BOARD MEETING DATE: May 7, 2010
AGENDA NO. 23
REPORT:
Legislative Committee
SYNOPSIS:
The Legislative Committee held its regular meeting on Friday, April 9, 2010. The next Legislative Committee meeting is scheduled for Friday, May 14, 2010 at 9:00 a.m. in Conference Room CC8. The Committee deliberated on agenda items for Board consideration and recommended the following positions.
RECOMMENDED ACTIONS:
Receive, file this report, and approve positions on the bills as specified in this letter.
Jane Carney, Chair
Legislative Committee
Attendance [Attachment 1]
The Legislative Committee met on April 9, 2010. Committee Member Jane Carney (Chair) and Dennis Yates (who was appointed to the Committee for this meeting) were present. Committee Members Michael Antonovich and Jan Perry were present via videoconference. Committee Member Marion Ashley was absent.
Update on Federal Legislative Issues
Mr. Mark Kadesh, AQMD federal legislative consultant, reported that AQMD met with U.S. Senate Environment and Public Works (EPW) committee regarding marine vessel policy issues. The draft policy issues have been forwarded to the EPW Committee director and Mr. Kadesh will follow-up to chart out a course of action. Mr. Chris Kierig, AQMD federal legislative consultant, reported that representatives Roybal-Allard and Schiff will be carrying AQMD appropriation requests. He reported that the U.S. House Republicans have made a pledge to not support any earmarks.
Regarding climate change policy issues, Mr. Kierig reported that there has been a lot of discussions about the Senators Kerry, Graham and Lieberman proposal. However, no specific details are clear at this point as to what will happen. He noted that the Clean Tea legislation advocates are also trying to engage in this matter.
Ms. Jane Carney congratulated Kadesh and Associates for obtaining interest and consideration from federal legislators regarding AQMD appropriation requests.
Andy Ehrlich, AQMD federal legislative consultant, reported that there was a mid-March visit to Washington D.C. by AQMD staff, which included an Air Quality Institute briefing on Capitol Hill, and other offices. He further stated that the Clean Cars Rule was issued by the U.S. EPA and implements new standards for fuel economy in passenger fleets throughout the country. Mr. Ehrlich added that the new rules will be effective nationwide by 2011, and represent significant efforts by U.S. EPA to regulate greenhouse gas (GHG) emissions. Mr. Ehrlich further noted that we are expecting a final U.S. EPA rule regarding tailoring regulation in the next month or so.
Mr. Peter Greenwald, Senior Policy Advisor, Executive Office, reported that the International Maritime Organization (IMO) approved the United States/Canada application for designation of an Emission Control Area (ECA), extending about 200 miles out into the coastal waters of those two countries. The most stringent IMO standards for ocean-going marine vessels apply within the ECA, including lower sulfur fuels and an 80% control of NOx from new vessels to be built in 2016 and later. However, Mr. Greenwald stated that NOx benefits will not come soon enough for this region’s needs because the most stringent NOx limits only apply to new vessels rather than existing vessels, which have a very long life. Thus, we have been developing proposals regarding requirements or incentives to route the cleanest vessels to this region. Also, additional direct particulate matter controls are needed because even with the lower sulfur fuel standards, ocean-going vessels will be the largest source of cancer risk around our ports.
Update on State Legislative Issues
Mr. Will Gonzalez, AQMD state legislative consultant, provided an update on AB 2691 (Hall), and said that this bill will be heard in the Natural Resources Committee. AQMD has taken an oppose position on the bill.
Regarding SB 1156 (Cedillo), which will help truckers who are now subject to the CARB on-road rule, he stated that the bill will provide $10 million from the AB 118 funds for compliance. In addition, he stated that AQMD staff has been working with the senator’s staff on recommendations on alternative approaches.
