MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD HEARING ROOM CALIFORNIA AIR RESOURCES BOARD 2020 L STREET SACRAMENTO, CALIFORNIA FRIDAY, MARCH 29, 1996 8:40 A.M. Nadine J. Parks Shorthand Reporter PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii MEMBERS PRESENT John D. Dunlap, III, Chairman Eugene Boston, M.D. Joseph C. Calhoun Lynne T. Edgerton M. Patricia Hilligoss John S. Lagarias Jack C. Parnell Barbara Riordan Ron Roberts James W. Silva Doug Vagim Staff: Jim Boyd, Executive Officer Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer Mike Kenny, Chief Counsel Bob Cross, Assistant Chief, Mobile Source Division Tom Evashenk, Staff, MSD Jack Kitowski, Chief, On Road Control Regulations, MSD Kathleen Walsh, Staff Counsel Patricia Hutchens, Board Secretary Wendy Grandchamp, Secretary Bill Valdez, Administrative Services PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii I N D E X PAGE Proceedings 1 AGENDA ITEM: (Continued) 96-2-2 Public Hearing to Consider Amendments to ZEV Requirements for Passenger Cars and Light-Duty Trucks Call to Order and Roll Call 1, 2 Summary Comments by Jim Boyd Executive Officer 2 Statement by Chairman Dunlap 9 Comments and Questions by Supervisor Roberts 15 Questions/Comments Comments by Mr. Calhoun 27 Questions/Comments 30 Clarification of Ex Parte Communications by Supervisor Silva 30 Comments by Supervisor Silva 31 Comments by Mr. Lagarias 34 Comments by Dr. Boston 37 Comments by Ms. Edgerton 38 Questions/Comments 44 Comments by Supervisor Riordan 48 Questions/Comments 49 Comments by Mr. Parnell 50 Comments by Supervisor Vagim 52 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv INDEX, continued. . . PAGE AGENDA ITEMS: 96-2-2 Further Comments by Supervisor Roberts 57 Questions/Comments 58 Motion to Approve Resolution 96-12 by Mr. Parnell 59 Discussion 59 Substitute Motion by Ms. Edgerton 60 Discussion 67 Roll Call Vote on Substitute Motion 74-75 Roll Call Vote on Main Motion 75-76 Discussion 76 Direction to Staff by Chairman 77-78 Discussion 79 Adjournment 81 Certificate of Reporter 82 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 P R O C E E D I N G S 2 --o0o-- 3 CHAIRMAN DUNLAP: Will Day 2 of the March meeting 4 of the California Air Resources Board please come to order. 5 Ms. Hutchens, will you please call the roll? 6 MS. HUTCHENS: Boston? 7 DR. BOSTON: Here. 8 MS. HUTCHENS: Calhoun? 9 MR. CALHOUN: Here. 10 MS. HUTCHENS: Edgerton? 11 MS. EDGERTON: Here. 12 MS. HUTCHENS: Hilligoss? 13 MAYOR HILLIGOSS: Here. 14 MS. HUTCHENS: Lagarias? 15 MR. LAGARIAS: Here. 16 MS. HUTCHENS: Parnell? 17 MR. PARNELL: Here. 18 MS. HUTCHENS: Riordan? 19 SUPERVISOR RIORDAN: Here. 20 MS. HUTCHENS: Roberts? 21 SUPERVISOR ROBERTS: Here. 22 MS. HUTCHENS: Silva? 23 SUPERVISOR SILVA: Here. 24 MS. HUTCHENS: Vagim? 25 SUPERVISOR VAGIM: Here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 MS. HUTCHENS: Chairman Dunlap. 2 CHAIRMAN DUNLAP: Here. 3 Before we begin, I'd like to recognize the 4 addition of Supervisor Vagim. I want you to know that he 5 had delivered to his hotel room more paper that he could 6 possibly carry, and he's assured me he stayed up all night 7 reading it. 8 So, he's prepared and sufficiently caught up, I 9 believe, to participate today. 10 Doug, you concur with that? 11 SUPERVISOR VAGIM: Yes. 12 CHAIRMAN DUNLAP: Okay. With that, I'd like to 13 live up to my commitment to Mr. Boyd to give him a few 14 moments this morning, and make some -- I guess some closing 15 comments on staff's behalf. 16 MR. BOYD: Thank you, Mr. Chairman. Good morning, 17 Board members, and good morning to the audience. 18 Now, that I've had time to mull over yesterday's 19 events and listen to the radio, I'll probably will speak a 20 little bit longer than I would have last night. 21 (Laughter.) 22 MR. BOYD: I think over the course of the long day 23 yesterday, I was reminded of the long continuing series of 24 forums, and workshops, and Board meetings last year. Last 25 year seems like only yesterday to some of us. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 And you get mixed messages from those experiences. 2 There's a lot of similar rhetoric that we've all learned to 3 just sit and be patient with, and there are a lot of very 4 good ideas and thoughts that come up at each subsequent 5 meeting and discussion, which gives rise to the theme that I 6 heard the Chairman address yesterday -- I heard many of you 7 address -- and many of the members of the public talked 8 about the theme of partnering, and participation, and 9 broad-based support for programs being a necessary thing in 10 this day and age, and a desirable thing, and something that 11 works that perhaps years ago didn't work. 12 And I think that continues to be a theme. And I 13 think I can pledge to you that I know we're interested in 14 it. The experience of cleaner burning gasoline and a lot of 15 other experiences that some Board members know something 16 about because they were involved that the public does or 17 doesn't know about. 18 I mean, we have had huge public partnerships 19 underway in the San Joaquin Valley for several years, and 20 the studies we've done with industry there. 21 And Supervisor Vagim's been intimately involved. 22 Mr. Parnell was involved in another life in that same study, 23 and other types of things like that just give rise to the 24 need to do those kinds of things. 25 Secondly, a lot of views yesterday about the glass PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 being "half empty," perhaps rather than half-full. I don't 2 think the glass is even only half full. But there's a lot 3 of negativism rather than positive views. But then there 4 were lots of, in my mind, rays of sunshine about people 5 saying that's then and now's now, and we want to work 6 together for the future. 7 So, I think that was extremely positive. There's 8 still many whose main touchstone for analysis and comparison 9 is the original 1990, as I said yesterday, decision of 2 10 percent in '98. And there's a lot of us who feel that that 11 never would be the starting point for any analysis today, no 12 matter what had happened in the past, no matter how 13 imperfect or perfect the world might have been. 14 I sincerely believe we'd before you today, if it 15 had been a perfect world, saying -- and no other firestorms 16 that we had to walk through -- we'd be saying, 17 technologically, you can't quite get there. We don't want 18 to ruin the program. It does need to be changed. And we'd 19 be having that debate. 20 This morning on the radio on the way to work, I 21 heard reference to the Board's meeting yesterday and the 22 fact the decision would be made today to, quote, "withdraw 23 from the program." 24 Well, I thought to myself, "That word's not as bad 25 as some I've heard the last few days." PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 But the item went on to make reference to "the 2 breathers will pay," and "the SIP will be put in jeopardy." 3 And then there was an interview of an individual 4 who made that case. And that brings up the issue that we 5 wrestled with so much yesterday, the NLEV issue and whether 6 we protect ourselves or what have you. 7 And I would remind you, had it been a perfect 8 world, and had we not had the type of situation we did, we 9 probably wouldn't have an agreement. We'd be sitting here 10 talking about whether to launch a program or not launch a 11 program. And had we launched it as originally proposed, or 12 in any modified form and it failed, the breathers and the 13 SIP both would be in jeopardy. 14 We have fortuitously or what have you -- 15 serendipitously, say what you want -- a situation where we 16 have a negotiated agreement that, in my mind, does guarantee 17 that the SIP is whole, the breathers are very well 18 protected. 19 There has been a lot of question about the 20 accuracy of the calculations in the analysis and whether, 21 you know, different bases should have been used, and 22 different averages, and what have you. And I hope Mr. 23 Cackette put a lot of that to rest yesterday by pointing out 24 that you can vary the numbers fairly widely, and it doesn't 25 make a big difference. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 Also injected is the issue of two other States and 2 the fact that they would have a different program than the 3 NLEV program. 4 Well, true. They'd have the California program if 5 they stick to their guns. And far be it for us to say that 6 anybody shouldn't have the California program. So, the 7 import of cars to California will either be NLEVs or they'll 8 be other California-type cars. And these are States very 9 remote from California, and the odds of their cars being a 10 predominant part of the vehicles that are imported into 11 California are pretty low. 12 In fact, by the time the snow and the salt gets 13 done with them, I don't know how good it is at all. But the 14 propensity is for most of the cars to come from areas closer 15 to California. But that's just, you know, trying to level 16 the playing field a little bit on that issue and whether or 17 not it's a make or break issue. 18 I have obviously infinite faith in the capability 19 of your staff and my staff to both analyze and calculate 20 what is best for California. And I was there, as was Mr. 21 Cackette, for the days, weeks, and hours -- and the late 22 hours -- that this debate went on as to the value of the 23 NLEV program. And I was there when we let the auto industry 24 know that, intuitively, it couldn't be as good as they said 25 it was going to be. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 And I was there as all the concessions were made 2 relative to the value of that program. I mean, they went 3 into this program like a lot of other people went into other 4 programs we've heard about that, "We don't need anything 5 else in the SIP. We just have this one magic program." went 6 They went into this thinking that you've got so 7 many credits here, I mean, you know, we're giving you the 8 whole thing, but it's worth the world. 9 Well, we were there when we boiled it down to the 10 final answer, which was: It's still positive, and it's 11 still even brings a premium. 12 So, I hope that the audience, the public, the 13 media gets the message that we've been here protecting the 14 public's health in the face of a lot of adversity for a long 15 time. And this recommendation we bring to you still 16 protects the public health and still protects the sanctity 17 of the State Implementation Plan. 18 Finally, the enforcement and legal protections: 19 If we don't get NLEVs, there are lots of teeth in the 20 memorandum and agreement. And I would just remind the 21 California public of the past history of the posture of this 22 Board and its staff relative to enforcing the rules and 23 regulations on the books of the State of California relative 24 to protecting our public health. 25 You can be assured that, first, your legal staff, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 in which I have undying faith of their ability to give us 2 advice and counsel on what would be the best possible 3 agreement, and their ability to understand the California 4 law and protect the public health I think is unchallenged 5 and unchallengeable. 6 And when they assure us and you that we have got a 7 positive deal, they would not do something lightly and put 8 in jeopardy our program or the breathers of this State. We 9 have legal protections. I think we have a very strong 10 situation here. We have the faith of the auto industry and 11 their pledges to do good. I happen to believe it. But I 12 happen to believe it because I know I'm backed up and you 13 are backed up by the strongest possible protections. 14 There's no question we have the ability to verify 15 the situation. 16 The modified program I think is a good deal for 17 California in today's world. The fact that it brings a 18 positive partnership forward rather than continuing any 19 adversarial situation I think is worth its weight in gold in 20 today's world. And I think people like Mr. Heckeroth 21 yesterday, who has been -- and I can sympathize -- through a 22 very bleak and black year because his small business -- I 23 can believe -- would have been impacted by all the adverse 24 publicity that was out there. 25 But if the auto industry's going to use its PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 talents and capabilities to advertise, as they do so well, 2 vehicles and sell them, Mr. Heckeroth should have a field 3 day in the future, if he can live that long economically, 4 because he should benefit from the very positive message 5 that I'm sure we will be seeing now in the future about 6 electric vehicles, and the value of electric vehicles, and 7 the reliability of electric vehicles and their benefits. 8 So, I only hope he can survive long enough to 9 benefit from that. 10 So, with that, Mr. Chairman and ladies and 11 gentlemen of the Board, I close my remarks -- again 12 recommending and indicating that I feel that what we have 13 brought to you and the guidance you have given us has given 14 us an excellent program to continue the future of the 15 electric vehicle in California. 