved by the SIP submission.

In response to Ms. Soto, Dr. Wallerstein indicated staff's agreement to include in the Resolution direction to staff to: (i) develop streamlined implementation and reporting procedures as done with the recent efficiencies and cost savings achieved by Regulation XV; and (ii) provide guidance and help determine the cost effectiveness of various options for employers and for different situations.

Mr. Hewitt submitted for the record a memorandum which he distributed to Board members explaining his opposition to PR 2202. In summary, that PR 2202 should not be adopted; and were it to be adopted, it should not be adopted in the face of pending federal legislation. He concluded the memorandum by stating, in anticipation of Senator Hurtt's comments, that if the Board passed PR 2202--even as amended, and he intended to support amendments and ultimately vote against adopting Rule 2202--the Board would not only invite the contempt of the Legislature, but will have earned it; and he would work with Senators Polanco, Hurtt and Lewis to draft legislation to restructure the agency.

MR. HEWITT MOVED TO AMEND THE MAIN MOTION TO INCLUDE THE MODIFICATIONS TO RULE 2202 ORIGINALLY PROPOSED BY COALESCE, AS FOLLOWS:

Modify 2202 (f)(6) as follows

"(f)(6) Emission Reduction Credits (ERC) and RECLAIM Trading Credits (RTC) from Stationary Sources

Adopt new paragraphs (m) and (n) as follows

"(m) Other Emission Reduction Strategies

(n) General Emissions Credit Provisions

The following provisions shall apply to any of the emission credit strategies identified in this rule.

(a) the strategy meets or exceeds the performance requirement for at least two of the three pollutants; or

(b) the sum of surplus emission reductions for all three pollutants meets or exceeds the combined pollutant reduction requirement (i.e., HC + NOx + CO).

(3) any person holding surplus emission credits under this rule may trade some or all of those credits to other employers for their use;

(4) any person holding surplus emission credits under this rule may bank some or all of those credits for future year use; and

THE MOTION WAS SECONDED BY MS. HAGGARD.

Ms. Haggard expressed her belief that it would be appropriate for the Mobile Source Committee to review the remote sensing and intercredit/interpollutant issues. Dr. Wallerstein noted that the Intercredit Trading Study was on the agenda for the next meeting of the Mobile Source Committee, and indicated that he was agreeable to appending to the Study staff's assessment of the rule language proposed by COALESCE that staff is recommending the Board not adopt at this time.

Speaking in support of the main motion and in opposition to the amendment by
Mr. Hewitt, Mr. Braude commented that the Board, in response to the public and the business community, had moved a long way from the original adaptation of Regulation XV. In the interim, the Board has adopted RECLAIM, perhaps the most revolutionary and most significant action in the use of the market mechanism to regulate air quality control in the history of this country. The COALESCE amendment suggests mixing pollutants, which he believed would jeopardize the advancement made with RECLAIM in setting up a market mechanism to control air pollution.

Mr. Mikels added that he also opposed Mr. Hewitt's amendment, for two reasons: (i) The COALESCE proposal basically says that the Executive Officer should be able to approve any strategy, whereas the language inserted into that by staff says the Executive Officer shall not approve an alternative emission reduction program unless it is consistent with Governing Board policies; and (ii) The Intercredit Study will be reviewed by the Mobile Source Committee and is scheduled for consideration by the full Board in February 1996. It seemed to him appropriate to wait until after the study and deal with the issue comprehensively, rather than taking a piece-meal approach.

Upon unanimous consent of the Board, Mr. Wyman addressed the Board in response to comments and staff's modifications to the COALESCE proposal. With respect to the interpollutant issue, he noted that both EPA and ARB have already adopted provisions exactly as proposed by COALESCE. Whatever small shortfall occurs can be made up with the AQIP. The consequence of not allowing one of the two options suggested by COALESCE would be no approval of remote sensing strategies.