Mr. Gonzalez reported that the Renewable Portfolio Standard (RPS) bill has been reintroduced in the Senate but not in the Assembly. However, there is not much interest by Senate leadership to move the bill early in the session, which will likely lead to a “stand off” at the end of session. Mr. Gonzalez noted that the Public Utilities Commission released a decision that with the existing RPS mandate, no more than 25% of that power can come from outside the state.
Mr. Gonzalez reported that there are a number of bills relating to and/or challenging CEQA and AB 32. There are several CEQA bills by republicans that are spot bills, setting the stage for this summer’s budget fight for CEQA exemption type issues. Mr. Gonzalez reported that there are also some CEQA bills by democrats that are focused on streamlining for energy related jobs. Mr. Gonzalez stated there will not likely be a lot of movement on these bills.
Mr. Gonzalez reported that there are over a dozen AB 32 related bills, including those dealing with market based compliance mechanisms and attempts to limit or restrict the State’s ability to raise funds. Mr. Gonzalez stated that these bills are not likely to move.
Mr. Jason Gonsalves, AQMD state legislative consultant, reported that on March 23, AQMD received word that the California Air Resources Board would be proposing to shift a portion of Southern California’s Proposition 1B air quality funds to the San Joaquin region. Mr. Gonsalves reported that the same day, a delegation letter was drafted and signed by Senators Lowenthal, Oropeza, Pavley, and Wright, as well as Assembly Members Lowenthal and Furutani, opposing any change in the regional distribution of funds. He referenced Dr. Wallerstein’s presentation before the CARB Board where he suggested that the two regions work together to maximize federal funding rather than fight over existing funding, and his suggestion was well received.
Mr. Gonsalves reported that the Governor is scheduled to release the state budget on May 14. It is anticipated that state revenues will be slightly higher than originally expected. Mr. Gonsalves stated that legislative analyst, Mack Taylor, reported to the budget committee that the $20 billion state deficit will not be resolved this year or next.
Ms. Carolyn Veal Hunter stated that there were outreach efforts to the Governor’s office, Speaker Pro Tem Steinberg and Assembly Speaker Perez’s office as well as telephone calls to CARB regarding the Proposition 1B issue described before. Ms. Hunter reported that with respects to offsets, NRG will no longer be pursuing legislation this year for additional credits as they want to get their permits from the CEC. Ms. Hunter stated that AB 388 (Calderon) is still in the Rules Committee and will probably not move. Ms. Hunter reported that in regard to GHG and energy-related legislation, she has been working to review and analyze bills to identify any trends for CEQA and AB 32 related legislation.
Ms. Hunter reported that AB 1846 is a bill to watch because it seeks to streamline the CEQA process for projects by allowing industries who are subject to GHG compliance to go through an expedited environmental review.
Recommend Position on the following Federal Bill
[Attachment 2]
Jill Whynot, Director of Strategic Initiatives, Planning, Rule Development & Area Sources, briefed the Committee on the following federal legislation:
S. 2995 (Carper) National Uniform Multiple Air Pollutant Regulatory Program for the Electric Generating Sector (“Clean Air Act Amendments of 2010”)
Ms. Whynot reported that a summary of the bill was given at the April Legislative Committee meeting as an informational item, and reminded the Committee that this bill would include California in a NOx reduction program with a 37% decrease in emissions from 2012-2020 and include an additional 57% reduction in SO2 from 2012-2020. Ms. Whynot stated that the facilities in the basin are already very clean and this bill as written causes concern because facilities in California would likely need to buy allowances and essentially finance controls in other parts of the country.
Ms. Whynot reported that AQMD staff met with the author’s staff in Washington D.C., who would like AQMD to support this bill. Ms. Whynot reported that staff drafted amendment language for the author to consider, including provisions to:
Exempt facilities in SCAQMD area as they are already very clean;
Give allowances based on emission levels and controls in place;
Use auction revenues just for air quality benefits;
Add that each ton over allocation is a single, separate violation for each day of the calendar year;
Require deductions for excess emissions the year after it is discovered, rather than year it occurred; and
Provide clarifications regarding the amending of applicable permit applications, compliance plans, and permits upon the transfer of allowances.