16 CHAIRMAN DUNLAP: Thank you, Mr. Boyd. I 17 appreciate your focusing on those issues that were discussed 18 most frequently yesterday. 19 I'd like again, before we kick off our 20 deliberations and discussion here, I'd like to take just a 21 few minutes and cover some ground, perhaps remind not only 22 my colleagues on the Board, but the audience as well the 23 staff, over what ground we have trod over the past year as 24 we dealt with this issue. 25 Again, my thanks to those that participated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 yesterday and throughout this process, from the staff to 2 those stakeholders that are so impacted by the Board's 3 action on this item. I appreciate your involvement. 4 I'd like to make a few observations about this 5 process. In December, we reflected on all the information 6 and viewpoints that were developed and brought forward to 7 the Board during the public forums, workshops, and Board 8 meetings, and decided on a course of action which balanced 9 the market-based approach as well as the more traditional 10 command and control approach. 11 I've heard considerable support over the last two 12 days for the approach we are considering today. I continue 13 to believe it offers the best course to follow. With proper 14 nurturing and a commitment to successful implementation by 15 the stakeholders, there is high assurance that we will 16 experience a healthy and growing market for zero-emission 17 vehicles in California beginning this fall. 18 With these changes, California has set a course to 19 have more ZEVs on the road than anywhere in the world. I 20 plan on being one of the 800,000 ZEV owners in the year 21 2010. Hopefully, by then it will be my second or maybe even 22 third ZEV vehicle. 23 Let me address some of the concerns I have heard, 24 however. We've heard comments that the MOA developed 25 between the staff and the seven automobile manufacturers has PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 weaknesses which should be addressed. 2 My read is these concerns result from differences 3 in interpretation primarily. I would like to suggest to my 4 colleagues that we provide on the record how the Board would 5 interpret some of the provisions for which concerns have 6 been raised, not only today but in previous meetings. 7 Let me share with you my thoughts and 8 perspectives. As you know, the MOA provides that the staff 9 will obtain the business plans for ZEV commercial 10 development from each of the seven automobile manufacturers 11 and will provide for site visits for verification. 12 The concern raised is that much of the information 13 provided by the manufacturers is propriety and can not be 14 revealed to the public. I've met with staff and they assure 15 me that they will be able to extract from the auto 16 manufacturers submissions, data the Board needs to measure 17 whether manufacturers good-faith efforts, complete efforts 18 to develop a market of adequate size to meet the 2003 19 requirements -- that 10 percent hard target. 20 For the record, I am committed to presenting as 21 much information to the public as possible, consistent with 22 protection of confidential information required under the 23 law. 24 There have also been concerns raised about the 25 ability of the Board to reimpose the current ZEV PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 requirements through 2002 should a manufacturer fail to make 2 a good-faith effort to implement the MOA, their commitments 3 under the contract. 4 Should this unexpected event occur, I am committed 5 to bring a rulemaking action to the Board and to move it 6 through the rulemaking process on an expedited basis. 7 Questions have also been raised regarding several 8 phrases contained in the MOA. One has to do with the 9 provision that states a manufacturer's not in violation of 10 the technology partnership if advanced batteries are not 11 available at a, quote, "reasonable pilot level price," end 12 quote. 13 Some parties believe this is a loophole; in fact, 14 as it was mentioned yesterday, it was put in the MOA to 15 preserve some market competition on pricing of pilot 16 batteries. 17 Certainly, our interests are not served if 18 advanced vehicles have million-dollar battery packs, which 19 would occur if the agreement requires batteries to be 20 purchased without regard for price. 21 The MOA requires the Executive Officer to decide 22 advanced are priced unreasonably. And our battery panel has 23 given us the information to make this judgment, the 24 framework from which it should be applied. 25 Finally, there have also been concerns raised PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 that, if the vehicle manufacturers choose to meet their 2 emission reduction requirements by other than a national LEV 3 program, we may not gain all the reductions needed. 4 Should the national low-emission vehicle agreement 5 not occur, the Executive Officer will be directed to provide 6 the greatest degree of scrutiny to all possible alternatives 7 and require the highest level of assurance that emission 8 reductions equivalents to or greater than would have been 9 provided by the NLEV program are achieved. 10 If, for any reason, the vehicles are not 11 introduced on time, the Board should then act to ensure that 12 the emission reductions are achieved from motor vehicles, 13 from that very source we're talking about today. 14 I believe the staff has also addressed these 15 issues in their draft resolution, which will be presented to 16 us shortly. If the Board approves the staff proposal -- and 17 I hope it will -- I will dedicating resources to assuring 18 that implementation is successful. Our team is ready to 19 take on this effort, which involves the removal of barriers 20 to the acceptance of ZEVs by the car-buying public. 21 To further bolster this effort, I will form an 22 implementation advisory group made up of representatives of 23 key stakeholder groups. I would like to appoint one of the 24 Board members as the Board's representative to this effort. 25 May expectation of this group is to assure that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 all issues affecting ZEV implementation and market growth 2 are being addressed and, if some are not, to encourage the 3 appropriate stakeholders -- where we are not the lead, but 4 others in some cases --- to address the issue. 5 One final note. There continues to be a growing 6 interest in fuel cells encouraged by developments that 7 suggest this promising technology is much closer to 8 commercialization than some would think. As was said 9 yesterday -- and I've said myself -- I've charged the staff 10 with tracking fuel cell progress, and already they report to 11 me many encouraging developments. 12 While the ZEV in 1998 will continue to be a 13 battery-powered electric vehicle, I expect we will be seeing 14 other ZEV technologies, such as fuel cells and hybrid 15 electric vehicles, nipping at their heels in very short 16 order. 17 I ask the Executive Officer to bring to the Board 18 later this year any regulatory changes needed to open the 19 way for these technologies if they're warranted. If you can 20 concur with me, this would be my direction to staff. 21 At this point, I'd like to open up the discussion 22 at the Board level on the proposal in front of us, and clear 23 up any issues that might remain. 24 I can go right around the horn if you like. Mr. 25 Roberts, would you like to start it off? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 SUPERVISOR ROBERTS: First of all, I have to tell 2 you that I've just received this -- 3 CHAIRMAN DUNLAP: Right. 4 SUPERVISOR ROBERTS: -- and I haven't read it. 5 And I'd like to do that before -- 6 CHAIRMAN DUNLAP: I'm not talking about at this 7 point even dealing with -- 8 SUPERVISOR ROBERTS: Okay. 9 CHAIRMAN DUNLAP: -- the resolution. 10 SUPERVISOR ROBERTS: Let me make some comments. 11 At the top of my list was going to be a suggestion that 12 there be some type of cooperative task force put together, 13 and I think that's what I understood you referred to, where 14 not only would our staff and the manufacturers participate, 15 but others with an interest in this, including members of 16 this Board. 17 That was a concern to me. 18 There are a couple of other things that I guess 19 remain as concerns, and the first of those has to do with 20 the functioning of that task force. It seems to me that one 21 of the problems in the way we have this every two-year 22 review is that you may fly past the point of being able to 23 take effective action just because of the nature of every 24 two years and coming up on the year 2000, which is a -- in 25 fact, 1999, we found is a critical year. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 And it would be my suggestion that somehow we 2 incorporate an annual review as part of this process. 3 CHAIRMAN DUNLAP: Some have argued that it's been 4 a continuous review. I've heard Boyd say that on more than 5 occasion. 6 SUPERVISOR ROBERTS: That may be what's needed, 7 but I am concerned with the two-year review. 8 I'm also concerned about the followup on the NLEV 9 program. It seems tome there has to be a strong monitoring 10 program as part of that to see if this theoretical 49-State 11 car is in actuality going to bring us the results that we're 12 looking for, and that it sounds like it would be something 13 relatively easy to do in time. 14 I did have a question in that respect, because the 15 one chart that was shown with the intersecting curves -- it 16 still isn't clear to me if the only difference -- if I 17 understand those charts -- is that one of those lines 18 includes a three-year benefit from the earlier introduction 19 of the NLEV. In all other respects, they're the same as far 20 as the contribution of the NLEV? 21 MR. CACKETTE: The one that has NLEV in it has 22 also subtracted from it five years of ZEVs, no ZEVs in '98 23 through 2002. 24 SUPERVISOR ROBERTS: Okay. 25 MR. CACKETTE: And the other one's the current PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 program, as on the books now, if it was to be implemented. 2 So, ZEVs from '98 on versus ZEVs from 2003 on, 3 plus NLEV. That's the two comparisons. 4 But shouldn't there be an NLEV that kicks in three 5 years later on the other one? 6 MR. CACKETTE: No, neither one of them have -- 7 neither one of them have NLEV beyond 2004. 8 SUPERVISOR ROBERTS: And that was the question I 9 was asking. Neither of them have that. 10 MR. CACKETTE: It's assumed that neither of them 11 beyond 2004. 12 SUPERVISOR ROBERTS: So, basically, they're equal 13 with respect to that issue. 14 And then let me also ask you -- in the credits 15 there was a mention of range. It's not clear to me how 16 range was being -- 17 CHAIRMAN DUNLAP: Factored in? 18 SUPERVISOR ROBERTS: -- defined. And I ask this, 19 because my own experience really raises some questions about 20 how range works. I was, as you know, very disappointed to 21 find that I couldn't in any way, shape, or form get the 22 range that was advertised with one of the ZEVs. 23 MR. CROSS: I think the key thing to do at this 24 point in range is to make sure that all of the vehicles are 25 measured the same way and with -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 SUPERVISOR ROBERTS: (Interjecting) Well, that's, 2 I mean that's -- I think that's -- 3 MR. CROSS: Let me -- 4 SUPERVISOR ROBERTS: -- that's basic, but you've 5 got a number. You've got some threshold numbers in there 6 with respect to range. 7 MR. CROSS: Okay. Let me -- I need to go on. 8 SUPERVISOR ROBERTS: Okay. 9 MR. CROSS: The procedure that -- 10 SUPERVISOR ROBERTS: You do. 11 MR. CROSS: The procedure that will be used is the 12 city driving cycle of the Federal test procedure, which is 13 the more energy consumptive cycle. And essentially, we will 14 repeat that urban cycle over and over until the vehicle's 15 discharge to the 20 percent level, to the lower bound of 16 what the battery can accept. 17 Originally, we were talking about a highway, urban 18 highway, urban mix, but that's too optimistic in terms of 19 estimating range. So, what we're doing is going with just 20 the city cycle. 21 In terms of -- at this point, it will not include 22 air conditioning load, but we're going to try and develop a 23 special procedure for air conditioning. The problem with 24 air conditioning is electric vehicles don't consume the same 25 amount of energy with air conditioning that conventional ICE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 vehicles do. And so, we don't do an inaccurate correction 2 on that. 3 But the test should provide a good mix. 4 SUPERVISOR ROBERTS: That would be in keeping with 5 the way I think it should be done. So, I don't have a 6 problem with that. 7 CHAIRMAN DUNLAP: Okay. 8 SUPERVISOR ROBERTS: The fourth item -- and I 9 don't think you touched on it -- though we touched on it, 10 although we touched on it in the discussion -- was the 11 battery value formula and incorporation of that in the 12 overall evaluation. 13 And those are four items that were of concern to 14 me, Mr. Chairman. Task force, one-year review, monitoring 15 of the NLEVs, and the battery value formula. 