THE MOTION BY MR. HEWITT TO AMEND THE MAIN MOTION TO INCLUDE THE MODIFICATIONS TO RULE 2202 ORIGINALLY PROPOSED BY COALESCE FAILED, FOR A LACK OF SEVEN CONCURRING VOTE, AS FOLLOWS:

AYES: Antonovich, Burke, Haggard, Hewitt, Loveridge and Silva.

NOES: Braude, Lee, Mikels, Paulitz, Soto and Wilson.

ABSENT: None.

MR. HEWITT MOVED TO AMEND THE MAIN MOTION TO INCLUDE THE FOLLOWING DEFINITIONS IN RULE 2202:

"AVR WINDOW is the period of time, Monday through Friday between the hours of 6:00 a.m. and 10:00 a.m. used to calculate AVR in accordance with these guidelines. AVR Window, as applies for businesses operating 24 hours a day, 7 days a week, is the period of time, Sunday through Saturday between the hours of 6:00 a.m. and 10:00 a.m., used to calculate AVR in accordance with these guidelines. A business operating a work week other than Monday through Friday must notify the District to change the AVR window for its annual survey and AVR calculation.

COMPRESSED WORK WEEK applies to employees who as an alternative to completing basic work requirements in five eight-hour workdays in one week, or ten eight-hour workdays in two weeks, are scheduled in a manner which reduces vehicle trips to the worksite. The recognized compressed work week schedules for this Rule are 36 hours in 3 days (3/36), 40 hours in 4 days (4/40), or 80 hours in 9 days (9/80). Compressed work week credit will only be granted when all days worked and all earned days off fall within the AVR survey week, except in cases where businesses operate 24 hours a day, 7 days a week. In those cases, compressed work week credit will be granted when an employee completes the required work days and scheduled days off within a 7 day period."

THE MOTION WAS DULY SECONDED, AND PASSED BY THE FOLLOWING VOTE:

AYES: Antonovich, Burke, Haggard, Hewitt, Lee, Loveridge, and Silva.

NOES: Braude, Mikels, Paulitz, Soto and Wilson.

ABSENT: None.

MR. HEWITT MOVED TO AMEND THE MAIN MOTION TO EXEMPT FROM RULE 2202 ALL PRIMARY AND SECONDARY SCHOOL DISTRICTS. THE MOTION WAS SECONDED BY MR. SILVA.

Dr. Wallerstein responded that staff did not have the statistics at hand to quantify the implications of the amendment in terms of emissions. Catherine Wasikowski, Transportation Programs Director added that pursuant to existing law, school districts do not pay filing fees for trip reduction plans. The AQMD collects those fees through the AB 2766 fund.

Mr. Greenwald recommended that this amendment be deferred to the January 1996 Board meeting, so that staff can assess the emissions impact and determine whether or not it is within the scope of the CEQA document.

Ms. Lee asked that in the future, for any other rules, a separate analysis be conducted to address the school districts issue.

MS. LEE MOVED TO AMEND THE MOTION BY MR. HEWITT BY DEFERRING THE ISSUE OF EXEMPTING PRIMARY AND SECONDARY SCHOOL DISTRICTS FROM RULE 2202 UNTIL STAFF HAS PERFORMED AN ANALYSIS OF THE IMPACTS OF SUCH EXEMPTION AND REPORTS BACK TO THE BOARD WITH A RECOMMENDATION. THE MOTION WAS SECONDED BY MR. BRAUDE.

Mr. Antonovich added that although exempt from trip reduction plan filing fees, the schools are still subject to fines and have to hire additional staff to prepare documentation. He believed the money spent to pay their salaries could be better spent on teaching supplies and materials.

THE MOTION BY MS. LEE TO AMEND THE MOTION BY MR. HEWITT BY DEFERRING THE ISSUE OF EXEMPTING PRIMARY AND SECONDARY SCHOOL DISTRICTS FROM RULE 2202 UNTIL STAFF HAS PERFORMED AN ANALYSIS OF THE IMPACTS OF SUCH EXEMPTION AND REPORTS BACK TO THE BOARD WITH A RECOMMENDATION PASSED BY THE FOLLOWING VOTE:

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

NOES: Antonovich, Haggard, Hewitt and Silva.