Ms. Whynot reported that the following questions still need clarification:
Will the bill provisions be enforced by Title V permits?
Will it be acceptable for state and local agencies to charge fees?
What is the basis for the amount of allowances being auctioned?
Staff recommends a SUPPORT WITH AMENDMENTS position, and will seek further clarification from the author.
Councilwoman Jan Perry asked if supporting this bill is premature due to the amendments needed. Mr. Abarca stated that the bill is scheduled to be marked up in the Senate EPW Committee in May, and the Senator’s staff has indicated a willingness to work with AQMD to discuss our concerns. Therefore, AQMD’s position would allow for continuing discussions and allow this bill to move forward for the markup hearing.
In response to a request from Suzanne Wilson from the City of Anaheim, Ms. Whynot replied that AQMD’s recommended position is to exempt power plants in the South Coast region from both NOx and SOx programs.
Chair Carney requested that staff put together data to share with Senator Carper’s staff regarding how clean the RECLAIM facilities within the South Coast region are, in order to bolster our request for amendments.
The Legislative Committee approved staff’s recommendation to Support S 2995 with Amendments.
Update on SB 1114 (Florez) Emission Reduction Credits: Private and Public Moneys, and (Wright) Legislation Addressing Air District Enforcement of Odor Nuisances.
Mr. Oscar Abarca, Deputy Executive Officer, Legislative & Public Affairs gave an update on the following legislation:
SB 1114 (Florez)
Mr. Abarca reported that this bill would authorize the creation of emission reduction credits from marine vessel or locomotive emission reductions funded by both public and private funds, under certain conditions.
Mr. Abarca reported that since the last meeting, Dr. Wallerstein had a positive meeting with Senator Florez and noted that while it appears that he does not intend to move the bill at this time, Senator Florez committed to work with AQMD staff if he does move the bill in the future.
(Wright) Legislation Addressing Air District Enforcement of Odor Nuisances. [Attachment 3]
Mr. Abarca updated the Committee about the legislation by Senator Wright regarding air district enforcement of odor nuisances. Mr. Abarca stated that at the last meeting Mr. Kurt Wiese, General Counsel, reported that a group of foundries from the Bay Area first raised the issue with the Senator. In turn, the Senator approached SCAQMD staff for input.
Mr. Abarca reported that since the last Legislative Committee meeting, staff has prepared legislative language based on enforcement protocols here at the District, which was shared with the Bay Area AQMD for input, and provided to the Committee today. This language has been shared with Senator Wright’s office and we are awaiting his response. Mr. Abarca stated that the Committee will be kept apprised of any new developments.
Chair Carney asked if action needed to be taken on the (Wright) legislation. Mr. Wiese did not think any action needed to be taken.
Dr. Wallerstein stated that this legislation would definitely be brought back to the committee for action at the May 14 meeting; however, staff wanted the Committee and Board to know how discussions are going with Senator Wright’s staff.
Recommend Position on State Bills
[Attachment 4]
Mr. Abarca briefed the Committee on the following state legislation:
ACR 109 (Nestande) Roy Wilson Memorial Highway
This resolution deservedly honors the late AQMD Governing Board Vice-Chairman, Supervisor Roy Wilson, for his years of leadership and public service in Riverside County. The measure designates a portion of State Highway Route 74 in the City of Palm Desert and Riverside County as the Roy Wilson Memorial Highway.
Staff recommends a SUPPORT for this resolution and recommends additional language that would enhance and reflect the supervisor’s leadership and significant contributions to Clean Air for the South Coast Basin and, in particular, the Coachella Valley.
The Legislative Committee approved staff’s recommendation to Support with Enhancements ACR 109.