16 Can I make just a general comment now? 17 CHAIRMAN DUNLAP: Sure. Sure. 18 SUPERVISOR ROBERTS: This process is a lot more 19 difficult right now than it ought to be, and think because 20 of the fear that I have and that a lot of the public has 21 based on the actions of some of the manufacturers' 22 associations. 23 I think what took place in this State last year 24 was exactly the opposite of what should have happened to 25 create an arena for us to be able to have the kind of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 discussion that we should be able to have. 2 Half of me wants to say, "The heck with all of 3 this," based on what was done. There was so much 4 misinformation, there was so much distortion, there were so 5 many outright lies that were put out that it makes it very 6 difficult to have a conversation on this issue in any 7 reasonable sort of way. 8 And, as much as I would join in the comments that 9 were made for the CalPIRG representative the other day, 10 which I concur in fully, I would have the same feeling 11 towards what was done on the part of the manufacturers this 12 past year. 13 If that's the spirit in which we're going into 14 this, we don't have a chance in the world of making this 15 work. 16 CHAIRMAN DUNLAP: Right. 17 SUPERVISOR ROBERTS: And that's why I'm concerned 18 on that task force. I hope that task force will have the 19 fullest access -- 20 CHAIRMAN DUNLAP: Sure. 21 SUPERVISOR ROBERTS: -- to the records and to be 22 able to report back to this Board not once every two years, 23 but at any point in the process in which they've discovered 24 that something is wrong. 25 I'm encouraged by what I've seen with natural gas PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 vehicles. Some of the manufacturers have really, without 2 any burden or regulatory reason, have really gone and made 3 every effort to extend those technologies and to make them 4 work. 5 And we've seen the introduction in San Diego 6 recently of some production line vehicles that I think are 7 exemplary. And that gives me some confidence that this may 8 work. 9 It's balanced off by the negatives that I've 10 mentioned. Some of the manufacturers clearly see the big 11 picture. I was very impressed with the Chairman of General 12 Motors and his comments at the auto show in acknowledging 13 that all of the countries, the developing countries of this 14 world aren't going to have the same interstate system that 15 we have. And that some of them are probably going to 16 regulate the types of cars you can drive in some of their 17 most polluted cities, and that there's a market beyond 18 California. 19 And, again, that's balanced by some of what seem 20 half-hearted efforts, minimal efforts that we're seeing by 21 some of the other companies that I'm concerned about with 22 respect to the ramp-up issue. 23 It's my intention to get to that 10 percent. I'd 24 like to get to that 10 percent with the use of market. But 25 what you have is some companies that will take that to heart PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 and will make it and others that would fall woefully short 2 if there were no regulatory push here. So, I think you'd 3 still need that. 4 And I'm going to support your efforts if it 5 includes those points that I mentioned. I'm going to remain 6 a little cynical, but I'm going to hope that we can work 7 this out, and I'm going to do everything I can to ensure 8 that that is the case. 9 I'd like to see, especially in San Diego -- I want 10 to see clean air. And I want to see this major component 11 reduced. 12 CHAIRMAN DUNLAP: Thank you for your comments. I 13 think, Supervisor, certainly it dovetails with not only the 14 spirit, but the specifics of what I'd outlined, and I think 15 they can be accommodated easily, and I think it makes good 16 sense. 17 I would like to, though, shift over to Mayor 18 Hilligoss about the point about the NLEV issue. And it was 19 brought up yesterday and discussed. 20 Jim, I'd like to have a little bit of a wrap-up 21 relative to what, if the NLEV hits some glitches, what's the 22 provision, the out provision for the automakers and for us, 23 and where we likely go immediately, and what would be the 24 likely time frame, et cetera? 25 How would we identify the problem, how would we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 remedy it, and how would we be certain that there's no air 2 quality -- negative air quality ramifications? 3 Mayor Hilligoss, did I catch the spirit of that? 4 MAYOR HILLIGOSS: Yes. 5 MR. BOYD: I'll ask Mr. Cackette to elaborate on 6 that. 7 CHAIRMAN DUNLAP: And, Tom, you know that one of 8 the things that causes us a lot of concern is when people 9 say that the air quality benefits aren't certain. And we 10 need that pinned down. And staff has been right so many 11 times -- I don't mean to suggest otherwise. You have been 12 right. 13 But, in this case, there's a lot of concern 14 focused, which is a little bit unusual for us to hear that, 15 so. . . 16 MR. CACKETTE: Okay. Well, on the more global 17 basis, the things that we'll do is, first of all, watch the 18 Federal rulemaking, which is the enforcement structure for 19 the NLEV cars to be sold in the other States. And that's 20 supposed to be out in May. And we'll track that to make 21 sure that the cars that are being sold under that are truly 22 equivalent to California cars and not some relaxed version 23 that may somehow result from negotiations that occur outside 24 this State. 25 Second of all, if that doesn't occur, then we'll PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 immediately meet with the manufacturers and start going over 2 what the alternatives are. The first alternative is for 3 them to sell just plain California cars in the other States. 4 And I don't think there's any legal impediment to that, but 5 again, we'd have to verify that EPA isn't a roadblock to 6 that occurring. 7 And from the many discussions we've had with them, 8 it's very clear that one of the those two paths is where 9 they want to go. Only if neither were possible would we 10 enter into -- and I think that's a very remote situation -- 11 would we have to enter into, "What else can you do?" 12 But, as Jim said when we do that -- and, as the 13 Chairman said -- if we ever get to that point, and I hope we 14 don't, we'll be as touch as we can to make sure that the 15 substitutes are as fully protective of air quality as 16 possible. 17 CHAIRMAN DUNLAP: Right. 18 MR. CACKETTE: So, let me flip back to the one 19 that we expect to happen, which is NLEV. And that's, in my 20 view, that's a 90 percent-plus probability that that will be 21 the outcome. 22 Based on, you know, the considerable discussion 23 we've had here today, staff will not only make sure that 24 we're aware -- fully aware that NLEV is occurring, but we 25 will do some monitoring in terms of where those cars are and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 we'll track the trends in migration back to the State of 2 California. 3 And, as you indicated, we'll go back and check the 4 numbers -- 5 CHAIRMAN DUNLAP: Sure. 6 MR. CACKETTE: -- a little bit more, look at some 7 of the things we didn't include, like the tourism and also, 8 you know, account for the fact that there may be California 9 cars anyway in some of the other States. 10 And we'll keep our ear open also on the national 11 scene to -- maybe better than we have -- to make sure that 12 what's being said out here is the same thing that's being 13 said back East. 14 CHAIRMAN DUNLAP: Elsewhere, that's great. 15 MR. CACKETTE: I think, with those, we'll keep on 16 top of it. Of course, we won't be doing any monitoring 17 until 2001 when those cars actually start being sold, but 18 we'll follow the migration trends in between anyway. 19 CHAIRMAN DUNLAP: Okay. So, back to the point 20 Supervisor Roberts made so well. 21 How would we -- Tom, how would we be able to 22 identify where there's a problem; in the reports that are 23 submitted to us? 24 MR. CACKETTE: The Board? Yeah. We'll keep you 25 informed if it becomes annual reports to the Board on what's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 happening in that area. And we'll try to be on top of the 2 more immediate negotiations of where these -- you know, the 3 structure for these cars going into the other States. 4 CHAIRMAN DUNLAP: Okay. 5 MR. CACKETTE: Which will be happening on a 6 monthly basis from now on. 7 CHAIRMAN DUNLAP: Okay. So, we'll be able to see 8 any problems coming in plenty of time -- 9 MR. CACKETTE: Yeah. 10 CHAIRMAN DUNLAP: -- in advance, and be able to 11 communicate back to the Board. 12 MR. CACKETTE: Right. 13 CHAIRMAN DUNLAP: Okay. 14 MR. BOYD: Just let me reinforce what Mr. Cackette 15 said. The original offer was the NLEV; our backstop was the 16 California LEV on a voluntary basis, but enforced by the MOA 17 should something happen with the so-called NLEV. 18 And then we put in an additional floor, if all 19 that fails, which we don't think it will. You will still be 20 committed to protect California. 21 So, the alternative provision is another one of 22 those provisions that we put in to make sure that, should 23 NLEV/Cal LEV fail for some reason -- which it won't -- but 24 that we would assure ourselves that they will continue to 25 have the obligation and would have to work with us. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 CHAIRMAN DUNLAP: Right. Okay. 2 Mr. Calhoun, I would like to come to you now about 3 having you share your perspective relative to the -- not 4 just the symbolism of this partnership approach, but some of 5 the practical considerations that provide us with a good 6 shot at the best launch possible. 7 Could you maybe share some of your views. 8 MR. CALHOUN: I guess I'd be happy to do that, Mr. 9 Chairman. But before I do that, let me just say a few 10 things. 11 MR. CALHOUN: Before I do that, let me just say a 12 few things. Yesterday, we heard testimony -- we heard a 13 proposal from the staff regarding changes to the ZEV 14 requirements. Following that proposal, we heard testimony 15 for and against the proposal. 16 The central theme of the opposition's testimony 17 seemed to be a recognition of the fact that something needed 18 to be done to the program, but their feeling is that the MOA 19 is not -- they don't have a lot of confidence. It doesn't 20 give you a warm tummy feeling, and they would have preferred 21 something else to be done. 22 While I'm sensitive to their concerns, I guess I 23 don't share the same feeling. And I say that because of my 24 own experiences and because of the fact that MOAs are 25 nothing new. The Board can enforce this particular PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 memorandum of understanding, plus the fact that over the 2 years the staff has had a unique way of influencing 3 manufacturers outside of the specific regulations being 4 looked. And I don't need to go into that, but the auto 5 industry recognizes what I'm talking about. 6 So, I don't think there would be any difficulty in 7 getting the MOA enforced. 8 And I guess I don't share Supervisor Roberts' 9 concerns that this whole thing isn't going to work. 10 Frankly, I think this is the best approach to having a 11 successful launch of a new technology. 12 We are, in fact, treading in an area where we 13 haven't gone before. And I just don't think you can rush 14 out there overnight and I think the approach being taken 15 here is the best possible that we could get if you want to 16 have a successful introduction. 17 Now, we don't have to wait for these two years in 18 order to get some feedback. And I don't think the staff 19 will be waiting two years. That isn't the way they normally 20 operate. They will be looking over the industry's shoulder, 21 and I'm sure the industry will be sharing information with 22 them, so that they will have some feel in advance of the two 23 years as to what is actually taking place. 24 And I also feel confident that, if the staff feels 25 as though things aren't progressing the way they should, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 they will the industry in and lean on them and see if we 2 can't get them to make amends. 3 And I tell you something, I'm absolutely amazed 4 that you've had seven auto companies stick together on this 5 issue. This is a first, I can assure you of that. And I 6 have been in many meetings where we've tried to effect a 7 similar type of an agreement. And if you had told me two 8 years ago that you would have gotten the -- if you had told 9 me a year ago that the auto industry would have stuck 10 together, I would have said, "No way." 11 But I'm pleasantly surprised and very happy that 12 they are committed to this program. And I think that one of 13 the things that happened - when the Chairman of General 14 Motors made the announcement in January that GM was going to 15 start marketing that product starting this year, all the 16 other manufacturers looked around and said, "Hey, we can not 17 allow GM to get ahead of us in the market." 