ABSENT: None.

Mr. Silva expressed his opposition to the main motion because of his belief that PR 2202 would have a detrimental effect on the health and welfare of the public. He believed employee ridesharing would make economic sense if the incentives were in place, and that the federal level might be the place to start, with income tax credits.

Dr. Wilson clarified that the main motion does include the amended language to allow expanding the CEQA interpretation for the flexibility that the COALESCE amendments seek.

Ms. Haggard expressed her concern with comments that PR 2202 was developed without consideration of other options. A tremendous amount of time and energy has gone into this issue over the past few months in an attempt to develop options that did not place mandates on employers; and she wanted to dispel any image that this issue has not received thoughtful consideration by Board members. She strongly supported reconsideration of AQMD's entire mobile strategy in the 1997 AQMP, as does the entire Board, with an emphasis on voluntary programs that provide bankable, tradable emissions credits. She asked for assurance that the Board has appropriately directed staff to comprehensively re-examine the mobile strategies in the 1997 AQMP, and to not take adoption of Rule 2202 with its three-year sunset provision as meaning that the Board wants the rule to be in effect that long.

Dr. Wallerstein responded that the last provision on the adopting Resolution states: "The Board does hereby direct staff to assess the necessity of developing and implementing the remaining indirect source rules contained in the 1994 AQMP as part of the 1997 AQMP Revisions". Staff was agreeable to modifying that language to include "continued implementation of Rule 2202".

Dr. Burke commented that while he had concern about the overall effectiveness of Regulation XV, he could not responsibly vote to repeal Regulation XV without there being a replacement rule to achieve equivalent emission reductions.

Ms. Soto expressed her support for PR 2202 because it provides alternatives and flexibility; and she believed the main thing the cities she represent are impressed with is that PR 2202 gives them a choice.

At Mr. Hewitt's request, Chairman Mikels directed staff to bring back to the Board at its February 9, 1996 meeting a proposal, appropriately noticed to the public along with all analyses and CEQA documents, to amend Rule 2202 to exempt primary and secondary schools and to allow the Board to consider adjusting the AQIP fee.

Ms. Lee stated for the record that she had no objection to having those two issues brought back in February, as long as those two specific items are the only issues the Board will be taking action on with respect to Rule 2202. Speaking in support of the main motion, she commented that it is a universal acceptance that Regulation XV does not work. On the other hand, many of the companies she has spoken with have made great strides in participating in cleaning up air quality. She has been an advocate on the Board of trying to work out a balance where existing businesses are not driven out and new businesses are not discouraged from locating to this region, and yet the air quality does not get any worse. She believes it a disservice to those who appoint members to the Board for a Board member to try to dismantle the Board and the AQMD, and did not appreciate hearing undercurrents of that being the result if Board members do not agree on certain rules that the Board promulgates.

Chairman Mikels commented that in recognition of the fact that the direct measures in the SIP regarding mobile sources are insufficient, state law gave the AQMD the authority to implement indirect source rules. He believed AQMD has acted responsibly in trying to make the proposed rule more flexible, reduce costs, and make it as workable as possible. The idea of defeating Regulation XV and not adopting PR 2202 seemed to him irresponsible and to commit the AQMD on a risky endeavor that invites problems with transportation conformity and a noncompliant AQMP, the consequences for which at this time are incalculable.