Dr. Anupom Ganguli, Assistant DEO, Legislative & Public Affairs, briefed the Committee on the following state legislation:
AB 2311 (Mendoza) California Global Warming Solutions Act of 2006: transportation fuels: review.
AB 2311 affects CARB’s GHG regulation regarding transportation fuels. Previously, CARB adopted low carbon fuel standards to lower the carbon intensity by 10% by 2020. Staff’s key concern regarding this bill is that it would delay implementation of AB 32. New language was introduced a few days ago to soften this effect however, staff’s concerns still remain. At this time, staff recommends a WATCH position.
The Legislative Committee approved staff’s recommendation to Watch AB 2311.
SB 908 (Wyland) Meal and rest periods: exceptions
Senator Wyland introduced SB 908 to provide an exception to the meal and rest break laws for persons in the armored transport industry. It is difficult for such persons to take breaks because of the significant and acute public safety risk present when staff takes a break.
Our interest in the bill stems from the significant diesel fuel emissions that result from these large armored trucks idling in order to comply with the meal and rest period requirements. Because of the unique public safety concerns related to the armored car industry and the potential to reduce diesel emissions, staff recommends a position of SUPPORT.
The Legislative Committee approved staff’s recommendation to Support SB 908.
SB 1033 (Wright) California Global Warming Solutions Act of 2006: allowances.
SB 1033 is intended to control the cost of GHG emission allowances by limiting the distribution of those allowances to those with compliance obligations. Thus, third party investors would not be allowed to hoard GHG allowances for purposes of speculation.
Because of both scarcity and speculative hoarding in the market for PM10 pollution credits, prices reached exorbitant and prohibitive levels. Given this experience, AQMD staff is supportive of efforts that would minimize market manipulations; however, the language should be clarified to allow the District and other local agencies the ability to sell, trade or distribute GHG credits they generate.
Consequently, staff recommends a position of SUPPORT WITH AMENDMENTS.
Mayor Yates asked if this is beneficial for the District. Dr. Ganguli replied that this is beneficial for the District, provided we have the ability to participate in the market.
The Legislative Committee approved staff’s recommendation to Support SB 1033 with Amendments.
Nicole Nishimura, Dr. Lyou’s board assistant, stated that Dr. Lyou wanted to express his concern about excluding brokers from the market because he believes that they are an important participant.
SB 1299 (Lowenthal) Vehicles: vehicle miles traveled fee (VMT)
SB 1299 would require the Department of Motor Vehicles to develop and implement a pilot program designed to study issues related to implementing a VMT fee in California and to report back regarding its findings to the Legislature by June 30, 2012. Issues to be evaluated include how to calculate the mileage, available technologies, data transmission, and privacy concerns.
This bill is an important first step in identifying and implementing an alternative, reliable funding stream to the fuel tax for transportation-related clean air initiatives; however, given the extraordinarily difficult economic climate, there are concerns regarding creating additional fees. Staff recommends a WATCH position for this bill.
Dr. Wallerstein suggested proposing an alternative to the Senator regarding this issue. Specifically, when dealing with the Caltrans budget, the Senator could add budget rider language which includes the contents of this bill, as a technology study.
Ms. Nishimura stated that Dr. Lyou wanted to raise the question as to why a person driving a Hummer would pay the same VMT fee as one driving a Prius. Dr. Wallerstein stated the fees wouldn’t necessarily be the same. The bill is asking us to think about those issues and to come up with a proposal that would incorporate technology for the separation of such data.
The Legislative Committee approved staff’s recommendation to Watch SB 1299.
Home Rule Advisory Group Committee Legislative Report
[Attachment 5]
Please refer to Attachment 4 for a written report.
Other Business: None
Public Comments: None
Attachment (EXE, 859k)
Attendance Roster
Federal Bill language and AQMD Bill Analysis
State Bill Language and AQMD Bill Analyses
Legislation Addressing Air District Enforcement of Odor Nuisances
Report from AQMD Home Rule Advisory Committee