18 So, whatever they had in the back rooms, they 19 pulled it out. I can assure you of that. 20 And that particular announcement influenced their 21 action. And I see them out there smiling, because it's a 22 fact. And the auto industry is one of the most competitive 23 industries that you can possibly imagine. And I have no 24 doubt, I have no worry; I'm not going to lose any sleep at 25 night worrying about whether or not this is going to happen, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 because I think it will happen. 2 And I'm willing, Mr. Chairman, to commit some of 3 my time to looking over their shoulders. 4 CHAIRMAN DUNLAP: Okay. 5 MR. CALHOUN: Thank you. 6 CHAIRMAN DUNLAP: Thank you, Mr. Calhoun. Just to 7 clarify, though the Supervisor doesn't need me to look out 8 for him, Ron was suggested, I think, Joe, that if we were 9 able to deal with these four or five issues, we would 10 strengthen this program's ability to work. And I think 11 that's how I took it at least, Supervisor. 12 SUPERVISOR ROBERTS: And I was suggesting that, 13 while I have some concerns, I would agree with you that this 14 is probably a better solution than the road we were going 15 down and is the best option for us today. I don't have any 16 disagreement with what you're saying. 17 I guess it's going to take some effort on our part 18 and some changes of attitude -- 19 CHAIRMAN DUNLAP: Right. 20 SUPERVISOR ROBERTS: -- on some of the others' 21 parts to make this work. And that's a concern I do have as 22 we go forward. 23 CHAIRMAN DUNLAP: Supervisor Silva. 24 SUPERVISOR SILVA: Yes. Thank you, Mr. Chairman. 25 Just for the record, I had in my office on the 14th of this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 month, March, '96, a meeting with Sam Leonard from General 2 Motors, Eric Ridenour of Chrysler, and John Schutz of Nissan 3 We looked it up last night. So, I apologize for not having 4 the names yesterday. 5 A couple comments. After yesterday's meeting and 6 actually some of the meetings I've had in Orange County, I 7 find that many -- not all people, but many of the people on 8 both sides of the ZEV mandate issue feel that the facts are 9 relatively simple. 10 And if you look at it, they are basically simple. 11 the goal, I think, for the CARB Board and the staff is to 12 reduce emissions whenever and wherever possible, all in the 13 name of public health. 14 I don't think that you'd find anyone in 15 disagreement up here. The problem is, which path to follow. 16 And there's not really a shortage of ZEV activists as we saw 17 yesterday. The problem is finding the buyers. I note that 18 there was a couple of college students yesterday, and they 19 were very excited about the program. And I wanted to ask 20 them, but I didn't, are they going to buy a car in '98. In 21 fact, when I go out to a lot of the groups, like I'm sure 22 that most of you do -- the Lions Clubs, the Rotary Clubs, 23 the homeowner groups -- I usually save the last 10 or 15 24 minutes of a presentation for questions. 25 And when they find out that I'm on the Board or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 just in general, they all ask about the electric vehicle. 2 And I have asked people to raise their hand -- "How many 3 would like to have -- or how many feel that the zero- 4 emission vehicle would be a way to go in the future?" 5 And just about everybody's hand will go up. And 6 then, I ask the question, "How many of you will be buying a 7 car in '98, an electric car?" 8 And there's not a hand goes up. 9 Well, actually, I did find one person that's going 10 to buy one in 1998. It's Councilman Marvin Braude in Los 11 Angeles. 12 (Laughter.) 13 SUPERVISOR SILVA: The first ZEV buyers I think 14 will be called pioneers. And if they have a bad experience, 15 they're not only going to tell ten people, they'll probably 16 end up telling a hundred people, which will multiply out. 17 And I think what we'll be doing is poisoning the well. 18 And I don't want to do that. I think this Board, 19 if they didn't believe in the ZEV mandate, would probably 20 let it go through at the two percent rule for '98, which 21 would, I think, poison the well. 22 I've talked to Supervisor Roberts and Chairman 23 Dunlap, and we would like to take -- I believe you've been 24 back to Detroit. I'd like to go back and look at some of 25 the R & D that is being done in this area. I think that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 it's very important that we get as much information as we 2 can. 3 I've driven two ZEV cars in the last three or four 4 months, and I think that there's still some work that has to 5 be done. The future of the ZEV I think looks bright. I 6 predict that the CARB staff in the year 2010 will be making 7 comments about the meetings that we've had here the last 8 couple days as being very naive. 9 I know that the fuel cells and lithium -- who 10 knows what else is out there and will be the solution and 11 provide success for the ZEV program? But there's one thing 12 for sure, that the growing body of information is, I think, 13 just on the cutting edge. There's some great improvements 14 that are going to be taking place. I do believe in the 15 program. 16 And, in fact, I'd like to see a special license 17 plate made for ZEV cars here in California. And I think 18 that this would be a valuable marketing tool. If you see a 19 person that's driving one and you talk to him about it and 20 he's having a good experience, I think that's the way that 21 we're going to sell the program. 22 The stakes are high. Public health and public 23 safety are at the top or they should be at the top of every 24 public official in the nation. 25 And today, I will be supporting -- I believe it's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 Resolution 96-12. 2 CHAIRMAN DUNLAP: Right. Okay. Thank you, 3 Supervisor. I'm not surprised that Councilman Braude's 4 going to buy one of the first cars if any of you know him. 5 Mr. Lagarias. 6 MR. LAGARIAS: I'd like to comment on two areas, 7 the first on the mitigating actions that are proposed for 8 the interim period if we don't have ZEVs in the first two 9 stages. 10 The assessment has been made that the NLEV program 11 will not quite make the anticipated reductions in the early 12 years, but will make them in the subsequent later years as 13 the population of ZEVs increases. 14 So, we look at a tradeoff. Do we accept a 15 shortfall at the beginning to get a larger benefit later on? 16 And, to my mind, I think that's a reasonable tradeoff. And 17 don't forget. We're not talking about emissions. We're 18 talking about promises of reductions of cars that won't put 19 out, not that there will be any increases of emissions. 20 Now, the second point I'd like to dwell on is my 21 assessment of the program. I've been involved with this 22 decision making since it was passed in 1990. Dr. Boston and 23 I served on that Board that passed that regulation. 24 And you have to keep in mind that the ZEV program 25 is the part of the Air Resources Board's clean car/clean PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 fuels program, and the ZEV at the most will only affect 10 2 percent of the new cars. And that's starting in the year 3 2003. 4 All the rest of the program, the TLEVs, the LEVs, 5 the ULEVs, and the clean burning gas are already being 6 implemented now or are in the process of being implemented. 7 The ZEV program, in a sense, is a sizzle, an aroma 8 of promises to come; whereas, the steak and the meat is in 9 the clean car and the clean gas program. 10 In the following years, between 1998 and 2002, a 11 five-year period, I look upon that as a demonstration 12 period where we can establish the acceptance, the 13 performance, the reliability, and the equivalency of the 14 ZEVs, and also to identify issues that are not known or 15 currently are underestimated. 16 You know, it's not what we know are the areas that 17 we should be concerned with, there are areas we don't know 18 about, and they won't show up till we get the cars on the 19 road and tested. And I'm concerned about what we don't know 20 as well as what we do know. 21 And market surveys aside, we don't know how people 22 will buy and use cars until they get a chance to use and 23 test them. And the performance won't be truly tested until 24 we have consumers actually using them and misusing them. 25 Now, the MOA that we're discussing today is a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 mandate to produce and market a certain number of cars, 2 although not as many as we had originally thought of in 3 1990. 4 In addition to what we get from the MOA are a 5 certain number of positive steps, as Joe has indicated, 6 that we have not been able to get and were not able to get. 7 We get a demonstration program to evaluate a number of 8 advance battery technologies. We get a commitment to a 49- 9 State NLEV program three years before the Federal Government 10 could possibly even act on it. 11 We get a financial commitment to support advanced 12 battery research, and we get the commitment to promote and 13 market ZEVs. 14 We get a commitment to prepare and submit a ramp- 15 up program to achieve a 10 percent reduction in the year 16 2003. None of these things did we get before. And I think 17 it's a compliment to the staff to hammer out such a 18 provision with the manufacturers. All these, from my 19 assessment from the beginning to where we are now -- to the 20 fact that the technology, as I see it, is not ready in the 21 next few years to support a full scale demonstration 22 program, makes me believe that this MOA is worthy of 23 support. 24 Thank you. 25 CHAIRMAN DUNLAP: Thank you, Mr. Lagarias. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 Dr. Boston? 2 DR. BOSTON: First of all, let me state that I 3 come from bankrupt Orange County, and I'm not sure I want 4 Supervisor Silva going to Detroit. 5 (Laughter.) 6 CHAIRMAN DUNLAP: He needs a little bit of a 7 break. It's been a tough year and a half. 8 DR. BOSTON: What I do want, though, is the 9 successful introduction of ZEVs. And I think the key word 10 is "successful." 11 It's obvious that our 1990 regulation has 12 stimulated tremendous research that never would have 13 happened without that regulation. If you just look at the 14 parking lot out there today and yesterday, it's obvious that 15 there's been a lot of money spent. And I believe that's in 16 the realm of hundreds of millions of dollars. 17 Now, these major auto companies are not stupid. 18 After spending all that money, they're going to want to sell 19 those products and are going to want to recover that money. 20 And I think it's time now for us to go ahead and let them do 21 their thing and start selling cars. I don't believe that 22 delaying this mandate by a few years is going to work 23 against us. I think it's going to be working for us. 24 I think that we'll have a union, and I think the 25 people that were here yesterday clamoring for electric cars PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 should really go out there and start promoting them now and 2 get their friends to buy them. So, if the auto companies 3 are seeing that there's a clamor for this type of car, I'm 4 sure they're going to make them even faster. And we may 5 have more than the 20,000 cars on the road by the end of 6 1998 than we would have had with the two percent mandate. 7 So, I'm for this agreement and I'm looking forward 8 to seeing lots of electric cars on the road in the near 9 future. 10 Thank you. 11 CHAIRMAN DUNLAP: Thank you, Dr. Boston. 12 Any other? Ms. Edgerton. 13 MS. EDGERTON: I appreciate you calling on me. 14 I have considered it a great privilege to serve on 15 the Board and I consider it a privilege to be here with you 16 today as we work on this difficult problem. 17 These are difficult balls and strikes to call, and 18 there's nothing any of us can do except bring everything 19 that we have -- as Mr. Calhoun has said -- experience that 20 we have to it. 21 I think that the direction that has been taken, as 22 I say -- I think that this proposal is directionally 23 correct. I think that I am mindful that my background is in 24 legal. I have a legal training background, and that may 25 make me more sensitive to some issues than others. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 CHAIRMAN DUNLAP: We just noticed when you speak, 2 Mr. Kenny sits up straight in his chair. 3 (Laughter.) 4 MS. EDGERTON: He's getting ready to have to -- 5 CHAIRMAN DUNLAP: When the rest of us do that, he 6 slouches a little bit. 7 (Laughter.) 8 MS. EDGERTON: Well, Mr. Kenny, thank you, Mr. 9 Kenny. I must say -- I might as well go ahead and say 10 publicly that I have taken up a fair amount of Mr. Kenny's 11 time on a number of these issues, and he's very sturdy and a 12 very fine lawyer for the Board. We are very fortunate to 13 have him as General Counsel. 