A VOTE WAS TAKEN ON THE MAIN MOTION BY DR. WILSON, AS AMENDED BY THE BOARD, TO:

(1) ADOPT RESOLUTION NO. 95-40, CERTIFYING THE FINAL ENVIRONMENTAL ASSESSMENT, ADOPTING RULE 2202 AND REPEALING RULES 1501 AND 1501.1, AS RECOMMENDED BY STAFF, INCLUDING THE MODIFICATIONS SET FORTH IN "Language Modifications for Proposed Rule 2202":

(2) ADD TO RULE 2202 THE FOLLOWING PARAGRAPHS (f)(8) AND (m)

"(f)(8) Other Emission Reduction Strategies

Notwithstanding the foregoing provisions, any employer may receive credit toward its ERT for any emission reduction strategy that the employer or other person demonstrates to the Executive Officer achieves real, quantifiable, enforceable, and surplus emission reductions for a discrete period of time. Such strategies may include, but are not limited to, the reduction of non-work trips, other vehicle or engine accelerated turnover programs, investments in clean fuel infrastructure, clean fuel fleet purchases or conversions as specified in Regulation XVI, the provision of new vehicle purchase subsidies or discounts, and local community or development projects that reduce trip or energy demand or that expand clean fuel or high-occupancy travel options. The Executive Officer shall not approve an alternative emission reduction program unless it is consistent with other District regulations and Governing Board policies, and shall consider guidelines established by the ARB and EPA.

(m) General Emissions Credit Provisions

The following provisions shall apply to any of the emission credit strategies identified in this rule.

(3) any person holding surplus emission credits, other than vehicle trip emission credits, under this rule may trade some or all of those credits to other employers for their use;

(3) INCLUDE THE FOLLOWING DEFINITIONS IN RULE 2202:

THE MOTION PASSED BY THE FOLLOWING VOTE:

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

NOES: Antonovich, Hewitt and Silva.

ABSENT: None.

Mr. Greenwald added that the schools exemption issue may be significant under CEQA, which would require a 45-day notice; therefore, staff will bring that item back to the Board in February to set a public hearing for the March 8, 1996 Board meeting.

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.

CLOSED SESSION/ADJOURNMENT

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

The Board adjourned to closed session at 1:20 p.m. as follows:

(i) Pursuant to Government Code Section 54956.9 (a), to confer with counsel regarding pending litigation;

Titles of Litigation: Fisher v. SCAQMD, Case No. BC 082431
Fisher v. SCAQMD, Case No. BC 138631

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

Agency Negotiators: Nick Nikkila/Charles Goldstein

Employee Organizations: Federation of Public Sector Workers
San Bernardino Public Employees Association

The foregoing is a true statement of the proceedings held by the South Coast Air Quality Management District Board on December 7 and December 8, 1995.

Respectfully Submitted,

SAUNDRA McDANIEL

Senior Deputy Clerk

Date Minutes Approved: _____________________________

_________________________________________________

Jon D. Mikels, Chairman

ACRONYMS

AQIP = Air Quality Investment Program NSR = New Source Review

AQMD = Air Quality Management District PAR = Proposed Amended Rule/Regulation

AQMP = Air Quality Management Plan PR = Proposed Rule/Regulation

ARB = California Air Resources Board PTIM = Planning, Transportation &

AVR = Average Vehicle Ridership Information Management

BACT = Best Available Control Technology RECLAIM = REgional CLean Air

CAA = Clean Air Act Incentives Market

CEQA = California Environmental Quality Act RFP = Request for Proposals

CO = Carbon Monoxide RTC = RECLAIM Trading Credit

EPA = Environmental Protection Agency SCAG = Southern California Association of

ERC = Emission Reduction Credit Governments

FLM = Federal Land Manager SIP = State Implementation Plan

IAIC - Interagency AQMP Implementation Committee SOx = Oxides of Sulfur

MSERCs = Mobile Source Emission Reduction Credits SSC = Stationary Source Compliance

MSRC = Mobile Source (Air Pollution Reduction) Review Committee VMT = Vehicle Miles Traveled

NOx = Oxides of Nitrogen VOC = Volatile Organic Compound

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URL: ftp://lb1/hb/1996/January/9512min.html