14 Having said that, there's some findings in this 15 resolution which I would prefer that we do not actually make 16 today, because they are fact findings. And I'd like to have 17 the opportunity to have a few more facts to make them. 18 I would say that, with respect to the finding in 19 the MMOA (sic) that the emissions reductions are equivalent, 20 I do not believe that it is appropriate for that finding to 21 be in the MMOA. 22 I believe that it may be appropriate to have it in 23 the resolution. I know it's in the resolution. I believe 24 that it's acceptable to me to go forward with it in the 25 resolution, because that gives us the opportunity to follow PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 through as Mr. Dunlap said and have more information about 2 exactly how the emissions reductions were calculated brought 3 to this Board and reflect on that. And if we believe that 4 here are additional measures which should go into place for 5 our SIP, we have retained Board prerogative to do that. 6 What troubles me is having that little provision 7 No. 3 in the MMOA, because that's a contractual matter, and 8 everybody can take that to court and the court -- if I were 9 the judge of the court, I would be bound to make that as a 10 matter of law. 11 We wouldn't even be able to take testimony really 12 on that. It's a finding. It's agreed by the parties that 13 there's an equivalency. That's a done deal. And anything 14 that you or I may have to say about it afterwards, I 15 believe, will be out of the ball park. 16 So, I think it would be more consistent with the 17 conversation we had yesterday to remove that finding from 18 the MMOA. 19 Secondly, I don't believe it's accurate to say, 20 with respect to the emissions findings, that there are no 21 emissions increases. The resolution itself is very specific 22 with respect to the particular pollutants which -- the 23 emissions of which are equivalently reduced. 24 But the resolution also clearly provides that 25 there are other pollutants which are increased by the action PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 and those emissions include some which are motor vehicle 2 toxic air contaminant emissions and global warming 3 emissions. 4 That doesn't, in my view doom the proposal. No, I 5 think we need to go forward with the proposal. But it does 6 again make me cautious about leaving the -- any kind of 7 finding of equivalency in the MMOA. I want to keep our 8 prerogatives to listen to the science over the years and 9 make our own decisions on that. 10 Again, another measure that's a finding -- it's 11 not part of the resolution, but is a finding, which troubles 12 me, is the finding that there are no additional feasible 13 mitigation measures or alternatives available to the Board 14 that would substantially reduce the potential adverse 15 impacts of the proposed regulatory action. 16 I am not prepared on this record to find that, 17 particularly since I sat here and heard Mr. Austin and other 18 people over the course of these hearings bring up other 19 things that we could conceivably do -- not easy things. I'm 20 not living in a dream world. But I would like to have the 21 staff, Mr. Dunlap, if it were possible, report back in some 22 way on other -- you know, if we can come up with any 23 additional mitigating measures. 24 Now, I know this is bound to make the staff go 25 into a massive decline. "How in the world is the woman -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 is she for real? Is she really saying we're supposed to 2 find some more reductions?" 3 And, yes, I really am saying that. I really do 4 want to find some more. And I would like to work on that 5 some more. 6 So, finally, one more comment, and it has to do 7 with the very difficult and complicated legal issue -- sit 8 up, Mr. Kenny -- of suspension versus repeal. I have 9 struggled with that a great deal, and I thought, Mr. 10 Chairman -- I believe the regulation -- I mean, even our 11 "whereases" show that. I quite honestly thought that what t 12 his Board had in December asked the staff to prepare for us 13 was documents which reflected a suspension. Now, that may 14 be semantics. But, in retrospect, I must say that I would 15 have sought more discourse on that had I understood that I 16 was going to be presented with a proposal suggesting 17 outright repeal. 18 And this is why. Well, there's several reasons 19 why. One of the reasons is what was discussed yesterday, 20 which is the difficulty of reinstituting -- the tremendous 21 difficulty of reinstituting a regulatory provision which 22 wouldn't violate the equal protection clause of the 23 constitution, or bills of attainder, or -- you know, all 24 kinds of provisions which make it hard to single out one 25 noncomplying company without penalizing the other ones. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 And I am the last person inn the world who wants 2 to penalize the people who are doing the right thing. 3 So, that bothers me. And, secondly, I have given 4 a lot of thought and I spoke about this in the car to my 5 colleague Barbara Riordan on the way over here -- I've given 6 a lot of thought to whether -- I really believe that this 7 repeal will effectively prevent Massachusetts and New York 8 from adopting -- for maintaining the adoption of their 9 California statute -- of their California program. 10 And it's very unclear to me that it will. I 11 believe that it very well may be that they adopted -- since 12 they adopted our program when it was legal, and they did it 13 all legally, that the mere repeal of it -- our repeal of it 14 will not at the end of day, after being litigated all the 15 way up to the Supreme Court, will not prevent them from 16 holding their ground. 17 But anyway, this is more a matter for the Supreme 18 Court than for this Board. 19 Suffice it to say -- suffice it to say -- I'm 20 almost finished. Suffice it to say that I'm not -- I'm 21 absolutely confident that the lawyers for the automobile 22 companies have made the same calculations and, consequently, 23 I wonder whether -- whether that requirement, their 24 insistence on that, isn't more a measure of intimidation 25 than of negotiation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 Thank you. 2 CHAIRMAN DUNLAP: Mr. Kenny, I'd like for you talk 3 about that selective enforcement issue again. 4 MR. KENNY: In terms of the question that Ms. 5 Edgerton raised with regard to selective enforcement, there 6 is a question with regard to how we would pursue enforcement 7 against an individual company that was not in compliance 8 with the MOAs. 9 Ms. Edgerton is correct that it is very difficult 10 to pursue a regulatory option that was targeted on a single 11 company. So that would not be the proposal, I think, that 12 we would bring to the Board in the event that that did 13 occur. 14 The proposal we would bring to the Board in the 15 event that occurred would be one in which we would 16 essentially be reinstituting a regulatory approach that was 17 applicable to all the companies, but which would have an 18 alternative compliance plan element that would allow for an 19 escape valve for those companies in compliance. 20 CHAIRMAN DUNLAP: And the alternative compliance 21 plan would be something that the Board would have to 22 sanction or approve for those other six or whatever the 23 number was. 24 MR. KENNY: Yes. 25 CHAIRMAN DUNLAP: If they were in accord with that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 alternative compliance plan, they would be separate from the 2 new requirements or the enforcement element to that 3 agreement. Correct? 4 MR. KENNY: Yes. And I think one of the key 5 elements here is essentially what would happen in the event 6 of this kind of noncompliance is really -- right now what 7 we're talking about is an Option B approach. 8 CHAIRMAN DUNLAP: Okay. 9 MR. KENNY: Under the three options. In the event 10 we went to this alternative compliance approach to 11 essentially provide for an enforcement mechanism, we're 12 really converting our Option B to an Option C. 13 CHAIRMAN DUNLAP: Okay. And that's conceptually 14 consistent with what we've done with consumer products in 15 the last three or four years, or whatever the time frame's 16 been, Mr. Kenny? 17 MR. KENNY: Yes. 18 CHAIRMAN DUNLAP: Okay. 19 MR. LAGARIAS: Another comment. 20 CHAIRMAN DUNLAP: Yes, Mr. Lagarias. 21 MR. LAGARIAS: I'd like to comment on the concern 22 that has been voiced, a distrust of the agreement that has 23 been made or is proposed with the industry on trying to 24 achieve a program. 25 By looking at the history of this particular Air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 Board, which originally started with command and control 2 regulations -- you do this because we say so, without 3 necessarily having to have a true justification for it, 4 other than the goal is laudatory. 5 Well, that evolved to going into a workshop 6 program in which proposed regulations were presented in a 7 workshop and people that might be affected could participate 8 in discussions of the proposed regulation before it came to 9 the Board. And this resolved a lot of issues. 10 And the command and control gradually involved 11 participation. And from that, when there were major studies 12 to be made -- like the San Joaquin Valley study -- which 13 Supervisor Vagim now chairs -- began, it involved the 14 involvement of Federal Government, State Government, some 40 15 industries that were affected in the San Joaquin Valley, 16 local agencies, industrial groups, agricultural groups, all 17 working to determine a common baseline of what the air 18 quality was in that valley. 19 And that program has been phenomenally successful, 20 in that the people involved were able to understand what the 21 issues were, to participate in it, and to agree on what the 22 facts were. And then the judgment and the regulation was 23 still left with us, with the Air Board, to take the 24 appropriate action. 25 And from that, we evolved into the advisory PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 committee for the clean burning gas in which automobile 2 people, oil people, environmental groups, public interest 3 groups all came to a common table, some 40 to 60 4 organizations affected, to bring a program into fruition. 5 And that experience in working with adversary 6 groups, affected groups has led me to believe that this 7 action is also positive and can work to our benefit. 8 We've got the experience there. 9 CHAIRMAN DUNLAP: Thank you, Mr. Lagarias. 10 I think that that process where people -- I took 11 to heart what Supervisor Roberts said about some of the 12 adversarial communications, plans, and how that affects us, 13 and I think it maybe would be of benefit for me to say a 14 word or two on that. 15 It's extremely challenging for us as appointed 16 public officials, and several of us are elected officials, 17 to weigh all of the evidence. And when you have a lot of 18 noise, extraneous noise, and some particularly that isn't on 19 an individual issue that isn't accurate, it confuses and 20 confounds the process. And that's why I am supremely 21 confident of the course that we took relative to coming to 22 this decision point from those workshops, and forums, and 23 the battery audit panel. 24 But we tried to sift through campaigns, some of 25 which was fraught with misinformation, to try to get to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 core issues. What was the status of the technology? What 2 were we looking at if we held the line in 1998? What kind 3 of consumer acceptability was likely? 4 And I felt that that process was not only 5 important, but absolutely essential. I don't think we could 6 have even come to this point without providing the 7 leadership to cut through it and get to the bottom line 8 issues. 9 And it's been a challenge to try to cut through 10 all of that information and get to those core elements. 11 There's been a few that haven't had a chance to 12 say anything. I'd like to offer that time now, if you'd 13 like, Supervisor Riordan? 14 SUPERVISOR RIORDAN: Thank you, Chairman Dunlap. 15 I appreciate that. My comments are very, very short. I 16 think the long-term goal for this Board is to have a 17 successful zero-emission program. And it really means that 18 we have to have consumer acceptance of a new technology. 19 And had we not had what I would term more of a 20 midcourse correction, hopefully, that we may deal with in 21 just a moment, I'm afraid that the consumer acceptance would 22 have been very, very low. 23 And that isn't going to lead us to a positive 24 result. 25 The MOA, in my opinion, underscores some very PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 important things and I'm particularly concerned with the 2 element of commitment to research. That continues to need 3 to march forward. It was addressed in our MOAs, and I think 4 it's very, very important. 5 We've talked a little bit about verification and 6 enforcement, and I think those are adequately handled, 7 though I would certainly agree with Supervisor Roberts on 8 more of an annualized report to the Board. 9 So, I recognize staff is going to have a great 10 deal of information on an ongoing basis. But I think the 11 Board and the public perhaps would feel much more 12 comfortable with an annualized report. 13 But I am very supportive of what is before us, and 14 I salute all of those who have worked so hard to make it 15 possible, including you, Mr. Chairman. 16 CHAIRMAN DUNLAP: Thank you. 17 SUPERVISOR RIORDAN: Because I think it is a good 18 working agreement that's going to lead to a very successful 19 program, and I do appreciate the factor of research. 20 Because I still think and believe that that is absolutely 21 essential to make this program work. 22 CHAIRMAN DUNLAP: Thank you. 23 SUPERVISOR RIORDAN: So, I end my comments there. 24 CHAIRMAN DUNLAP: The research provision, that 25 technology development partnership is going to be absolutely PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 essential for us to be able to assess those new 2 technologies. And I think Ms. Edgerton's perspective on 3 fuel cells and what we've learned over the course of the 4 last few months I think opened our eyes that, you know, 5 unless we're particularly vigilant in doing technology 6 assessment work, there's some things that might escape our 7 attention. 8 And I would echo what you said about the research 9 element. That's very, very important. 10 Mr. Parnell. 11 MR. PARNELL: Well, I'll keep my comments very 12 brief and very general. But I think, as we look at the 13 whole issue of EVs, it strikes me as being one of a real 14 confrontation which was taken to the Press. And we've had 15 some comments about whether that was right or wrong. I 16 think that's freedom of speech. That's one of the 17 greatnesses of this country, because we can say what we 18 believe and we can do it in a public forum. And I invite 19 that. I continue to invite that. 20 That's what public officials are all about, to 21 listen to all sides of an argument, and then to weigh those 22 arguments and to make judgments. 23 But we've come on this issue from a place where -- 24 for varying reasons. I see this as kind of three sides to 25 this issue, not just two. There are those who want to force PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 EVs onto the market because of the clean air benefits. We 2 support that. 3 There are those who want to do away with mandates 4 all together. 5 There are those who want to bring EVs to the 6 market in a logical and more intelligent way, which is 7 supported by those who will be responsible for doing so. 8 So, I think it's fun and appropriate that all 9 people have made their voices heard in the process. 10 But we've come from a time when people were 11 basically saying that EVs won't work under any set of 12 circumstances, and automobile manufacturers going in a 13 variety of directions. And today, I think we should be 14 excited about the future and the good work that the staff 15 has done. 16 We should be enthusiastic about supporting an 17 approach that seems to now be unified. I was struck with 18 the whole idea of General Motors coming into the market 19 early. And just in an idle conversation saying to another 20 automobile man manufacturer, "Wasn't it interesting. This 21 is a good looking car. It's an excellent car." 22 They're going to try to bring it to the market in 23 a very intelligent and appropriate way. And they kind of 24 tugged on my shirt sleeve, "You ain't seen nothing yet. We 25 have something in the back room that'll blow the doors off PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 of this thing." 2 Now, I don't know whether they do or don't. But 3 what I'm saying is that markets are working. And that'll do 4 more to bring EVs effectively to the California market than 5 any other one thing. And I believe this agreement is 6 protective of air quality. It is protective in every way. 7 And I can't say strongly enough or in terms that are more 8 glowing -- the staff has done a superb job of negotiating 9 the best possible deal under the most adverse set of 10 circumstances, and I compliment you. My hat's off to you. 11 And I'm ready to support Resolution 96-12. 12 CHAIRMAN DUNLAP: Okay. Very good. Thank you, 13 Mr. Parnell. 14 Supervisor Vagim. 15 SUPERVISOR VAGIM: Thank you, Mr. Chairman. Thank 16 you for delivering the mail. 17 CHAIRMAN DUNLAP: Brought about 40 pounds of paper 18 to your doorstep. 19 SUPERVISOR VAGIM: I brought a young colleague up 20 with me last night so he could get together with his old 21 rock band. And I was pulled out of the Old Country Tavern 22 to join with this. So, I had an interesting evening last 23 night. 24 But having sat through many hearings, many 25 workshops, and listening to the debate from both sides, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 from my colleagues, and even today, I think we have to look 2 at this in another perspective, too, and that's there are 3 other parts of this State that will get more benefit out of 4 this particular program than would be the previous program. 5 And I'm specifically talking about the NLEV program. 6 The San Joaquin Valley, which I represent on this 7 Board, does have a significant problem in its air quality. 8 As a matter of fact, we have to be there by 1999, not by 9 2010. And I believe the NLEV will have the ability to, as 10 we grow -- and we are the fastest growing part of the State. 11 The NLEV will have more potential to the San Joaquin Valley 12 than will the ZEV program, for the fact that the ZEV program 13 really won't be started in the San Joaquin Valley as it will 14 in Southern California and other parts of the State. 15 The issue, of course, for this agency has always 16 been, where it's always met its, I think, most promise is in 17 its ability to nudge the more modern technologies of 18 environmental control. 19 I believe a nudge is still there with 10 percent 20 at 2003, particularly when the Eastern States can now meet 21 also that 10 percent and not fall over the other side of the 22 2004 deadline, which is allowing them to hook into their 23 mandate. 24 I think some other areas need to be looked at. 25 And I firmly believe that the nudge factor will allow the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 entrepreneurial -- which we've heard so much from, 2 particularly when they criticized the price of the vehicle 3 that the Big Seven will be -- already out by GM -- is too 4 high. Well, then, fine. Put out a product that's cheaper. 5 This will give that opportunity. It will give 6 those -- the Big Seven having to look over their shoulders, 7 and someone's going to be there with a product that's better 8 than ours if we're really not working hard enough. 9 So, it does keep that pressure on. 10 The other issue for me is some that I think have 11 not really been dealt with that much here, and that is what 12 will your first and second vehicle, Chairman Dunlap, be 13 worth when you sell them? 14 What is the used market going to be like in this? 15 And anybody who knows the automobile industry knows the used 16 market is just as important as the new market. Where are 17 you going to move those vehicles, or are they going to go 18 directly to the crusher? 19 I mean these are issues that need to be dealt 20 with. 21 Some other issues need to be dealt with, too, and 22 I hope we have this intervening time to start really dealing 23 with this statewide. 24 What happens to the tax? Where is this tax 25 transfer going to happen? The road tax, the sales tax, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 energy tax. All these taxes that we pay on a gallon of 2 gasoline are not currently in a kilowatt, and we have to 3 figure that out and, at the same time, the piracy issue has 4 to be dealt with. 5 Many of these issues, I hope, will be ironed out 6 as we move through and finding out the nudge factor will 7 create an actual demand for these vehicles versus forcing 8 the product. 9 We've heard a lot about when we demanded certain 10 elements in a car, like airbags, catalytic converters, the 11 price was high and it went low. 12 As much as it's easy to compare those past events, 13 I do believe this is a major quantum leap in taking a 14 product that is one element of a whole automobile and 15 comparing it to a whole another regime of travel, and 16 saying, oh, you're going to have the same effect; start out 17 high costs and go lost costs. Is everything going to be the 18 same way as it occurred with an airbag? 19 That's a big unknown. This will give us some time 20 to find that out. 21 And, of course, the other issue is, where are the 22 batteries going to go? How are they going to be recycled? 23 How are we going to keep them off our highways, byways, and 24 empty areas around our counties? 25 Are we going to have the used tire marketplace, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 where you pay a dollar and find out that they all end up in 2 the same spot on some empty field? 3 I mean, these issues need to be dealt with. If 4 they're not, it's going to come back to haunt us, 5 particularly as we get closer to 2003. I do support 6 Resolution 96-12, and I hope we can incorporate the concerns 7 of this Board as we move through the time. 8 Thank you. 9 CHAIRMAN DUNLAP: Appreciate your comments and the 10 long-term view. I think most of the debate is centered on 11 some of the things confronting us immediately, not looking 12 at the integration of these vehicles into the overall 13 system. 14 Wise counsel. Appreciate that, Supervisor. 15 Mayor Hilligoss from the Bay Area's perspective. 16 I know you've been very, very concerned about ensuring that 17 those air quality benefits under this program are real and 18 are going to be consistent. 19 MAYOR HILLIGOSS: That's right. That's the main 20 part of my -- but, also, I think for the Bay Area, just like 21 for San Joaquin, I think that the NLEVs will certainly be 22 very good, because we do have a lot of new people coming in. 23 So, I think that -- I am in favor of it. 24 CHAIRMAN DUNLAP: Okay. Has staff been able to 25 adequately answer your questions in the regard? Feel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 comfortable with that, Mayor Hilligoss? 2 MAYOR HILLIGOSS: Yes. 3 CHAIRMAN DUNLAP: Very good. Is there any other 4 discussion that we need to have before Mr. Parnell moves 5 this item? 6 SUPERVISOR ROBERTS: Mr. Chairman, could I close 7 the loop on one last -- 8 CHAIRMAN DUNLAP: Sure. 9 SUPERVISOR ROBERTS: -- because you called on me 10 first, and I wasn't completely prepared. 11 CHAIRMAN DUNLAP: That was intentional. 12 (Laughter.) 13 SUPERVISOR ROBERTS: I had a feeling that was part 14 of your strategy. 15 Let me -- just two quick comments. One, an issue 16 that I had raised over the last few meetings was the amount 17 of money that was going to be contributed to the USABC 18 effort. And I feel comfortable, having talked to staff now, 19 about this issue since yesterday's meeting, that the USABC 20 budget -- and I guess it was November of last year, prior to 21 the more generous commitment made by Mr. Leonard -- 22 (Laughter.) 23 SUPERVISOR ROBERTS: -- and I appreciate his 24 efforts. But prior to his making that statement as part of 25 the public record, it does reflect the amount that's in this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 agreement. So, I feel his statement notwithstanding, that 2 this is an appropriate number for us to proceed on. 3 I would also hope that they might consider a 4 contribution level closer to that higher amount, but I think 5 this is the number that we should have in here. 6 And finally, I think -- you know, one of the 7 things that I think maybe needs to be said, that a good part 8 of this is really a trade of two different strategies, a 9 trade of quality for quantity. Having driven one of these 10 electric cars for some considerable miles with the lead acid 11 batteries, I found that the performance was -- with respect 12 to range - was in all respects less than what I would have 13 expected based on all the hoopla surrounding this. 14 And you don't have the options that you have with 15 gas stations out there. We need some time to put some 16 infrastructure. We're starting on that in San Diego County, 17 and I think that, along with the advanced batteries as 18 opposed to the lead-acid batteries, really gives us an 19 opportunity to be successful if the cooperation of the 20 manufacturers is there. 21 And I think that is what is giving me the balance 22 to go forward with this. 23 CHAIRMAN DUNLAP: Thank you, Supervisor. 24 One, perhaps just a clarifying comment. In the 25 advanced lead-acid battery arena, I've been quite impressed. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 I know several of you have had an opportunity to hear from 2 those folks. 3 They have made great strides and have done an 4 awful lot to communicate to us the advancements they've made 5 and what they're anticipating. 6 So, the lead-acid agency folks have a significant 7 niche market, perhaps more than that. And I don't want to 8 write them off too soon. There's some things that they can 9 certainly do to help us implement this program. 10 Mr. Parnell. 11 MR. PARNELL: Mr. Chairman, it gives me pleasure 12 to move Resolution 96-12 as submitted to the Board members 13 just a few minutes ago. 14 CHAIRMAN DUNLAP: Thank you. Is there a second to 15 Mr. Parnell's motion? 16 MR. CALHOUN: I second it. 17 CHAIRMAN DUNLAP: Mr. Calhoun. All right. 18 Do we need to have any specific discussion on the 19 resolution that we haven't already covered? 20 MS. EDGERTON: Move to separate. I want to 21 substitute -- either we can have a substitute motion or we 22 can just move to separate certain questions. 23 CHAIRMAN DUNLAP: What I would ask is, Lynne, if 24 you would outline what you would like to be done, we'll ask 25 the person -- the folks that made the motion and a second PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 whether it's agreeable to them. Go ahead. 2 MS. EDGERTON: Well, then it would be taken up as 3 an amendment to their main motion. I would prefer to take a 4 vote up on certain provisions -- substitute takes precedence 5 over the other. So, we can vote those up or down and then 6 we can vote on the main motion. 7 CHAIRMAN DUNLAP: Well, we have a main motion now. 8 What I'd prefer is have you outline what you would like to 9 do, and let's see if we can get the motion's amended. 10 MS. EDGERTON: Okay. Then I'll make a substitute 11 motion, with the following changes. 12 My substitute motion would be to have the entire 13 resolution 96-12, as it is proved here, with the following 14 modifications. 15 None on 1, none on page 2, none on page 3, none on 16 page 4, none on page 5, none on page 6. One on page 7, 17 second paragraph of the whereas the Board finds. 18 "Elimination of the ZEV requirement for model 19 years 1998 through 1992 (sic) will not jeopardize the SIP 20 because the NOx and NMOG emission reductions to be realized 21 from implementation of a 49-state program are not encumbered 22 by or otherwise available to meet any. . .SIP 23 requirement(sic) and are sufficient. . ." 24 I would prefer to -- my motion says "may be 25 sufficient." PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 Next page. 2 CHAIRMAN DUNLAP: Rather than "will not," you 3 would substitute "may not"? 4 MS. EDGERTON: Yeah. Rather than "are not" 5 sufficient, I'm saying "may be" sufficient. 6 That's the only change on page 7. Instead of "are 7 sufficient," I want it to be "may be sufficient to." Oh, 8 yeah, "are" is changed to "may be." 9 CHAIRMAN DUNLAP: All right. 10 DR. BOSTON: What line are you talking about? 11 MS. EDGERTON: Oh, you want me to say what line 12 number it is? 13 Okay. On page 7, line number -- 14 CHAIRMAN DUNLAP: Second paragraph, fourth line. 15 MS. EDGERTON: Oh, second paragraph, line 4. 16 CHAIRMAN DUNLAP: The word "are" -- 17 MS. EDGERTON: The word "are" changed to "may be." 18 CHAIRMAN DUNLAP: Okay. 19 MS. EDGERTON: All right. Page 8 -- 20 CHAIRMAN DUNLAP: Mr. Kenny, are you traveling 21 with us here? 22 Okay. 23 MS. EDGERTON: Would you please interrupt if you 24 need to have a clarification? 25 In the first paragraph under the whereas -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 CHAIRMAN DUNLAP: Page 8? 2 MS. EDGERTON: Page 8, the first paragraph under 3 the whereas, line 1, 2. Again, this is instead of the 4 emissions benefits "will be" equivalent. I'd like for it to 5 be "may be" equivalent. 6 So, I would change "will" to "may." 7 CHAIRMAN DUNLAP: All right. 8 MS. EDGERTON: I will -- on the fourth paragraph - 9 CHAIRMAN DUNLAP: Under whereas? 10 MS. EDGERTON: Under whereas, on page 8, it says, 11 "There are no additional feasible mitigation measures. . . 12 available to the Board that would substantially reduce the 13 potential adverse impacts. . ." 14 I would change to "there may be no." 15 CHAIRMAN DUNLAP: Okay. So, delete "are," put in 16 "may be." 17 MS. EDGERTON: Uh-huh. 18 CHAIRMAN DUNLAP: Okay. 19 MS. EDGERTON: With respect to the resolution for 20 the Board approval, on page 8, it says at the very bottom, 21 "Be it further resolved that the Board approves the terms 22 and conditions of the MOAs. . ." 23 CHAIRMAN DUNLAP: Right. 24 MS. EDGERTON: Turn the page -- let's see. That's 25 fine. Well, let's see. I don't know whether. I'll put it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 here. 2 Okay. In that one, on the bottom of page 8, after 3 ". . .signatory manufacturers," put comma, "provided, 4 however, that. . ." 5 I want to get the exact -- Section III, that's 6 Roman Numeral III, SIP credits, is modified as follows: 7 MR. LAGARIAS: Where are you now? 8 CHAIRMAN DUNLAP: She's at the bottom of page 8. 9 MR. LAGARIAS: Well, I know that. I've got 10 "provided, however, that. . ." 11 MS. EDGERTON: -- ". . .that the MOA. . ." Roman 12 Numeral III, line 3 is changed to read, "the emissions 13 reductions benefits could be equivalent" as opposed to "are 14 at least equivalent." 15 CHAIRMAN DUNLAP: Could be. 16 MS. EDGERTON: Uh-huh. 17 SUPERVISOR VAGIM: Can you read that whole thing 18 again, please? 19 CHAIRMAN DUNLAP: Read the whole sentence. 20 SUPERVISOR VAGIM: Just of your modification. 21 CHAIRMAN DUNLAP: Read the whole sentence that you 22 just outlined. 23 MS. EDGERTON: Oh, from III? 24 SUPERVISOR RIORDAN: Provided, however -- 25 MS. EDGERTON: ". . .provided, however, that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 Section III of the MMOA be modified to read that the 2 emissions reduction benefits 'could be', quote/unquote, 3 equivalent to the benefits attributable to the 1998 through 4 2002 percentage ZEV requirements in the current SIP." 5 And also provided that -- and this is Mr. Roberts' 6 suggestion that I thought was a good one -- provided that 7 provision -- 8 CHAIRMAN DUNLAP: What -- 9 MS. EDGERTON: This is the product plan. I would 10 like to have an annual product plan submission as opposed to 11 a product plan submission the November 1st before our 12 biennial review? 13 Can you look in your thing? Let's find the exact 14 cite. 15 CHAIRMAN DUNLAP: While you're doing that, may I 16 ask Mr. Cackette a question? 17 Is there a problem that you see with the 18 automakers providing us an update, an annual update to their 19 product plan? 20 MR. CACKETTE: Since they have product plans at 21 all times that fit various time frames, I don't know that 22 there's a problem in providing. The problem would, in 23 general, is opening up the MOA. I guess I thought I heard 24 Supervisor Roberts indicating, and you, Mr. Chairman, 25 indicating -- Supervisor Riordan, too -- that they'd like to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 have annual reports back from the Board on what was going 2 on. We get out of the MOA and the annual report on what's 3 happened in the past. We get a biennial report that is 4 specifically designed to feed into these more massive 5 reviews like we've had this time. 6 CHAIRMAN DUNLAP: Right. 7 MR. CACKETTE: And at least I could envision that 8 we could meet the Board's needs by having a combination of 9 both, one more of an informational report on an annual 10 basis, and then the next year having the more full-blown 11 biennial review based on the plans and the business plans, 12 et cetera. 13 MR. BOYD: Mr. Chairman, I didn't jump in at that 14 point of the discussion of an annual report, but I was 15 prepared to say earlier that I thought we had the tools to 16 accomplish the needs of the Board to have an annual report 17 along the lines of what Mr. Cackette just said. 18 We are asking for annual on certain facets; we get 19 an update of the business plan on a biennial basis. We have 20 the provision for access to staff and facilities on a 21 fulltime regular basis. And I felt that we could easily 22 provide an annual report of progress -- 23 CHAIRMAN DUNLAP: Okay. 24 MR. BOYD: -- perhaps every other year -- 25 MS. EDGERTON: That's not my -- yeah. I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 appreciate the clarification, but that's not my substitute 2 motion. 3 CHAIRMAN DUNLAP: All right. 4 MS. EDGERTON: My substitute motion is in Section 5 I-C, ZEV Product Plans, Ramp-Up Transition Plans. 6 And I want it to be so that instead of saying 7 "prior to November 1st of the year preceding each of the 8 scheduled reviews, the manufacturers shall submit to ARB 9 confidentially its ZEV plans." 10 I'd like for it to say, "on November 1st of every 11 year manufacturers shall submit to ARB confidentially its 12 ZEV product plans." 13 I'm less concerned about having, you know, an 14 annual with the full forum here than I am concerned about 15 having a binding obligation in the contract itself for the 16 manufacturers to submit product plans each year. 17 So, my motion sounds like it wouldn't be a problem 18 for them. My motion is to ask them to submit confidentially 19 to the Air Resources Board annual product plans. 20 I think that's -- 21 SUPERVISOR ROBERTS: Lynne, that's also in 22 keeping, I think, with the stronger type of reporting that 23 I'd like to see. 24 MS. EDGERTON: Is that something you could 25 support? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 SUPERVISOR ROBERTS: I could. 2 MS. EDGERTON: Good. I think it's a minor, minor, 3 minor change. And I think that it would help us to have a 4 little more confidence overall in the process that we're 5 undertaking for the next six years. And, in fact, we do 6 want to know what the product plans are every year, and 7 that's what I thought we had. 8 So, that's my substitute motion. And I move my 9 motion. 10 CHAIRMAN DUNLAP: Okay. 11 MS. EDGERTON: Is there a second? 12 CHAIRMAN DUNLAP: Is there a second to the 13 substitute motion? 14 SUPERVISOR ROBERTS: I'll second that. 15 CHAIRMAN DUNLAP: Okay. We need to have some 16 discussion on this. 17 SUPERVISOR RIORDAN: Yes. Mr. Chairman, if I 18 might. 19 CHAIRMAN DUNLAP: Supervisor Riordan. 20 SUPERVISOR RIORDAN: While I certainly appreciate 21 your last motion -- 22 MS. EDGERTON: The whole substitute or the last 23 part? 24 SUPERVISOR RIORDAN: The last part of your motion. 25 I need to understand from staff the wording change of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 "could." I believe we've added a lot of coulds instead of 2 "ares." 3 And I need to understand what that does. 4 MR. KENNY: With the exception of the last one 5 with regard to product plans, all three of the prior 6 amendments relate to whether or not the SIP would be whole 7 by this particular change. That does raise some concerns, 8 at least in my mind, because of the fact that we've recently 9 had EPA proposed approval of our SIP submittal. 10 To the extent that this language would be changed 11 from an equivalent emissions reduction being achieved from 12 the MOAs to a possible equivalent emissions reduction 13 achieved from the MOAs, when we eventually submit to this to 14 EPA for a scope of the waiver determination, it could raise 15 questions about whether or not the SIP is whole. 16 And I think -- 17 CHAIRMAN DUNLAP: And it could jeopardize the SIP 18 approval? 19 MR. KENNY: I don't want to say it would 20 jeopardize the SIP approval. I think it will simply raise 21 questions about how we are going to ensure that the 22 emissions equivalency determination is made, because, 23 clearly, by the resolution of this Board with the "could" 24 language there is not an equivalents determination made. 25 CHAIRMAN DUNLAP: All right. Would these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 amendments require an opening up of the MOA, Mr. Kenny, Mr. 2 Cackette? 3 MR. KENNY: The MOA currently does have language 4 in it that says the MOA reductions would be equivalent to 5 the reductions that would have been achieved from the 6 existing regulatory programs. So, yes. 7 In addition, one of Mr. Edgerton's amendments was 8 specifically on point. 9 CHAIRMAN DUNLAP: Mr. Cackette, the ramifications 10 here by these amendments relative to the balance that's been 11 struck relative to the negotiations with the automakers on 12 your proposal, or what? 13 MR. CACKETTE: I can only speculate, because it 14 was a negotiated agreement to this point to initial them. I 15 don't know what the total reaction would be of the other 16 seven signatories other than the Air Resources Board. 17 But the general theme was that no one was -- no 18 one was entertaining the idea of additional change -- what 19 we were told at least on the automobile side, was that it 20 was a fragile agreement which any change could jeopardize 21 it. 22 I can't answer the question directly, because I 23 don't know the -- 24 CHAIRMAN DUNLAP: Okay. Mr. Parnell. 25 MR. PARNELL: Mr. Chairman, I rise to speak PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 against the substitute motion for the very reason that this 2 was a very sensitive negotiation. Each one of the 3 participants in that negotiation had to go back to their 4 CEOs with pills that they did not want to swallow. 5 And the quickest and most direct route to strike 6 down the agreement that's in place that I talked about with 7 some enthusiasm will be to change it in this forum. 8 I think what we need to do is decide up or down 9 whether or not the resolution, the MOA, as it's currently 10 written, can stand. 11 That was my motion. That's where it should go, 12 and not to attempt to tweak or to change something that is 13 undergone a very, very, serious, serious negotiation. 14 CHAIRMAN DUNLAP: I, too, share those concerns, 15 particularly as it relates to the whole SIP process we've 16 been through. Mr. Roberts, did you have a comment? 17 SUPERVISOR ROBERTS: Well, it sounds like you 18 don't want to discuss the issues of the points that have 19 been made, which I think is unfortunate. 20 I'm not used to walking in a room when somebody 21 tells me we're going to vote this up or down. I attended a 22 large number of the public workshops, and I can tell you, I 23 don't feel like I've been involved in this negotiation that 24 has brought this forward here today. 25 And it bothers me to be told that you can't change PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 anything, however significant or insignificant you may feel 2 that it is. And if that's the case, you know, I don't think 3 it bodes well for us. 4 I didn't have a hand in these negotiations, and 5 I'm taking it on good faith that, in fact, that our staff 6 put their best effort into this. But to say that we now are 7 at a point that we've got to take it or leave it, you might 8 as well just let the industry write whatever they want and 9 just sending it in here in a take it or leave it situation. 10 The points that have been raised I think ought to 11 be the discussion. And I think the points are well made and 12 the language is fairly innocuous. 13 And if this would bring everybody to their knees, 14 then I don't think we're going to get there anyway. 15 CHAIRMAN DUNLAP: First of all, the Board doesn't 16 directly negotiate. That's what we have staff for. 17 The process, as -- I think it's been lauded 18 uniformly by everyone on this Board that the process to get 19 to this decision has been one that has been complete, 20 thorough. We've relied upon not only experts here on staff, 21 but we commissioned battery panels. We've examined these 22 things. 23 I'm more interested in getting on with 24 implementation rather than some artful manipulation of 25 language at the eleventh hour here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 And there are ramifications to this language, 2 Supervisor Roberts, relative to something that this Board 3 worked on and -- the majority of this Board worked on that 4 predates me, and that's their SIP. And I'm concerned about 5 in any way weakening a very positive situation we have 6 relative to our SIP review and throwing that into question. 7 And so, that's why I am comfortable with the 8 original motion. I'm uncomfortable with the motion made and 9 seconded by you and Ms. Edgerton, because it throws in some 10 factors into the situation that could have dire 11 consequences. 12 Now, I've heard staff indicate that they are 13 comfortable and willing to come forward with an annual 14 review. I've indicated some support at the outset for 15 having this implementation advisory committee that can get 16 heavily involved with this, and that we have the ability, if 17 this thing went sour, to make some significant changes and 18 hole those people accountable and not suffer any air quality 19 harm. 20 And for me, at this juncture, I am very 21 comfortable with being in that situation. And so, I'd like 22 to, unless there's anything else that needs to be said, I'd 23 like to call the question on this substitute motion. 24 Dr. Boston. 25 DR. BOSTON: Well, I just wanted to say that I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 don't really see the point in all the "may bes" and the 2 "coulds." It just makes it sound as though we don't know 3 how to make calculations, and we don't know how to do our 4 figuring. And I think that's totally erroneous. 5 And I don't see the point of it. It makes no 6 sense to me. So, I stick with the original resolution as 7 presented by Mr. Parnell. 8 CHAIRMAN DUNLAP: Mr. Lagarias. 9 MR. LAGARIAS: With regard to the SIP submittal, 10 changing the language from can to may be to get the 11 equivalent emission reductions, the last resolution says 12 that the Executive Officer must submit documentation to EPA 13 demonstrating that the SIP is not jeopardized, so that -- 14 there is a checkup on this. It has to be documented and it 15 has to be submitted to EPA to show that the LEV program is 16 indeed achieving the reductions that we claim for it. 17 There's the check for it -- 18 MS. EDGERTON: Excuse me. Which is -- 19 MR. LAGARIAS: -- in the last resolution. 20 MS. EDGERTON: -- thank you for making the point. 21 Because that's -- I agree. And that's consistent 22 with -- I believe that's consistent with my substitute 23 motion. Because I believe that it is this Board's 24 obligation and prerogative to submit to the U.S. EPA our 25 calculations of equivalency. And I don't think it should be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 a matter of contract with the auto manufacturers. But 2 that's a technicality which matters to me. 3 I do not believe that the changes that I am making 4 would jeopardize in any way the approval of our SIP. 5 Thank you. 6 CHAIRMAN DUNLAP: If there's nothing else, I'll 7 ask the Board Secretary to call the question on the 8 substitute motion. 9 MS. HUTCHENS: Boston? 10 DR. BOSTON: No. 11 MS. HUTCHENS: Calhoun? 12 MR. CALHOUN: No. 13 MS. HUTCHENS: Edgerton? 14 MS. EDGERTON: Yes. 15 MS. HUTCHENS: Hilligoss? 16 MAYOR HILLIGOSS: No. 17 MS. HUTCHENS: Lagarias? 18 MR. LAGARIAS: No. 19 MS. HUTCHENS: Parnell? 20 MR. PARNELL: No. 21 MS. HUTCHENS: Riordan? 22 SUPERVISOR RIORDAN: No. 23 MS. HUTCHENS: Roberts? 24 SUPERVISOR ROBERTS: Yes. 25 MS. HUTCHENS: Silva? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 SUPERVISOR SILVA: No. 2 MS. HUTCHENS: Vagim? 3 SUPERVISOR VAGIM: No. 4 MS. HUTCHENS: Chairman Dunlap. 5 CHAIRMAN DUNLAP: No. 6 MS. HUTCHENS: The SIP doesn't pass 9 to 2. I 7 mean the substitute motion. 8 (Laughter.) 9 CHAIRMAN DUNLAP: "There" was a slip of the 10 tongue. 11 (Laughter.) 12 CHAIRMAN DUNLAP: Okay. Let's go back to the 13 original motion. 14 We have a motion and a second. We've had 15 discussion on Mr. Parnell's motion. Is there any other 16 discussion that we need to have on it? 17 With that, I'll ask the Board Secretary to call 18 the question, which is approval of the Resolution before the 19 Board, 96-12. 20 MS. HUTCHENS: Boston? 21 DR. BOSTON: Yes. 22 MS. HUTCHENS: Calhoun? 23 MR. CALHOUN: Aye. 24 MS. HUTCHENS: Edgerton? 25 MS. EDGERTON: Yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 MS. HUTCHENS: Hilligoss? 2 MAYOR HILLIGOSS: Aye. 3 MS. HUTCHENS: Lagarias? 4 MR. LAGARIAS: Yes. 5 MS. HUTCHENS: Parnell? 6 MR. PARNELL: Yes. 7 MS. HUTCHENS: Riordan? 8 SUPERVISOR RIORDAN: Aye. 9 MS. HUTCHENS: Roberts? 10 SUPERVISOR ROBERTS: Yes. 11 MS. HUTCHENS: Silva? 12 SUPERVISOR SILVA: Yes. 13 MS. HUTCHENS: Vagim? 14 SUPERVISOR VAGIM: Aye. 15 MS. HUTCHENS: Chairman Dunlap. 16 CHAIRMAN DUNLAP: Aye. 17 MS. HUTCHENS: Passes 11-0. 18 CHAIRMAN DUNLAP: Okay. Thank you very much. 19 Appreciate it. 20 (Applause.) 21 CHAIRMAN DUNLAP: Supervisor Riordan. 22 SUPERVISOR RIORDAN: Mr. Chairman, I don't know if 23 there needs to be any motion to -- or maybe it just can 24 come as a direction from the Chair -- on working out a 25 little bit of a difference of reporting more towards the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 annual basis. And I don't know how you or staff want to 2 handle that. But I think it needs to be part of the record 3 that there are a number of us who would like to see a little 4 more -- I don't think that creates a problem for anybody. 5 As you do your planning, you usually roll it out one year, 6 one year, and one year. So, hopefully, that could be done. 7 CHAIRMAN DUNLAP: Sure. 8 SUPERVISOR RIORDAN: And I don't know how you want 9 to do it. 10 MR. BOYD: Mr. Chairman, I've already taken that 11 as the sense of the Board -- 12 CHAIRMAN DUNLAP: To do that. 13 MR. BOYD: -- that you'd like that done. And, as 14 I said, I really think we have the tools -- 15 CHAIRMAN DUNLAP: Okay. 16 MR. BOYD: -- and the capacity to do that. 17 CHAIRMAN DUNLAP: I'd like to ask the audience to 18 please take their seats. We have a couple more minutes 19 where we need to discuss a few things at the meeting. 20 So, Mr. Boyd, to cover that ground, you've 21 indicated the annual report is something you'll do. 22 Also, it's probably wise to summarize a few things 23 here. This Board, as you well know, Mr. Boyd, and have said 24 to me many times, there's a lot of expertise on this Board. 25 There's some perspectives that bear listening to very PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 carefully. 2 I think the questioning of the witnesses yesterday 3 where we had the back and forth was productive and positive, 4 but don't leave -- staff, do not leave this hearing room 5 today thinking that all questions have been answered and 6 that the Board is in complete accord with all the nooks and 7 crannies of this MOA. 8 There are some areas of concern. There's some 9 areas of vulnerability. There's also some areas -- and we 10 believe an overriding theme, is that we have an overriding 11 chance of success, and we're positioned very, very 12 positively. 13 And don't lose those perspectives, because they're 14 important. You need to be particularly vigilant, as you are 15 in every other case, to examine what progress is being made, 16 how things are going, and if we are going to be facing a 17 problem. And you need to get back to this Board quickly. 18 So, the annual reviews are fine. We need them. We've 19 requested them. 20 But there might be other communication mechanisms 21 that you can employ to get the word out to this Board. 22 I've indicated a willingness to appoint this advisory 23 committee. We can't have all of the Board members on the 24 advisory committee, certainly one or two. And that will be 25 a conduit to get word back as well. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 But you need to be reporting on a regular basis, 2 particularly in the area of legal accountability, Mr. Kenny. 3 You need to be very vigilant to make sure that we are 4 positioned where we can move quickly if anyone fails to live 5 up to their obligations. 6 And we're counting on you and expect you to be 7 ready to move very, very quickly. We do not want to be 8 surprised relative to the implementation of this program. 9 MR. BOYD: Mr. Chairman, I take your comments 10 quite seriously. And I agree with you. Let me assure you, 11 I recognize this vote as not only momentous and significant, 12 but in some respects a vote of confidence in the staff and 13 our responsibilities to you to follow up and see that 14 there's enforcement, and see that all that we are mutually 15 pledged to do with the auto industry really takes place. 16 Nobody is more interested than your staff in the 17 successful launch -- 18 CHAIRMAN DUNLAP: Right. 19 MR. BOYD: -- of this program. Some of us have 20 been there since conception, birth, and what have you, and 21 are desperate to see it survive. 22 And I take to heart what each and every one of you 23 individually, as well as collectively, says. And Supervisor 24 Roberts, I want to make sure he feels more comfortable in 25 the future with regard to actions we take. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 And he had some very sage advice with regard to -- 2 and I appreciated some of his comments with regard to the 3 climate out there and the climate that has existed -- 4 CHAIRMAN DUNLAP: Right. 5 MR. BOYD: -- in the past. The dark side is still 6 there. They're still opposed, and they will still be active 7 in their opposition to this program. And I think we need to 8 work together, all of us, staff and Board, to see that these 9 questions are always answered. 10 CHAIRMAN DUNLAP: Thank you. Having said that, 11 and issued the warning to you all to be vigilant and on your 12 game, also, I want to echo something that Mr. Parnell said 13 very well. I appreciated his comments and perspective. 14 Staff has done a good job here. You've done an 15 excellent job. It's been difficult. You've had a lot of 16 people giving you counsel and advice, and you've kept your 17 heads. And you have put forward a good proposal. 18 And you should feel very proud of that fact. And 19 you're to be commended. 20 Mr Boyd, I've said many times you have a world 21 class staff, and you've shown it certainly here with this 22 proposal. 23 So, with that, Mr. Boyd, do you have anything else 24 to add or bring before the Board today? 25 MR. BOYD: No, Mr. Chairman. That concludes our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 business for the Board. 2 CHAIRMAN DUNLAP: Okay. 3 We will now conclude, adjourn this, the March 4 Board meeting of the California Air Resources Board. 5 (Thereupon, the meeting was adjourned 6 at 10:30 a.m.) 7 --o0o-- 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 4 I, Nadine J. Parks, a shorthand reporter of the 5 State of California, do hereby certify that I am a 6 disinterested person herein; that the foregoing meeting was 7 reported by me in shorthand writing, and thereafter 8 transcribed into typewriting. 9 I further certify that I am not of counsel or 10 attorney for any of the parties to said meeting, nor am I 11 interested in the outcome of said meeting. 12 In witness whereof, I have hereunto set my hand 13 this 8th day of April , 1996. 14 15 16 Nadine J. Parks 17 Shorthand Reporter 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345